Business Wire | Jul 22, 2021 06:03AM EDT

Banc of California Reports Second Quarter 2021 Financial Results

Jul. 22, 2021

SANTA ANA, Calif.--(BUSINESS WIRE)--Jul. 22, 2021--Banc of California, Inc. (NYSE: BANC) today reported net income of $19.1 million and net income available to common stockholders for the second quarter of 2021 of $17.3 million, or diluted earnings per common share of $0.34.

Highlights for the second quarter included:

* Return on average assets of 0.98% * Total loan production of $904.1 million, including loan fundings of $847.0 million * Period-end total cost of deposits of 0.20% and average cost of total deposits of 0.23%, a 5 basis point decrease from the prior quarter * Net interest margin expanded to 3.27%, an 8 basis point increase from the prior quarter * Noninterest-bearing deposit balances represented 29% of total deposits at June 30, 2021, up from 23% a year earlier * Allowance for credit losses at 1.33% of total loans and 155% of non-performing loans * Total deferrals/forbearances declined to $86.6 million at June 30, 2021 from $108.7 million at March 31, 2021 * Common Equity Tier 1 capital at 11.14%

Jared Wolff, President & CEO of Banc of California, commented, "Our strong second quarter results reflect the acceleration of our organic growth and our success in attracting new commercial client relationships. During the second quarter, our total loans increased at an annualized rate of 15%. The significant loan growth combined with an expanding net interest margin and disciplined expense control helped to produce a solid quarter of earnings."

Mr. Wolff continued, "Our loan pipeline remains strong. We believe that we are well positioned to deliver continued organic balance sheet growth and even greater profitability in the second half of the year, barring any setbacks to the economic recovery. We will also benefit from the significant earnings accretion that we expect from the Pacific Mercantile Bancorp acquisition, which we anticipate to close during the third quarter. We now have visibility on cost savings of at least 40%, with substantially all of the savings expected to be realized by the end of this year."

Lynn Hopkins, Chief Financial Officer of Banc of California, said, "The continued decline in our deposit costs combined with the redeployment of our excess liquidity into higher yielding earning assets drove an eight basis point increase in our net interest margin to 3.27%. We continued to drive a positive shift in the composition of our funding base with eight consecutive quarters of demand deposit growth, which now account for 65% of our total deposits. We also saw improved asset quality with declines in total delinquencies, deferrals and non-performing loans. As a result of the positive trends in asset quality and improving economic forecasts, we had a reserve release this quarter while still maintaining a high coverage ratio of allowance to total loans of 1.33%. Our capital optimization actions resulted in a $1.4 million increase to net income available to common stockholders in the second quarter following the redemption of our Series D Preferred Stock, and we continue to view the redemption of our Series E Preferred Stock as a late 2021 or early 2022 event, subject to regulatory approval, which we expect to provide additional earnings accretion."

Income Statement Highlights

Three Months Ended Six Months Ended

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

($ in thousands)

Totalinterest and $ 69,677 $ 68,618 $ 73,530 $ 69,666 $ 72,697 $ 138,295 $ 147,411 dividendincome

Totalinterest 9,830 10,702 11,967 13,811 17,382 20,532 40,235 expense

Net interest 59,847 57,916 61,563 55,855 55,315 117,763 107,176 income

Totalnoninterest 4,170 4,381 6,975 3,954 5,528 8,551 7,589 income

Total revenue 64,017 62,297 68,538 59,809 60,843 126,314 114,765

Totalnoninterest 40,559 46,735 38,950 40,394 72,770 87,294 119,689 expense

Pre-tax /pre-provision 23,458 15,562 29,588 19,415 (11,927 ) 39,020 (4,924 ) income (loss)

(Reversal of)provision for (2,154 ) (1,107 ) 991 1,141 11,826 (3,261 ) 27,587 credit losses

Income taxexpense 6,562 2,294 6,894 2,361 (5,304 ) 8,856 (7,469 ) (benefit)

Net income $ 19,050 $ 14,375 $ 21,703 $ 15,913 $ (18,449 ) $ 33,425 $ (25,042 ) (loss)



Net income(loss)available to $ 17,323 $ 7,825 $ 17,706 $ 12,084 $ (21,936 ) $ 25,088 $ (31,630 ) 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

Q2-2021 vs Q1-2021

Net interest income increased $1.9 million to $59.8 million for the second quarter due to the higher yield on earning-assets, the lower cost and volume of interest-bearing liabilities, and the impact of one additional day in the current quarter.

The net interest margin increased 8 basis points to 3.27% for the second quarter from 3.19% for the first quarter as the average earning-assets yield increased 3 basis points and the average cost of total funding decreased 6 basis points. The yield on average interest-earning assets increased to 3.81% for the second quarter from 3.78% for the first quarter due mostly to an improved earning-asset mix as excess liquidity was redeployed. Average securities increased $72.1 million while average other interest-earning assets decreased $77.5 million and loans decreased by $12.6 million. The average yield on loans remained unchanged at 4.30% during the second quarter and included the impact of prepayment penalty fees, net reversal of nonaccrual loan interest, and accelerated fees from PPP loan forgiveness; these items increased the second quarter loan yield by 18 basis points and the first quarter loan yield by 13 basis points. The average yield on securities increased 1 basis point to 2.14% between quarters, including a 4 basis points decrease in the average yield on collateralized loan obligations (CLOs) to 1.87% for the second quarter due mostly to an increase in fair value of such investments.

The average cost of funds decreased 6 basis points to 0.57% for the second quarter from 0.63% for the first 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 second quarter, average deposits increased $52.8 million, consisting of higher average noninterest-bearing deposits of $114.2 million and lower average interest-bearing deposits of $61.4 million. Average noninterest-bearing deposits represented 28% of total average deposits for the second quarter compared to 27% of total average deposits for the first quarter. Average Federal Home Loan Bank (FHLB) advances decreased $28.5 million due to lower average term advances during the second quarter from maturities of term advances in the first and second quarters of 2021. Average long-term debt and other interest-bearing liabilities increased $13.9 million as a result of an increase in unsecured overnight borrowings from various financial institutions through the American Financial Exchange platform. The average cost of interest-bearing liabilities decreased 6 basis points to 0.77% for the second quarter from 0.83% for the first quarter due to continuing to actively managing down the cost of interest-bearing deposits. The average cost of interest-bearing deposits declined 6 basis points to 0.32% for the second quarter from 0.38% for the first quarter. The average cost of total deposits decreased 5 basis points to 0.23% for the second quarter. The spot rate of total deposits at the end of the second quarter was 0.20%.

YTD 2021 vs YTD 2020

Net interest income for the six months ended June 30, 2021 increased $10.6 million to $117.8 million from $107.2 million for the same 2020 period. Net interest income was positively impacted by higher average interest-earning assets, lower average interest-earning liabilities and improved funding costs, offset by lower yields on average interest-earning assets. For the six months ended June 30, 2021, average interest-earning assets increased $233.8 million to $7.35 billion, and the net interest margin increased 20 basis points to 3.23% for the six months ended June 30, 2021 compared to 3.03% for the same 2020 period.

The net interest margin expanded due to a 62 basis point decrease in the average cost of funds outpacing a 37 basis point decline in the average interest-earning assets yield. The average yield on interest-earning assets decreased to 3.80% for the six months ended June 30, 2021, from 4.17% for same 2020 period due mostly to the impact of lower market interest rates on loan and securities yields over this time period. The average fed funds rate for the six months ended June 30, 2021 was 0.08% compared to 0.66% for the same 2020 period. The average yield on loans was 4.30% for the six months ended June 30, 2021, compared to 4.52% for the same 2020 period and the average yield on securities decreased 98 basis points to 2.14% due mostly to CLOs repricing into the lower rate environment.

The average cost of funds decreased to 0.60% for the six months ended June 30, 2021, from 1.22% for the same 2020 period. This decrease was driven by the lower average cost of interest-bearing liabilities and the improved funding mix, including higher average noninterest-bearing deposits. The average cost of interest-bearing liabilities decreased 70 basis points to 0.80% for the six months ended June 30, 2021 from 1.50% for the same 2020 period due to the combination of actively managing deposit pricing down into the lower interest rate environment and the lower average cost of FHLB term advances resulting from maturities, early termination and refinancing of certain term advances during 2020. Compared to the same 2020 period, the average cost of interest-bearing deposits declined 81 basis points to 0.35% and the average cost of total deposits decreased 65 basis points to 0.25%. Additionally, average noninterest-bearing deposits increased by $469.4 million or 37.8% for the six months ended June 30, 2021 when compared to the same 2020 period.

Provision for credit losses

Q2-2021 vs Q1-2021

The provision for credit losses was a reversal of $2.2 million for the second quarter, compared to a reversal of $1.1 million for the first quarter. The second quarter reversal of credit losses was due primarily to improvements in key macro-economic forecast variables, such as unemployment and gross domestic product, and consideration of credit quality metrics, offset by higher period end loan balances of $221.1 million.

YTD 2021 vs YTD 2020

During the six months ended June 30, 2021, the provision for credit losses was a reversal of $3.3 million, compared to a provision of $27.6 million during the same 2020 period. The lower provision for credit losses was due primarily to improvements in key macro-economic forecast variables, such as unemployment and gross domestic product, and consideration of credit quality metrics, offset by higher period end loan balances of $357.8 million.

Noninterest income

Q2-2021 vs Q1-2021

Noninterest income decreased $211 thousand, to $4.2 million for the second quarter due mostly to certain legal settlements for the benefit of the Company occurring in the first quarter and recorded in other income. Customer service fees increased by $232 thousand due to higher loan fees of $91 thousand due to extension fees and higher deposit activity fees of $140 thousand attributed to higher average deposit balances and our initiative to bring our service fee schedules more in line with market.

YTD 2021 vs YTD 2020

Noninterest income for the six months ended June 30, 2021 increased $1.0 million to $8.6 million compared to the same 2020 period. The increase in noninterest income was mainly due to higher customer service fees and lower fair value adjustment for loans held for sale, offset by lower net gain on sale of securities. The $1.4 million increase in customer services fees was due to higher loan fees of $363 thousand and higher deposit and interchange fees of $1.1 million. The increase in deposit activity fees is attributed to higher average deposit balances, and our initiative to bring our service fee schedules more in line with market. Fair value adjustment for loans held for sale improved $1.6 million as the comparable period included valuation losses on loans held for sale due to the impact of the decreases in market interest rates; there were no similar losses in 2021. The were no gains from sale of securities for the six months ended June 30, 2021, compared to $2.0 million in net gains in the same 2020 period from the sale of $20.7 million in securities, primarily consisting of corporate securities.

Noninterest expense

Q2-2021 vs Q1-2021

Noninterest expense decreased $6.2 million to $40.6 million for the second quarter compared to the prior quarter. The decrease was primarily due to lower professional fees of $2.3 million and higher net gain in alternative energy partnership investments of $4.5 million, offset by higher all other expense of $1.2 million. Professional fees included net recoveries of indemnified legal expenses of $1.3 million in the second quarter compared to net indemnified legal expenses of $721 thousand during the first quarter. The increase in all other expense was due to a $1.2 million increase in net losses on equity investments due to net losses of $727 thousand in the second quarter compared to net gains of $428 thousand in the prior quarter. Our equity investments without readily determinable fair values include investments in privately held companies and limited partnerships and our income or loss from these investments fluctuates based on their underlying performance. Total operating costs, defined as noninterest expense adjusted for certain non-core items (refer to section Non-GAAP Measures), increased $288 thousand to $42.0 million for the second quarter compared to $41.7 million for the prior quarter primarily due to the aforementioned net losses on equity investments offset by lower salaries and benefits and professional fees.

YTD 2021 vs YTD 2020

Noninterest expense for the six months ended June 30, 2021 decreased $32.4 million to $87.3 million compared to the prior year. The decrease was primarily due to: (i) the same 2020 period including a $26.8 million one-time charge related to the termination of our LAFC naming rights agreements and a $2.5 million debt extinguishment fee associated with the early repayment of certain FHLB term advances, (ii) lower professional fees of $4.8 million, due to overall reductions in indemnified legal fees for resolved legal proceedings and various other litigations, (iii) lower advertising fees of $2.7 million due to the termination of our LAFC agreements in May 2020 and (iv) lower all other expense of $4.2 million resulting from overall expense reduction efforts, the comparable 2020 period including the aforementioned $2.5 million debt extinguishment fee and a $1.2 million charge to settle and conclude two legacy legal matters, and a $304 thousand increase in loss on equity investments between periods. These decreases were partially offset by higher (i) salaries and employee benefits of $3.1 million due to higher commissions and incentive-based compensation, (ii) merger-related costs of $1.4 million associated with our proposed merger with PMB, and (iii) net losses in alternative energy partnership investments of $1.1 million.

Income taxes

Q2-2021 vs Q1-2021

Income tax expense totaled $6.6 million for the second quarter resulting in an effective tax rate of 25.6% compared to $2.3 million for the first quarter and an effective tax rate of 13.8%. The higher effective tax rate between quarters was due to the first quarter including a net tax benefit of $2.1 million resulting from the exercise of all previously issued outstanding stock appreciation rights. The effective tax rate is expected to be in the 25% to 27% range for the remaining quarters in 2021.

YTD 2021 vs YTD 2020

Income tax expense totaled $8.9 million for the six months ended June 30, 2021, representing an effective tax rate of 20.9%, compared to an income tax benefit of $7.5 million and an effective tax rate of 23.0% for the same 2020 period. The effective tax rate for the six months ended June 30, 2021 differs from the 21% federal statutory rate due primarily to the aforementioned tax benefit resulting from the exercise of all previously issued outstanding stock appreciation rights.

Balance Sheet

At June 30, 2021, total assets were $8.03 billion, which represented a linked-quarter increase of $94.0 million. The following table shows selected balance sheet line items as of the dates indicated.

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

Net interest income

Q2-2021 vs Q1-2021

Net interest income increased $1.9 million to $59.8 million for the second quarter due to the higher yield on earning-assets, the lower cost and volume of interest-bearing liabilities, and the impact of one additional day in the current quarter.

The net interest margin increased 8 basis points to 3.27% for the second quarter from 3.19% for the first quarter as the average earning-assets yield increased 3 basis points and the average cost of total funding decreased 6 basis points. The yield on average interest-earning assets increased to 3.81% for the second quarter from 3.78% for the first quarter due mostly to an improved earning-asset mix as excess liquidity was redeployed. Average securities increased $72.1 million while average other interest-earning assets decreased $77.5 million and loans decreased by $12.6 million. The average yield on loans remained unchanged at 4.30% during the second quarter and included the impact of prepayment penalty fees, net reversal of nonaccrual loan interest, and accelerated fees from PPP loan forgiveness; these items increased the second quarter loan yield by 18 basis points and the first quarter loan yield by 13 basis points. The average yield on securities increased 1 basis point to 2.14% between quarters, including a 4 basis points decrease in the average yield on collateralized loan obligations (CLOs) to 1.87% for the second quarter due mostly to an increase in fair value of such investments.

The average cost of funds decreased 6 basis points to 0.57% for the second quarter from 0.63% for the first 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 second quarter, average deposits increased $52.8 million, consisting of higher average noninterest-bearing deposits of $114.2 million and lower average interest-bearing deposits of $61.4 million. Average noninterest-bearing deposits represented 28% of total average deposits for the second quarter compared to 27% of total average deposits for the first quarter. Average Federal Home Loan Bank (FHLB) advances decreased $28.5 million due to lower average term advances during the second quarter from maturities of term advances in the first and second quarters of 2021. Average long-term debt and other interest-bearing liabilities increased $13.9 million as a result of an increase in unsecured overnight borrowings from various financial institutions through the American Financial Exchange platform. The average cost of interest-bearing liabilities decreased 6 basis points to 0.77% for the second quarter from 0.83% for the first quarter due to continuing to actively managing down the cost of interest-bearing deposits. The average cost of interest-bearing deposits declined 6 basis points to 0.32% for the second quarter from 0.38% for the first quarter. The average cost of total deposits decreased 5 basis points to 0.23% for the second quarter. The spot rate of total deposits at the end of the second quarter was 0.20%.

YTD 2021 vs YTD 2020

Net interest income for the six months ended June 30, 2021 increased $10.6 million to $117.8 million from $107.2 million for the same 2020 period. Net interest income was positively impacted by higher average interest-earning assets, lower average interest-earning liabilities and improved funding costs, offset by lower yields on average interest-earning assets. For the six months ended June 30, 2021, average interest-earning assets increased $233.8 million to $7.35 billion, and the net interest margin increased 20 basis points to 3.23% for the six months ended June 30, 2021 compared to 3.03% for the same 2020 period.

The net interest margin expanded due to a 62 basis point decrease in the average cost of funds outpacing a 37 basis point decline in the average interest-earning assets yield. The average yield on interest-earning assets decreased to 3.80% for the six months ended June 30, 2021, from 4.17% for same 2020 period due mostly to the impact of lower market interest rates on loan and securities yields over this time period. The average fed funds rate for the six months ended June 30, 2021 was 0.08% compared to 0.66% for the same 2020 period. The average yield on loans was 4.30% for the six months ended June 30, 2021, compared to 4.52% for the same 2020 period and the average yield on securities decreased 98 basis points to 2.14% due mostly to CLOs repricing into the lower rate environment.

The average cost of funds decreased to 0.60% for the six months ended June 30, 2021, from 1.22% for the same 2020 period. This decrease was driven by the lower average cost of interest-bearing liabilities and the improved funding mix, including higher average noninterest-bearing deposits. The average cost of interest-bearing liabilities decreased 70 basis points to 0.80% for the six months ended June 30, 2021 from 1.50% for the same 2020 period due to the combination of actively managing deposit pricing down into the lower interest rate environment and the lower average cost of FHLB term advances resulting from maturities, early termination and refinancing of certain term advances during 2020. Compared to the same 2020 period, the average cost of interest-bearing deposits declined 81 basis points to 0.35% and the average cost of total deposits decreased 65 basis points to 0.25%. Additionally, average noninterest-bearing deposits increased by $469.4 million or 37.8% for the six months ended June 30, 2021 when compared to the same 2020 period.

Provision for credit losses

Q2-2021 vs Q1-2021

The provision for credit losses was a reversal of $2.2 million for the second quarter, compared to a reversal of $1.1 million for the first quarter. The second quarter reversal of credit losses was due primarily to improvements in key macro-economic forecast variables, such as unemployment and gross domestic product, and consideration of credit quality metrics, offset by higher period end loan balances of $221.1 million.

YTD 2021 vs YTD 2020

During the six months ended June 30, 2021, the provision for credit losses was a reversal of $3.3 million, compared to a provision of $27.6 million during the same 2020 period. The lower provision for credit losses was due primarily to improvements in key macro-economic forecast variables, such as unemployment and gross domestic product, and consideration of credit quality metrics, offset by higher period end loan balances of $357.8 million.

Noninterest income

Q2-2021 vs Q1-2021

Noninterest income decreased $211 thousand, to $4.2 million for the second quarter due mostly to certain legal settlements for the benefit of the Company occurring in the first quarter and recorded in other income. Customer service fees increased by $232 thousand due to higher loan fees of $91 thousand due to extension fees and higher deposit activity fees of $140 thousand attributed to higher average deposit balances and our initiative to bring our service fee schedules more in line with market.

YTD 2021 vs YTD 2020

Noninterest income for the six months ended June 30, 2021 increased $1.0 million to $8.6 million compared to the same 2020 period. The increase in noninterest income was mainly due to higher customer service fees and lower fair value adjustment for loans held for sale, offset by lower net gain on sale of securities. The $1.4 million increase in customer services fees was due to higher loan fees of $363 thousand and higher deposit and interchange fees of $1.1 million. The increase in deposit activity fees is attributed to higher average deposit balances, and our initiative to bring our service fee schedules more in line with market. Fair value adjustment for loans held for sale improved $1.6 million as the comparable period included valuation losses on loans held for sale due to the impact of the decreases in market interest rates; there were no similar losses in 2021. The were no gains from sale of securities for the six months ended June 30, 2021, compared to $2.0 million in net gains in the same 2020 period from the sale of $20.7 million in securities, primarily consisting of corporate securities.

Noninterest expense

Q2-2021 vs Q1-2021

Noninterest expense decreased $6.2 million to $40.6 million for the second quarter compared to the prior quarter. The decrease was primarily due to lower professional fees of $2.3 million and higher net gain in alternative energy partnership investments of $4.5 million, offset by higher all other expense of $1.2 million. Professional fees included net recoveries of indemnified legal expenses of $1.3 million in the second quarter compared to net indemnified legal expenses of $721 thousand during the first quarter. The increase in all other expense was due to a $1.2 million increase in net losses on equity investments due to net losses of $727 thousand in the second quarter compared to net gains of $428 thousand in the prior quarter. Our equity investments without readily determinable fair values include investments in privately held companies and limited partnerships and our income or loss from these investments fluctuates based on their underlying performance. Total operating costs, defined as noninterest expense adjusted for certain non-core items (refer to section Non-GAAP Measures), increased $288 thousand to $42.0 million for the second quarter compared to $41.7 million for the prior quarter primarily due to the aforementioned net losses on equity investments offset by lower salaries and benefits and professional fees.

YTD 2021 vs YTD 2020

Noninterest expense for the six months ended June 30, 2021 decreased $32.4 million to $87.3 million compared to the prior year. The decrease was primarily due to: (i) the same 2020 period including a $26.8 million one-time charge related to the termination of our LAFC naming rights agreements and a $2.5 million debt extinguishment fee associated with the early repayment of certain FHLB term advances, (ii) lower professional fees of $4.8 million, due to overall reductions in indemnified legal fees for resolved legal proceedings and various other litigations, (iii) lower advertising fees of $2.7 million due to the termination of our LAFC agreements in May 2020 and (iv) lower all other expense of $4.2 million resulting from overall expense reduction efforts, the comparable 2020 period including the aforementioned $2.5 million debt extinguishment fee and a $1.2 million charge to settle and conclude two legacy legal matters, and a $304 thousand increase in loss on equity investments between periods. These decreases were partially offset by higher (i) salaries and employee benefits of $3.1 million due to higher commissions and incentive-based compensation, (ii) merger-related costs of $1.4 million associated with our proposed merger with PMB, and (iii) net losses in alternative energy partnership investments of $1.1 million.

Income taxes

Q2-2021 vs Q1-2021

Income tax expense totaled $6.6 million for the second quarter resulting in an effective tax rate of 25.6% compared to $2.3 million for the first quarter and an effective tax rate of 13.8%. The higher effective tax rate between quarters was due to the first quarter including a net tax benefit of $2.1 million resulting from the exercise of all previously issued outstanding stock appreciation rights. The effective tax rate is expected to be in the 25% to 27% range for the remaining quarters in 2021.

YTD 2021 vs YTD 2020

Income tax expense totaled $8.9 million for the six months ended June 30, 2021, representing an effective tax rate of 20.9%, compared to an income tax benefit of $7.5 million and an effective tax rate of 23.0% for the same 2020 period. The effective tax rate for the six months ended June 30, 2021 differs from the 21% federal statutory rate due primarily to the aforementioned tax benefit resulting from the exercise of all previously issued outstanding stock appreciation rights.

Balance Sheet

At June 30, 2021, total assets were $8.03 billion, which represented a linked-quarter increase of $94.0 million. The following table shows selected balance sheet line items as of the dates indicated.

Amount Change

June 30, March 31, December 31, September 30, June 30, Q2-21 vs. Q1- Q2-21 vs. Q2- 2021 2021 2020 2020 2020 21 20



($ in thousands)

Securities $ 1,353,154 $ 1,270,830 $ 1,231,431 $ 1,245,867 $ 1,176,029 $ 82,324 $ 177,125 available-for-sale

Loans held-for-investment $ 5,985,477 $ 5,764,401 $ 5,898,405 $ 5,678,002 $ 5,627,696 $ 221,076 $ 357,781

Loans held-for-sale $ 2,853 $ 1,408 $ 1,413 $ 1,849 $ 19,768 $ 1,445 $ (16,915 )

Total assets $ 8,027,413 $ 7,933,459 $ 7,877,334 $ 7,738,106 $ 7,770,138 $ 93,954 $ 257,275



Noninterest-bearing $ 1,808,918 $ 1,700,343 $ 1,559,248 $ 1,450,744 $ 1,391,504 $ 108,575 $ 417,414 deposits

Total deposits $ 6,206,544 $ 6,142,042 $ 6,085,800 $ 6,032,266 $ 6,037,465 $ 64,502 $ 169,079

Borrowings ^(1) $ 871,973 $ 891,546 $ 796,110 $ 733,105 $ 790,707 $ (19,573 ) $ 81,266

Total liabilities $ 7,198,051 $ 7,128,766 $ 6,980,127 $ 6,863,852 $ 6,923,179 $ 69,285 $ 274,872

Total equity $ 829,362 $ 804,693 $ 897,207 $ 874,254 $ 846,959 $ 24,669 $ (17,597 )

(1)

Represents Advances from Federal Home Loan Bank, Notes Payable, Net and Other Borrowings

Investments

Securities available-for-sale increased $82.3 million during the second quarter to $1.35 billion at June 30, 2021 primarily due to purchases of $174.0 million, offset by calls and maturities of $100.2 million and principal payments of $4.6 million, and higher unrealized net gains of $13.5 million. The increase in unrealized net gains was due mostly to increases in the value of mortgage-backed securities as a result of decreases in longer term interest rates during the second quarter, coupled with improved pricing of CLOs and corporate debt securities due to lower credit spreads. As of June 30, 2021, our securities portfolio included $584.3 million of CLOs, $462.9 million of agency securities, $121.0 million of municipal securities, $168.6 million of corporate debt securities, and $16.2 million of SBA pool securities. The CLO portfolio, which is comprised only of AA and AAA rated securities, represented 43.2% of the total securities portfolio and the carrying value included an unrealized net loss of $3.0 million at June 30, 2021 compared to an unrealized net loss of $3.6 million at March 31, 2021.

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, Notes Payable, Net and Other Borrowings

Investments

Securities available-for-sale increased $82.3 million during the second quarter to $1.35 billion at June 30, 2021 primarily due to purchases of $174.0 million, offset by calls and maturities of $100.2 million and principal payments of $4.6 million, and higher unrealized net gains of $13.5 million. The increase in unrealized net gains was due mostly to increases in the value of mortgage-backed securities as a result of decreases in longer term interest rates during the second quarter, coupled with improved pricing of CLOs and corporate debt securities due to lower credit spreads. As of June 30, 2021, our securities portfolio included $584.3 million of CLOs, $462.9 million of agency securities, $121.0 million of municipal securities, $168.6 million of corporate debt securities, and $16.2 million of SBA pool securities. The CLO portfolio, which is comprised only of AA and AAA rated securities, represented 43.2% of the total securities portfolio and the carrying value included an unrealized net loss of $3.0 million at June 30, 2021 compared to an unrealized net loss of $3.6 million at March 31, 2021.

Loans

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

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

($ in thousands)

Composition ofheld-for-investment loans

Commercial real $ 871,790 $ 839,965 $ 807,195 $ 826,683 $ 822,694 estate

Multifamily 1,325,770 1,258,278 1,289,820 1,476,803 1,434,071

Construction 150,557 169,122 176,016 197,629 212,979

Commercial and 725,596 760,150 748,299 710,667 764,839 industrial

Commercial andindustrial - 1,345,314 1,118,175 1,340,009 876,157 672,151 warehouse lending

SBA 253,924 338,903 273,444 320,573 310,784

Total commercial 4,672,951 4,484,593 4,634,783 4,408,512 4,217,518 loans

Single-familyresidential 1,288,176 1,253,251 1,230,236 1,234,479 1,370,785 mortgage

Other consumer 24,350 26,557 33,386 35,011 39,393

Total consumer 1,312,526 1,279,808 1,263,622 1,269,490 1,410,178 loans

Total gross loans $ 5,985,477 $ 5,764,401 $ 5,898,405 $ 5,678,002 $ 5,627,696

Compositionpercentage of held-for-investmentloans

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

Multifamily 22.2 % 21.8 % 21.9 % 26.0 % 25.5 %

Construction 2.5 % 2.9 % 3.0 % 3.5 % 3.8 %

Commercial and 12.1 % 13.2 % 12.7 % 12.5 % 13.6 %industrial

Commercial andindustrial - 22.5 % 19.4 % 22.6 % 15.5 % 11.9 %warehouse lending

SBA 4.2 % 5.9 % 4.6 % 5.6 % 5.5 %

Total commercial 78.1 % 77.8 % 78.5 % 77.7 % 74.9 %loans

Single-familyresidential 21.5 % 21.7 % 20.9 % 21.7 % 24.4 %mortgage

Other consumer 0.4 % 0.5 % 0.6 % 0.6 % 0.7 %

Total consumer 21.9 % 22.2 % 21.5 % 22.3 % 25.1 %loans

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

Held-for-investment loans increased $221.1 million to $5.99 billion from the prior quarter, resulting from higher commercial and industrial (C&I) loans related to our warehouse credit facilities of $227.1 million and increases in multifamily loans of $67.5 million and commercial real estate loans of $31.8 million. The increases were partially offset by decreases in construction loans of $18.6 million due to prepayment activity and SBA loans of $85.0 million due mostly to the forgiveness of $94.9 million in PPP loans during the quarter, offset by $11.8 million of PPP loans originated and outstanding at June 30, 2021. At June 30, 2021, SBA loans included $193.9 million of PPP loans, net of fees, of which $65.5 million related to PPP loans originated in 2020.

The C&I industry concentrations in dollars and as a percentage of total outstanding C&I loan balances are summarized below:

June 30, 2021

Amount % of Portfolio

($ in thousands)

C&I Portfolio by Industry

Finance and Insurance - Warehouse Lending $ 1,345,314 65 %

Real Estate & Rental Leasing 192,323 9 %

Finance and Insurance - Other 84,528 4 %

Gas Stations 73,169 4 %

Healthcare 71,941 3 %

Wholesale Trade 40,757 2 %

Manufacturing 34,086 2 %

Television / Motion Pictures 30,002 1 %

Food Services 29,371 1 %

Other Retail Trade 28,999 1 %

Professional Services 19,448 1 %

Transportation 4,739 - %

Accommodations 2,200 - %

All Other 114,033 6 %

Total $ 2,070,910 100 %

Deposits

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

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

($ in thousands)

Composition of deposits

Noninterest-bearing $ 1,808,918 $ 1,700,343 $ 1,559,248 $ 1,450,744 $ 1,391,504 checking

Interest-bearing 2,217,306 2,088,528 2,107,942 2,045,115 1,846,698 checking

Savings 901,334 909,631 932,363 946,293 939,018

Money market 692,390 775,072 714,297 689,769 765,854

Non-brokeredcertificates of 586,596 668,468 755,727 820,531 924,630 deposit

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

Total deposits $ 6,206,544 $ 6,142,042 $ 6,085,800 $ 6,032,266 $ 6,037,465

Compositionpercentage of deposits

Noninterest-bearing 29.1 % 27.7 % 25.6 % 24.1 % 23.0 %checking

Interest-bearing 35.7 % 34.0 % 34.6 % 33.9 % 30.6 %checking

Savings 14.5 % 14.8 % 15.3 % 15.7 % 15.6 %

Money market 11.2 % 12.6 % 11.7 % 11.4 % 12.7 %

Non-brokeredcertificates of 9.5 % 10.9 % 12.4 % 13.6 % 15.3 %deposit

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

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

Total deposits increased $64.5 million during the second quarter of 2021 to $6.21 billion due to higher noninterest-bearing checking balances of $108.6 million and interest-bearing checking of $128.8 million, offset by lower money market balances of $82.7 million, savings balances of $8.3 million, and non-brokered certificates of deposit of $81.9 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 $1.81 billion and represented 29.1% of total deposits at June 30, 2021 compared to $1.70 billion, or 27.7% of total deposits, at March 31, 2021.

Debt

Advances from the FHLB decreased $144.7 million to $490.4 million, as of June 30, 2021, due to lower overnight advances, and maturities of $5.0 million in term advances during the second quarter. At June 30, 2021, FHLB advances included $85.0 million in overnight borrowings and $411.0 million in term advances with a weighted average life of 4.5 years and weighted average interest rate of 2.53%. Other borrowings totaled $125.0 million at June 30, 2021 and related to unsecured overnight borrowing from various financial institutions through the American Financial Exchange platform.

Equity

At June 30, 2021, total stockholders' equity increased by $24.7 million to $829.4 million and tangible common equity increased by $25.0 million to $695.2 million on a linked-quarter basis. The increase in total stockholders' equity for the second quarter included net income of $19.1 million, share-based award compensation of $1.3 million, and higher net accumulated other comprehensive income of $9.6 million, offset by dividends to common and preferred stockholders of $4.7 million and the impact of vested and exercised share-based awards of $0.5 million. Tangible book value per share increased to $13.69 as of June 30, 2021 from $13.24 at March 31, 2021.

Capital ratios remain strong with total risk-based capital at 15.33% and a tier 1 leverage ratio of 9.89%. The following table sets forth our regulatory capital ratios at June 30, 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 8 basis points at June 30, 2021.

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

Capital Ratios^(1)

Banc of California, Inc.

Total risk-based capital 15.33 % 15.87 % 17.01 % 16.19 % 16.35 %ratio

Tier 1 risk-based capital 12.71 % 13.17 % 14.35 % 14.94 % 15.10 %ratio

Common equity tier 1 11.14 % 11.50 % 11.19 % 11.59 % 11.68 %capital ratio

Tier 1 leverage ratio 9.89 % 9.62 % 10.90 % 10.79 % 10.56 %

Banc of California, NA

Total risk-based capital 17.25 % 17.82 % 17.27 % 18.14 % 18.17 %ratio

Tier 1 risk-based capital 16.09 % 16.57 % 16.02 % 16.89 % 16.92 %ratio

Common equity tier 1 16.09 % 16.57 % 16.02 % 16.89 % 16.92 %capital ratio

Tier 1 leverage ratio 12.52 % 12.13 % 12.19 % 12.21 % 11.84 %

(1)

June 30, 2021 capital ratios are preliminary.

Credit Quality

(1) June 30, 2021 capital ratios are preliminary.

Credit Quality

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

Asset qualityinformation and ($ in thousands)ratios

Delinquent loans held-for-investment

30 to 89 days $ 16,983 $ 31,005 $ 13,981 $ 51,229 $ 49,810 delinquent

90+ days delinquent 17,998 30,292 17,636 31,809 45,384

Total delinquent $ 34,981 $ 61,297 $ 31,617 $ 83,038 $ 95,194 loans

Total delinquentloans to total 0.58 % 1.06 % 0.54 % 1.46 % 1.69 %loans

Non-performingassets, excluding loans held-for-sale

Non-accrual loans $ 51,299 $ 55,920 $ 35,900 $ 66,337 $ 72,703

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

Non-performing 51,299 55,920 36,628 66,884 72,703 loans

Other real estate 3,253 - - - - owned

Non-performing $ 54,552 $ 55,920 $ 36,628 $ 66,884 $ 72,703 assets

ALL tonon-performing 147.93 % 141.90 % 221.22 % 135.95 % 124.30 %loans

Non-performingloans to total 0.86 % 0.97 % 0.62 % 1.18 % 1.29 %loansheld-for-investment

Non-performingassets to total 0.68 % 0.70 % 0.46 % 0.86 % 0.94 %assets

Troubled debtrestructurings (TDRs)

Performing TDRs $ 6,029 $ 6,347 $ 4,733 $ 5,408 $ 5,597

Non-performing TDRs 3,120 4,130 4,264 20,002 20,275

Total TDRs $ 9,149 $ 10,477 $ 8,997 $ 25,410 $ 25,872

Total delinquent loans decreased $26.3 million in the second quarter to $35.0 million at June 30, 2021, due to $45.5 million returning to current status offset by $19.8 million of additions including $4.3 million in guaranteed SBA loans that were repurchased and are pending resolution. Delinquent loans included single-family residential (SFR) loans of $21.7 million, or 62% of the total delinquent balance at quarter end, and represented $26.1 million of the quarter over quarter decrease. Excluding delinquent SFR loans, the remaining delinquent loans totaled $13.3 million, or 0.28% of total loans at June 30, 2021.

Non-performing loans decreased $4.6 million to $51.3 million as of June 30, 2021, of which $32.0 million, or 62%, relates to loans in a current payment status. The second quarter decrease was due to $16.1 million in cured loans and payoffs offset by $11.5 million of loans placed on non-accrual status, including $6.6 million in guaranteed SBA loans that were repurchased and are pending resolution. At June 30, 2021, non-performing loans included (i) a legacy relationship totaling $7.2 million that is well-secured by a combination of commercial real estate and SFR properties with an average loan-to-value ratio of 50%, (ii) SFR loans totaling $21.2 million, (iii) repurchased guaranteed SBA loans of $6.6 million, and (iv) other commercial loans of $16.3 million.

At June 30, 2021, non-performing assets includes other real estate, consisting of one SFR property, totaling $3.3 million.

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:

June 30, 2021 March 31, 2021

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

($ in thousands)

Single-familyresidential 46 $ 52,384 4 % 47 $ 48,831 4 %mortgage

All other loans 10 34,174 1 % 15 59,858 1 %

Total 56 $ 86,558 1 % 62 $ 108,689 2 %

(1)

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

Allowance for Credit Losses

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

Allowance for Credit Losses

Three Months Ended

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

($ in thousands)

Allowance for loan losses (ALL)

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

Loans charged off (886 ) (565 ) (11,520 ) (1,821 ) -

Recoveries 26 172 609 248 608

Net (charge-offs) (860 ) (393 ) (10,911 ) (1,573 ) 608 recoveries

(Reversal of)provision for loan (2,608 ) (1,284 ) 1,014 2,130 11,519 losses

Balance at end of $ 75,885 $ 79,353 $ 81,030 $ 90,927 $ 90,370 period

Reserve forunfunded loan commitments

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

Provision for(reversal of) 454 177 (23 ) (989 ) 307 credit losses

Balance at end of 3,814 3,360 3,183 3,206 4,195 period

Allowance for $ 79,699 $ 82,713 $ 84,213 $ 94,133 $ 94,565 credit losses (ACL)



ALL to total loans 1.27 % 1.38 % 1.37 % 1.60 % 1.61 %

ACL to total loans 1.33 % 1.43 % 1.43 % 1.66 % 1.68 %

ACL to total loans, 1.38 % 1.51 % 1.48 % 1.74 % 1.76 %excluding PPP loans

ACL to NPLs 155.36 % 147.91 % 229.91 % 140.74 % 130.07 %

Annualized net loancharge-offs(recoveries) to 0.06 % 0.03 % 0.77 % 0.12 % (0.04 ) %average total loansheld-for-investment



Reserve for loss on repurchased loans

Balance at $ 5,383 $ 5,515 $ 5,487 $ 5,567 $ 5,601 beginning of period

Initial provisionfor loan - - - 11 - repurchases

(Reversal of)provision for loan (99 ) (132 ) 28 (91 ) (34 ) repurchases

Utilization ofreserve for loan (189 ) - - - - repurchases

Balance at end of $ 5,095 $ 5,383 $ 5,515 $ 5,487 $ 5,567 period

The allowance for expected credit losses (ACL), which includes the reserve for unfunded loan commitments, totaled $79.7 million, or 1.33% of total loans, at June 30, 2021, compared to $82.7 million, or 1.43% of total loans, at March 31, 2021. The $3.0 million decrease in the ACL was due to: (i) lower general reserves of $3.3 million from portfolio mix, including higher portfolio balances, offset by improved economic assumptions and asset quality trends, (ii) net charge-offs of $860 thousand, and (iii) higher specific reserves of $1.2 million. The ACL coverage of non-performing loans was 155% at June 30, 2021 compared to 148% at March 31, 2021.

Our 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 June 2021. In contrast to the March 2021 forecasts, the assumptions in the June 2021 forecasts generally reflect a more favorable view of the economy (i.e. higher GDP growth rates and lower unemployment rates). While the June 2021 forecasts reflect an improving economy with the rollout of the vaccine and other factors, there continues to be uncertainty regarding the impact of inflation (lasting or transitory), COVID-19 variants and the ultimate pace of the recovery. Accordingly, our economic assumptions and the resulting ACL level and provision reversal consider both the positive assumptions and potential 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 various segments of 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 second quarter 2021 financial results at 10:00 a.m. Pacific Time (PT) on Thursday, July 22, 2021. Interested parties are welcome to attend the conference call by dialing (888) 317-6003, and referencing event code 7494802. 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 10157715.

About Banc of California, Inc.

Banc of California, Inc. (NYSE: BANC) is a bank holding company with approximately $8.0 billion in assets and one wholly-owned banking subsidiary, Banc of California, N.A. (the Bank). The Bank has 36 offices including 30 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 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.

Banc of California, Inc.

Consolidated Statements of Financial Condition (Unaudited)

(Dollars in thousands)

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

ASSETS

Cash and cash $ 163,332 $ 379,509 $ 220,819 $ 292,490 $ 420,640 equivalents

Securities 1,353,154 1,270,830 1,231,431 1,245,867 1,176,029 available-for-sale

Loans held-for-sale 2,853 1,408 1,413 1,849 19,768

Loans 5,985,477 5,764,401 5,898,405 5,678,002 5,627,696 held-for-investment

Allowance for loan (75,885 ) (79,353 ) (81,030 ) (90,927 ) (90,370 ) losses

Federal Home LoanBank and other bank 44,569 44,964 44,506 44,809 46,585 stock

Servicing rights, 1,162 1,407 1,454 1,621 1,753 net

Other real estate 3,253 - - - - owned, net

Premises and 118,649 120,071 121,520 123,812 125,247 equipment, net

Alternative energypartnership 24,068 23,809 27,977 27,786 26,967 investments, net

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

Other intangible 2,069 2,351 2,633 2,939 3,292 assets, net

Deferred income 41,628 47,877 45,957 43,744 48,288 tax, net

Income tax 4,084 210 1,105 10,701 13,094 receivable

Bank owned lifeinsurance 113,168 112,479 111,807 111,115 110,487 investment

Right of use assets 20,364 22,069 19,633 18,909 19,408

Other assets 188,324 184,283 192,560 188,245 184,110

Total assets $ 8,027,413 $ 7,933,459 $ 7,877,334 $ 7,738,106 $ 7,770,138



LIABILITIES ANDSTOCKHOLDERS' EQUITY

Noninterest-bearing $ 1,808,918 $ 1,700,343 $ 1,559,248 $ 1,450,744 $ 1,391,504 deposits

Interest-bearing 4,397,626 4,441,699 4,526,552 4,581,522 4,645,961 deposits

Total deposits 6,206,544 6,142,042 6,085,800 6,032,266 6,037,465

Advances fromFederal Home Loan 490,419 635,105 539,795 559,482 617,170 Bank

Other borrowings 125,000 - - - -

Long-term debt, net 256,554 256,441 256,315 173,623 173,537

Reserve for loss on 5,095 5,383 5,515 5,487 5,567 repurchased loans

Lease liabilities 21,588 23,173 20,647 19,938 20,531

Due on unsettledsecurities 28,629 - - - - purchases

Accrued expensesand other 64,222 66,622 72,055 73,056 68,909 liabilities

Total liabilities 7,198,051 7,128,766 6,980,127 6,863,852 6,923,179

Commitments andcontingent liabilities

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

Common stock 527 526 522 522 522

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

Additional paid-in 630,654 629,844 634,704 633,409 632,117 capital

Retained earnings 129,307 115,004 110,179 95,001 85,670

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

Accumulated othercomprehensive 14,740 5,185 7,746 1,266 (15,565 ) income (loss), net

Total stockholders' 829,362 804,693 897,207 874,254 846,959 equity

Total liabilitiesand stockholders' $ 8,027,413 $ 7,933,459 $ 7,877,334 $ 7,738,106 $ 7,770,138 equity

Banc of California, Inc.

Consolidated Statements of Operations (Unaudited)

(Dollars in thousands, except per share data)

Three Months Ended

Six Months Ended

June 30,2021

March 31,2021

December 31,2020

September 30,2020

June 30,2020

June 30,2021

June 30,2020

Interest and dividend income

Loans, including fees

$

61,900

$

61,345

$

66,105

$

62,019

$

63,642

$

123,245

$

129,176

Securities

6,986

6,501

6,636

6,766

7,816

13,487

15,636

Other interest-earning assets

791

772

789

881

1,239

1,563

2,599

Total interest and dividend income

69,677

68,618

73,530

69,666

72,697

138,295

147,411

Interest expense

Deposits

3,543

4,286

5,436

7,564

10,205

7,829

24,816

Federal Home Loan Bank advances

2,944

3,112

3,479

3,860

4,818

6,056

10,701

Notes payable and other interest-bearing liabilities

3,343

3,304

3,052

2,387

2,359

6,647

4,718

Total interest expense

9,830

10,702

11,967

13,811

17,382

20,532

40,235

Net interest income

59,847

57,916

61,563

55,855

55,315

117,763

107,176

(Reversal of) provision for credit losses

(2,154

)

(1,107

)

991

1,141

11,826

(3,261

)

27,587

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

62,001

59,023

60,572

54,714

43,489

121,024

79,589

Noninterest income

Customer service fees

1,990

1,758

1,953

1,498

1,224

3,748

2,320

Loan servicing income

38

268

149

186

95

306

170

Income from bank owned life insurance

690

672

691

629

591

1,362

1,169

Net gain on sale of securities available for sale

-

-

-

-

2,011

-

2,011

Fair value adjustment on loans held for sale

20

-

36

24

25

20

(1,561

)

Net gain (loss) on sale of loans

-

-

-

272

-

-

(27

)

All other income

1,432

1,683

4,146

1,345

1,582

3,115

3,507

Total noninterest income

4,170

4,381

6,975

3,954

5,528

8,551

7,589

Noninterest expense

Salaries and employee benefits

25,042

25,719

25,836

23,277

24,260

50,761

47,696

Naming rights termination

-

-

-

-

26,769

-

26,769

Occupancy and equipment

7,277

7,196

7,560

7,457

7,090

14,473

14,333

Professional fees

1,749

4,022

29

5,147

4,596

5,771

10,560

Data processing

1,621

1,655

1,608

1,657

1,536

3,276

3,309

Advertising

78

118

171

219

1,157

196

2,913

Regulatory assessments

769

774

748

784

725

1,543

1,209

(Reversal of) provision for loan repurchase reserves

(99

)

(132

)

28

(91

)

(34

)

(231

)

(634

)

Amortization of intangible assets

282

282

306

353

430

564

859

Merger-related costs

700

700

-

-

-

1,400

-

All other expense

3,969

2,771

3,337

3,021

6,408

6,740

10,937

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

41,388

43,105

39,623

41,824

72,937

84,493

117,951

(Gain) loss in alternative energy partnership investments

(829

)

3,630

(673

)

(1,430

)

(167

)

2,801

1,738

Total noninterest expense

40,559

46,735

38,950

40,394

72,770

87,294

119,689

Income (loss) before income taxes

25,612

16,669

28,597

18,274

(23,753

)

42,281

(32,511

)

Income tax expense (benefit)

6,562

2,294

6,894

2,361

(5,304

)

8,856

(7,469

)

Net income (loss)

19,050

14,375

21,703

15,913

(18,449

)

33,425

(25,042

)

Preferred stock dividends

1,727

3,141

3,447

3,447

3,442

4,868

6,975

Income allocated to participating securities

-

62

456

281

-

122

-

Participating securities dividends

-

-

94

94

94

-

188

Impact of preferred stock redemption

-

3,347

-

7

(49

)

3,347

(575

)

Net income (loss) available to common stockholders

$

17,323

$

7,825

$

17,706

$

12,084

$

(21,936

)

$

25,088

$

(31,630

)

Earnings (loss) per common share:

Basic

$

0.34

$

0.16

$

0.35

$

0.24

$

(0.44

)

$

0.50

$

(0.63

)

Diluted

$

0.34

$

0.15

$

0.35

$

0.24

$

(0.44

)

$

0.49

$

(0.63

)

Weighted average number of common shares outstanding

Basic

50,650,186

50,350,897

50,125,462

50,108,655

50,030,919

50,501,369

50,247,848

Diluted

50,892,202

50,750,522

50,335,271

50,190,933

50,030,919

50,810,285

50,247,848

Dividends declared per common share

$

0.06

$

0.06

$

0.06

$

0.06

$

0.06

$

0.12

$

0.12

Banc of California, Inc.

Consolidated Statements of Operations (Unaudited)

(Dollars in thousands, except per share data)

Three Months Ended Six Months Ended

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

Interest and dividend income

Loans, including fees $ 61,900 $ 61,345 $ 66,105 $ 62,019 $ 63,642 $ 123,245 $ 129,176

Securities 6,986 6,501 6,636 6,766 7,816 13,487 15,636

Other interest-earning 791 772 789 881 1,239 1,563 2,599 assets

Total interest and 69,677 68,618 73,530 69,666 72,697 138,295 147,411 dividend income

Interest expense

Deposits 3,543 4,286 5,436 7,564 10,205 7,829 24,816

Federal Home Loan Bank 2,944 3,112 3,479 3,860 4,818 6,056 10,701 advances

Notes payable and otherinterest-bearing 3,343 3,304 3,052 2,387 2,359 6,647 4,718 liabilities

Total interest expense 9,830 10,702 11,967 13,811 17,382 20,532 40,235

Net interest income 59,847 57,916 61,563 55,855 55,315 117,763 107,176

(Reversal of) provision (2,154 ) (1,107 ) 991 1,141 11,826 (3,261 ) 27,587 for credit losses

Net interest incomeafter (reversal of) 62,001 59,023 60,572 54,714 43,489 121,024 79,589 provision for creditlosses

Noninterest income

Customer service fees 1,990 1,758 1,953 1,498 1,224 3,748 2,320

Loan servicing income 38 268 149 186 95 306 170

Income from bank owned 690 672 691 629 591 1,362 1,169 life insurance

Net gain on sale ofsecurities available - - - - 2,011 - 2,011 for sale

Fair value adjustment 20 - 36 24 25 20 (1,561 ) on loans held for sale

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

All other income 1,432 1,683 4,146 1,345 1,582 3,115 3,507

Total noninterest 4,170 4,381 6,975 3,954 5,528 8,551 7,589 income

Noninterest expense

Salaries and employee 25,042 25,719 25,836 23,277 24,260 50,761 47,696 benefits

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

Occupancy and equipment 7,277 7,196 7,560 7,457 7,090 14,473 14,333

Professional fees 1,749 4,022 29 5,147 4,596 5,771 10,560

Data processing 1,621 1,655 1,608 1,657 1,536 3,276 3,309

Advertising 78 118 171 219 1,157 196 2,913

Regulatory assessments 769 774 748 784 725 1,543 1,209

(Reversal of) provisionfor loan repurchase (99 ) (132 ) 28 (91 ) (34 ) (231 ) (634 ) reserves

Amortization of 282 282 306 353 430 564 859 intangible assets

Merger-related costs 700 700 - - - 1,400 -

All other expense 3,969 2,771 3,337 3,021 6,408 6,740 10,937

Total noninterestexpense before (gain)loss in alternative 41,388 43,105 39,623 41,824 72,937 84,493 117,951 energy partnershipinvestments

(Gain) loss inalternative energy (829 ) 3,630 (673 ) (1,430 ) (167 ) 2,801 1,738 partnership investments

Total noninterest 40,559 46,735 38,950 40,394 72,770 87,294 119,689 expense

Income (loss) before 25,612 16,669 28,597 18,274 (23,753 ) 42,281 (32,511 ) income taxes

Income tax expense 6,562 2,294 6,894 2,361 (5,304 ) 8,856 (7,469 ) (benefit)

Net income (loss) 19,050 14,375 21,703 15,913 (18,449 ) 33,425 (25,042 )

Preferred stock 1,727 3,141 3,447 3,447 3,442 4,868 6,975 dividends

Income allocated toparticipating - 62 456 281 - 122 - securities

Participating - - 94 94 94 - 188 securities dividends

Impact of preferred - 3,347 - 7 (49 ) 3,347 (575 ) stock redemption

Net income (loss)available to common $ 17,323 $ 7,825 $ 17,706 $ 12,084 $ (21,936 ) $ 25,088 $ (31,630 ) stockholders



Earnings (loss) per common share:

Basic $ 0.34 $ 0.16 $ 0.35 $ 0.24 $ (0.44 ) $ 0.50 $ (0.63 )

Diluted $ 0.34 $ 0.15 $ 0.35 $ 0.24 $ (0.44 ) $ 0.49 $ (0.63 )

Weighted average numberof common shares outstanding

Basic 50,650,186 50,350,897 50,125,462 50,108,655 50,030,919 50,501,369 50,247,848

Diluted 50,892,202 50,750,522 50,335,271 50,190,933 50,030,919 50,810,285 50,247,848

Dividends declared per $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.12 $ 0.12 common share

Banc of California, Inc.

Selected Financial Data

(Unaudited)

Three Months Ended

June 30,2021

March 31,2021

December 31,2020

September 30,2020

June 30,2020

Profitability and other ratios of consolidated operations

Return on average assets(1)

0.98

%

0.74

%

1.11

%

0.82

%

(0.96)

%

Return on average equity(1)

9.38

%

6.56

%

9.67

%

7.32

%

(8.69)

%

Return on average tangible common equity(2)

10.34

%

4.77

%

10.69

%

7.68

%

(13.83)

%

Pre-tax pre-provision income (loss) ROAA(2)

1.20

%

0.80

%

1.52

%

1.00

%

(0.62)

%

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

1.13

%

1.06

%

1.25

%

0.98

%

0.83

%

Dividend payout ratio(3)

17.65

%

37.50

%

17.14

%

25.00

%

(13.64)

%

Average loan yield

4.30

%

4.30

%

4.58

%

4.46

%

4.48

%

Average cost of interest-bearing deposits

0.32

%

0.38

%

0.47

%

0.66

%

0.93

%

Average cost of total deposits

0.23

%

0.28

%

0.36

%

0.51

%

0.71

%

Net interest spread

3.04

%

2.95

%

3.15

%

2.84

%

2.77

%

Net interest margin(1)

3.27

%

3.19

%

3.38

%

3.09

%

3.09

%

Noninterest income to total revenue(4)

6.51

%

7.03

%

10.18

%

6.61

%

9.09

%

Noninterest income to average total assets(1)

0.21

%

0.23

%

0.36

%

0.20

%

0.29

%

Noninterest expense to average total assets(1)

2.08

%

2.41

%

2.00

%

2.09

%

3.78

%

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

2.15

%

2.15

%

2.26

%

2.10

%

2.22

%

Efficiency ratio(2)(5)

63.36

%

75.02

%

56.83

%

67.54

%

119.60

%

Adjusted efficiency ratio(2)(5)

65.58

%

66.91

%

64.26

%

68.31

%

72.74

%

Average loans held-for-investment to average deposits

92.74

%

93.74

%

95.65

%

92.86

%

98.51

%

Average securities available-for-sale to average total assets

16.71

%

15.73

%

15.96

%

15.49

%

13.75

%

Average stockholders' equity to average total assets

10.41

%

11.30

%

11.49

%

11.26

%

11.04

%

Banc of California, Inc.

Selected Financial Data

(Unaudited)

Three Months Ended

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

Profitability and otherratios of consolidated operations

Return on average assets^ 0.98 % 0.74 % 1.11 % 0.82 % (0.96) %(1)

Return on average equity^ 9.38 % 6.56 % 9.67 % 7.32 % (8.69) %(1)

Return on average tangible 10.34 % 4.77 % 10.69 % 7.68 % (13.83) %common equity^(2)

Pre-tax pre-provision 1.20 % 0.80 % 1.52 % 1.00 % (0.62) %income (loss) ROAA^(2)

Adjusted pre-taxpre-provision income ROAA^ 1.13 % 1.06 % 1.25 % 0.98 % 0.83 %(1)(2)

Dividend payout ratio^(3) 17.65 % 37.50 % 17.14 % 25.00 % (13.64) %

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

Average cost of 0.32 % 0.38 % 0.47 % 0.66 % 0.93 %interest-bearing deposits

Average cost of total 0.23 % 0.28 % 0.36 % 0.51 % 0.71 %deposits

Net interest spread 3.04 % 2.95 % 3.15 % 2.84 % 2.77 %

Net interest margin^(1) 3.27 % 3.19 % 3.38 % 3.09 % 3.09 %

Noninterest income to 6.51 % 7.03 % 10.18 % 6.61 % 9.09 %total revenue^(4)

Noninterest income to 0.21 % 0.23 % 0.36 % 0.20 % 0.29 %average total assets^(1)

Noninterest expense to 2.08 % 2.41 % 2.00 % 2.09 % 3.78 %average total assets^(1)

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

Efficiency ratio^(2)(5) 63.36 % 75.02 % 56.83 % 67.54 % 119.60 %

Adjusted efficiency ratio^ 65.58 % 66.91 % 64.26 % 68.31 % 72.74 %(2)(5)

Average loansheld-for-investment to 92.74 % 93.74 % 95.65 % 92.86 % 98.51 %average deposits

Average securitiesavailable-for-sale to 16.71 % 15.73 % 15.96 % 15.49 % 13.75 %average total assets

Average stockholders'equity to average total 10.41 % 11.30 % 11.49 % 11.26 % 11.04 %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

June 30, 2021

March 31, 2021

December 31, 2020

Average

Yield

Average

Yield

Average

Yield

Balance

Interest

/ Cost

Balance

Interest

/ Cost

Balance

Interest

/ Cost

Interest-earning assets

Loans held-for-sale

$

1,987

$

15

3.03

%

$

1,413

$

7

2.01

%

$

1,564

$

8

2.03

%

SFR mortgage

1,277,552

11,410

3.58

%

1,210,105

11,747

3.94

%

1,224,865

12,955

4.21

%

Commercial real estate, multifamily, and construction

2,313,483

27,222

4.72

%

2,322,509

26,387

4.61

%

2,507,950

30,371

4.82

%

Commercial and industrial, SBA, and lease financing

2,154,512

22,978

4.28

%

2,221,494

22,910

4.18

%

1,978,684

21,984

4.42

%

Other consumer

23,881

275

4.62

%

28,520

294

4.18

%

31,856

787

9.83

%

Gross loans and leases

5,771,415

61,900

4.30

%

5,784,041

61,345

4.30

%

5,744,919

66,105

4.58

%

Securities

1,308,230

6,986

2.14

%

1,236,138

6,501

2.13

%

1,239,295

6,636

2.13

%

Other interest-earning assets

258,915

791

1.23

%

336,443

772

0.93

%

262,363

789

1.20

%

Total interest-earning assets

7,338,560

69,677

3.81

%

7,356,622

68,618

3.78

%

7,246,577

73,530

4.04

%

Allowance for loan losses

(79,103

)

(81,111

)

(83,745

)

BOLI and noninterest-earning assets

567,549

585,441

602,165

Total assets

$

7,827,006

$

7,860,952

$

7,764,997

Interest-bearing liabilities

Interest-bearing checking

$

2,182,419

$

679

0.12

%

$

2,140,314

$

901

0.17

%

$

2,086,146

$

1,131

0.22

%

Savings

903,940

1,974

0.88

%

928,446

2,013

0.88

%

937,649

2,128

0.90

%

Money market

734,165

270

0.15

%

726,079

377

0.21

%

671,949

414

0.25

%

Certificates of deposit

633,101

620

0.39

%

720,180

995

0.56

%

860,131

1,763

0.82

%

Total interest-bearing deposits

4,453,625

3,543

0.32

%

4,515,019

4,286

0.38

%

4,555,875

5,436

0.47

%

FHLB advances

418,111

2,944

2.82

%

446,618

3,112

2.83

%

534,303

3,479

2.59

%

Long-term debt and other interest-bearing liabilities

274,412

3,343

4.89

%

260,488

3,304

5.14

%

238,265

3,052

5.10

%

Total interest-bearing liabilities

5,146,148

9,830

0.77

%

5,222,125

10,702

0.83

%

5,328,443

11,967

0.89

%

Noninterest-bearing deposits

1,767,711

1,653,517

1,448,422

Noninterest-bearing liabilities

98,174

97,136

95,567

Total liabilities

7,012,033

6,972,778

6,872,432

Total stockholders' equity

814,973

888,174

892,565

Total liabilities and stockholders' equity

$

7,827,006

$

7,860,952

$

7,764,997

Net interest income/spread

$

59,847

3.04

%

$

57,916

2.95

%

$

61,563

3.15

%

Net interest margin

3.27

%

3.19

%

3.38

%

Ratio of interest-earning assets to interest-bearing liabilities

143

%

141

%

136

%

Total deposits

$

6,221,336

$

3,543

0.23

%

$

6,168,536

$

4,286

0.28

%

$

6,004,297

$

5,436

0.36

%

Total funding (1)

$

6,913,859

$

9,830

0.57

%

$

6,875,642

$

10,702

0.63

%

$

6,776,865

$

11,967

0.70

%

Banc of California, Inc.

Average Balance, Average Yield Earned, and Average Cost Paid

(Dollars in thousands)

(Unaudited)

Three Months Ended

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

Average Yield Average Yield Average Yield

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

Interest-earning assets

Loans held-for-sale $ 1,987 $ 15 3.03 % $ 1,413 $ 7 2.01 % $ 1,564 $ 8 2.03 %

SFR mortgage 1,277,552 11,410 3.58 % 1,210,105 11,747 3.94 % 1,224,865 12,955 4.21 %

Commercial real estate,multifamily, and 2,313,483 27,222 4.72 % 2,322,509 26,387 4.61 % 2,507,950 30,371 4.82 %construction

Commercial andindustrial, SBA, and 2,154,512 22,978 4.28 % 2,221,494 22,910 4.18 % 1,978,684 21,984 4.42 %lease financing

Other consumer 23,881 275 4.62 % 28,520 294 4.18 % 31,856 787 9.83 %

Gross loans and leases 5,771,415 61,900 4.30 % 5,784,041 61,345 4.30 % 5,744,919 66,105 4.58 %

Securities 1,308,230 6,986 2.14 % 1,236,138 6,501 2.13 % 1,239,295 6,636 2.13 %

Other interest-earning 258,915 791 1.23 % 336,443 772 0.93 % 262,363 789 1.20 %assets

Total interest-earning 7,338,560 69,677 3.81 % 7,356,622 68,618 3.78 % 7,246,577 73,530 4.04 %assets

Allowance for loan losses (79,103 ) (81,111 ) (83,745 )

BOLI andnoninterest-earning 567,549 585,441 602,165 assets

Total assets $ 7,827,006 $ 7,860,952 $ 7,764,997



Interest-bearing liabilities

Interest-bearing checking $ 2,182,419 $ 679 0.12 % $ 2,140,314 $ 901 0.17 % $ 2,086,146 $ 1,131 0.22 %

Savings 903,940 1,974 0.88 % 928,446 2,013 0.88 % 937,649 2,128 0.90 %

Money market 734,165 270 0.15 % 726,079 377 0.21 % 671,949 414 0.25 %

Certificates of deposit 633,101 620 0.39 % 720,180 995 0.56 % 860,131 1,763 0.82 %

Total interest-bearing 4,453,625 3,543 0.32 % 4,515,019 4,286 0.38 % 4,555,875 5,436 0.47 %deposits

FHLB advances 418,111 2,944 2.82 % 446,618 3,112 2.83 % 534,303 3,479 2.59 %

Long-term debt and otherinterest-bearing 274,412 3,343 4.89 % 260,488 3,304 5.14 % 238,265 3,052 5.10 %liabilities

Total interest-bearing 5,146,148 9,830 0.77 % 5,222,125 10,702 0.83 % 5,328,443 11,967 0.89 %liabilities

Noninterest-bearing 1,767,711 1,653,517 1,448,422 deposits

Noninterest-bearing 98,174 97,136 95,567 liabilities

Total liabilities 7,012,033 6,972,778 6,872,432

Total stockholders' 814,973 888,174 892,565 equity

Total liabilities and $ 7,827,006 $ 7,860,952 $ 7,764,997 stockholders' equity



Net interest income/ $ 59,847 3.04 % $ 57,916 2.95 % $ 61,563 3.15 %spread

Net interest margin 3.27 % 3.19 % 3.38 %



Ratio of interest-earningassets to 143 % 141 % 136 % interest-bearingliabilities

Total deposits $ 6,221,336 $ 3,543 0.23 % $ 6,168,536 $ 4,286 0.28 % $ 6,004,297 $ 5,436 0.36 %

Total funding ^(1) $ 6,913,859 $ 9,830 0.57 % $ 6,875,642 $ 10,702 0.63 % $ 6,776,865 $ 11,967 0.70 %

(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

September 30, 2020

June 30, 2020

Average

Yield

Average

Yield

Balance

Interest

/ Cost

Balance

Interest

/ Cost

Interest-earning assets

Loans held-for-sale

$

19,544

$

139

2.83

%

$

19,967

$

155

3.12

%

SFR mortgage

1,311,513

13,178

4.00

%

1,416,358

14,187

4.03

%

Commercial real estate, multifamily, and construction

2,493,408

29,666

4.73

%

2,524,477

29,459

4.69

%

Commercial and industrial, SBA, and lease financing

1,673,548

18,585

4.42

%

1,706,120

19,392

4.57

%

Other consumer

35,563

451

5.05

%

40,697

449

4.44

%

Gross loans and leases

5,533,576

62,019

4.46

%

5,707,619

63,642

4.48

%

Securities

1,190,765

6,766

2.26

%

1,063,941

7,816

2.95

%

Other interest-earning assets

457,558

881

0.77

%

424,776

1,239

1.17

%

Total interest-earning assets

7,181,899

69,666

3.86

%

7,196,336

72,697

4.06

%

Allowance for loan losses

(89,679

)

(78,528

)

BOLI and noninterest-earning assets

594,885

622,398

Total assets

$

7,687,105

$

7,740,206

Interest-bearing liabilities

Interest-bearing checking

$

1,919,327

$

1,660

0.34

%

$

1,710,038

$

2,186

0.51

%

Savings

948,898

2,353

0.99

%

905,997

2,718

1.21

%

Money market

681,421

645

0.38

%

592,872

850

0.58

%

Certificates of deposit

1,030,829

2,906

1.12

%

1,214,939

4,451

1.47

%

Total interest-bearing deposits

4,580,475

7,564

0.66

%

4,423,846

10,205

0.93

%

FHLB advances

608,169

3,860

2.52

%

819,166

4,818

2.37

%

Securities sold under repurchase agreements

1,309

2

0.61

%

1,024

2

0.79

%

Long-term debt and other interest-bearing liabilities

173,911

2,385

5.46

%

173,977

2,357

5.45

%

Total interest-bearing liabilities

5,363,864

13,811

1.02

%

5,418,013

17,382

1.29

%

Noninterest-bearing deposits

1,357,411

1,349,735

Noninterest-bearing liabilities

100,424

118,208

Total liabilities

6,821,699

6,885,956

Total stockholders' equity

865,406

854,250

Total liabilities and stockholders' equity

$

7,687,105

$

7,740,206

Net interest income/spread

$

55,855

2.84

%

$

55,315

2.77

%

Net interest margin

3.09

%

3.09

%

Ratio of interest-earning assets to interest-bearing liabilities

134

%

133

%

Total deposits

$

5,937,886

$

7,564

0.51

%

$

5,773,581

$

10,205

0.71

%

Total funding (1)

$

6,721,275

$

13,811

0.82

%

$

6,767,748

$

17,382

1.03

%

Three Months Ended

September 30, 2020 June 30, 2020

Average Yield Average Yield

Balance Interest / Cost Balance Interest / Cost

Interest-earning assets

Loans held-for-sale $ 19,544 $ 139 2.83 % $ 19,967 $ 155 3.12 %

SFR mortgage 1,311,513 13,178 4.00 % 1,416,358 14,187 4.03 %

Commercial realestate, 2,493,408 29,666 4.73 % 2,524,477 29,459 4.69 %multifamily, andconstruction

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

Other consumer 35,563 451 5.05 % 40,697 449 4.44 %

Gross loans and 5,533,576 62,019 4.46 % 5,707,619 63,642 4.48 %leases

Securities 1,190,765 6,766 2.26 % 1,063,941 7,816 2.95 %

Otherinterest-earning 457,558 881 0.77 % 424,776 1,239 1.17 %assets

Totalinterest-earning 7,181,899 69,666 3.86 % 7,196,336 72,697 4.06 %assets

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

BOLI andnoninterest-earning 594,885 622,398 assets

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



Interest-bearing liabilities

Interest-bearing $ 1,919,327 $ 1,660 0.34 % $ 1,710,038 $ 2,186 0.51 %checking

Savings 948,898 2,353 0.99 % 905,997 2,718 1.21 %

Money market 681,421 645 0.38 % 592,872 850 0.58 %

Certificates of 1,030,829 2,906 1.12 % 1,214,939 4,451 1.47 %deposit

Totalinterest-bearing 4,580,475 7,564 0.66 % 4,423,846 10,205 0.93 %deposits

FHLB advances 608,169 3,860 2.52 % 819,166 4,818 2.37 %

Securities soldunder repurchase 1,309 2 0.61 % 1,024 2 0.79 %agreements

Long-term debt andother 173,911 2,385 5.46 % 173,977 2,357 5.45 %interest-bearingliabilities

Totalinterest-bearing 5,363,864 13,811 1.02 % 5,418,013 17,382 1.29 %liabilities

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

Noninterest-bearing 100,424 118,208 liabilities

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

Total stockholders' 865,406 854,250 equity

Total liabilitiesand stockholders' $ 7,687,105 $ 7,740,206 equity



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

Net interest margin 3.09 % 3.09 %



Ratio ofinterest-earningassets to 134 % 133 % interest-bearingliabilities

Total deposits $ 5,937,886 $ 7,564 0.51 % $ 5,773,581 $ 10,205 0.71 %

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

(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.

Six Months Ended

June 30, 2021

June 30, 2020

Average

Yield

Average

Yield

Balance

Interest

/ Cost

Balance

Interest

/ Cost

Interest-earning assets

Loans held-for-sale

$

1,701

$

21

2.49

%

$

21,120

$

376

3.58

%

SFR mortgage

1,244,015

23,157

3.75

%

1,474,663

29,481

4.02

%

Commercial real estate, multifamily, and construction

2,317,971

53,610

4.66

%

2,544,480

59,682

4.72

%

Commercial and industrial, SBA, and lease financing

2,187,818

45,888

4.23

%

1,659,722

38,550

4.67

%

Other consumer

26,188

569

4.38

%

44,229

1,087

4.94

%

Gross loans and leases

5,777,693

123,245

4.30

%

5,744,214

129,176

4.52

%

Securities

1,272,383

13,487

2.14

%

1,008,454

15,636

3.12

%

Other interest-earning assets

297,465

1,563

1.06

%

361,110

2,599

1.45

%

Total interest-earning assets

7,347,541

138,295

3.80

%

7,113,778

147,411

4.17

%

Allowance for credit losses

(80,102)

(69,499)

BOLI and noninterest-earning assets

576,446

607,296

Total assets

$

7,843,885

$

7,651,575

Interest-bearing liabilities

Interest-bearing checking

$

2,161,483

$

1,581

0.15

%

$

1,615,480

$

5,915

0.74

%

Savings

916,125

3,987

0.88

%

898,414

6,013

1.35

%

Money market

730,144

647

0.18

%

600,899

2,610

0.87

%

Certificates of deposit

676,400

1,614

0.48

%

1,183,229

10,278

1.75

%

Total interest-bearing deposits

4,484,152

7,829

0.35

%

4,298,022

24,816

1.16

%

FHLB advances

432,286

6,056

2.83

%

929,110

10,701

2.32

%

Securities sold under repurchase agreements

-

-

-

%

512

2

0.79

%

Long-term debt and other interest-bearing liabilities

267,488

6,647

5.01

%

174,017

4,716

5.45

%

Total interest-bearing liabilities

5,183,926

20,532

0.80

%

5,401,661

40,235

1.50

%

Noninterest-bearing deposits

1,710,930

1,241,521

Noninterest-bearing liabilities

97,658

123,244

Total liabilities

6,992,514

6,766,426

Total stockholders' equity

851,371

885,149

Total liabilities and stockholders' equity

$

7,843,885

$

7,651,575

Net interest income/spread

$

117,763

3.00

%

$

107,176

2.67

%

Net interest margin

3.23

%

3.03

%

Ratio of interest-earning assets to interest-bearing liabilities

142

%

132

%

Total deposits

$

6,195,082

$

7,829

0.25

%

$

5,539,543

$

24,816

0.90

%

Total funding (1)

$

6,894,856

$

20,532

0.60

%

$

6,643,182

$

40,235

1.22

%

Six Months Ended

June 30, 2021 June 30, 2020

Average Yield Average Yield

Balance Interest / Cost Balance Interest / Cost

Interest-earning assets

Loans held-for-sale $ 1,701 $ 21 2.49 % $ 21,120 $ 376 3.58 %

SFR mortgage 1,244,015 23,157 3.75 % 1,474,663 29,481 4.02 %

Commercial realestate, 2,317,971 53,610 4.66 % 2,544,480 59,682 4.72 %multifamily, andconstruction

Commercial andindustrial, SBA, 2,187,818 45,888 4.23 % 1,659,722 38,550 4.67 %and lease financing

Other consumer 26,188 569 4.38 % 44,229 1,087 4.94 %

Gross loans and 5,777,693 123,245 4.30 % 5,744,214 129,176 4.52 %leases

Securities 1,272,383 13,487 2.14 % 1,008,454 15,636 3.12 %

Otherinterest-earning 297,465 1,563 1.06 % 361,110 2,599 1.45 %assets

Totalinterest-earning 7,347,541 138,295 3.80 % 7,113,778 147,411 4.17 %assets

Allowance for (80,102) (69,499) credit losses

BOLI andnoninterest-earning 576,446 607,296 assets

Total assets $ 7,843,885 $ 7,651,575



Interest-bearing liabilities

Interest-bearing $ 2,161,483 $ 1,581 0.15 % $ 1,615,480 $ 5,915 0.74 %checking

Savings 916,125 3,987 0.88 % 898,414 6,013 1.35 %

Money market 730,144 647 0.18 % 600,899 2,610 0.87 %

Certificates of 676,400 1,614 0.48 % 1,183,229 10,278 1.75 %deposit

Totalinterest-bearing 4,484,152 7,829 0.35 % 4,298,022 24,816 1.16 %deposits

FHLB advances 432,286 6,056 2.83 % 929,110 10,701 2.32 %

Securities soldunder repurchase - - - % 512 2 0.79 %agreements

Long-term debt andother 267,488 6,647 5.01 % 174,017 4,716 5.45 %interest-bearingliabilities

Totalinterest-bearing 5,183,926 20,532 0.80 % 5,401,661 40,235 1.50 %liabilities

Noninterest-bearing 1,710,930 1,241,521 deposits

Noninterest-bearing 97,658 123,244 liabilities

Total liabilities 6,992,514 6,766,426

Total stockholders' 851,371 885,149 equity

Total liabilitiesand stockholders' $ 7,843,885 $ 7,651,575 equity



Net interest income $ 117,763 3.00 % $ 107,176 2.67 %/spread

Net interest margin 3.23 % 3.03 %



Ratio ofinterest-earningassets to 142 % 132 % interest-bearingliabilities

Total deposits $ 6,195,082 $ 7,829 0.25 % $ 5,539,543 $ 24,816 0.90 %

Total funding ^(1) $ 6,894,856 $ 20,532 0.60 % $ 6,643,182 $ 40,235 1.22 %

(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 total 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 total revenue, 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 total 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 total revenue, 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)

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

Tangible commonequity, andtangible common equity totangible assetsratio

Total assets $ 8,027,413 $ 7,933,459 $ 7,877,334 $ 7,738,106 $ 7,770,138

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

Less otherintangible (2,069 ) (2,351 ) (2,633 ) (2,939 ) (3,292 ) assets

Tangible assets $ 7,988,200 $ 7,893,964 $ 7,837,557 $ 7,698,023 $ 7,729,702 ^(1)



Totalstockholders' $ 829,362 $ 804,693 $ 897,207 $ 874,254 $ 846,959 equity

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

Less otherintangible (2,069 ) (2,351 ) (2,633 ) (2,939 ) (3,292 ) assets

Tangible equity 790,149 765,198 857,430 834,171 806,523 ^(1)

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

Tangible common $ 695,193 $ 670,242 $ 672,552 $ 649,293 $ 621,486 equity^(1)



Totalstockholders' 10.33 % 10.14 % 11.39 % 11.30 % 10.90 %equity to totalassets

Tangible equityto tangible 9.89 % 9.69 % 10.94 % 10.84 % 10.43 %assets^(1)

Tangible commonequity to 8.70 % 8.49 % 8.58 % 8.43 % 8.04 %tangible assets^(1)



Common shares 50,313,228 50,150,447 49,767,489 49,760,543 49,750,958 outstanding

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

Total commonshares 50,790,549 50,627,768 50,244,810 50,237,864 50,228,279 outstanding



Tangible commonequity per $ 13.69 $ 13.24 $ 13.39 $ 12.92 $ 12.37 common share^(1)

Book value per $ 14.46 $ 14.02 $ 14.18 $ 13.72 $ 13.18 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

June 30,2021

March 31,2021

December 31,2020

September 30,2020

June 30,2020

Return on tangible common equity

Average total stockholders' equity

$

814,973

$

888,174

$

892,565

$

865,406

$

854,250

Less average preferred stock

(94,956

)

(164,895

)

(184,878

)

(184,910

)

(185,471

)

Less average goodwill

(37,144

)

(37,144

)

(37,144

)

(37,144

)

(37,144

)

Less average other intangible assets

(2,224

)

(2,517

)

(2,826

)

(3,172

)

(3,574

)

Average tangible common equity(1)

$

680,649

$

683,618

$

667,717

$

640,180

$

628,061

Net income (loss) available to common stockholders

17,323

7,825

17,706

12,084

(21,936

)

Add amortization of intangible assets

282

282

306

353

430

Less tax effect on amortization of intangible assets

(59

)

(59

)

(64

)

(74

)

(90

)

Net income (loss) available to common stockholders after adjustments for intangible assets(1)

$

17,546

$

8,048

$

17,948

$

12,363

$

(21,596

)

Return on average equity

9.38

%

6.56

%

9.67

%

7.32

%

(8.69

)

%

Return on average tangible common equity(1)

10.34

%

4.77

%

10.69

%

7.68

%

(13.83

)

%

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

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

Return ontangible common equity

Average totalstockholders' $ 814,973 $ 888,174 $ 892,565 $ 865,406 $ 854,250 equity

Less averagepreferred (94,956 ) (164,895 ) (184,878 ) (184,910 ) (185,471 ) stock

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

Less averageother (2,224 ) (2,517 ) (2,826 ) (3,172 ) (3,574 ) intangibleassets

Averagetangible $ 680,649 $ 683,618 $ 667,717 $ 640,180 $ 628,061 common equity^(1)





Net income(loss)available to 17,323 7,825 17,706 12,084 (21,936 ) commonstockholders

Addamortization 282 282 306 353 430 of intangibleassets

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

Net income(loss)available tocommonstockholders $ 17,546 $ 8,048 $ 17,948 $ 12,363 $ (21,596 ) afteradjustmentsforintangibleassets^(1)



Return onaverage 9.38 % 6.56 % 9.67 % 7.32 % (8.69 ) %equity

Return onaveragetangible 10.34 % 4.77 % 10.69 % 7.68 % (13.83 ) %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

June 30,2021

March 31,2021

December 31,2020

September 30,2020

June 30,2020

Adjusted noninterest income and expense

Total noninterest income

$

4,170

$

4,381

$

6,975

$

3,954

$

5,528

Noninterest income adjustments:

Net gain on securities available for sale

-

-

-

-

(2,011

)

Net gain on sale of legacy SFR loans held for sale

-

-

-

(272

)

-

Fair value adjustment on legacy SFR loans held for sale

(20

)

-

(36

)

(24

)

(25

)

Total noninterest income adjustments

(20

)

-

(36

)

(296

)

(2,036

)

Adjusted noninterest income(1)

$

4,150

$

4,381

$

6,939

$

3,658

$

3,492

Total noninterest expense

$

40,559

$

46,735

$

38,950

$

40,394

$

72,770

Noninterest expense adjustments:

Naming rights termination

-

-

-

-

(26,769

)

Extinguishment of debt

-

-

-

-

(2,515

)

Professional recoveries (fees)

1,284

(721

)

4,398

(1,172

)

(875

)

Merger-related costs

(700

)

(700

)

-

-

-

Noninterest expense adjustments before gain (loss) in alternative energy partnership investments

584

(1,421

)

4,398

(1,172

)

(30,159

)

Gain (loss) in alternative energy partnership investments

829

(3,630

)

673

1,430

167

Total noninterest expense adjustments

1,413

(5,051

)

5,071

258

(29,992

)

Adjusted noninterest expense(1)

$

41,972

$

41,684

$

44,021

$

40,652

$

42,778

Average assets

$

7,827,006

$

7,860,952

$

7,764,997

$

7,687,105

$

7,740,206

Noninterest expense to average total assets

2.08

%

2.41

%

2.00

%

2.09

%

3.78

%

Adjusted noninterest expense to average total assets(1)

2.15

%

2.15

%

2.26

%

2.10

%

2.22

%

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended

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

Adjustednoninterest income andexpense

Totalnoninterest $ 4,170 $ 4,381 $ 6,975 $ 3,954 $ 5,528 income

Noninterestincome adjustments:

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

Net gain onsale of legacy - - - (272 ) - SFR loans heldfor sale

Fair valueadjustment onlegacy SFR (20 ) - (36 ) (24 ) (25 ) loans held forsale

Totalnoninterest (20 ) - (36 ) (296 ) (2,036 ) incomeadjustments

Adjustednoninterest $ 4,150 $ 4,381 $ 6,939 $ 3,658 $ 3,492 income^(1)



Totalnoninterest $ 40,559 $ 46,735 $ 38,950 $ 40,394 $ 72,770 expense

Noninterestexpense adjustments:

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

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

Professionalrecoveries 1,284 (721 ) 4,398 (1,172 ) (875 ) (fees)

Merger-related (700 ) (700 ) - - - costs

Noninterestexpenseadjustmentsbefore gain(loss) in 584 (1,421 ) 4,398 (1,172 ) (30,159 ) alternativeenergypartnershipinvestments

Gain (loss) inalternativeenergy 829 (3,630 ) 673 1,430 167 partnershipinvestments

Totalnoninterest 1,413 (5,051 ) 5,071 258 (29,992 ) expenseadjustments

Adjustednoninterest $ 41,972 $ 41,684 $ 44,021 $ 40,652 $ 42,778 expense^(1)



Average assets $ 7,827,006 $ 7,860,952 $ 7,764,997 $ 7,687,105 $ 7,740,206

Noninterestexpense to 2.08 % 2.41 % 2.00 % 2.09 % 3.78 %average totalassets

Adjustednoninterestexpense to 2.15 % 2.15 % 2.26 % 2.10 % 2.22 %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

June 30,2021

March 31,2021

December 31,2020

September 30,2020

June 30,2020

Adjusted pre-tax pre-provision income

Net interest income

$

59,847

$

57,916

$

61,563

$

55,855

$

55,315

Noninterest income

4,170

4,381

6,975

3,954

5,528

Total revenue

64,017

62,297

68,538

59,809

60,843

Noninterest expense

40,559

46,735

38,950

40,394

72,770

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

$

23,458

$

15,562

$

29,588

$

19,415

$

(11,927)

Total revenue

$

64,017

$

62,297

$

68,538

$

59,809

$

60,843

Total noninterest income adjustments

(20)

-

(36)

(296)

(2,036)

Adjusted total revenue(1)

63,997

62,297

68,502

59,513

58,807

Noninterest expense

40,559

46,735

38,950

40,394

72,770

Total noninterest expense adjustments

1,413

(5,051)

5,071

258

(29,992)

Adjusted noninterest expense(1)

41,972

41,684

44,021

40,652

42,778

Adjusted pre-tax pre-provision income(1)

$

22,025

$

20,613

$

24,481

$

18,861

$

16,029

Average assets

$

7,827,006

$

7,860,952

$

7,764,997

$

7,687,105

$

7,740,206

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

1.20

%

0.80

%

1.52

%

1.00

%

(0.62)

%

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

1.13

%

1.06

%

1.25

%

0.98

%

0.83

%

Efficiency ratio(1)

63.36

%

75.02

%

56.83

%

67.54

%

119.60

%

Adjusted efficiency ratio(1)

65.58

%

66.91

%

64.26

%

68.31

%

72.74

%

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended

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

Adjustedpre-tax pre-provisionincome

Net interest $ 59,847 $ 57,916 $ 61,563 $ 55,855 $ 55,315 income

Noninterest 4,170 4,381 6,975 3,954 5,528 income

Total revenue 64,017 62,297 68,538 59,809 60,843

Noninterest 40,559 46,735 38,950 40,394 72,770 expense

Pre-taxpre-provision $ 23,458 $ 15,562 $ 29,588 $ 19,415 $ (11,927) income (loss)^(1)



Total revenue $ 64,017 $ 62,297 $ 68,538 $ 59,809 $ 60,843

Totalnoninterest (20) - (36) (296) (2,036) incomeadjustments

Adjustedtotal revenue 63,997 62,297 68,502 59,513 58,807 ^(1)



Noninterest 40,559 46,735 38,950 40,394 72,770 expense

Totalnoninterest 1,413 (5,051) 5,071 258 (29,992) expenseadjustments

Adjustednoninterest 41,972 41,684 44,021 40,652 42,778 expense^(1)

Adjustedpre-tax $ 22,025 $ 20,613 $ 24,481 $ 18,861 $ 16,029 pre-provisionincome^(1)



Average $ 7,827,006 $ 7,860,952 $ 7,764,997 $ 7,687,105 $ 7,740,206 assets

Pre-taxpre-provision 1.20 % 0.80 % 1.52 % 1.00 % (0.62) %income (loss)ROAA^(1)

Adjustedpre-taxpre-provision 1.13 % 1.06 % 1.25 % 0.98 % 0.83 %income ROAA^(1)

Efficiency 63.36 % 75.02 % 56.83 % 67.54 % 119.60 %ratio^(1)

Adjustedefficiency 65.58 % 66.91 % 64.26 % 68.31 % 72.74 %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

June 30,2021

March 31,2021

December 31,2020

September 30,2020

June 30,2020

Adjusted net income (loss)

Net income (loss)

$

19,050

$

14,375

$

21,703

$

15,913

$

(18,449

)

Adjustments, net:(1)

Noninterest income

15

-

27

222

1,527

Noninterest expense

(1,060

)

3,788

(3,803

)

(194

)

22,494

Adjusted net income before tax adjustment

18,005

18,163

17,927

15,941

5,572

Tax adjustment: tax impact from exercise of stock appreciation rights

-

2,093

-

-

-

Adjusted net income(2)

$

18,005

$

16,070

$

17,927

$

15,941

$

5,572

Average assets

$

7,827,006

$

7,860,952

$

7,764,997

$

7,687,105

$

7,740,206

ROAA

0.98

%

0.74

%

1.11

%

0.82

%

(0.96

)

%

Adjusted ROAA(2)

0.92

%

0.83

%

0.92

%

0.82

%

0.29

%

Adjusted net income available to common stockholders

Net income (loss) available to common stockholders

$

17,323

$

7,825

$

17,706

$

12,084

$

(21,936

)

Adjustments to net income (loss)(3)

(1,045

)

1,695

(3,776

)

28

24,021

Adjustments for impact of preferred stock redemption

-

3,347

-

7

(49

)

Adjusted net income available to common stockholders(2)

$

16,278

$

12,867

$

13,930

$

12,119

$

2,036

Average diluted common shares

50,892,202

50,750,522

50,335,271

50,190,933

50,030,919

Diluted EPS

$

0.34

$

0.15

$

0.35

$

0.24

$

(0.44

)

Adjusted diluted EPS(2)(4)

$

0.32

$

0.25

$

0.28

$

0.24

$

0.04

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended

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

Adjusted netincome (loss)

Net income $ 19,050 $ 14,375 $ 21,703 $ 15,913 $ (18,449 ) (loss)

Adjustments, net:^(1)

Noninterest 15 - 27 222 1,527 income

Noninterest (1,060 ) 3,788 (3,803 ) (194 ) 22,494 expense

Adjusted netincome 18,005 18,163 17,927 15,941 5,572 before taxadjustment

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

Adjusted net $ 18,005 $ 16,070 $ 17,927 $ 15,941 $ 5,572 income^(2)



Average $ 7,827,006 $ 7,860,952 $ 7,764,997 $ 7,687,105 $ 7,740,206 assets

ROAA 0.98 % 0.74 % 1.11 % 0.82 % (0.96 ) %

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



Adjusted netincomeavailable to commonstockholders

Net income(loss)available to $ 17,323 $ 7,825 $ 17,706 $ 12,084 $ (21,936 ) commonstockholders

Adjustmentsto net (1,045 ) 1,695 (3,776 ) 28 24,021 income(loss)^(3)

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

Adjusted netincomeavailable to $ 16,278 $ 12,867 $ 13,930 $ 12,119 $ 2,036 commonstockholders^(2)



Averagediluted 50,892,202 50,750,522 50,335,271 50,190,933 50,030,919 commonshares

Diluted EPS $ 0.34 $ 0.15 $ 0.35 $ 0.24 $ (0.44 )

Adjusteddiluted EPS^ $ 0.32 $ 0.25 $ 0.28 $ 0.24 $ 0.04 (2)(4)

(1)

Adjustments shown net of an effective tax rate of 25%

(2)

Non-GAAP measure.

(3)

Represents the difference between net income (loss) and adjusted net income

(4)

Represents adjusted net income available to common stockholders divided by average diluted common shares

View source version on businesswire.com: https://www.businesswire.com/news/home/20210722005395/en/

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