Business Wire | Oct 21, 2021 06:05AM EDT

Banc of California Reports Third Quarter 2021 Financial Results

Oct. 21, 2021

SANTA ANA, Calif.--(BUSINESS WIRE)--Oct. 21, 2021--Banc of California, Inc. (NYSE: BANC) today reported net income of $23.2 million and net income available to common stockholders for the third quarter of 2021 of $21.4 million, or diluted earnings per common share of $0.42.

Highlights for the third quarter included:

* Return on average assets of 1.13% * Annualized loan growth, excluding PPP, of 16% * Period-end total cost of deposits of 0.08%, a 12 basis point decrease from the end of the second quarter * Average cost of total deposits of 0.15%, an 8 basis point decrease from the previous quarter * Net interest margin of 3.28%, a 1 basis point increase from the previous quarter * Noninterest-bearing deposit balances represented 32% of total deposits at September 30, 2021, up from 24% a year earlier * Allowance for credit losses at 1.26% of total loans and 173% of non-performing loans * Total deferrals/forbearances declined to $54.2 million at September 30, 2021 from $86.6 million at June 30, 2021 * Common Equity Tier 1 capital at 10.89%

Jared Wolff, President & CEO of Banc of California, commented, "Our third quarter results demonstrate the greater earnings power and improved profitability we have generated over the past two years as we continue to accelerate our growth in earning assets and increase operating leverage. Our teams continue to bring in high quality relationships throughout California and we are seeing a significant increase in commercial & industrial loan production, which helped generate a 16% annualized increase in total loans, excluding Paycheck Protection Program loans. Our deposit engine also continues to be highly productive in attracting new clients and expanding relationships with existing clients, which resulted in a 17% increase in noninterest-bearing deposits from the end of the prior quarter."

Mr. Wolff continued, "Our loan and deposit pipelines remain strong and we expect to see a continuation of the positive trends that have led to our improved profitability. The system conversion for Pacific Mercantile is planned for November and we expect to have most of the cost savings in place by the end of the year. This will put us on track to fully realize the accretive benefits of this transaction starting in 2022. Combined with the strong organic growth that we are generating, we are well-positioned to continue delivering a higher level of earnings and returns."

Lynn Hopkins, Chief Financial Officer of Banc of California, said, "We continue to execute well on our strategic initiatives, which is resulting in positive trends across most of our key metrics. Our cost of deposits continues to decline, our net interest margin is increasing, our efficiency ratio is improving, and our non-performing loans are declining. We continue to have a high level of liquidity, capital and reserves, which positions us well to continue supporting the profitable growth of our franchise. Along with our continued organic growth and the synergies to be realized from the Pacific Mercantile Bancorp acquisition, we also have additional opportunities to reduce our deposit costs as we continue to improve our mix of deposits and, subject to regulatory approval, redeem preferred stock that will further accelerate earnings growth."

Merger with Pacific Mercantile Bancorp

On October 18, 2021, the Company completed the acquisition of Pacific Mercantile Bancorp ("PMBC"), pursuant to which PMBC merged (the "Merger") with and into the Company, with the Company as the surviving corporation.

Under the terms and conditions of the Merger Agreement, each outstanding share of PMBC common stock was converted into the right to receive 0.5 of a share of the Company's common stock. This resulted in the issuance of 11,856,713 shares of BOC common stock with an estimated fair value of $222.2 million based upon the $18.74 closing price of BANC's common stock on October 18, 2021. In addition, at the effective time of the Merger, the Company paid cash for all outstanding PMBC share-based awards, including stock options and outstanding shares subject to unvested restricted stock awards for a total paid in cash at closing of $3.2 million based upon the volume weighted average common stock price of BANC on each of the last 20 trading days ending on the fifth trading day prior to the closing of the Merger. The aggregate purchase price totaled $225.4 million.

At September 30, 2021, PMBC had total gross loans of $982.4 million and total assets of $1.49 billion. Total deposits were $1.29 billion at September 30, 2021.

Income Statement Highlights

Three Months Ended Nine Months Ended

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

($ in thousands)

Totalinterest and $ 71,791 $ 69,677 $ 68,618 $ 73,530 $ 69,666 $ 210,086 $ 217,077 dividendincome

Totalinterest 8,815 9,830 10,702 11,967 13,811 29,347 54,046 expense

Net interest 62,976 59,847 57,916 61,563 55,855 180,739 163,031 income

Totalnoninterest 5,519 4,170 4,381 6,975 3,954 14,070 11,543 income

Total revenue 68,495 64,017 62,297 68,538 59,809 194,809 174,574

Totalnoninterest 37,811 40,559 46,735 38,950 40,394 125,105 160,083 expense

Pre-tax /pre-provision 30,684 23,458 15,562 29,588 19,415 69,704 14,491 income

(Reversal of)provision for (1,147 ) (2,154 ) (1,107 ) 991 1,141 (4,408 ) 28,728 credit losses

Income taxexpense 8,661 6,562 2,294 6,894 2,361 17,517 (5,108 )(benefit)

Net income $ 23,170 $ 19,050 $ 14,375 $ 21,703 $ 15,913 $ 56,595 $ (9,129 )(loss)



Net income(loss)available to $ 21,443 $ 17,323 $ 7,825 $ 17,706 $ 12,084 $ 46,493 $ (19,265 )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

Q3-2021 vs Q2-2021

Net interest income increased $3.1 million to $63.0 million for the third quarter due to higher average interest-earning assets, lower cost of interest-bearing liabilities, and the impact of one additional day in the current quarter.

The net interest margin increased 1 basis point to 3.28% for the third quarter as the average earning-assets yield decreased 8 basis points and the average cost of total funding decreased 8 basis points. The yield on average interest-earning assets decreased to 3.73% for the third quarter from 3.81% for the second quarter due mostly to a reduction of prepayment penalties, offset by a higher level of accelerated PPP fees and an improved mix of earning assets. Average loans increased by $287.9 million while average securities and other interest-earning assets decreased $2.4 million. The average yield on loans decreased 12 basis points to 4.18% during the third quarter. The loan yield includes the impact of prepayment penalty fees, the net reversal or recapture of nonaccrual loan interest, accelerated discount accretion on the early payoff of purchased loans, and accelerated fees from PPP loan forgiveness; these items increased the loan yield by 11 basis points in the third quarter and 18 basis points in the second quarter. The average yield on securities decreased 3 basis point to 2.11% between quarters, including a 5 basis points decrease in the average yield on collateralized loan obligations (CLOs) to 1.82% for the third quarter due mostly to an increase in fair value of such investments.

The average cost of funds decreased 8 basis points to 0.49% for the third quarter from 0.57% for the second quarter. This decrease was driven by the lower average cost of interest-bearing liabilities and an improved funding mix, including higher average noninterest-bearing deposits. Average noninterest-bearing deposits represented 30% of total average deposits for the third quarter compared to 28% of total average deposits for the second quarter. Average noninterest-bearing deposits were $172.2 million higher in the third quarter compared to the second quarter while average deposits were $154.6 million higher for the linked quarters. Average Federal Home Loan Bank (FHLB) advances and other borrowings increased $126.3 million due to higher average overnight balances from loan portfolio growth during the third quarter. The average cost of interest-bearing liabilities decreased 10 basis points to 0.67% for the third quarter from 0.77% for the second quarter due to our continuing efforts to actively manage down the cost of interest-bearing deposits. The average cost of interest-bearing deposits declined 10 basis points to 0.22% for the third quarter from 0.32% for the second quarter. The average cost of total deposits decreased 8 basis points to 0.15% for the third quarter. The spot rate of total deposits was 0.08% at the end of the third quarter.

YTD 2021 vs YTD 2020

Net interest income for the nine months ended September 30, 2021 increased $17.7 million to $180.7 million from $163.0 million for the same 2020 period. Net interest income was positively impacted by higher average interest-earning assets, lower average interest-bearing liabilities and improved funding costs, offset by lower yields on average interest-earning assets. For the nine months ended September 30, 2021, average interest-earning assets increased $305.7 million to $7.44 billion, and the net interest margin increased 20 basis points to 3.25% compared to 3.05% for the same 2020 period.

The net interest margin expanded due to a 52 basis point decrease in the average cost of funds outpacing a 29 basis point decline in the average interest-earning assets yield. The average yield on interest-earning assets decreased to 3.77% for the nine months ended September 30, 2021, from 4.06% for the 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 nine months ended September 30, 2021 was 0.08% compared to 0.47% for the same 2020 period. The average yield on loans was 4.26% for the nine months ended September 30, 2021, compared to 4.50% for the same 2020 period and the average yield on securities decreased 67 basis points to 2.13% due mostly to CLOs repricing into the lower rate environment.

The average cost of funds decreased to 0.56% for the nine months ended September 30, 2021, from 1.08% 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 59 basis points to 0.75% for the nine months ended September 30, 2021 from 1.34% for the same 2020 period due to the combination of actively managing deposit pricing down into the lower interest rate environment and the overall reduced usage of FHLB advances to fund loan growth. Compared to the same 2020 period, the average cost of interest-bearing deposits declined 67 basis points to 0.31% and the average cost of total deposits decreased 54 basis points to 0.22%. Additionally, average noninterest-bearing deposits increased by $507.6 million or 39.6% for the nine months ended September 30, 2021 when compared to the same 2020 period.

Provision for credit losses

Q3-2021 vs Q2-2021

There was a reversal of provision for credit losses of $1.1 million for the third quarter, compared to a reversal of $2.2 million for the second quarter. The third quarter reversal 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 partially by higher period end loan balances of $243.1 million.

YTD 2021 vs YTD 2020

During the nine months ended September 30, 2021, the provision for credit losses was a reversal of $4.4 million, compared to a provision of $28.7 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, lower specific reserves and consideration of credit quality metrics, offset partially by higher period end loan balances of $550.6 million.

Noninterest income

Q3-2021 vs Q2-2021

Noninterest income increased $1.3 million to $5.5 million for the third quarter due mostly to an increase in all other income. The $1.1 million increase in all other income was due mostly to an $841 thousand gain related to a sale-leaseback transaction of one branch location.

YTD 2021 vs YTD 2020

Noninterest income for the nine months ended September 30, 2021 increased $2.5 million to $14.1 million compared to the same 2020 period. The increase in noninterest income was mainly due to higher customer service fees, lower fair value adjustment for loans held for sale and higher all other income, offset by lower net gain on sale of securities and loans. The $1.8 million increase in customer services fees was due to higher loan fees of $351 thousand and higher deposit activity fees of $1.5 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 $1.7 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 gains from sale of securities for the nine months ended September 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. The $837 thousand increase in all other income is due mostly to the aforementioned gain related to the sale-leaseback transaction, higher rental income, interest rate swap income and processing fees, offset by lower legal settlement income and lower earnout income which ended in 2020.

Noninterest expense

Q3-2021 vs Q2-2021

Noninterest expense decreased $2.7 million to $37.8 million for the third quarter compared to the prior quarter. The decrease was due mostly to lower professional fees of $857 thousand, lower all other expense of $995 thousand and higher net gain in alternative energy partnership investments of $956 thousand, offset by higher merger-related costs of $300 thousand. Professional fees included net recoveries of indemnified legal expenses of $2.2 million in the third quarter compared to net recoveries of $1.3 million during the second quarter. The $995 thousand decrease in all other expense was due mostly to the third quarter including a gain on sale of other real estate owned of $365 thousand compared to $0 in the prior quarter, and higher equity investment income as the prior quarter included net losses of $727 thousand compared to $0 in the third quarter. Equity investments without readily determinable fair values include investments in privately held companies and limited partnerships and income or loss from these investments fluctuates based on their underlying performance. Total merger-related costs increased $300 thousand to $1.0 million for the third quarter compared to the prior quarter.

Total operating costs, defined as noninterest expense adjusted for certain expense items (refer to section Non-GAAP Measures), decreased $1.2 million to $40.7 million for the third quarter compared to $42.0 million for the prior quarter primarily due to the lower salaries and benefits, higher gain on sale of other real estate owned and lower losses on equity investments.

YTD 2021 vs YTD 2020

Noninterest expense for the nine months ended September 30, 2021 decreased $35.0 million to $125.1 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, (ii) lower professional fees of $9.0 million, due mostly to a $7.6 million decrease in legal fees, net of insurance recoveries, (iii) lower advertising fees of $2.8 million due to the termination of the LAFC agreements in May 2020, and (iv) lower all other expense of $4.2 million resulting from the previous year including a $2.5 million debt extinguishment fee for the early repayment of certain FHLB term advances and a $1.2 million charge for two legacy legal settlements combined with overall expense reduction efforts. These decreases were partially offset by higher (i) salaries and employee benefits of $4.6 million due to higher commissions and incentive-based compensation due to higher production and financial performance levels, (ii) merger-related costs of $2.4 million associated with the approved merger with PMB, and (iii) net losses in alternative energy partnership investments of $708 thousand.

Income taxes

Q3-2021 vs Q2-2021

Income tax expense totaled $8.7 million for the third quarter resulting in an effective tax rate of 27.2% compared to $6.6 million for the second quarter and an effective tax rate of 25.6%.

YTD 2021 vs YTD 2020

Income tax expense totaled $17.5 million for the nine months ended September 30, 2021, representing an effective tax rate of 23.6%, compared to an income tax benefit of $5.1 million and an effective tax rate of 35.9% for the same 2020 period. The effective tax rate for the nine months ended September 30, 2021 differs from the 29.5% combined federal and state statutory rate due primarily to the net tax benefit of $2.5 million resulting from the exercise of all previously issued outstanding stock appreciation rights in the first quarter of 2021 and other discrete tax items that impact our effective tax rate.

Balance Sheet

At September 30, 2021, total assets were $8.28 billion, which represented a linked-quarter increase of $251.3 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

Q3-2021 vs Q2-2021

Net interest income increased $3.1 million to $63.0 million for the third quarter due to higher average interest-earning assets, lower cost of interest-bearing liabilities, and the impact of one additional day in the current quarter.

The net interest margin increased 1 basis point to 3.28% for the third quarter as the average earning-assets yield decreased 8 basis points and the average cost of total funding decreased 8 basis points. The yield on average interest-earning assets decreased to 3.73% for the third quarter from 3.81% for the second quarter due mostly to a reduction of prepayment penalties, offset by a higher level of accelerated PPP fees and an improved mix of earning assets. Average loans increased by $287.9 million while average securities and other interest-earning assets decreased $2.4 million. The average yield on loans decreased 12 basis points to 4.18% during the third quarter. The loan yield includes the impact of prepayment penalty fees, the net reversal or recapture of nonaccrual loan interest, accelerated discount accretion on the early payoff of purchased loans, and accelerated fees from PPP loan forgiveness; these items increased the loan yield by 11 basis points in the third quarter and 18 basis points in the second quarter. The average yield on securities decreased 3 basis point to 2.11% between quarters, including a 5 basis points decrease in the average yield on collateralized loan obligations (CLOs) to 1.82% for the third quarter due mostly to an increase in fair value of such investments.

The average cost of funds decreased 8 basis points to 0.49% for the third quarter from 0.57% for the second quarter. This decrease was driven by the lower average cost of interest-bearing liabilities and an improved funding mix, including higher average noninterest-bearing deposits. Average noninterest-bearing deposits represented 30% of total average deposits for the third quarter compared to 28% of total average deposits for the second quarter. Average noninterest-bearing deposits were $172.2 million higher in the third quarter compared to the second quarter while average deposits were $154.6 million higher for the linked quarters. Average Federal Home Loan Bank (FHLB) advances and other borrowings increased $126.3 million due to higher average overnight balances from loan portfolio growth during the third quarter. The average cost of interest-bearing liabilities decreased 10 basis points to 0.67% for the third quarter from 0.77% for the second quarter due to our continuing efforts to actively manage down the cost of interest-bearing deposits. The average cost of interest-bearing deposits declined 10 basis points to 0.22% for the third quarter from 0.32% for the second quarter. The average cost of total deposits decreased 8 basis points to 0.15% for the third quarter. The spot rate of total deposits was 0.08% at the end of the third quarter.

YTD 2021 vs YTD 2020

Net interest income for the nine months ended September 30, 2021 increased $17.7 million to $180.7 million from $163.0 million for the same 2020 period. Net interest income was positively impacted by higher average interest-earning assets, lower average interest-bearing liabilities and improved funding costs, offset by lower yields on average interest-earning assets. For the nine months ended September 30, 2021, average interest-earning assets increased $305.7 million to $7.44 billion, and the net interest margin increased 20 basis points to 3.25% compared to 3.05% for the same 2020 period.

The net interest margin expanded due to a 52 basis point decrease in the average cost of funds outpacing a 29 basis point decline in the average interest-earning assets yield. The average yield on interest-earning assets decreased to 3.77% for the nine months ended September 30, 2021, from 4.06% for the 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 nine months ended September 30, 2021 was 0.08% compared to 0.47% for the same 2020 period. The average yield on loans was 4.26% for the nine months ended September 30, 2021, compared to 4.50% for the same 2020 period and the average yield on securities decreased 67 basis points to 2.13% due mostly to CLOs repricing into the lower rate environment.

The average cost of funds decreased to 0.56% for the nine months ended September 30, 2021, from 1.08% 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 59 basis points to 0.75% for the nine months ended September 30, 2021 from 1.34% for the same 2020 period due to the combination of actively managing deposit pricing down into the lower interest rate environment and the overall reduced usage of FHLB advances to fund loan growth. Compared to the same 2020 period, the average cost of interest-bearing deposits declined 67 basis points to 0.31% and the average cost of total deposits decreased 54 basis points to 0.22%. Additionally, average noninterest-bearing deposits increased by $507.6 million or 39.6% for the nine months ended September 30, 2021 when compared to the same 2020 period.

Provision for credit losses

Q3-2021 vs Q2-2021

There was a reversal of provision for credit losses of $1.1 million for the third quarter, compared to a reversal of $2.2 million for the second quarter. The third quarter reversal 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 partially by higher period end loan balances of $243.1 million.

YTD 2021 vs YTD 2020

During the nine months ended September 30, 2021, the provision for credit losses was a reversal of $4.4 million, compared to a provision of $28.7 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, lower specific reserves and consideration of credit quality metrics, offset partially by higher period end loan balances of $550.6 million.

Noninterest income

Q3-2021 vs Q2-2021

Noninterest income increased $1.3 million to $5.5 million for the third quarter due mostly to an increase in all other income. The $1.1 million increase in all other income was due mostly to an $841 thousand gain related to a sale-leaseback transaction of one branch location.

YTD 2021 vs YTD 2020

Noninterest income for the nine months ended September 30, 2021 increased $2.5 million to $14.1 million compared to the same 2020 period. The increase in noninterest income was mainly due to higher customer service fees, lower fair value adjustment for loans held for sale and higher all other income, offset by lower net gain on sale of securities and loans. The $1.8 million increase in customer services fees was due to higher loan fees of $351 thousand and higher deposit activity fees of $1.5 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 $1.7 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 gains from sale of securities for the nine months ended September 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. The $837 thousand increase in all other income is due mostly to the aforementioned gain related to the sale-leaseback transaction, higher rental income, interest rate swap income and processing fees, offset by lower legal settlement income and lower earnout income which ended in 2020.

Noninterest expense

Q3-2021 vs Q2-2021

Noninterest expense decreased $2.7 million to $37.8 million for the third quarter compared to the prior quarter. The decrease was due mostly to lower professional fees of $857 thousand, lower all other expense of $995 thousand and higher net gain in alternative energy partnership investments of $956 thousand, offset by higher merger-related costs of $300 thousand. Professional fees included net recoveries of indemnified legal expenses of $2.2 million in the third quarter compared to net recoveries of $1.3 million during the second quarter. The $995 thousand decrease in all other expense was due mostly to the third quarter including a gain on sale of other real estate owned of $365 thousand compared to $0 in the prior quarter, and higher equity investment income as the prior quarter included net losses of $727 thousand compared to $0 in the third quarter. Equity investments without readily determinable fair values include investments in privately held companies and limited partnerships and income or loss from these investments fluctuates based on their underlying performance. Total merger-related costs increased $300 thousand to $1.0 million for the third quarter compared to the prior quarter.

Total operating costs, defined as noninterest expense adjusted for certain expense items (refer to section Non-GAAP Measures), decreased $1.2 million to $40.7 million for the third quarter compared to $42.0 million for the prior quarter primarily due to the lower salaries and benefits, higher gain on sale of other real estate owned and lower losses on equity investments.

YTD 2021 vs YTD 2020

Noninterest expense for the nine months ended September 30, 2021 decreased $35.0 million to $125.1 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, (ii) lower professional fees of $9.0 million, due mostly to a $7.6 million decrease in legal fees, net of insurance recoveries, (iii) lower advertising fees of $2.8 million due to the termination of the LAFC agreements in May 2020, and (iv) lower all other expense of $4.2 million resulting from the previous year including a $2.5 million debt extinguishment fee for the early repayment of certain FHLB term advances and a $1.2 million charge for two legacy legal settlements combined with overall expense reduction efforts. These decreases were partially offset by higher (i) salaries and employee benefits of $4.6 million due to higher commissions and incentive-based compensation due to higher production and financial performance levels, (ii) merger-related costs of $2.4 million associated with the approved merger with PMB, and (iii) net losses in alternative energy partnership investments of $708 thousand.

Income taxes

Q3-2021 vs Q2-2021

Income tax expense totaled $8.7 million for the third quarter resulting in an effective tax rate of 27.2% compared to $6.6 million for the second quarter and an effective tax rate of 25.6%.

YTD 2021 vs YTD 2020

Income tax expense totaled $17.5 million for the nine months ended September 30, 2021, representing an effective tax rate of 23.6%, compared to an income tax benefit of $5.1 million and an effective tax rate of 35.9% for the same 2020 period. The effective tax rate for the nine months ended September 30, 2021 differs from the 29.5% combined federal and state statutory rate due primarily to the net tax benefit of $2.5 million resulting from the exercise of all previously issued outstanding stock appreciation rights in the first quarter of 2021 and other discrete tax items that impact our effective tax rate.

Balance Sheet

At September 30, 2021, total assets were $8.28 billion, which represented a linked-quarter increase of $251.3 million. The following table shows selected balance sheet line items as of the dates indicated:

Amount Change

September June 30, March 31, December September Q3-21 vs. Q3-21 vs. 30, 2021 2021 31, 30, Q2-21 Q3-20 2021 2020 2020



($ in thousands)

Securities $ 1,303,368 $ 1,353,154 $ 1,270,830 $ 1,231,431 $ 1,245,867 $ (49,786 ) $ 57,501 available-for-sale

Loans $ 6,228,575 $ 5,985,477 $ 5,764,401 $ 5,898,405 $ 5,678,002 $ 243,098 $ 550,573 held-for-investment

Loans held-for-sale $ 3,422 $ 2,853 $ 1,408 $ 1,413 $ 1,849 $ 569 $ 1,573

Total assets $ 8,278,741 $ 8,027,413 $ 7,933,459 $ 7,877,334 $ 7,738,106 $ 251,328 $ 540,635



Noninterest-bearing $ 2,107,709 $ 1,808,918 $ 1,700,343 $ 1,559,248 $ 1,450,744 $ 298,791 $ 656,965 deposits

Total deposits $ 6,543,225 $ 6,206,544 $ 6,142,042 $ 6,085,800 $ 6,032,266 $ 336,681 $ 510,959

Borrowings ^(1) $ 762,444 $ 871,973 $ 891,546 $ 796,110 $ 733,105 $ (109,529 ) $ 29,339

Total liabilities $ 7,433,938 $ 7,198,051 $ 7,128,766 $ 6,980,127 $ 6,863,852 $ 235,887 $ 570,086

Total equity $ 844,803 $ 829,362 $ 804,693 $ 897,207 $ 874,254 $ 15,441 $ (29,451 )

(1)

Represents Advances from Federal Home Loan Bank, Other Borrowing and Long Term Debt, net.

Investments

Securities available-for-sale decreased $49.8 million during the third quarter to $1.30 billion at September 30, 2021 primarily due to payoffs of $35.5 million from CLO resets, principal payments of $8.5 million, and lower unrealized net gains of $5.4 million. The decrease in unrealized net gains was due mostly to decreases in the value of mortgage-backed securities as a result of increases in longer term interest rates during the third quarter, offset by improved pricing of CLOs and corporate debt securities. As of September 30, 2021, the securities portfolio included $549.3 million of CLOs, $448.6 million of agency securities, $120.4 million of municipal securities, $169.5 million of corporate debt securities, and $15.4 million of SBA pool securities. The CLO portfolio, which is comprised only of AA and AAA rated securities, represented 42% of the total securities portfolio and the carrying value included an unrealized net loss of $2.5 million at September 30, 2021 compared to an unrealized net loss of $3.0 million at June 30, 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, Other Borrowing and Long Term Debt, net.

Investments

Securities available-for-sale decreased $49.8 million during the third quarter to $1.30 billion at September 30, 2021 primarily due to payoffs of $35.5 million from CLO resets, principal payments of $8.5 million, and lower unrealized net gains of $5.4 million. The decrease in unrealized net gains was due mostly to decreases in the value of mortgage-backed securities as a result of increases in longer term interest rates during the third quarter, offset by improved pricing of CLOs and corporate debt securities. As of September 30, 2021, the securities portfolio included $549.3 million of CLOs, $448.6 million of agency securities, $120.4 million of municipal securities, $169.5 million of corporate debt securities, and $15.4 million of SBA pool securities. The CLO portfolio, which is comprised only of AA and AAA rated securities, represented 42% of the total securities portfolio and the carrying value included an unrealized net loss of $2.5 million at September 30, 2021 compared to an unrealized net loss of $3.0 million at June 30, 2021.

Loans

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

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

($ in thousands)

Composition ofheld-for-investment loans

Commercial real $ 907,224 $ 871,790 $ 839,965 $ 807,195 $ 826,683 estate

Multifamily 1,295,613 1,325,770 1,258,278 1,289,820 1,476,803

Construction 130,536 150,557 169,122 176,016 197,629

Commercial and 773,681 725,596 760,150 748,299 710,667 industrial

Commercial andindustrial - 1,522,945 1,345,314 1,118,175 1,340,009 876,157 warehouse lending

SBA 181,582 253,924 338,903 273,444 320,573

Total commercial 4,811,581 4,672,951 4,484,593 4,634,783 4,408,512 loans

Single-familyresidential 1,393,696 1,288,176 1,253,251 1,230,236 1,234,479 mortgage

Other consumer 23,298 24,350 26,557 33,386 35,011

Total consumer 1,416,994 1,312,526 1,279,808 1,263,622 1,269,490 loans

Total gross loans $ 6,228,575 $ 5,985,477 $ 5,764,401 $ 5,898,405 $ 5,678,002

Compositionpercentage of held-for-investmentloans

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

Multifamily 20.7 % 22.2 % 21.8 % 21.9 % 26.0 %

Construction 2.1 % 2.5 % 2.9 % 3.0 % 3.5 %

Commercial and 12.4 % 12.1 % 13.2 % 12.7 % 12.5 %industrial

Commercial andindustrial - 24.5 % 22.5 % 19.4 % 22.6 % 15.5 %warehouse lending

SBA 2.9 % 4.2 % 5.9 % 4.6 % 5.6 %

Total commercial 77.2 % 78.1 % 77.8 % 78.5 % 77.7 %loans

Single-familyresidential 22.4 % 21.5 % 21.7 % 20.9 % 21.7 %mortgage

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

Total consumer 22.8 % 21.9 % 22.2 % 21.5 % 22.3 %loans

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

Held-for-investment loans increased $243.1 million to $6.23 billion from the prior quarter, resulting from higher commercial and industrial (C&I) loans related to warehouse credit facilities of $177.6 million, other C&I loans of $48.1 million and commercial real estate loans of $35.4 million. In addition, single-family residential loans increased by $105.5 million as a result of purchases of $249.4 million during the quarter offset by repayment activity within this portfolio. These increases were partially offset by decreases in multifamily loans of $30.2 million, construction loans of $20.0 million, and SBA loans of $72.3 million due mostly to the forgiveness of $79.2 million in PPP loans during the quarter. At September 30, 2021, SBA loans included $116.5 million of PPP loans, net of fees.

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

September 30, 2021

Amount % of Portfolio

($ in thousands)

C&I Portfolio by Industry

Finance and Insurance - Warehouse Lending $ 1,522,945 66 %

Real Estate & Rental Leasing 221,541 10 %

Finance and Insurance - Other 84,569 4 %

Gas Stations 73,926 3 %

Healthcare 72,252 3 %

Television / Motion Pictures 51,097 2 %

Manufacturing 47,421 2 %

Wholesale Trade 38,770 2 %

Other Retail Trade 29,950 1 %

Food Services 29,034 1 %

Professional Services 15,339 1 %

Transportation 4,685 - %

Accommodations 2,135 - %

All Other 102,962 4 %

Total $ 2,296,626 100 %

Deposits

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

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

($ in thousands)

Composition of deposits

Noninterest-bearing $ 2,107,709 $ 1,808,918 $ 1,700,343 $ 1,559,248 $ 1,450,744 checking

Interest-bearing 2,214,678 2,217,306 2,088,528 2,107,942 2,045,115 checking

Savings and money 1,661,013 1,593,724 1,684,703 1,646,660 1,636,062 market

Non-brokeredcertificates of 559,825 586,596 668,468 755,727 820,531 deposit

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

Total deposits $ 6,543,225 $ 6,206,544 $ 6,142,042 $ 6,085,800 $ 6,032,266

Compositionpercentage of deposits

Noninterest-bearing 32.2 % 29.1 % 27.7 % 25.6 % 24.1 %checking

Interest-bearing 33.8 % 35.7 % 34.0 % 34.6 % 33.9 %checking

Savings and money 25.4 % 25.7 % 27.4 % 27.0 % 27.1 %market

Non-brokeredcertificates of 8.6 % 9.5 % 10.9 % 12.4 % 13.6 %deposit

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

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

Total deposits increased $336.7 million during the third quarter of 2021 to $6.54 billion due to higher noninterest-bearing checking balances of $298.8 million and higher savings and money market balances of $67.3 million, offset by lower interest-bearing checking of $2.6 million, and non-brokered certificates of deposit of $26.8 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 $2.11 billion and represented 32% of total deposits at September 30, 2021 compared to $1.81 billion, or 29% of total deposits, at June 30, 2021.

Debt

Advances from the FHLB decreased $84.7 million during the third quarter to $405.7 million as of September 30, 2021, due to lower overnight advances. At September 30, 2021, FHLB advances included no overnight borrowings and $411.0 million in term advances with a weighted average life of 4.2 years and weighted average interest rate of 2.53%. Other borrowings totaled $100.0 million at September 30, 2021 and related to unsecured overnight borrowing from various financial institutions through the American Financial Exchange platform.

Equity

At September 30, 2021, total stockholders' equity increased by $15.4 million to $844.8 million and tangible common equity increased by $15.7 million to $710.9 million on a linked-quarter basis. The increase in total stockholders' equity for the third quarter included net income of $23.2 million and share-based award compensation of $1.1 million, offset by lower net accumulated other comprehensive income of $3.8 million, dividends to common and preferred stockholders of $4.8 million and the impact of vested and exercised share-based awards of $0.3 million. Book value per share increased to $14.76 as of September 30, 2021 from $14.46 at June 30, 2021. Tangible book value per share increased to $13.99 as of September 30, 2021 from $13.69 at June 30, 2021.

Capital ratios remain strong with total risk-based capital at 14.76% and a tier 1 leverage ratio of 9.80% at September 30, 2021. 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 September 30, 2021. The following table sets forth our regulatory capital ratios as of the dates indicated:

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

Capital Ratios^(1)

Banc of California, Inc.

Total risk-based capital 14.76 % 15.33 % 15.87 % 17.01 % 16.19 %ratio

Tier 1 risk-based 12.38 % 12.71 % 13.17 % 14.35 % 14.94 %capital ratio

Common equity tier 1 10.89 % 11.14 % 11.50 % 11.19 % 11.59 %capital ratio

Tier 1 leverage ratio 9.80 % 9.89 % 9.62 % 10.90 % 10.79 %

Banc of California, NA

Total risk-based capital 16.35 % 17.25 % 17.82 % 17.27 % 18.14 %ratio

Tier 1 risk-based 15.26 % 16.09 % 16.57 % 16.02 % 16.89 %capital ratio

Common equity tier 1 15.26 % 16.09 % 16.57 % 16.02 % 16.89 %capital ratio

Tier 1 leverage ratio 12.08 % 12.52 % 12.13 % 12.19 % 12.21 %

(1)

September 30, 2021 capital ratios are preliminary.

Credit Quality

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

Credit Quality

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

Asset qualityinformation and ($ in thousands)ratios

Delinquent loans held-for-investment

30 to 89 days $ 23,144 $ 16,983 $ 31,005 $ 13,981 $ 51,229 delinquent

90+ days delinquent 21,979 17,998 30,292 17,636 31,809

Total delinquent $ 45,123 $ 34,981 $ 61,297 $ 31,617 $ 83,038 loans

Total delinquentloans to total 0.72 % 0.58 % 1.06 % 0.54 % 1.46 %loans

Non-performingassets, excluding loans held-for-sale

Non-accrual loans $ 45,621 $ 51,299 $ 55,920 $ 35,900 $ 66,337

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

Non-performing 45,621 51,299 55,920 36,628 66,884 loans

Other real estate - 3,253 - - - owned

Non-performing $ 45,621 $ 54,552 $ 55,920 $ 36,628 $ 66,884 assets

ALL tonon-performing 161.16 % 147.93 % 141.90 % 221.22 % 135.95 %loans

Non-performingloans to total 0.73 % 0.86 % 0.97 % 0.62 % 1.18 %loansheld-for-investment

Non-performingassets to total 0.55 % 0.68 % 0.70 % 0.46 % 0.86 %assets

Troubled debtrestructurings (TDRs)

Performing TDRs $ 5,835 $ 6,029 $ 6,347 $ 4,733 $ 5,408

Non-performing TDRs 2,366 3,120 4,130 4,264 20,002

Total TDRs $ 8,201 $ 9,149 $ 10,477 $ 8,997 $ 25,410

Total delinquent loans increased $10.1 million in the third quarter to $45.1 million at September 30, 2021, due mostly to additions of $24.9 million, offset by $12.4 million returning to current status and $2.3 million in other reductions including paydowns. The additions included single-family residential (SFR) loans of $9.8 million, a C&I relationship of $6.6 million, and SBA loans of $7.6 million, including $5.0 million in guaranteed SBA loans that were repurchased and are pending resolution. Delinquent loans included SFR loans of $19.1 million, SBA loans of $14.9 million, of which $10.6 million is guaranteed, and other loans of $11.1 million.

Non-performing loans decreased $5.7 million to $45.6 million as of September 30, 2021, of which $22.7 million, or 50%, relates to loans in a current payment status. The third quarter decrease was due mostly to $4.6 million in loans returning to accrual status and $3.3 million in payoffs, paydowns and a note sale, offset by one $2.6 million guaranteed SBA loan that was repurchased and is pending resolution. At September 30, 2021, non-performing loans included (i) a legacy relationship totaling $7.0 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 $16.5 million, (iii) SBA loans totaling $12.8 million, of which $8.7 million is guaranteed, and (iv) other commercial loans of $9.2 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:

September 30, 2021 June 30, 2021

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

($ in thousands)

Single-familyresidential 40 $ 49,501 4 % 46 $ 52,384 4 %mortgage

All other loans 5 4,691 - % 10 34,174 1 %

Total 45 $ 54,192 1 % 56 $ 86,558 1 %

(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

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

($ in thousands)

Allowance for loan losses (ALL)

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

Loans charged off (327 ) (886 ) (565 ) (11,520 ) (1,821 )

Recoveries 532 26 172 609 248

Net recoveries 205 (860 ) (393 ) (10,911 ) (1,573 )(charge-offs)

(Reversal of)provision for loan (2,566 ) (2,608 ) (1,284 ) 1,014 2,130 losses

Balance at end of $ 73,524 $ 75,885 $ 79,353 $ 81,030 $ 90,927 period

Reserve forunfunded loan commitments

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

Provision for(reversal of) 1,419 454 177 (23 ) (989 )credit losses

Balance at end of 5,233 3,814 3,360 3,183 3,206 period

Allowance for $ 78,757 $ 79,699 $ 82,713 $ 84,213 $ 94,133 credit losses (ACL)



ALL to total loans 1.18 % 1.27 % 1.38 % 1.37 % 1.60 %

ACL to total loans 1.26 % 1.33 % 1.43 % 1.43 % 1.66 %

ACL to total loans, 1.29 % 1.38 % 1.51 % 1.48 % 1.74 %excluding PPP loans

ACL to NPLs 172.63 % 155.36 % 147.91 % 229.91 % 140.74 %

Annualized net loancharge-offs )(recoveries) to (0.01 % 0.06 % 0.03 % 0.77 % 0.12 %average total loansheld-for-investment



Reserve for loss on repurchased loans

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

Initial provisionfor loan - - - - 11 repurchases

(Reversal of)provision for loan (42 ) (99 ) (132 ) 28 (91 )repurchases

Utilization ofreserve for loan (30 ) (189 ) - - - repurchases

Balance at end of $ 5,023 $ 5,095 $ 5,383 $ 5,515 $ 5,487 period

The allowance for expected credit losses (ACL), which includes the reserve for unfunded loan commitments, totaled $78.8 million, or 1.26% of total loans, at September 30, 2021, compared to $79.7 million, or 1.33% of total loans, at June 30, 2021. The $942 thousand decrease in the ACL was due to: (i) lower general reserves of $1.9 million due to improved economic assumptions and asset quality trends, offset by higher period end portfolio balances, (ii) net recoveries of $205 thousand, and (iii) higher specific reserves of $828 thousand. The ACL coverage of non-performing loans was 173% at September 30, 2021 compared to 155% at June 30, 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 September 2021. The September 2021 forecasts reflect a more favorable view of the economy (i.e. higher GDP growth rates, higher CRE price indices and lower unemployment rates) compared to the June 2021 forecasts. While the current forecasts generally reflect an improving economy with the availability of the vaccine and other factors, there continues to be uncertainty regarding the impact of inflation (lasting or transitory), COVID-19 variants, further government stimulus, supply chain issues, and the ultimate pace of economic recovery. Accordingly, our economic assumptions, the resulting ACL level and provision reversal consider both the positive assumptions and potential uncertainties.

The Company will host a conference call to discuss its third quarter 2021 financial results at 10:00 a.m. Pacific Time (PT) on Thursday, October 21, 2021. Interested parties are welcome to attend the conference call by dialing (888) 317-6003, and referencing event code 9764771. 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 $8.3 billion in assets at September 30, 2021 and one wholly-owned banking subsidiary, Banc of California, N.A. (the Bank). With the acquisition of PMBC completed on October 18, 2021, assets total $9.8 billion on a combined proforma basis at September 30, 2021. The Bank has 39 offices including 33 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 Pacific Mercantile Bancorp acquisition 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 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; (ii) the ability to promptly and effectively integrate the businesses of Banc of California, Inc. and Pacific Mercantile Bancorp; (iii) the reaction to the transaction of the companies' customers, employees and counterparties; (iv) diversion of management time on integration-related issues; (v) lower than expected revenues, credit quality deterioration or a reduction in real estate values or a reduction in net earnings; and (vi) other risks that are described in Banc of California, Inc.'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)

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

ASSETS

Cash and cash $ 185,840 $ 163,332 $ 379,509 $ 220,819 $ 292,490 equivalents

Securities 1,303,368 1,353,154 1,270,830 1,231,431 1,245,867 available-for-sale

Loans held-for-sale 3,422 2,853 1,408 1,413 1,849

Loans 6,228,575 5,985,477 5,764,401 5,898,405 5,678,002 held-for-investment

Allowance for loan (73,524 ) (75,885 ) (79,353 ) (81,030 ) (90,927 )losses

Federal Home LoanBank and other bank 44,604 44,569 44,964 44,506 44,809 stock

Servicing rights, 1,022 1,162 1,407 1,454 1,621 net

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

Premises and 114,011 118,649 120,071 121,520 123,812 equipment, net

Alternative energypartnership 25,196 24,068 23,809 27,977 27,786 investments, net

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

Other intangible 1,787 2,069 2,351 2,633 2,939 assets, net

Deferred income 40,659 41,628 47,877 45,957 43,744 tax, net

Income tax 2,107 4,084 210 1,105 10,701 receivable

Bank owned lifeinsurance 113,884 113,168 112,479 111,807 111,115 investment

Right of use assets 29,054 20,364 22,069 19,633 18,909

Other assets 221,592 188,324 184,283 192,560 188,245

Total assets $ 8,278,741 $ 8,027,413 $ 7,933,459 $ 7,877,334 $ 7,738,106



LIABILITIES ANDSTOCKHOLDERS' EQUITY

Noninterest-bearing $ 2,107,709 $ 1,808,918 $ 1,700,343 $ 1,559,248 $ 1,450,744 deposits

Interest-bearing 4,435,516 4,397,626 4,441,699 4,526,552 4,581,522 deposits

Total deposits 6,543,225 6,206,544 6,142,042 6,085,800 6,032,266

Advances fromFederal Home Loan 405,738 490,419 635,105 539,795 559,482 Bank

Other borrowings 100,000 125,000 - - -

Long-term debt, net 256,706 256,554 256,441 256,315 173,623

Reserve for loss on 5,023 5,095 5,383 5,515 5,487 repurchased loans

Lease liabilities 30,390 21,588 23,173 20,647 19,938

Accrued expensesand other 92,856 92,851 66,622 72,055 73,056 liabilities

Total liabilities 7,433,938 7,198,051 7,128,766 6,980,127 6,863,852

Commitments andcontingent liabilities

Preferred stock 94,956 94,956 94,956 184,878 184,878

Common stock 527 527 526 522 522

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

Additional paid-in 631,512 630,654 629,844 634,704 633,409 capital

Retained earnings 147,682 129,307 115,004 110,179 95,001

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

Accumulated othercomprehensive 10,948 14,740 5,185 7,746 1,266 income, net

Total stockholders' 844,803 829,362 804,693 897,207 874,254 equity

Total liabilitiesand stockholders' $ 8,278,741 $ 8,027,413 $ 7,933,459 $ 7,877,334 $ 7,738,106 equity

Banc of California, Inc.

Consolidated Statements of Operations (Unaudited)

(Dollars in thousands, except per share data)

Three Months Ended

Nine Months Ended

September 30,2021

June 30,2021

March 31,2021

December 31,2020

September 30,2020

September 30,2021

September 30,2020

Interest and dividend income

Loans, including fees

$

63,837

$

61,900

$

61,345

$

66,105

$

62,019

$

187,082

$

191,195

Securities

7,167

6,986

6,501

6,636

6,766

20,654

22,402

Other interest-earning assets

787

791

772

789

881

2,350

3,480

Total interest and dividend income

71,791

69,677

68,618

73,530

69,666

210,086

217,077

Interest expense

Deposits

2,412

3,543

4,286

5,436

7,564

10,241

32,380

Federal Home Loan Bank advances

2,990

2,944

3,112

3,479

3,860

9,046

14,561

Other interest-bearing liabilities

3,413

3,343

3,304

3,052

2,387

10,060

7,105

Total interest expense

8,815

9,830

10,702

11,967

13,811

29,347

54,046

Net interest income

62,976

59,847

57,916

61,563

55,855

180,739

163,031

(Reversal of) provision for credit losses

(1,147

)

(2,154

)

(1,107

)

991

1,141

(4,408

)

28,728

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

64,123

62,001

59,023

60,572

54,714

185,147

134,303

Noninterest income

Customer service fees

1,900

1,990

1,758

1,953

1,498

5,648

3,818

Loan servicing income

170

38

268

149

186

476

356

Income from bank owned life insurance

715

690

672

691

629

2,077

1,798

Net gain on sale of securities available for sale

-

-

-

-

-

-

2,011

Fair value adjustment on loans held for sale

160

20

-

36

24

180

(1,537

)

Net gain on sale of loans

-

-

-

-

272

-

245

All other income

2,574

1,432

1,683

4,146

1,345

5,689

4,852

Total noninterest income

5,519

4,170

4,381

6,975

3,954

14,070

11,543

Noninterest expense

Salaries and employee benefits

24,786

25,042

25,719

25,836

23,277

75,547

70,973

Naming rights termination

-

-

-

-

-

-

26,769

Occupancy and equipment

7,124

7,277

7,196

7,560

7,457

21,597

21,790

Professional fees

892

1,749

4,022

29

5,147

6,663

15,707

Data processing

1,646

1,621

1,655

1,608

1,657

4,922

4,966

Advertising

122

78

118

171

219

318

3,132

Regulatory assessments

812

769

774

748

784

2,355

1,993

(Reversal of) provision for loan repurchase reserves

(42

)

(99

)

(132

)

28

(91

)

(273

)

(725

)

Amortization of intangible assets

282

282

282

306

353

846

1,212

Merger-related costs

1,000

700

700

-

-

2,400

-

All other expense

2,974

3,969

2,771

3,337

3,021

9,714

13,958

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

39,596

41,388

43,105

39,623

41,824

124,089

159,775

(Gain) loss in alternative energy partnership investments

(1,785

)

(829

)

3,630

(673

)

(1,430

)

1,016

308

Total noninterest expense

37,811

40,559

46,735

38,950

40,394

125,105

160,083

Income (loss) before income taxes

31,831

25,612

16,669

28,597

18,274

74,112

(14,237

)

Income tax expense (benefit)

8,661

6,562

2,294

6,894

2,361

17,517

(5,108

)

Net income (loss)

23,170

19,050

14,375

21,703

15,913

56,595

(9,129

)

Preferred stock dividends

1,727

1,727

3,141

3,447

3,447

6,595

10,422

Income allocated to participating securities

-

-

62

456

281

160

-

Participating securities dividends

-

-

-

94

94

-

282

Impact of preferred stock redemption

-

-

3,347

-

7

3,347

(568

)

Net income (loss) available to common stockholders

$

21,443

$

17,323

$

7,825

$

17,706

$

12,084

$

46,493

$

(19,265

)

Earnings (loss) per common share:

Basic

$

0.42

$

0.34

$

0.16

$

0.35

$

0.24

$

0.92

$

(0.38

)

Diluted

$

0.42

$

0.34

$

0.15

$

0.35

$

0.24

$

0.91

$

(0.38

)

Weighted average number of common shares outstanding

Basic

50,716,680

50,650,186

50,350,897

50,125,462

50,108,655

50,573,928

50,201,112

Diluted

50,909,317

50,892,202

50,750,522

50,335,271

50,190,933

50,821,972

50,201,112

Dividends declared per common share

$

0.06

$

0.06

$

0.06

$

0.06

$

0.06

$

0.18

$

0.18

Banc of California, Inc.

Consolidated Statements of Operations (Unaudited)

(Dollars in thousands, except per share data)

Three Months Ended Nine Months Ended

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

Interest and dividend income

Loans, including $ 63,837 $ 61,900 $ 61,345 $ 66,105 $ 62,019 $ 187,082 $ 191,195 fees

Securities 7,167 6,986 6,501 6,636 6,766 20,654 22,402

Otherinterest-earning 787 791 772 789 881 2,350 3,480 assets

Total interestand dividend 71,791 69,677 68,618 73,530 69,666 210,086 217,077 income

Interest expense

Deposits 2,412 3,543 4,286 5,436 7,564 10,241 32,380

Federal HomeLoan Bank 2,990 2,944 3,112 3,479 3,860 9,046 14,561 advances

Otherinterest-bearing 3,413 3,343 3,304 3,052 2,387 10,060 7,105 liabilities

Total interest 8,815 9,830 10,702 11,967 13,811 29,347 54,046 expense

Net interest 62,976 59,847 57,916 61,563 55,855 180,739 163,031 income

(Reversal of)provision for (1,147 ) (2,154 ) (1,107 ) 991 1,141 (4,408 ) 28,728 credit losses

Net interestincome after(reversal of) 64,123 62,001 59,023 60,572 54,714 185,147 134,303 provision forcredit losses

Noninterest income

Customer service 1,900 1,990 1,758 1,953 1,498 5,648 3,818 fees

Loan servicing 170 38 268 149 186 476 356 income

Income from bankowned life 715 690 672 691 629 2,077 1,798 insurance

Net gain on saleof securities - - - - - - 2,011 available forsale

Fair valueadjustment on 160 20 - 36 24 180 (1,537 )loans held forsale

Net gain on sale - - - - 272 - 245 of loans

All other income 2,574 1,432 1,683 4,146 1,345 5,689 4,852

Totalnoninterest 5,519 4,170 4,381 6,975 3,954 14,070 11,543 income

Noninterest expense

Salaries andemployee 24,786 25,042 25,719 25,836 23,277 75,547 70,973 benefits

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

Occupancy and 7,124 7,277 7,196 7,560 7,457 21,597 21,790 equipment

Professional 892 1,749 4,022 29 5,147 6,663 15,707 fees

Data processing 1,646 1,621 1,655 1,608 1,657 4,922 4,966

Advertising 122 78 118 171 219 318 3,132

Regulatory 812 769 774 748 784 2,355 1,993 assessments

(Reversal of)provision for (42 ) (99 ) (132 ) 28 (91 ) (273 ) (725 )loan repurchasereserves

Amortization ofintangible 282 282 282 306 353 846 1,212 assets

Merger-related 1,000 700 700 - - 2,400 - costs

All other 2,974 3,969 2,771 3,337 3,021 9,714 13,958 expense

Totalnoninterestexpense before(gain) loss in 39,596 41,388 43,105 39,623 41,824 124,089 159,775 alternativeenergypartnershipinvestments

(Gain) loss inalternativeenergy (1,785 ) (829 ) 3,630 (673 ) (1,430 ) 1,016 308 partnershipinvestments

Totalnoninterest 37,811 40,559 46,735 38,950 40,394 125,105 160,083 expense

Income (loss)before income 31,831 25,612 16,669 28,597 18,274 74,112 (14,237 )taxes

Income taxexpense 8,661 6,562 2,294 6,894 2,361 17,517 (5,108 )(benefit)

Net income 23,170 19,050 14,375 21,703 15,913 56,595 (9,129 )(loss)

Preferred stock 1,727 1,727 3,141 3,447 3,447 6,595 10,422 dividends

Income allocatedto participating - - 62 456 281 160 - securities

Participatingsecurities - - - 94 94 - 282 dividends

Impact ofpreferred stock - - 3,347 - 7 3,347 (568 )redemption

Net income(loss) available $ 21,443 $ 17,323 $ 7,825 $ 17,706 $ 12,084 $ 46,493 $ (19,265 )to commonstockholders



Earnings (loss)per common share:

Basic $ 0.42 $ 0.34 $ 0.16 $ 0.35 $ 0.24 $ 0.92 $ (0.38 )

Diluted $ 0.42 $ 0.34 $ 0.15 $ 0.35 $ 0.24 $ 0.91 $ (0.38 )

Weighted averagenumber of common sharesoutstanding

Basic 50,716,680 50,650,186 50,350,897 50,125,462 50,108,655 50,573,928 50,201,112

Diluted 50,909,317 50,892,202 50,750,522 50,335,271 50,190,933 50,821,972 50,201,112

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

Banc of California, Inc.

Selected Financial Data

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,2021

June 30,2021

March 31,2021

December 31,2020

September 30,2020

September 30,2021

September 30,2020

Profitability and other ratios of consolidated operations

Return on average assets(1)

1.13

%

0.98

%

0.74

%

1.11

%

0.82

%

0.95

%

(0.16

)%

Return on average equity(1)

10.84

%

9.38

%

6.56

%

9.67

%

7.32

%

8.90

%

(1.39

)%

Return on average tangible common equity(1)(2)

12.04

%

10.34

%

4.77

%

10.69

%

7.68

%

9.10

%

(3.76

)%

Pre-tax pre-provision income (loss) ROAA(1)(2)

1.50

%

1.20

%

0.80

%

1.52

%

1.00

%

1.17

%

0.25

%

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

1.34

%

1.13

%

1.06

%

1.25

%

0.98

%

1.18

%

0.82

%

Dividend payout ratio(3)

14.29

%

17.65

%

37.50

%

17.14

%

25.00

%

19.57

%

(47.37

)%

Average loan yield

4.18

%

4.30

%

4.30

%

4.58

%

4.46

%

4.26

%

4.50

%

Average cost of interest-bearing deposits

0.22

%

0.32

%

0.38

%

0.47

%

0.66

%

0.31

%

0.98

%

Average cost of total deposits

0.15

%

0.23

%

0.28

%

0.36

%

0.51

%

0.22

%

0.76

%

Net interest spread

3.06

%

3.04

%

2.95

%

3.15

%

2.84

%

3.02

%

2.72

%

Net interest margin(1)

3.28

%

3.27

%

3.19

%

3.38

%

3.09

%

3.25

%

3.05

%

Noninterest income to total revenue(4)

8.06

%

6.51

%

7.03

%

10.18

%

6.61

%

7.22

%

6.61

%

Noninterest income to average total assets(1)

0.27

%

0.21

%

0.23

%

0.36

%

0.20

%

0.24

%

0.20

%

Noninterest expense to average total assets(1)

1.84

%

2.08

%

2.41

%

2.00

%

2.09

%

2.11

%

2.79

%

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

1.99

%

2.15

%

2.15

%

2.26

%

2.10

%

2.09

%

2.21

%

Efficiency ratio(2)(5)

55.20

%

63.36

%

75.02

%

56.83

%

67.54

%

64.22

%

91.70

%

Adjusted efficiency ratio(2)(6)

59.63

%

65.58

%

66.91

%

64.26

%

68.31

%

63.92

%

72.93

%

Average loans held-for-investment to average deposits

94.99

%

92.74

%

93.74

%

95.65

%

92.86

%

93.84

%

99.64

%

Average securities available-for-sale to average total assets

16.55

%

16.71

%

15.73

%

15.96

%

15.49

%

16.33

%

13.96

%

Average stockholders' equity to average total assets

10.41

%

10.41

%

11.30

%

11.49

%

11.26

%

10.70

%

11.46

%

Banc of California, Inc.

Selected Financial Data

(Unaudited)

Three Months Ended Nine Months Ended

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

Profitability andother ratios of consolidatedoperations

Return on average 1.13 % 0.98 % 0.74 % 1.11 % 0.82 % 0.95 % (0.16 )%assets^(1)

Return on average 10.84 % 9.38 % 6.56 % 9.67 % 7.32 % 8.90 % (1.39 )%equity^(1)

Return on averagetangible common 12.04 % 10.34 % 4.77 % 10.69 % 7.68 % 9.10 % (3.76 )%equity^(1)(2)

Pre-taxpre-provision 1.50 % 1.20 % 0.80 % 1.52 % 1.00 % 1.17 % 0.25 %income (loss) ROAA^(1)(2)

Adjusted pre-taxpre-provision 1.34 % 1.13 % 1.06 % 1.25 % 0.98 % 1.18 % 0.82 %income ROAA^(1)(2)

Dividend payout 14.29 % 17.65 % 37.50 % 17.14 % 25.00 % 19.57 % (47.37 )%ratio^(3)

Average loan yield 4.18 % 4.30 % 4.30 % 4.58 % 4.46 % 4.26 % 4.50 %

Average cost ofinterest-bearing 0.22 % 0.32 % 0.38 % 0.47 % 0.66 % 0.31 % 0.98 %deposits

Average cost of 0.15 % 0.23 % 0.28 % 0.36 % 0.51 % 0.22 % 0.76 %total deposits

Net interest spread 3.06 % 3.04 % 2.95 % 3.15 % 2.84 % 3.02 % 2.72 %

Net interest margin 3.28 % 3.27 % 3.19 % 3.38 % 3.09 % 3.25 % 3.05 %^(1)

Noninterest incometo total revenue^ 8.06 % 6.51 % 7.03 % 10.18 % 6.61 % 7.22 % 6.61 %(4)

Noninterest incometo average total 0.27 % 0.21 % 0.23 % 0.36 % 0.20 % 0.24 % 0.20 %assets^(1)

Noninterest expenseto average total 1.84 % 2.08 % 2.41 % 2.00 % 2.09 % 2.11 % 2.79 %assets^(1)

Adjustednoninterest expense 1.99 % 2.15 % 2.15 % 2.26 % 2.10 % 2.09 % 2.21 %to average totalassets^(1)(2)

Efficiency ratio^ 55.20 % 63.36 % 75.02 % 56.83 % 67.54 % 64.22 % 91.70 %(2)(5)

Adjusted efficiency 59.63 % 65.58 % 66.91 % 64.26 % 68.31 % 63.92 % 72.93 %ratio^(2)(6)

Average loansheld-for-investment 94.99 % 92.74 % 93.74 % 95.65 % 92.86 % 93.84 % 99.64 %to average deposits

Average securitiesavailable-for-sale 16.55 % 16.71 % 15.73 % 15.96 % 15.49 % 16.33 % 13.96 %to average totalassets

Averagestockholders' 10.41 % 10.41 % 11.30 % 11.49 % 11.26 % 10.70 % 11.46 %equity to averagetotal assets

(1)

Ratio presented on an annualized basis.

(2)

Ratio 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)

Ratio 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)

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

(6)

Ratio calculated by dividing adjusted noninterest expense by the sum of net interest income before provision for credit losses and adjusted noninterest income.

(1) Ratio presented on an annualized basis.

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

(3) Ratio 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) Ratio calculated by dividing noninterest expense by the sum of net interest income before provision for credit losses and noninterest income.

Ratio calculated by dividing adjusted noninterest expense by the sum of(6) net interest income before provision for credit losses and adjusted noninterest income.

Banc of California, Inc.

Average Balance, Average Yield Earned, and Average Cost Paid

(Dollars in thousands)

(Unaudited)

Three Months Ended

September 30, 2021

June 30, 2021

March 31, 2021

Average

Yield

Average

Yield

Average

Yield

Balance

Interest

/ Cost

Balance

Interest

/ Cost

Balance

Interest

/ Cost

Interest-earning assets

Commercial real estate, multifamily, and construction

$

2,379,962

$

26,542

4.42

%

$

2,313,483

$

27,222

4.72

%

$

2,322,509

$

26,387

4.61

%

Commercial and industrial and SBA

2,322,372

25,345

4.33

%

2,154,512

22,978

4.28

%

2,221,494

22,910

4.18

%

SFR mortgage

1,331,876

11,683

3.48

%

1,277,552

11,410

3.58

%

1,210,105

11,747

3.94

%

Other consumer

22,164

238

4.26

%

23,881

275

4.62

%

28,520

294

4.18

%

Loans held-for-sale

2,956

29

3.89

%

1,987

15

3.03

%

1,413

7

2.01

%

Gross loans and leases

6,059,330

63,837

4.18

%

5,771,415

61,900

4.30

%

5,784,041

61,345

4.30

%

Securities

1,347,317

7,167

2.11

%

1,308,230

6,986

2.14

%

1,236,138

6,501

2.13

%

Other interest-earning assets

222,274

787

1.40

%

258,915

791

1.23

%

336,443

772

0.93

%

Total interest-earning assets

7,628,921

71,791

3.73

%

7,338,560

69,677

3.81

%

7,356,622

68,618

3.78

%

Allowance for loan losses

(76,028

)

(79,103

)

(81,111

)

BOLI and noninterest-earning assets

588,720

567,549

585,441

Total assets

$

8,141,613

$

7,827,006

$

7,860,952

Interest-bearing liabilities

Interest-bearing checking

$

2,280,429

$

632

0.11

%

$

2,182,419

$

679

0.12

%

$

2,140,314

$

901

0.17

%

Savings and money market

1,583,791

1,350

0.34

%

1,638,105

2,244

0.55

%

1,654,525

2,390

0.59

%

Certificates of deposit

571,822

430

0.30

%

633,101

620

0.39

%

720,180

995

0.56

%

Total interest-bearing deposits

4,436,042

2,412

0.22

%

4,453,625

3,543

0.32

%

4,515,019

4,286

0.38

%

FHLB advances

435,984

2,990

2.72

%

418,111

2,944

2.82

%

446,618

3,112

2.83

%

Other borrowings

126,352

34

0.11

%

17,920

4

0.09

%

4,127

2

0.20

%

Long-term debt

256,634

3,379

5.22

%

256,492

3,339

5.22

%

256,361

3,302

5.22

%

Total interest-bearing liabilities

5,255,012

8,815

0.67

%

5,146,148

9,830

0.77

%

5,222,125

10,702

0.83

%

Noninterest-bearing deposits

1,939,912

1,767,711

1,653,517

Noninterest-bearing liabilities

98,748

98,174

97,136

Total liabilities

7,293,672

7,012,033

6,972,778

Total stockholders' equity

847,941

814,973

888,174

Total liabilities and stockholders' equity

$

8,141,613

$

7,827,006

$

7,860,952

Net interest income/spread

$

62,976

3.06

%

$

59,847

3.04

%

$

57,916

2.95

%

Net interest margin

3.28

%

3.27

%

3.19

%

Ratio of interest-earning assets to interest-bearing liabilities

145

%

143

%

141

%

Total deposits

$

6,375,954

$

2,412

0.15

%

$

6,221,336

$

3,543

0.23

%

$

6,168,536

$

4,286

0.28

%

Total funding (1)

$

7,194,924

$

8,815

0.49

%

$

6,913,859

$

9,830

0.57

%

$

6,875,642

$

10,702

0.63

%

Banc of California, Inc.

Average Balance, Average Yield Earned, and Average Cost Paid

(Dollars in thousands)

(Unaudited)

Three Months Ended

September 30, 2021 June 30, 2021 March 31, 2021

Average Yield Average Yield Average Yield

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

Interest-earning assets

Commercial real estate,multifamily, and $ 2,379,962 $ 26,542 4.42 % $ 2,313,483 $ 27,222 4.72 % $ 2,322,509 $ 26,387 4.61 %construction

Commercial and 2,322,372 25,345 4.33 % 2,154,512 22,978 4.28 % 2,221,494 22,910 4.18 %industrial and SBA

SFR mortgage 1,331,876 11,683 3.48 % 1,277,552 11,410 3.58 % 1,210,105 11,747 3.94 %

Other consumer 22,164 238 4.26 % 23,881 275 4.62 % 28,520 294 4.18 %

Loans held-for-sale 2,956 29 3.89 % 1,987 15 3.03 % 1,413 7 2.01 %

Gross loans and leases 6,059,330 63,837 4.18 % 5,771,415 61,900 4.30 % 5,784,041 61,345 4.30 %

Securities 1,347,317 7,167 2.11 % 1,308,230 6,986 2.14 % 1,236,138 6,501 2.13 %

Other interest-earning 222,274 787 1.40 % 258,915 791 1.23 % 336,443 772 0.93 %assets

Total interest-earning 7,628,921 71,791 3.73 % 7,338,560 69,677 3.81 % 7,356,622 68,618 3.78 %assets

Allowance for loan (76,028 ) (79,103 ) (81,111 ) losses

BOLI andnoninterest-earning 588,720 567,549 585,441 assets

Total assets $ 8,141,613 $ 7,827,006 $ 7,860,952



Interest-bearing liabilities

Interest-bearing $ 2,280,429 $ 632 0.11 % $ 2,182,419 $ 679 0.12 % $ 2,140,314 $ 901 0.17 %checking

Savings and money 1,583,791 1,350 0.34 % 1,638,105 2,244 0.55 % 1,654,525 2,390 0.59 %market

Certificates of deposit 571,822 430 0.30 % 633,101 620 0.39 % 720,180 995 0.56 %

Total interest-bearing 4,436,042 2,412 0.22 % 4,453,625 3,543 0.32 % 4,515,019 4,286 0.38 %deposits

FHLB advances 435,984 2,990 2.72 % 418,111 2,944 2.82 % 446,618 3,112 2.83 %

Other borrowings 126,352 34 0.11 % 17,920 4 0.09 % 4,127 2 0.20 %

Long-term debt 256,634 3,379 5.22 % 256,492 3,339 5.22 % 256,361 3,302 5.22 %

Total interest-bearing 5,255,012 8,815 0.67 % 5,146,148 9,830 0.77 % 5,222,125 10,702 0.83 %liabilities

Noninterest-bearing 1,939,912 1,767,711 1,653,517 deposits

Noninterest-bearing 98,748 98,174 97,136 liabilities

Total liabilities 7,293,672 7,012,033 6,972,778

Total stockholders' 847,941 814,973 888,174 equity

Total liabilities and $ 8,141,613 $ 7,827,006 $ 7,860,952 stockholders' equity



Net interest income/ $ 62,976 3.06 % $ 59,847 3.04 % $ 57,916 2.95 %spread

Net interest margin 3.28 % 3.27 % 3.19 %



Ratio ofinterest-earning assets 145 % 143 % 141 % to interest-bearingliabilities

Total deposits $ 6,375,954 $ 2,412 0.15 % $ 6,221,336 $ 3,543 0.23 % $ 6,168,536 $ 4,286 0.28 %

Total funding ^(1) $ 7,194,924 $ 8,815 0.49 % $ 6,913,859 $ 9,830 0.57 % $ 6,875,642 $ 10,702 0.63 %

(1)

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

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

Three Months Ended

December 31, 2020

September 30, 2020

Average

Yield

Average

Yield

Balance

Interest

/ Cost

Balance

Interest

/ Cost

Interest-earning assets

Commercial real estate, multifamily, and construction

$

2,507,950

$

30,371

4.82

%

$

2,493,408

$

29,666

4.73

%

Commercial and industrial and SBA

1,978,684

21,984

4.42

%

1,673,548

18,585

4.42

%

SFR mortgage

1,224,865

12,955

4.21

%

1,311,513

13,178

4.00

%

Other consumer

31,856

787

9.83

%

35,563

451

5.05

%

Loans held-for-sale

1,564

8

2.03

%

19,544

139

2.83

%

Gross loans and leases

5,744,919

66,105

4.58

%

5,533,576

62,019

4.46

%

Securities

1,239,295

6,636

2.13

%

1,190,765

6,766

2.26

%

Other interest-earning assets

262,363

789

1.20

%

457,558

881

0.77

%

Total interest-earning assets

7,246,577

73,530

4.04

%

7,181,899

69,666

3.86

%

Allowance for loan losses

(83,745

)

(89,679

)

BOLI and noninterest-earning assets

602,165

594,885

Total assets

$

7,764,997

$

7,687,105

Interest-bearing liabilities

Interest-bearing checking

$

2,086,146

$

1,131

0.22

%

$

1,919,327

$

1,660

0.34

%

Savings and money market

1,609,598

2,542

0.63

%

1,630,319

2,998

0.73

%

Certificates of deposit

860,131

1,763

0.82

%

1,030,829

2,906

1.12

%

Total interest-bearing deposits

4,555,875

5,436

0.47

%

4,580,475

7,564

0.66

%

FHLB advances

534,303

3,479

2.59

%

608,169

3,860

2.52

%

Securities sold under repurchase agreements

-

-

-

%

1,309

2

0.61

%

Other borrowings

8,026

3

0.15

%

325

2

2.45

%

Long-term debt

230,239

3,049

5.27

%

173,586

2,383

5.46

%

Total interest-bearing liabilities

5,328,443

11,967

0.89

%

5,363,864

13,811

1.02

%

Noninterest-bearing deposits

1,448,422

1,357,411

Noninterest-bearing liabilities

95,567

100,424

Total liabilities

6,872,432

6,821,699

Total stockholders' equity

892,565

865,406

Total liabilities and stockholders' equity

$

7,764,997

$

7,687,105

Net interest income/spread

$

61,563

3.15

%

$

55,855

2.84

%

Net interest margin

3.38

%

3.09

%

Ratio of interest-earning assets to interest-bearing liabilities

136

%

134

%

Total deposits

$

6,004,297

$

5,436

0.36

%

$

5,937,886

$

7,564

0.51

%

Total funding (1)

$

6,776,865

$

11,967

0.70

%

$

6,721,275

$

13,811

0.82

%

Three Months Ended

December 31, 2020 September 30, 2020

Average Yield Average Yield

Balance Interest / Cost Balance Interest / Cost

Interest-earning assets

Commercial realestate, $ 2,507,950 $ 30,371 4.82 % $ 2,493,408 $ 29,666 4.73 %multifamily, andconstruction

Commercial and 1,978,684 21,984 4.42 % 1,673,548 18,585 4.42 %industrial and SBA

SFR mortgage 1,224,865 12,955 4.21 % 1,311,513 13,178 4.00 %

Other consumer 31,856 787 9.83 % 35,563 451 5.05 %

Loans held-for-sale 1,564 8 2.03 % 19,544 139 2.83 %

Gross loans and 5,744,919 66,105 4.58 % 5,533,576 62,019 4.46 %leases

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

Otherinterest-earning 262,363 789 1.20 % 457,558 881 0.77 %assets

Totalinterest-earning 7,246,577 73,530 4.04 % 7,181,899 69,666 3.86 %assets

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

BOLI andnoninterest-earning 602,165 594,885 assets

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



Interest-bearing liabilities

Interest-bearing $ 2,086,146 $ 1,131 0.22 % $ 1,919,327 $ 1,660 0.34 %checking

Savings and money 1,609,598 2,542 0.63 % 1,630,319 2,998 0.73 %market

Certificates of 860,131 1,763 0.82 % 1,030,829 2,906 1.12 %deposit

Totalinterest-bearing 4,555,875 5,436 0.47 % 4,580,475 7,564 0.66 %deposits

FHLB advances 534,303 3,479 2.59 % 608,169 3,860 2.52 %

Securities soldunder repurchase - - - % 1,309 2 0.61 %agreements

Other borrowings 8,026 3 0.15 % 325 2 2.45 %

Long-term debt 230,239 3,049 5.27 % 173,586 2,383 5.46 %

Totalinterest-bearing 5,328,443 11,967 0.89 % 5,363,864 13,811 1.02 %liabilities

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

Noninterest-bearing 95,567 100,424 liabilities

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

Total stockholders' 892,565 865,406 equity

Total liabilitiesand stockholders' $ 7,764,997 $ 7,687,105 equity



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

Net interest margin 3.38 % 3.09 %



Ratio ofinterest-earningassets to 136 % 134 % interest-bearingliabilities

Total deposits $ 6,004,297 $ 5,436 0.36 % $ 5,937,886 $ 7,564 0.51 %

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

(1)

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

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

Nine Months Ended

September 30, 2021

September 30, 2020

Average

Yield

Average

Yield

Balance

Interest

/ Cost

Balance

Interest

/ Cost

Interest-earning assets

Commercial real estate, multifamily, and construction

$

2,338,862

$

80,152

4.58

%

$

2,527,331

$

89,348

4.72

%

Commercial and industrial and SBA

2,233,162

71,233

4.26

%

1,664,365

57,134

4.59

%

SFR mortgage

1,273,624

34,839

3.66

%

1,419,882

42,660

4.01

%

Other consumer

24,832

807

4.35

%

41,319

1,538

4.97

%

Loans held-for-sale

2,124

51

3.21

%

20,591

515

3.34

%

Gross loans and leases

5,872,604

187,082

4.26

%

5,673,488

191,195

4.50

%

Securities

1,297,636

20,654

2.13

%

1,069,668

22,402

2.80

%

Other interest-earning assets

272,126

2,350

1.15

%

393,495

3,480

1.18

%

Total interest-earning assets

7,442,366

210,086

3.77

%

7,136,651

217,077

4.06

%

Allowance for credit losses

(78,729

)

(76,275

)

BOLI and noninterest-earning assets

580,581

603,128

Total assets

$

7,944,218

$

7,663,504

Interest-bearing liabilities

Interest-bearing checking

$

2,201,568

$

2,212

0.13

%

$

1,717,483

$

7,575

0.59

%

Savings and money market

1,625,214

5,985

0.49

%

1,543,291

11,621

1.01

%

Certificates of deposit

641,157

2,044

0.43

%

1,132,058

13,184

1.56

%

Total interest-bearing deposits

4,467,939

10,241

0.31

%

4,392,832

32,380

0.98

%

FHLB advances

433,532

9,046

2.79

%

821,349

14,561

2.37

%

Securities sold under repurchase agreements

-

-

-

%

779

4

0.69

%

Other borrowings

49,914

40

0.11

%

469

9

2.56

%

Long-term debt

256,497

10,020

5.22

%

173,512

7,092

5.46

%

Total interest-bearing liabilities

5,207,882

29,347

0.75

%

5,388,941

54,046

1.34

%

Noninterest-bearing deposits

1,788,096

1,280,461

Noninterest-bearing liabilities

98,025

115,582

Total liabilities

7,094,003

6,784,984

Total stockholders' equity

850,215

878,520

Total liabilities and stockholders' equity

$

7,944,218

$

7,663,504

Net interest income/spread

$

180,739

3.02

%

$

163,031

2.72

%

Net interest margin

3.25

%

3.05

%

Ratio of interest-earning assets to interest-bearing liabilities

143

%

132

%

Total deposits

$

6,256,035

$

10,241

0.22

%

$

5,673,293

$

32,380

0.76

%

Total funding (1)

$

6,995,978

$

29,347

0.56

%

$

6,669,402

$

54,046

1.08

%

Nine Months Ended

September 30, 2021 September 30, 2020

Average Yield Average Yield

Balance Interest / Cost Balance Interest / Cost

Interest-earning assets

Commercial realestate, $ 2,338,862 $ 80,152 4.58 % $ 2,527,331 $ 89,348 4.72 %multifamily, andconstruction

Commercial and 2,233,162 71,233 4.26 % 1,664,365 57,134 4.59 %industrial and SBA

SFR mortgage 1,273,624 34,839 3.66 % 1,419,882 42,660 4.01 %

Other consumer 24,832 807 4.35 % 41,319 1,538 4.97 %

Loans held-for-sale 2,124 51 3.21 % 20,591 515 3.34 %

Gross loans and 5,872,604 187,082 4.26 % 5,673,488 191,195 4.50 %leases

Securities 1,297,636 20,654 2.13 % 1,069,668 22,402 2.80 %

Otherinterest-earning 272,126 2,350 1.15 % 393,495 3,480 1.18 %assets

Totalinterest-earning 7,442,366 210,086 3.77 % 7,136,651 217,077 4.06 %assets

Allowance for (78,729 ) (76,275 ) credit losses

BOLI andnoninterest-earning 580,581 603,128 assets

Total assets $ 7,944,218 $ 7,663,504



Interest-bearing liabilities

Interest-bearing $ 2,201,568 $ 2,212 0.13 % $ 1,717,483 $ 7,575 0.59 %checking

Savings and money 1,625,214 5,985 0.49 % 1,543,291 11,621 1.01 %market

Certificates of 641,157 2,044 0.43 % 1,132,058 13,184 1.56 %deposit

Totalinterest-bearing 4,467,939 10,241 0.31 % 4,392,832 32,380 0.98 %deposits

FHLB advances 433,532 9,046 2.79 % 821,349 14,561 2.37 %

Securities soldunder repurchase - - - % 779 4 0.69 %agreements

Other borrowings 49,914 40 0.11 % 469 9 2.56 %

Long-term debt 256,497 10,020 5.22 % 173,512 7,092 5.46 %

Totalinterest-bearing 5,207,882 29,347 0.75 % 5,388,941 54,046 1.34 %liabilities

Noninterest-bearing 1,788,096 1,280,461 deposits

Noninterest-bearing 98,025 115,582 liabilities

Total liabilities 7,094,003 6,784,984

Total stockholders' 850,215 878,520 equity

Total liabilitiesand stockholders' $ 7,944,218 $ 7,663,504 equity



Net interest income $ 180,739 3.02 % $ 163,031 2.72 %/spread

Net interest margin 3.25 % 3.05 %



Ratio ofinterest-earningassets to 143 % 132 % interest-bearingliabilities

Total deposits $ 6,256,035 $ 10,241 0.22 % $ 5,673,293 $ 32,380 0.76 %

Total funding ^(1) $ 6,995,978 $ 29,347 0.56 % $ 6,669,402 $ 54,046 1.08 %

(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, after adjustment for amortization of intangible assets, 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, after adjustment for amortization of intangible assets, 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)

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

Tangible commonequity, andtangible common equity totangible assetsratio

Total assets $ 8,278,741 $ 8,027,413 $ 7,933,459 $ 7,877,334 $ 7,738,106

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

Less otherintangible (1,787 ) (2,069 ) (2,351 ) (2,633 ) (2,939 )assets

Tangible assets $ 8,239,810 $ 7,988,200 $ 7,893,964 $ 7,837,557 $ 7,698,023 ^(1)



Totalstockholders' $ 844,803 $ 829,362 $ 804,693 $ 897,207 $ 874,254 equity

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

Less otherintangible (1,787 ) (2,069 ) (2,351 ) (2,633 ) (2,939 )assets

Tangible equity 805,872 790,149 765,198 857,430 834,171 ^(1)

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

Tangible common $ 710,916 $ 695,193 $ 670,242 $ 672,552 $ 649,293 equity^(1)



Totalstockholders' 10.20 % 10.33 % 10.14 % 11.39 % 11.30 %equity to totalassets

Tangible equityto tangible 9.78 % 9.89 % 9.69 % 10.94 % 10.84 %assets^(1)

Tangible commonequity to 8.63 % 8.70 % 8.49 % 8.58 % 8.43 %tangible assets^(1)



Common shares 50,321,096 50,313,228 50,150,447 49,767,489 49,760,543 outstanding

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

Total commonshares 50,798,417 50,790,549 50,627,768 50,244,810 50,237,864 outstanding



Tangible commonequity per $ 13.99 $ 13.69 $ 13.24 $ 13.39 $ 12.92 common share^(1)

Book value per $ 14.76 $ 14.46 $ 14.02 $ 14.18 $ 13.72 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

Nine Months Ended

September 30,2021

June 30,2021

March 31,2021

December 31,2020

September 30,2020

September 30,2021

September 30,2020

Return on tangible common equity

Average total stockholders' equity

$

847,941

$

814,973

$

888,174

$

892,565

$

865,406

$

850,215

$

878,520

Less average preferred stock

(94,956

)

(94,956

)

(164,895

)

(184,878

)

(184,910

)

(118,013

)

(186,656

)

Less average goodwill

(37,144

)

(37,144

)

(37,144

)

(37,144

)

(37,144

)

(37,144

)

(37,144

)

Less average other intangible assets

(1,941

)

(2,224

)

(2,517

)

(2,826

)

(3,172

)

(2,226

)

(3,581

)

Average tangible common equity(1)

$

713,900

$

680,649

$

683,618

$

667,717

$

640,180

$

692,832

$

651,139

Net income (loss) available to common stockholders

$

21,443

$

17,323

$

7,825

$

17,706

$

12,084

$

46,493

$

(19,265

)

Add amortization of intangible assets

282

282

282

306

353

846

1,212

Less tax effect on amortization of intangible assets(2)

(59

)

(59

)

(59

)

(64

)

(74

)

(178

)

(255

)

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

$

21,666

$

17,546

$

8,048

$

17,948

$

12,363

$

47,161

$

(18,308

)

Return on average equity

10.84

%

9.38

%

6.56

%

9.67

%

7.32

%

8.90

%

(1.39

)%

Return on average tangible common equity(1)

12.04

%

10.34

%

4.77

%

10.69

%

7.68

%

9.10

%

(3.76

)%

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended Nine Months Ended

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

Return ontangible common equity

Average totalstockholders' $ 847,941 $ 814,973 $ 888,174 $ 892,565 $ 865,406 $ 850,215 $ 878,520 equity

Less averagepreferred (94,956 ) (94,956 ) (164,895 ) (184,878 ) (184,910 ) (118,013 ) (186,656 )stock

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

Less averageother (1,941 ) (2,224 ) (2,517 ) (2,826 ) (3,172 ) (2,226 ) (3,581 )intangibleassets

Averagetangible $ 713,900 $ 680,649 $ 683,618 $ 667,717 $ 640,180 $ 692,832 $ 651,139 common equity^(1)



Net income(loss)available to $ 21,443 $ 17,323 $ 7,825 $ 17,706 $ 12,084 $ 46,493 $ (19,265 )commonstockholders

Addamortization 282 282 282 306 353 846 1,212 of intangibleassets

Less taxeffect onamortization (59 ) (59 ) (59 ) (64 ) (74 ) (178 ) (255 )of intangibleassets^(2)

Net income(loss)available tocommonstockholders $ 21,666 $ 17,546 $ 8,048 $ 17,948 $ 12,363 $ 47,161 $ (18,308 )afteradjustmentsforintangibleassets^(1)



Return on )average 10.84 % 9.38 % 6.56 % 9.67 % 7.32 % 8.90 % (1.39 %equity

Return onaverage )tangible 12.04 % 10.34 % 4.77 % 10.69 % 7.68 % 9.10 % (3.76 %common equity^(1)

(1)

Non-GAAP measure.

(2)

Adjustments shown net of a statutory Federal tax rate of 21%.

(1) Non-GAAP measure.

(2) Adjustments shown net of a statutory Federal tax rate of 21%.

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,2021

June 30,2021

March 31,2021

December 31,2020

September 30,2020

September 30,2021

September 30,2020

Adjusted noninterest income and expense

Total noninterest income

$

5,519

$

4,170

$

4,381

$

6,975

$

3,954

$

14,070

$

11,543

Noninterest income adjustments:

Net gain on securities available for sale

-

-

-

-

-

-

(2,011

)

Net gain on sale of legacy SFR loans held for sale

-

-

-

-

(272

)

-

(272

)

Fair value adjustment on legacy SFR loans held for sale

(160

)

(20

)

-

(36

)

(24

)

(180

)

1,537

Total noninterest income adjustments

(160

)

(20

)

-

(36

)

(296

)

(180

)

(746

)

Adjusted noninterest income(1)

$

5,359

$

4,150

$

4,381

$

6,939

$

3,658

$

13,890

$

10,797

Total noninterest expense

$

37,811

$

40,559

$

46,735

$

38,950

$

40,394

$

125,105

$

160,083

Noninterest expense adjustments:

Naming rights termination

-

-

-

-

-

-

(26,769

)

Extinguishment of debt

-

-

-

-

-

-

(2,515

)

Professional recoveries (fees)

2,152

1,284

(721

)

4,398

(1,172

)

2,715

(3,725

)

Merger-related costs

(1,000

)

(700

)

(700

)

-

-

(2,400

)

-

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

1,152

584

(1,421

)

4,398

(1,172

)

315

(33,009

)

Gain (loss) in alternative energy partnership investments

1,785

829

(3,630

)

673

1,430

(1,016

)

(308

)

Total noninterest expense adjustments

2,937

1,413

(5,051

)

5,071

258

(701

)

(33,317

)

Adjusted noninterest expense(1)

$

40,748

$

41,972

$

41,684

$

44,021

$

40,652

$

124,404

$

126,766

Average assets

$

8,141,613

$

7,827,006

$

7,860,952

$

7,764,997

$

7,687,105

$

7,944,218

$

7,663,504

Noninterest expense to average total assets

1.84

%

2.08

%

2.41

%

2.00

%

2.09

%

2.11

%

2.79

%

Adjusted noninterest expense to average total assets(1)

1.99

%

2.15

%

2.15

%

2.26

%

2.10

%

2.09

%

2.21

%

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended Nine Months Ended

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

Adjustednoninterest income andexpense

Totalnoninterest $ 5,519 $ 4,170 $ 4,381 $ 6,975 $ 3,954 $ 14,070 $ 11,543 income

Noninterestincome adjustments:

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

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

Fair valueadjustment onlegacy SFR (160 ) (20 ) - (36 ) (24 ) (180 ) 1,537 loans held forsale

Totalnoninterest (160 ) (20 ) - (36 ) (296 ) (180 ) (746 )incomeadjustments

Adjustednoninterest $ 5,359 $ 4,150 $ 4,381 $ 6,939 $ 3,658 $ 13,890 $ 10,797 income^(1)



Totalnoninterest $ 37,811 $ 40,559 $ 46,735 $ 38,950 $ 40,394 $ 125,105 $ 160,083 expense

Noninterestexpense adjustments:

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

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

Professionalrecoveries 2,152 1,284 (721 ) 4,398 (1,172 ) 2,715 (3,725 )(fees)

Merger-related (1,000 ) (700 ) (700 ) - - (2,400 ) - costs

Noninterestexpenseadjustmentsbefore gain(loss) in 1,152 584 (1,421 ) 4,398 (1,172 ) 315 (33,009 )alternativeenergypartnershipinvestments

Gain (loss) inalternativeenergy 1,785 829 (3,630 ) 673 1,430 (1,016 ) (308 )partnershipinvestments

Totalnoninterest 2,937 1,413 (5,051 ) 5,071 258 (701 ) (33,317 )expenseadjustments

Adjustednoninterest $ 40,748 $ 41,972 $ 41,684 $ 44,021 $ 40,652 $ 124,404 $ 126,766 expense^(1)



Average assets $ 8,141,613 $ 7,827,006 $ 7,860,952 $ 7,764,997 $ 7,687,105 $ 7,944,218 $ 7,663,504

Noninterestexpense to 1.84 % 2.08 % 2.41 % 2.00 % 2.09 % 2.11 % 2.79 %average totalassets

Adjustednoninterestexpense to 1.99 % 2.15 % 2.15 % 2.26 % 2.10 % 2.09 % 2.21 %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

Nine Months Ended

September 30,2021

June 30,2021

March 31,2021

December 31,2020

September 30,2020

September 30,2021

September 30,2020

Adjusted pre-tax pre-provision income

Net interest income

$

62,976

$

59,847

$

57,916

$

61,563

$

55,855

$

180,739

$

163,031

Noninterest income

5,519

4,170

4,381

6,975

3,954

14,070

11,543

Total revenue

68,495

64,017

62,297

68,538

59,809

194,809

174,574

Noninterest expense

37,811

40,559

46,735

38,950

40,394

125,105

160,083

Pre-tax pre-provision income(1)

$

30,684

$

23,458

$

15,562

$

29,588

$

19,415

$

69,704

$

14,491

Total revenue

$

68,495

$

64,017

$

62,297

$

68,538

$

59,809

$

194,809

$

174,574

Total noninterest income adjustments

(160

)

(20

)

-

(36

)

(296

)

(180

)

(746

)

Adjusted total revenue(1)

68,335

63,997

62,297

68,502

59,513

194,629

173,828

Noninterest expense

37,811

40,559

46,735

38,950

40,394

125,105

160,083

Total noninterest expense adjustments

2,937

1,413

(5,051

)

5,071

258

(701

)

(33,317

)

Adjusted noninterest expense(1)

40,748

41,972

41,684

44,021

40,652

124,404

126,766

Adjusted pre-tax pre-provision income(1)

$

27,587

$

22,025

$

20,613

$

24,481

$

18,861

$

70,225

$

47,062

Average assets

$

8,141,613

$

7,827,006

$

7,860,952

$

7,764,997

$

7,687,105

$

7,944,218

$

7,663,504

Pre-tax pre-provision income ROAA(1)

1.50

%

1.20

%

0.80

%

1.52

%

1.00

%

1.17

%

0.25

%

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

1.34

%

1.13

%

1.06

%

1.25

%

0.98

%

1.18

%

0.82

%

Efficiency ratio(1)

55.20

%

63.36

%

75.02

%

56.83

%

67.54

%

64.22

%

91.70

%

Adjusted efficiency ratio(1)

59.63

%

65.58

%

66.91

%

64.26

%

68.31

%

63.92

%

72.93

%

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended Nine Months Ended

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

Adjustedpre-tax pre-provisionincome

Net interest $ 62,976 $ 59,847 $ 57,916 $ 61,563 $ 55,855 $ 180,739 $ 163,031 income

Noninterest 5,519 4,170 4,381 6,975 3,954 14,070 11,543 income

Total revenue 68,495 64,017 62,297 68,538 59,809 194,809 174,574

Noninterest 37,811 40,559 46,735 38,950 40,394 125,105 160,083 expense

Pre-taxpre-provision $ 30,684 $ 23,458 $ 15,562 $ 29,588 $ 19,415 $ 69,704 $ 14,491 income^(1)



Total revenue $ 68,495 $ 64,017 $ 62,297 $ 68,538 $ 59,809 $ 194,809 $ 174,574

Totalnoninterest (160 ) (20 ) - (36 ) (296 ) (180 ) (746 )incomeadjustments

Adjustedtotal revenue 68,335 63,997 62,297 68,502 59,513 194,629 173,828 ^(1)



Noninterest 37,811 40,559 46,735 38,950 40,394 125,105 160,083 expense

Totalnoninterest 2,937 1,413 (5,051 ) 5,071 258 (701 ) (33,317 )expenseadjustments

Adjustednoninterest 40,748 41,972 41,684 44,021 40,652 124,404 126,766 expense^(1)

Adjustedpre-tax $ 27,587 $ 22,025 $ 20,613 $ 24,481 $ 18,861 $ 70,225 $ 47,062 pre-provisionincome^(1)



Average $ 8,141,613 $ 7,827,006 $ 7,860,952 $ 7,764,997 $ 7,687,105 $ 7,944,218 $ 7,663,504 assets

Pre-taxpre-provision 1.50 % 1.20 % 0.80 % 1.52 % 1.00 % 1.17 % 0.25 %income ROAA^(1)

Adjustedpre-taxpre-provision 1.34 % 1.13 % 1.06 % 1.25 % 0.98 % 1.18 % 0.82 %income ROAA^(1)

Efficiency 55.20 % 63.36 % 75.02 % 56.83 % 67.54 % 64.22 % 91.70 %ratio^(1)

Adjustedefficiency 59.63 % 65.58 % 66.91 % 64.26 % 68.31 % 63.92 % 72.93 %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

Nine Months Ended

September 30,2021

June 30,2021

March 31,2021

December 31,2020

September 30,2020

September 30,2021

September 30,2020

Adjusted net income (loss)

Net income (loss)

$

23,170

$

19,050

$

14,375

$

21,703

$

15,913

$

56,595

$

(9,129

)

Adjustments:

Noninterest income

160

20

-

36

296

180

746

Noninterest expense

(2,937

)

(1,413

)

5,051

(5,071

)

(258

)

701

33,317

Total adjustments

(2,777

)

(1,393

)

5,051

(5,035

)

38

881

34,063

Tax impact of adjustments above(1)

694

348

(1,263

)

1,259

(10

)

(220

)

(8,515

)

Tax impact from exercise of stock appreciation rights

-

-

(2,093

)

-

-

(2,093

)

-

Adjustments to net income

(2,083

)

(1,045

)

1,695

(3,776

)

28

(1,432

)

25,548

Adjusted net income(2)

$

21,087

$

18,005

$

16,070

$

17,927

$

15,941

$

55,163

$

16,419

Average assets

$

8,141,613

$

7,827,006

$

7,860,952

$

7,764,997

$

7,687,105

$

7,944,218

$

7,663,504

ROAA

1.13

%

0.98

%

0.74

%

1.11

%

0.82

%

0.95

%

(0.16

)%

Adjusted ROAA(2)

1.03

%

0.92

%

0.83

%

0.92

%

0.82

%

0.93

%

0.29

%

Adjusted net income available to common stockholders

Net income (loss) available to common stockholders

$

21,443

$

17,323

$

7,825

$

17,706

$

12,084

$

46,493

$

(19,265

)

Adjustments to net income (loss)

(2,083

)

(1,045

)

1,695

(3,776

)

28

(1,432

)

25,548

Adjustments for impact of preferred stock redemption

-

-

3,347

-

7

3,347

(568

)

Adjusted net income available to common stockholders(2)

$

19,360

$

16,278

$

12,867

$

13,930

$

12,119

$

48,408

$

5,715

Average diluted common shares

50,909,317

50,892,202

50,750,522

50,335,271

50,190,933

50,821,972

50,201,112

Diluted EPS

$

0.42

$

0.34

$

0.15

$

0.35

$

0.24

$

0.91

$

(0.38

)

Adjusted diluted EPS(2)(3)

$

0.38

$

0.32

$

0.25

$

0.28

$

0.24

$

0.95

$

0.11

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended Nine Months Ended

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

Adjusted netincome (loss)

Net income $ 23,170 $ 19,050 $ 14,375 $ 21,703 $ 15,913 $ 56,595 $ (9,129 )(loss)

Adjustments:

Noninterest 160 20 - 36 296 180 746 income

Noninterest (2,937 ) (1,413 ) 5,051 (5,071 ) (258 ) 701 33,317 expense

Total (2,777 ) (1,393 ) 5,051 (5,035 ) 38 881 34,063 adjustments

Tax impactof 694 348 (1,263 ) 1,259 (10 ) (220 ) (8,515 )adjustmentsabove^(1)

Tax impactfromexercise of - - (2,093 ) - - (2,093 ) - stockappreciationrights

Adjustmentsto net (2,083 ) (1,045 ) 1,695 (3,776 ) 28 (1,432 ) 25,548 income

Adjusted net $ 21,087 $ 18,005 $ 16,070 $ 17,927 $ 15,941 $ 55,163 $ 16,419 income^(2)



Average $ 8,141,613 $ 7,827,006 $ 7,860,952 $ 7,764,997 $ 7,687,105 $ 7,944,218 $ 7,663,504 assets

ROAA 1.13 % 0.98 % 0.74 % 1.11 % 0.82 % 0.95 % (0.16 ) %

Adjusted 1.03 % 0.92 % 0.83 % 0.92 % 0.82 % 0.93 % 0.29 %ROAA^(2)



Adjusted netincomeavailable to commonstockholders

Net income(loss)available to $ 21,443 $ 17,323 $ 7,825 $ 17,706 $ 12,084 $ 46,493 $ (19,265 )commonstockholders

Adjustmentsto net (2,083 ) (1,045 ) 1,695 (3,776 ) 28 (1,432 ) 25,548 income(loss)

Adjustmentsfor impactof preferred - - 3,347 - 7 3,347 (568 )stockredemption

Adjusted netincomeavailable to $ 19,360 $ 16,278 $ 12,867 $ 13,930 $ 12,119 $ 48,408 $ 5,715 commonstockholders^(2)



Averagediluted 50,909,317 50,892,202 50,750,522 50,335,271 50,190,933 50,821,972 50,201,112 commonshares

Diluted EPS $ 0.42 $ 0.34 $ 0.15 $ 0.35 $ 0.24 $ 0.91 $ (0.38 )

Adjusteddiluted EPS^ $ 0.38 $ 0.32 $ 0.25 $ 0.28 $ 0.24 $ 0.95 $ 0.11 (2)(3)

(1)

Tax impact of adjustments shown at an effective tax rate of 25%.

(2)

Non-GAAP measure.

(3)

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/20211021005374/en/

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