Equibles

8-K

BANC OF CALIFORNIA, INC. (BANC)

8-K 2023-01-19 For: 2023-01-19
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Added on April 10, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

in

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 19, 2023

BANC OF CALIFORNIA, INC.

(Exact name of registrant as specified in its charter)

Maryland 001-35522 04-3639825
(State or other jurisdiction<br>of incorporation) (Commission File Number) (IRS Employer<br>Identification No.)
3 MacArthur Place, Santa Ana, California 92707
--- --- --- ---
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (855) 361-2262

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.01 per share BANC New York Stock Exchange

Item 2.02 Results of Operations and Financial Condition.

On January 19, 2023, Banc of California, Inc. (the “Company”) issued a press release announcing 2022 fourth quarter financial results.

A copy of the press release is attached to this report as Exhibit 99.1 and is incorporated by reference herein.

Item 7.01 Regulation FD Disclosure.

The Company will host a conference call to discuss its fourth quarter results at 10:00 A.M. Pacific Time on Thursday, January 19, 2023. Interested parties may attend the conference call by dialing (888) 317-6003, and referencing event code 2741581. A live audio webcast will be available through the webcast link to be posted on the Company’s Investor Relations website at www.bancofcal.com/investor, in addition to the slide presentation for investor review prior to the call. A copy of the presentation materials is attached to this report as Exhibit 99.2 and is incorporated by reference herein.

Item 9.01     Financial Statements and Exhibits.

(d) Exhibits.

99.1    Banc of California, Inc. Press Release dated January 19, 2023.

99.2    Banc of California, Inc. Earnings Conference Call Presentation Materials dated January 19, 2023.

104    Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

BANC OF CALIFORNIA, INC.

January 19, 2023 /s/ Lynn M. Hopkins
Lynn M. Hopkins
Executive Vice President and Chief Financial Officer

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Banc of California Reports Record Net Income in 2022

SANTA ANA, Calif., (January 19, 2023) — Banc of California, Inc. (NYSE: BANC) today reported net income of $21.5 million, or $0.36 per diluted common share, for the fourth quarter of 2022. This compares to net income of $24.2 million, or $0.40 per diluted common share for the third quarter of 2022. The fourth quarter included a pre-tax loss on sale of securities of $7.7 million. On an adjusted basis, net income was $26.8 million for the quarter, or $0.45 per diluted common share. This compares to adjusted net income of $26.7 million, or $0.44 per diluted common share, for the third quarter of 2022. For the full year 2022, the Company reported record net income available to common shareholders of $115.8 million, or $1.89 per diluted common share. This compares to net income available to common shareholders of $50.6 million, or $0.95 per diluted common share in 2021. On an adjusted basis, net income available to common shareholders was $128.4 million, or $2.10 per diluted common share. Net income and adjusted net income available to common shareholders for 2022 included a pre-tax $31.3 million recovery from the settlement of a previously charged-off loan.(1)

Fourth quarter highlights(1):

•Diluted EPS of $0.36 and adjusted diluted EPS of $0.45

•Noninterest-bearing deposits represented 41% of average deposits, up from 38%

•Period-end noninterest bearing deposits at 39%, stable with prior quarter

•Net interest margin of 3.69%, an increase of 11 basis points

•Return on average assets of 0.92% and adjusted return on average assets of 1.15%

•Total ACL coverage ratio of 1.28%

•Book value per share of $16.26, up from $15.83

•Tangible common equity per share of $14.19, up from $13.79

•Repurchased $18.9 million of common stock representing 2% of the shares outstanding at the end of the third quarter

Full year highlights(1):

•Diluted EPS of $1.89 and adjusted diluted EPS of $2.10

•Noninterest-bearing deposits represented 39% of average deposits compared to 30% in the prior year

•Net interest margin of 3.59%, an increase of 33 basis points

•Return on average assets of 1.29% and adjusted return on average assets of 1.39%

•Book value per share of $16.26, up from $15.48

•Tangible common equity per share of $14.19, up from $13.88

•Completed $75.0 million in common stock repurchases representing 7% of the shares outstanding at the end of the prior year

•$31.3 million pre-tax recovery from the settlement of a previously charged-off loan

•Redeemed all Series E Preferred Stock for total consideration of $98.7 million with annual savings of $6.9 million

•Completed the acquisition of Deepstack Technologies on September 15, 2022

Jared Wolff, President & CEO of Banc of California, commented, "During the fourth quarter, we capitalized on our strong, stable deposit base and slightly asset sensitive balance sheet to continue generating solid core earnings while being selective in our new loan production given the macroeconomic uncertainty. As a result, while we had a slightly smaller average balance sheet in the fourth quarter, our core earnings were consistent with the prior quarter and we generated a significant increase in our tangible book value per share."

Mr. Wolff continued, “With the strong deposit base we have built, conservatively underwritten loan portfolio, and high capital ratios, we are well positioned to continue generating strong financial results for our shareholders and effectively managing through the economic uncertainty. While maintaining disciplined expense management, we continue to take a long-term approach and opportunistically invest in areas that will strengthen our franchise. We believe these investments, along with the

(1)Adjusted financial metrics represent non-GAAP measures; refer to section 'Non-GAAP Measures'

1

high performing team and culture that we have built, will allow us to continue to gain market share and enhance franchise value.”

Lynn Hopkins, Chief Financial Officer of Banc of California, said, “With noninterest-bearing deposits averaging 41% of total deposits in the fourth quarter, combined with the balance sheet management actions we took earlier in the year to manage our funding costs, our net interest margin increased 11 basis points from the prior quarter and contributed to our strong financial performance. Our healthy capital ratios enabled us to take advantage of higher interest rates and reposition a portion of our securities portfolio. During the fourth quarter, we sold approximately $119 million of lower-yielding securities for a loss of $7.7 million and reinvested the proceeds into securities with a higher average yield of over 230 basis points, which will contribute to our future earnings growth. Our adjusted diluted earnings per share were $0.45 for the fourth quarter when adjusting for the loss on sale of securities, net indemnified legal costs, and net losses on investments in alternative energy partnerships.”

Income Statement Highlights

Three Months Ended Year Ended
December 31,2022 September 30,<br>2022 June 30,<br>2022 March 31,<br>2022 December 31,<br>2021 December 31,<br>2022 December 31,<br>2021
( in thousands)
Total interest and dividend income $ 95,973 $ 88,418 $ 84,269 $ 81,573 $ 372,772 $ 291,659
Total interest expense 23,895 16,565 10,119 7,828 8,534 58,407 37,881
Net interest income 80,217 79,408 78,299 76,441 73,039 314,365 253,778
Net (loss) gain on sale of securities available for sale (7,708) — — 16 — (7,692) —
Other noninterest income 6,281 5,681 7,186 5,894 5,605 25,042 19,376
Total noninterest income (1,427) 5,681 7,186 5,910 5,605 17,350 19,376
Total revenue 78,790 85,089 85,485 82,351 78,644 331,715 273,154
Total noninterest expense 48,203 50,962 48,612 46,596 58,872 194,373 183,678
Pre-tax / pre-provision income(1) 30,587 34,127 36,873 35,755 19,772 137,342 89,476
Provision for (reversal of) credit losses — — — (31,542) 11,262 (31,542) 6,854
Income tax expense 9,068 9,931 10,161 18,785 2,759 47,945 20,276
Net income $ 24,196 $ 26,712 $ 48,512 $ 5,751 $ 120,939 $ 62,346
Net income available to common stockholders(2) $ 24,196 $ 26,712 $ 43,345 $ 4,024 $ 115,772 $ 50,563

All values are in US Dollars.

(1)Non-GAAP Measure

(2)Balance represents the net income 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. Refer to the Statements of Operations for additional detail on these amounts.

Net interest income

Q4-2022 vs Q3-2022

Net interest income increased $809 thousand to $80.2 million for the fourth quarter due to a higher yield on interest-earning assets and lower average interest-bearing liabilities balances, offset by lower average interest-earning assets and a higher cost on interest-bearing liabilities.

The net interest margin increased 11 basis points to 3.69% for the fourth quarter as the average interest-earning assets yield increased 46 basis points and the cost of average total funding increased 38 basis points. The yield on average interest-earning assets increased to 4.79% for the fourth quarter from 4.33% for the third quarter mainly due to higher yields on loans, securities and other interest-earning assets. The overall loan yield increased 38 basis points to 4.92% during the fourth quarter as a result of the impact of higher market interest rates and changes in portfolio mix. The loan yields include the impact of prepayment penalty fees, the net reversal or recapture of nonaccrual loan interest and accelerated discount accretion on the early payoff of purchased loans; these items increased the overall loan yield by 6 basis points in both the fourth quarter and prior quarter. The yield on securities increased 81 basis points to 4.19%% due mostly to CLO yields resetting higher in the current rate environment and the impact of securities sales and purchases.

The average cost of funds increased 38 basis points to 1.17% for the fourth quarter from 0.79% for the third quarter. This increase was driven by the higher cost of average interest-bearing liabilities, which increased 61 basis points to 1.81% for the fourth quarter from 1.20% for the third quarter. The cost of average interest-bearing deposits increased 57 basis points to 1.34% for the fourth quarter from 0.77% for the third quarter while the cost of average Federal Home Loan Bank (FHLB) advances increased 29 basis points to 3.21% for the fourth quarter from 2.92% for the third quarter. The increase in the cost of these funding sources was due to the impact of higher market interest rates as the average effective Federal Funds rate increased 147 basis points from 2.18% in the third quarter to 3.65% in the fourth quarter.

Average noninterest-bearing deposits were $42.5 million higher in the fourth quarter compared to the third quarter while average deposits were $375.8 million lower for the linked quarter. Average noninterest-bearing deposits represented 41% of average total deposits for the fourth quarter, compared to 38% for the third quarter. The cost of average total deposits increased 32 basis points to 0.79% for the fourth quarter.

The spot rate of total deposits was 1.07% at the end of the fourth quarter, compared to 0.56% in the prior quarter. Average FHLB advances and other borrowings were $172.0 million higher in the fourth quarter compared to the third quarter as wholesale funding sources were strategically utilized to further improve liquidity and manage funding costs.

YTD 2022 vs YTD 2021

Net interest income increased $60.6 million, or 23.9%, to $314.4 million for the year ended December 31, 2022 due to higher average balances and yield on interest-earning assets, partially offset by higher average balances and costs of interest-bearing liabilities. Interest income increased $81.1 million and interest expense increased $20.5 million as average earning assets increased $961.9 million and average total funding sources increased $953.3 million due largely to the impact of the acquisition of Pacific Mercantile Bancorp (PMB) in the fourth quarter of 2021.

The net interest margin increased 33 basis points to 3.59% as the average earning-assets yield increased 52 basis points and the average cost of total funding increased 19 basis points between periods. The yield on average interest-earning assets increased to 4.26% for the year ended December 31, 2022, from 3.74% for the same period in 2021 due mostly to higher market interest rates and changes in the mix of interest-earning assets. Average loans represented 83% of average earnings assets in 2022 compared to 79% for the full year in 2021. Average loans increased by $1.11 billion from organic loan growth and the impact of the PMB acquisition. The yield on average loans increased 28 basis points to 4.52% for the year ended December 31, 2022 compared to the full year of 2021. The yield on average investment securities and other interest-earning assets increased 100 basis points and 149 basis points, respectively, for the year ended December 31, 2022, compared to the full year of 2021.

The average cost of funds increased 19 basis points to 0.71% for the year ended December 31, 2022 from 0.52% for 2021. This increase was driven by the higher cost of average interest-bearing liabilities, partially offset by the overall improved funding mix, including higher average noninterest-bearing deposits as a result of growth from business development efforts and the impact of the acquisition of PMB. The cost of average interest-bearing liabilities increased 36 basis points to 1.08% for the year ended December 31, 2022 compared to 0.72% for the same period in 2021 and included a 35 basis point increase in the cost of average interest-bearing deposits to 0.62%. Average noninterest-bearing deposits were $842.2 million higher for the year ended December 31, 2022 compared to 2021 while average total deposits were $795.2 million higher. Average noninterest-bearing deposits represented 39% of total average deposits for the year ended December 31, 2022 compared to 30% for 2021. The

average cost of total deposits increased 19 basis points to 0.38% for the year ended December 31, 2022 compared to the full year of 2021.

Provision for credit losses

Q4-2022 vs Q3-2022

There was no provision for credit losses for the fourth quarter and the third quarter as benefits related to overall stable credit quality metrics within the loan portfolio combined with changes in the portfolio mix and a decrease in total loan balances were offset by the impact of the deterioration in the macroeconomic outlook, which includes the impact of higher market interest rates and the anticipated ongoing actions of the Federal Reserve to lower inflation.

YTD 2022 vs YTD 2021

During the year ended December 31, 2022, the provision for credit losses was a reversal of $31.5 million, compared to a provision for credit losses of $6.9 million during 2021. The reversal of credit losses for the year ended December 31, 2022 was due to a $31.3 million recovery from the settlement of a loan previously charged-off in 2019. The provision for credit losses in 2021 included a $11.3 million charge related to establishing the initial allowance for credit losses for non-purchased credit-deteriorated (non-PCD) loans acquired in the PMB acquisition. This charge was offset by benefits from improvements in key macroeconomic forecast variables.

Noninterest income

Q4-2022 vs Q3-2022

Noninterest income decreased $7.1 million to a loss of $1.4 million for the fourth quarter due mainly to a $7.7 million loss on the sale of investment securities offset by higher other income of $1.0 million. Other income included higher gains from equity investments of $724 thousand. Gains or losses from equity investments are recorded based on the most recent information available from the investee and fluctuates based on their underlying performance.

YTD 2022 vs YTD 2021

Noninterest income for the year ended December 31, 2022 decreased $2.0 million to $17.4 million compared to 2021. The decrease was mainly due to the aforementioned loss on sale of securities, offset by higher customer service fees, loan servicing income, income from bank-owned life insurance, and all other income. Many of these increases are a result of including PMB's operations for the full year in 2022 compared to 2021. Customer services fees increased $1.9 million due mostly to higher deposit activity fees of $2.6 million attributed to higher average deposit balances, partially offset by lower loan fees of $755 thousand. Loan servicing income increased $923 thousand due mostly to the acquisition of mortgage servicing rights at the end of the second quarter of 2022. Income from bank-owned life insurance increased $531 thousand due to higher average balances and all other income increased $2.4 million due mostly to higher gains from equity investments.

Noninterest expense

Q4-2022 vs Q3-2022

Noninterest expense decreased $2.8 million to $48.2 million for the fourth quarter compared to the third quarter. The decrease was due mostly to (i) lower acquisition, integration and transaction costs of $2.1 million, (ii) lower professional fees of $1.0 million, due to a $1.9 million decrease in indemnified legal fees (net of recoveries) and a $859 thousand increase in other professional fees, and (iii) lower occupancy and equipment expense of $218 thousand as the prior quarter included an early lease termination charge of $285 thousand, partially offset by (iv) higher all other expenses of $454 thousand. Professional fees included net indemnified legal recoveries of $869 thousand in the fourth quarter compared to net indemnified legal expenses of $1.0 million in the third quarter.

Adjusted noninterest expense, which represents total operating costs (a non-GAAP measure; refer to section Non-GAAP Measures), increased $1.1 million to $48.5 million for the fourth quarter compared to $47.4 million for the prior quarter. This increase was due mostly to higher professional fees of $859 thousand and all other expenses of $454 thousand, partially offset by lower occupancy and equipment expense of $218 thousand.

YTD 2022 vs YTD 2021

Noninterest expense for the year ended December 31, 2022 increased $10.7 million to $194.4 million compared to 2021. The increase was primarily due to: (i) higher salaries and employee benefits of $9.7 million and occupancy and equipment expense of $3.4 million due mainly to the increases in personnel and facilities from the acquisition of PMB, (ii) higher professional fees

of $4.4 million, due mostly to a $2.6 million increase in indemnified legal fees (net of insurance recoveries) and a $1.8 million increase in other professional fees, (iii) higher all other expenses of $3.7 million due to including the operations of PMB since the date of acquisition, (iv) higher loss in alternative energy partnership investments of $2.5 million, and (v) higher amortization of intangible assets of $429 thousand due to the acquisitions of PMB in 2021 and Deepstack during 2022. These increases were partially offset by lower acquisition, integration and transaction costs of $13.8 million.

Income taxes

Q4-2022 vs Q3-2022

Income tax expense totaled $9.1 million for the fourth quarter resulting in an effective tax rate of 29.6% compared to $9.9 million for the third quarter and an effective tax rate of 29.1%.

YTD 2022 vs YTD 2021

Income tax expense totaled $47.9 million for the year ended December 31, 2022, representing an effective tax rate of 28.4%, compared to $20.3 million and an effective tax rate of 24.5% for 2021. The effective tax rate for the year ended December 31, 2022 was higher than the prior year due mostly to 2021 including a net tax benefit of $2.1 million resulting from the exercise of all previously issued outstanding stock appreciation rights.

Balance Sheet

At December 31, 2022, total assets were $9.2 billion, which represented a linked-quarter decrease of $171.6 million. The following table shows selected balance sheet line items as of the dates indicated:

Amount Change
December 31,2022 September 30,<br>2022 June 30,<br>2022 March 31,<br>2022 December 31,<br>2021 Q4-22 vs. Q3-22 Q4-22 vs. Q4-21
( in thousands)
Securities held-to-maturity $ 328,757 $ 329,272 $ 329,381 $ — $ (116) $ 328,641
Securities available-for-sale $ 847,565 $ 865,435 $ 898,775 $ 1,315,703 $ 20,732 $ (447,406)
Loans held-for-investment $ 7,289,320 $ 7,451,264 $ 7,451,573 $ 7,251,480 $ (174,282) $ (136,442)
Total assets $ 9,368,578 $ 9,502,113 $ 9,583,540 $ 9,393,743 $ (171,562) $ (196,727)
Noninterest-bearing deposits $ 2,943,585 $ 2,826,599 $ 2,958,632 $ 2,788,196 $ (134,257) $ 21,132
Total deposits $ 7,280,385 $ 7,558,683 $ 7,479,701 $ 7,439,435 $ (159,464) $ (318,514)
Borrowings (1) $ 1,011,767 $ 884,282 $ 1,020,842 $ 775,445 $ (9,513) $ 226,809
Total liabilities $ 8,416,588 $ 8,552,983 $ 8,604,531 $ 8,328,453 $ (179,190) $ (91,055)
Total equity $ 951,990 $ 949,130 $ 979,009 $ 1,065,290 $ 7,628 $ (105,672)

All values are in US Dollars.

(1)Represents Advances from Federal Home Loan Bank, Other Borrowings and Long Term Debt, net.

Investments

Securities held-to-maturity totaled $328.6 million at December 31, 2022 and included $214.4 million in agency securities and $114.2 million in municipal securities.

Securities available-for-sale increased $20.7 million during the fourth quarter to $868.3 million at December 31, 2022, due mostly to purchases of $135.0 million and unrealized net gains of $2.6 million, offset by sales of securities of $118.9 million for $111.2 million resulting in a loss of $7.7 million and principal payments of $5.8 million. The securities sold during the quarter had an average yield of 3.5% and the securities purchased had an estimated yield of 5.8% at the time of purchase. The lower unrealized net losses of $9.5 million were due mostly to the realization of losses on sale of securities, the impact of decreases in certain longer-term market interest rates, and the tightening of credit spreads on the value of each class of securities.

As of December 31, 2022, the securities available-for-sale portfolio included $476.6 million of CLOs, $166.6 million of corporate debt securities, $133.4 million of agency securities, $80.5 million of residential collateralized mortgage obligations, and $11.2 million of SBA securities. The CLO portfolio, which is comprised of AAA and AA-rated securities, represented 40%

of the total securities portfolio and the carrying value included an unrealized net loss of $15.6 million at December 31, 2022, compared to 40% of the total securities portfolio and an unrealized net loss of $20.1 million at September 30, 2022.

Loans

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

December 31,2022 September 30,<br>2022 June 30,<br>2022 March 31,<br>2022 December 31,<br>2021
( in thousands)
Composition of loans
Commercial real estate $ 1,240,927 $ 1,204,414 $ 1,163,381 $ 1,311,105
Multifamily 1,689,943 1,698,455 1,572,308 1,397,761 1,361,054
Construction 243,553 236,495 228,341 225,153 181,841
Commercial and industrial 1,243,452 1,227,054 1,273,307 1,224,908 1,066,497
Commercial and industrial - warehouse lending 602,508 766,362 1,160,157 1,574,549 1,602,487
SBA 68,137 85,674 92,235 133,116 205,548
Total commercial loans 5,107,244 5,254,967 5,530,762 5,718,868 5,728,532
Single-family residential mortgage 1,920,806 1,947,652 1,832,279 1,637,307 1,420,023
Other consumer 86,988 86,701 88,223 95,398 102,925
Total consumer loans 2,007,794 2,034,353 1,920,502 1,732,705 1,522,948
Total gross loans $ 7,289,320 $ 7,451,264 $ 7,451,573 $ 7,251,480
Composition percentage of loans
Commercial real estate 17.7 % 17.0 % 16.2 % 15.6 % 18.1 %
Multifamily 23.8 % 23.3 % 21.1 % 18.8 % 18.8 %
Construction 3.4 % 3.2 % 3.1 % 3.0 % 2.5 %
Commercial and industrial 17.5 % 16.8 % 17.1 % 16.4 % 14.7 %
Commercial and industrial - warehouse lending 8.4 % 10.6 % 15.5 % 21.1 % 22.1 %
SBA 1.0 % 1.2 % 1.2 % 1.8 % 2.8 %
Total commercial loans 71.8 % 72.1 % 74.2 % 76.7 % 79.0 %
Single-family residential mortgage 27.0 % 26.7 % 24.6 % 22.0 % 19.6 %
Other consumer 1.2 % 1.2 % 1.2 % 1.3 % 1.4 %
Total consumer loans 28.2 % 27.9 % 25.8 % 23.3 % 21.0 %
Total gross loans 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %

All values are in US Dollars.

Total loans ended the fourth quarter of 2022 at $7.12 billion, down $174.3 million from $7.29 billion at September 30, 2022, due mostly to a $163.9 million decrease in warehouse lending balances, a $26.8 million decrease in single-family residential (SFR) loans, and a $17.5 million decrease in SBA loans due mostly to PPP forgiveness, offset by a $18.7 million increase in commercial real estate loans and $14.9 million increase in other commercial loans. Loan fundings of $495.6 million in the fourth quarter were offset by net warehouse paydowns of $165.9 million and other loan paydowns and payoffs of $496.0 million.

Deposits

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

December 31,2022 September 30,<br>2022 June 30,<br>2022 March 31,<br>2022 December 31,<br>2021
( in thousands)
Composition of deposits
Noninterest-bearing checking $ 2,943,585 $ 2,826,599 $ 2,958,632 $ 2,788,196
Interest-bearing checking 1,947,247 1,921,816 2,359,857 2,395,329 2,393,386
Savings and money market 1,174,925 1,478,045 1,622,922 1,605,088 1,751,135
Non-brokered certificates of deposit 584,476 614,569 615,719 520,652 506,718
Brokered certificates of deposit 604,945 322,370 133,586 — —
Total deposits $ 7,280,385 $ 7,558,683 $ 7,479,701 $ 7,439,435
Composition percentage of deposits
Noninterest-bearing checking 39.5 % 40.4 % 37.4 % 39.6 % 37.5 %
Interest-bearing checking 27.3 % 26.4 % 31.2 % 32.0 % 32.2 %
Savings and money market 16.5 % 20.4 % 21.5 % 21.4 % 23.5 %
Non-brokered certificates of deposit 8.2 % 8.4 % 8.1 % 7.0 % 6.8 %
Brokered certificates of deposit 8.5 % 4.4 % 1.8 % — % — %
Total deposits 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %

All values are in US Dollars.

Total deposits decreased $159.5 million during the fourth quarter of 2022 to $7.12 billion at December 31, 2022, due mostly to lower savings and money market balances of $303.1 million and lower noninterest-bearing checking balances of $134.3 million, offset by higher certificate of deposit balances of $252.5 million and interest-bearing checking balances of $25.4 million. Noninterest-bearing checking totaled $2.81 billion and represented 39% of total deposits at December 31, 2022, compared to $2.94 billion, or 40% of total deposits, at September 30, 2022.

Debt

Advances from the FHLB increased $327 thousand during the fourth quarter to $727.3 million at December 31, 2022, due to the addition of a $100.0 million term advance, offset by lower overnight advances of $100.0 million. At December 31, 2022, FHLB advances included $20.0 million of overnight borrowings and $711.0 million in term advances with a weighted average life of 3.0 years and weighted average interest rate of 2.97%.

Equity

During the fourth quarter, total stockholders’ equity increased by $7.6 million to $959.6 million and tangible common equity (a non-GAAP measure; refer to section Non-GAAP Measures) increased by $8.2 million to $837.8 million at December 31, 2022. The increase in total stockholders’ equity for the fourth quarter resulted from net income of $21.5 million, lower accumulated other comprehensive net loss of $7.0 million and share-based award compensation of $1.7 million, partially offset by the repurchase of common stock of $18.9 million and dividends to common stockholders of $3.6 million. Book value per common share increased $0.43 during the fourth quarter to $16.26 as of December 31, 2022. Tangible common equity per share (a non-GAAP measures; refer to section Non-GAAP Measures) increased $0.40 during the fourth quarter to $14.19 as of December 31, 2022 due mostly to net income and lower accumulated other comprehensive loss, offset by the impact of share repurchases.

During the fourth quarter of 2022, the Company completed its authorized common stock repurchase program. Fourth quarter common stock repurchases totaled $18.9 million, or 1,143,824 shares at a weighted average price of $16.53 per share, and the full year common stock repurchases totaled $75.0 million, or 4,212,882 shares at a weighted average price of $17.80 per share. The repurchased shares represent approximately 7% of the shares outstanding at the time this program was authorized.

Capital ratios remain strong with total risk-based capital at 14.30% and a tier 1 leverage ratio of 9.71% at December 31, 2022. 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 9 basis points at December 31, 2022. The following table sets forth our regulatory capital ratios as of the dates indicated:

December 31,<br>2022 September 30,<br>2022 June 30,<br>2022 March 31,<br>2022 December 31,<br>2021
Capital Ratios(1)
Banc of California, Inc.
Total risk-based capital ratio 14.30 % 13.86 % 13.69 % 13.79 % 14.98 %
Tier 1 risk-based capital ratio 11.88 % 11.43 % 11.29 % 11.40 % 12.55 %
Common equity tier 1 capital ratio 11.88 % 11.43 % 11.29 % 11.40 % 11.31 %
Tier 1 leverage ratio 9.71 % 9.52 % 9.58 % 9.72 % 10.37 %
Banc of California, NA
Total risk-based capital ratio 16.06 % 15.70 % 15.54 % 15.66 % 15.71 %
Tier 1 risk-based capital ratio 14.98 % 14.56 % 14.41 % 14.54 % 14.60 %
Common equity tier 1 capital ratio 14.98 % 14.56 % 14.41 % 14.54 % 14.60 %
Tier 1 leverage ratio 12.25 % 12.12 % 12.27 % 12.38 % 12.06 %

(1)December 31, 2022 capital ratios are preliminary.

Credit Quality

December 31,2022 September 30,<br>2022 June 30,<br>2022 March 31,<br>2022 December 31,<br>2021
Asset quality information and ratios ( in thousands)
Delinquent loans held-for-investment
30 to 89 days delinquent $ 38,694 $ 38,285 $ 27,067 $ 40,142
90+ days delinquent 44,554 18,843 23,905 33,930 32,609
Total delinquent loans $ 57,537 $ 62,190 $ 60,997 $ 72,751
Total delinquent loans to total loans 1.28 % 0.79 % 0.83 % 0.82 % 1.00 %
Non-performing assets, excluding loans held-for-sale
Non-accrual loans $ 42,674 $ 44,443 $ 54,529 $ 52,558
90+ days delinquent and still accruing loans — — — — —
Non-performing loans 55,251 42,674 44,443 54,529 52,558
Other real estate owned — — — — —
Non-performing assets $ 42,674 $ 44,443 $ 54,529 $ 52,558
ALL to non-performing loans 155.58 % 216.63 % 211.04 % 170.97 % 176.16 %
Non-performing loans to total loans held-for-investment 0.78 % 0.59 % 0.60 % 0.73 % 0.72 %
Non-performing assets to total assets 0.60 % 0.46 % 0.47 % 0.57 % 0.56 %
Troubled debt restructurings (TDRs)
Performing TDRs $ 11,252 $ 10,946 $ 14,850 $ 12,538
Non-performing TDRs 13,406 19,538 14,989 15,059 4,146
Total TDRs $ 30,790 $ 25,935 $ 29,909 $ 16,684

All values are in US Dollars.

At December 31, 2022, total delinquent loans were $91.2 million, and included SFR mortgages of $60.8 million, or 66.7% of total delinquent loans. During the fourth quarter, delinquent loans increased $33.7 million due mostly to total additions of $46.3 million, offset by cures of $11.8 million and amortization and other removals of $0.9 million. Additions to delinquent loans included $33.5 million of SFR mortgages, $12.1 million of commercial and industrial loans, and $718 thousand of other loans.

At December 31, 2022, non-performing loans were $55.3 million, and included (i) SFR mortgages of $21.1 million, (ii) $8.9 million of commercial loans in a current payment status, however are on nonaccrual based on other criteria, and (iii) other commercial loans of $25.3 million. Excluding SFR mortgages, which are well secured with low loan-to-value ratios, non-performing loans decreased $529 thousand from the prior quarter. During the fourth quarter, a $7.4 million partial charge-off was recognized on a purchased credit-deteriorated commercial and industrial loan, which has a remaining carrying value of $4.0 million at quarter-end.

Allowance for Credit Losses

Three Months Ended
December 31,2022 September 30,<br>2022 June 30,<br>2022 March 31,<br>2022 December 31,<br>2021
( in thousands)
Allowance for loan losses (ALL)
Balance at beginning of period $ 93,793 $ 93,226 $ 92,584 $ 73,524
Initial reserve for purchased credit-deteriorated loans(1) — — — — 13,650
Loans charged off (7,641) (912) (494) (231) (8,108)
Recoveries 57 63 1,561 32,215 2,628
Net (charge-offs) recoveries (7,584) (849) 1,067 31,984 (5,480)
Provision for (reversal of) loan losses 1,100 (500) (500) (31,342) 10,890
Balance at end of period $ 92,444 $ 93,793 $ 93,226 $ 92,584
Reserve for unfunded loan commitments (RUC)
Balance at beginning of period $ 5,905 $ 5,405 $ 5,605 $ 5,233
(Reversal of) provision for credit losses (1,100) 500 500 (200) 372
Balance at end of period 5,305 6,405 5,905 5,405 5,605
Allowance for credit losses (ACL) $ 98,849 $ 99,698 $ 98,631 $ 98,189
ALL to total loans 1.21 % 1.27 % 1.26 % 1.25 % 1.28 %
ACL to total loans 1.28 % 1.36 % 1.34 % 1.32 % 1.35 %
ACL to total loans, excluding PPP loans 1.28 % 1.36 % 1.34 % 1.33 % 1.38 %
ACL to NPLs 165.18 % 231.64 % 224.33 % 180.88 % 186.82 %
Annualized net loan charge-offs (recoveries) to average total loans held-for-investment 0.42 % 0.05 % (0.06) % (1.76) % 0.32 %
Reserve for loss on repurchased loans
Balance at beginning of period $ 3,222 $ 3,877 $ 4,348 $ 5,023
(Reversal of) provision for loan repurchases (17) (26) (490) (471) (675)
Utilization of reserve for loan repurchases — (190) (165) — —
Balance at end of period $ 3,006 $ 3,222 $ 3,877 $ 4,348

All values are in US Dollars.

(1)Represents the amounts, at acquisition date, of expected credit losses on PCD loans and expected recoveries of PCD loans charged-off prior to acquisition date that we have a contractual right to receive.

The allowance for credit losses (ACL), which includes the reserve for unfunded loan commitments, totaled $91.3 million, or 1.28% of total loans, at December 31, 2022, compared to $98.8 million, or 1.36% of total loans, at September 30, 2022. The $7.6 million decrease in the ACL was due to: (i) net charge offs of $7.6 million, of which $7.1 million related to specific reserves for a purchased credit-deteriorated loan and (ii) $1.1 million lower RUC from lower volume of unfunded commitments, offset by (iii) new specific reserves totaling $1.0 million and (iv) higher general reserves of $0.2 million due to changes in portfolio mix. The ACL coverage of non-performing loans was 165% at December 31, 2022 compared to 232% at September 30, 2022.

The ACL methodology uses a nationally recognized, third-party model that includes many assumptions based on historical and peer loss data, current loan portfolio risk profile including risk ratings, and economic forecasts including macroeconomic variables released by the model provider during December 2022. The published forecasts consider the Federal Reserve's monetary policy, labor market constraints, inflation levels, higher oil prices and the military conflict between Russia and Ukraine, among other factors.

Conference Call

The Company will host a conference call to discuss its fourth quarter 2022 financial results at 10:00 a.m. Pacific Time (PT) on Thursday, January 19, 2023. Interested parties are welcome to attend the conference call by dialing (888) 317-6003, and referencing event code 2741581. 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 5929784.

About Banc of California, Inc.

Banc of California, Inc. (NYSE: BANC) is a bank holding company with $9.2 billion in assets at December 31, 2022 and one wholly-owned banking subsidiary, Banc of California, N.A. (the Bank). The Bank has 34 offices including 28 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, and full stack payment processing solution through our subsidiary Deepstack Technologies. 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. 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.

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

Banc of California, Inc.

Consolidated Statements of Financial Condition (Unaudited)

(Dollars in thousands)

December 31,<br>2022 September 30,<br>2022 June 30,<br>2022 March 31,<br>2022 December 31,<br>2021
ASSETS
Cash and cash equivalents $ 228,896 $ 256,058 $ 243,064 $ 254,241 $ 228,123
Securities held-to-maturity 328,641 328,757 329,272 329,381 —
Securities available-for-sale 868,297 847,565 865,435 898,775 1,315,703
Loans 7,115,038 7,289,320 7,451,264 7,451,573 7,251,480
Allowance for loan losses (85,960) (92,444) (93,793) (93,226) (92,584)
Federal Home Loan Bank and other bank stock 57,092 54,428 51,489 51,456 44,632
Premises and equipment, net 107,345 107,728 108,523 109,593 112,868
Goodwill 114,312 114,312 95,127 95,127 94,301
Other intangible assets, net 7,526 8,081 4,677 4,990 6,411
Deferred income tax, net 50,518 56,376 54,455 51,516 50,774
Bank owned life insurance investment 127,122 126,199 125,326 124,516 123,720
Other assets 278,189 272,198 267,274 305,598 258,315
Total assets $ 9,197,016 $ 9,368,578 $ 9,502,113 $ 9,583,540 $ 9,393,743
LIABILITIES AND STOCKHOLDERS’ EQUITY
Noninterest-bearing deposits $ 2,809,328 $ 2,943,585 $ 2,826,599 $ 2,958,632 $ 2,788,196
Interest-bearing deposits 4,311,593 4,336,800 4,732,084 4,521,069 4,651,239
Total deposits 7,120,921 7,280,385 7,558,683 7,479,701 7,439,435
Advances from Federal Home Loan Bank 727,348 727,021 511,695 556,374 476,059
Other borrowings — 10,000 98,000 190,000 25,000
Long-term debt, net 274,906 274,746 274,587 274,468 274,386
Accrued expenses and other liabilities 114,223 124,436 110,018 103,988 113,573
Total liabilities 8,237,398 8,416,588 8,552,983 8,604,531 8,328,453
Commitments and contingent liabilities
Preferred stock — — — — 94,956
Common stock 651 652 647 646 646
Common stock, class B non-voting non-convertible 5 5 5 5 5
Additional paid-in capital 866,478 864,806 856,079 855,198 854,873
Retained earnings 248,988 231,084 210,471 187,457 147,894
Treasury stock (115,907) (96,978) (84,013) (45,125) (40,827)
Accumulated other comprehensive (loss) income, net (40,597) (47,579) (34,059) (19,172) 7,743
Total stockholders’ equity 959,618 951,990 949,130 979,009 1,065,290
Total liabilities and stockholders’ equity $ 9,197,016 $ 9,368,578 $ 9,502,113 $ 9,583,540 $ 9,393,743

Banc of California, Inc.

Consolidated Statements of Operations (Unaudited)

(Dollars in thousands, except per share data)

Three Months Ended Year Ended
December 31,<br>2022 September 30,<br>2022 June 30,<br>2022 March 31,<br>2022 December 31,<br>2021 December 31,<br>2022 December 31,<br>2021
Interest and dividend income
Loans, including fees $ 88,717 $ 83,699 $ 78,895 $ 76,234 $ 73,605 $ 327,545 $ 260,687
Securities 12,905 10,189 8,124 7,309 6,934 38,527 27,588
Other interest-earning assets 2,490 2,085 1,399 726 1,034 6,700 3,384
Total interest and dividend income 104,112 95,973 88,418 84,269 81,573 372,772 291,659
Interest expense
Deposits 14,278 8,987 3,180 1,388 2,072 27,833 12,313
Federal Home Loan Bank advances 5,528 3,558 3,114 2,953 2,977 15,153 12,023
Other interest-bearing liabilities 4,089 4,020 3,825 3,487 3,485 15,421 13,545
Total interest expense 23,895 16,565 10,119 7,828 8,534 58,407 37,881
Net interest income 80,217 79,408 78,299 76,441 73,039 314,365 253,778
Provision for (reversal of) credit losses — — — (31,542) 11,262 (31,542) 6,854
Net interest income after provision for (reversal of) credit losses 80,217 79,408 78,299 107,983 61,777 345,907 246,924
Noninterest income
Customer service fees 2,066 2,462 2,578 2,434 2,037 9,540 7,685
Loan servicing income 561 636 109 212 119 1,518 595
Income from bank owned life insurance 923 873 810 796 794 3,402 2,871
Net (loss) gain on sale of securities available for sale (7,708) — — 16 — (7,692) —
All other income 2,731 1,710 3,689 2,452 2,655 10,582 8,225
Total noninterest income (1,427) 5,681 7,186 5,910 5,605 17,350 19,376
Noninterest expense
Salaries and employee benefits 27,812 27,997 28,264 28,987 27,811 113,060 103,358
Occupancy and equipment 8,431 8,649 7,876 7,855 7,855 32,811 29,452
Professional fees 3,480 4,507 4,107 2,907 3,921 15,001 10,584
Data processing 1,744 1,699 1,782 1,828 1,939 7,053 6,861
Regulatory assessments 905 925 1,021 775 1,040 3,626 3,395
Reversal of loan repurchase reserves (17) (26) (490) (471) (675) (1,004) (948)
Amortization of intangible assets 555 396 313 441 430 1,705 1,276
Acquisition, integration and transaction costs — 2,080 — — 13,469 2,080 15,869
All other expense 4,685 4,231 4,696 4,116 4,302 17,728 14,035
Total noninterest expense before loss (gain) in alternative energy partnership investments 47,595 50,458 47,569 46,438 60,092 192,060 183,882
Loss (gain) in alternative energy partnership investments 608 504 1,043 158 (1,220) 2,313 (204)
Total noninterest expense 48,203 50,962 48,612 46,596 58,872 194,373 183,678
Income before income taxes 30,587 34,127 36,873 67,297 8,510 168,884 82,622
Income tax expense 9,068 9,931 10,161 18,785 2,759 47,945 20,276
Net income 21,519 24,196 26,712 48,512 5,751 120,939 62,346
Preferred stock dividends — — — 1,420 1,727 1,420 8,322
Income allocated to participating securities — — — — — — 114
Impact of preferred stock redemption — — — 3,747 — 3,747 3,347
Net income available to common stockholders $ 21,519 $ 24,196 $ 26,712 $ 43,345 $ 4,024 $ 115,772 $ 50,563
Earnings per common share:
Basic $ 0.36 $ 0.40 $ 0.44 $ 0.69 $ 0.07 $ 1.90 $ 0.95
Diluted $ 0.36 $ 0.40 $ 0.43 $ 0.69 $ 0.07 $ 1.89 $ 0.95
Weighted average number of common shares outstanding
Basic 59,252,995 60,044,403 61,350,802 62,606,450 60,401,366 60,802,082 53,050,980
Diluted 59,725,283 60,492,460 61,600,615 62,906,003 60,690,046 61,175,108 53,302,926
Dividends declared per common share $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.24 $ 0.24

Banc of California, Inc.

Selected Financial Data

(Unaudited)

Three Months Ended Year Ended
December 31,<br>2022 September 30,<br>2022 June 30,<br>2022 March 31,<br>2022 December 31,<br>2021 December 31,<br>2022 December 31,<br>2021
Profitability and other ratios of consolidated operations
Return on average assets (ROAA)(1) 0.92 % 1.02 % 1.15 % 2.09 % 0.24 % 1.29 % 0.75 %
Adjusted ROAA(1)(2) 1.15 % 1.13 % 1.19 % 2.10 % 0.63 % 1.39 % 0.84 %
Return on average equity(1) 8.63 % 9.99 % 11.05 % 18.74 % 2.20 % 12.19 % 6.95 %
Return on average tangible common equity(1)(2) 10.02 % 11.33 % 12.42 % 20.27 % 2.02 % 13.49 % 7.03 %
Pre-tax pre-provision income ROAA(1)(2) 1.31 % 1.44 % 1.58 % 1.54 % 0.84 % 1.47 % 1.08 %
Adjusted pre-tax pre-provision income ROAA(1)(2) 1.63 % 1.59 % 1.65 % 1.55 % 1.39 % 1.60 % 1.24 %
Dividend payout ratio(3) 16.67 % 15.00 % 13.64 % 8.70 % 85.71 % 12.63 % 25.26 %
Average loan yield 4.92 % 4.54 % 4.35 % 4.26 % 4.20 % 4.52 % 4.24 %
Average cost of interest-bearing deposits 1.34 % 0.77 % 0.28 % 0.12 % 0.17 % 0.62 % 0.27 %
Average cost of total deposits 0.79 % 0.47 % 0.17 % 0.08 % 0.11 % 0.38 % 0.19 %
Net interest spread 2.98 % 3.13 % 3.30 % 3.29 % 3.05 % 3.18 % 3.02 %
Net interest margin(1) 3.69 % 3.58 % 3.58 % 3.51 % 3.28 % 3.59 % 3.26 %
Noninterest income to total revenue(4) (1.81) % 6.68 % 8.41 % 7.18 % 7.13 % 5.23 % 7.09 %
Adjusted noninterest income to adjusted total revenue(2)(4) 7.26 % 6.68 % 8.41 % 7.16 % 7.13 % 7.38 % 7.09 %
Noninterest expense to average total assets(1) 2.07 % 2.15 % 2.09 % 2.01 % 2.50 % 2.08 % 2.21 %
Adjusted noninterest expense to average total assets(1)(2) 2.08 % 2.00 % 2.02 % 2.01 % 1.95 % 2.03 % 2.05 %
Efficiency ratio(2)(5) 61.18 % 59.89 % 56.87 % 56.58 % 74.86 % 58.60 % 67.24 %
Adjusted efficiency ratio(2)(6) 56.03 % 55.66 % 55.11 % 56.53 % 58.47 % 55.83 % 62.27 %
Average loans to average deposits 100.25 % 97.34 % 98.21 % 98.28 % 92.99 % 98.50 % 93.59 %
Average securities to average total assets 13.19 % 12.70 % 13.02 % 13.76 % 13.83 % 13.16 % 15.62 %
Average stockholders’ equity to average total assets 10.69 % 10.21 % 10.38 % 11.18 % 11.10 % 10.61 % 10.81 %

(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 (reversal of) credit losses and noninterest income.

(6)Ratio calculated by dividing adjusted noninterest expense by the sum of net interest income before provision for (reversal of) 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
December 31, 2022 September 30, 2022 June 30, 2022
Average Yield Average Yield Average Yield
Balance Interest / Cost Balance Interest / Cost Balance Interest / Cost
Interest-earning assets
Commercial real estate, multifamily, and construction $ 3,223,614 $ 36,214 4.46 % $ 3,142,772 $ 34,269 4.33 % $ 2,889,652 $ 31,290 4.34 %
Commercial and industrial and SBA 1,909,144 31,492 6.54 % 2,151,511 29,296 5.40 % 2,527,506 29,334 4.66 %
SFR mortgage 1,932,397 19,661 4.04 % 1,927,694 18,699 3.85 % 1,755,719 16,795 3.84 %
Other consumer 86,273 1,335 6.14 % 87,335 1,331 6.05 % 93,160 1,450 6.24 %
Loans held-for-sale 4,352 15 1.37 % 4,207 104 9.81 % 3,618 26 2.88 %
Gross loans and leases 7,155,780 88,717 4.92 % 7,313,519 83,699 4.54 % 7,269,655 78,895 4.35 %
Securities 1,221,147 12,905 4.19 % 1,194,942 10,189 3.38 % 1,216,612 8,124 2.68 %
Other interest-earning assets 239,336 2,490 4.13 % 292,819 2,085 2.82 % 295,715 1,399 1.90 %
Total interest-earning assets 8,616,263 104,112 4.79 % 8,801,280 95,973 4.33 % 8,781,982 88,418 4.04 %
Allowance for loan losses (91,606) (93,517) (94,217)
BOLI and noninterest-earning assets 732,654 700,977 654,931
Total assets $ 9,257,311 $ 9,408,740 $ 9,342,696
Interest-bearing liabilities
Interest-bearing checking $ 1,854,333 $ 4,998 1.07 % $ 2,285,071 $ 3,880 0.67 % $ 2,363,233 $ 1,457 0.25 %
Savings and money market 1,308,383 2,379 0.72 % 1,536,438 2,236 0.58 % 1,598,663 860 0.22 %
Certificates of deposit 1,072,953 6,901 2.55 % 832,506 2,871 1.37 % 631,415 863 0.55 %
Total interest-bearing deposits 4,235,669 14,278 1.34 % 4,654,015 8,987 0.77 % 4,593,311 3,180 0.28 %
FHLB advances 684,177 5,528 3.21 % 482,842 3,558 2.92 % 485,629 3,114 2.57 %
Other borrowings 41,075 414 4.00 % 70,431 412 2.32 % 117,688 325 1.11 %
Long-term debt 274,812 3,675 5.31 % 274,665 3,608 5.21 % 274,515 3,500 5.11 %
Total interest-bearing liabilities 5,235,733 23,895 1.81 % 5,481,953 16,565 1.20 % 5,471,143 10,119 0.74 %
Noninterest-bearing deposits 2,897,755 2,855,220 2,804,877
Noninterest-bearing liabilities 134,409 110,761 96,791
Total liabilities 8,267,897 8,447,934 8,372,811
Total stockholders’ equity 989,414 960,806 969,885
Total liabilities and stockholders’ equity $ 9,257,311 $ 9,408,740 $ 9,342,696
Net interest income/spread $ 80,217 2.98 % $ 79,408 3.13 % $ 78,299 3.30 %
Net interest margin 3.69 % 3.58 % 3.58 %
Ratio of interest-earning assets to interest-bearing liabilities 165 % 161 % 161 %
Total deposits $ 7,133,424 $ 14,278 0.79 % $ 7,509,235 $ 8,987 0.47 % $ 7,398,188 $ 3,180 0.17 %
Total funding (1) $ 8,133,488 $ 23,895 1.17 % $ 8,337,173 $ 16,565 0.79 % $ 8,276,020 $ 10,119 0.49 %

(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.

Three Months Ended
March 31, 2022 December 31, 2021
Average Yield Average Yield
Balance Interest / Cost Balance Interest / Cost
Interest-earning assets
Commercial real estate, multifamily, and construction $ 2,850,811 $ 31,367 4.46 % $ 2,809,181 $ 32,184 4.55 %
Commercial and industrial and SBA 2,748,541 30,043 4.43 % 2,631,596 28,028 4.23 %
SFR mortgage 1,562,478 13,273 3.45 % 1,418,057 11,884 3.32 %
Other consumer 97,516 1,523 6.33 % 85,193 1,483 6.91 %
Loans held-for-sale 3,428 28 3.31 % 3,309 26 3.12 %
Gross loans and leases 7,262,774 76,234 4.26 % 6,947,336 73,605 4.20 %
Securities 1,292,079 7,309 2.29 % 1,290,664 6,934 2.13 %
Other interest-earning assets 265,339 726 1.11 % 593,739 1,034 0.69 %
Total interest-earning assets 8,820,192 84,269 3.87 % 8,831,739 81,573 3.66 %
Allowance for loan losses (92,618) (92,367)
BOLI and noninterest-earning assets 664,731 592,583
Total assets $ 9,392,305 $ 9,331,955
Interest-bearing liabilities
Interest-bearing checking $ 2,409,262 $ 641 0.11 % $ 2,461,397 $ 693 0.11 %
Savings and money market 1,673,244 510 0.12 % 1,780,483 1,078 0.24 %
Certificates of deposit 508,244 237 0.19 % 610,766 301 0.20 %
Total interest-bearing deposits 4,590,750 1,388 0.12 % 4,852,646 2,072 0.17 %
FHLB advances 459,749 2,953 2.60 % 407,122 2,977 2.90 %
Other borrowings 116,495 55 0.19 % 27,300 7 0.10 %
Long-term debt 274,417 3,432 5.07 % 270,879 3,478 5.09 %
Total interest-bearing liabilities 5,441,411 7,828 0.58 % 5,557,947 8,534 0.61 %
Noninterest-bearing deposits 2,795,633 2,614,712
Noninterest-bearing liabilities 105,349 123,514
Total liabilities 8,342,393 8,296,173
Total stockholders’ equity 1,049,912 1,035,782
Total liabilities and stockholders’ equity $ 9,392,305 $ 9,331,955
Net interest income/spread $ 76,441 3.29 % $ 73,039 3.05 %
Net interest margin 3.51 % 3.28 %
Ratio of interest-earning assets to interest-bearing liabilities 162 % 159 %
Total deposits $ 7,386,383 $ 1,388 0.08 % $ 7,467,358 $ 2,072 0.11 %
Total funding (1) $ 8,237,044 $ 7,828 0.39 % $ 8,172,659 $ 8,534 0.41 %

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

Year Ended
December 31, 2022 December 31, 2021
Average Yield Average Yield
Balance Interest / Cost Balance Interest / Cost
Interest-earning assets
Commercial real estate, multifamily, and construction $ 3,028,052 $ 133,140 4.40 % $ 2,457,408 $ 112,335 4.57 %
Commercial and industrial and SBA 2,331,375 120,164 5.15 % 2,333,589 99,262 4.25 %
SFR mortgage 1,795,951 68,428 3.81 % 1,310,029 46,723 3.57 %
Other consumer 91,030 5,640 6.20 % 40,046 2,290 5.72 %
Loans held-for-sale 3,904 173 4.43 % 2,423 77 3.18 %
Gross loans and leases 7,250,312 327,545 4.52 % 6,143,495 260,687 4.24 %
Securities 1,230,901 38,527 3.13 % 1,295,879 27,588 2.13 %
Other interest-earning assets 273,284 6,700 2.45 % 353,190 3,383 0.96 %
Total interest-earning assets 8,754,497 372,772 4.26 % 7,792,564 291,658 3.74 %
Allowance for credit losses (92,988) (82,166)
BOLI and noninterest-earning assets 688,545 583,606
Total assets $ 9,350,054 $ 8,294,004
Interest-bearing liabilities
Interest-bearing checking $ 2,226,611 $ 10,976 0.49 % $ 2,267,059 $ 2,906 0.13 %
Savings and money market 1,528,202 5,985 0.39 % 1,664,350 7,063 0.42 %
Certificates of deposit 763,022 10,872 1.42 % 633,497 2,344 0.37 %
Total interest-bearing deposits 4,517,835 27,833 0.62 % 4,564,906 12,313 0.27 %
FHLB advances 528,590 15,153 2.87 % 426,875 12,023 2.82 %
Other borrowings 86,172 1,206 1.40 % 44,214 46 0.10 %
Long-term debt 274,604 14,215 5.18 % 260,122 13,498 5.19 %
Total interest-bearing liabilities 5,407,201 58,407 1.08 % 5,296,117 37,880 0.72 %
Noninterest-bearing deposits 2,838,697 1,996,449
Noninterest-bearing liabilities 111,904 104,450
Total liabilities 8,357,802 7,397,016
Total stockholders’ equity 992,252 896,988
Total liabilities and stockholders’ equity $ 9,350,054 $ 8,294,004
Net interest income/spread $ 314,365 3.18 % $ 253,778 3.02 %
Net interest margin 3.59 % 3.26 %
Ratio of interest-earning assets to interest-bearing liabilities 162 % 147 %
Total deposits $ 7,356,532 $ 27,833 0.38 % $ 6,561,355 $ 12,313 0.19 %
Total funding (1) $ 8,245,898 $ 58,407 0.71 % $ 7,292,566 $ 37,880 0.52 %

(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 share, return on average tangible common equity, adjusted noninterest income, adjusted noninterest expense, adjusted noninterest income to adjusted total revenue, adjusted noninterest expense to average total assets, pre-tax pre-provision (PTPP) income, adjusted PTPP income, PTPP income ROAA, adjusted PTPP income ROAA, efficiency ratio, adjusted efficiency ratio, adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share (EPS) and adjusted return on average assets (ROAA) constitute supplemental financial information determined by methods other than in accordance with GAAP. These non-GAAP measures are used by management in its analysis of the Company's performance.

Tangible assets and tangible equity are calculated by subtracting goodwill and other intangible assets from total assets and total equity. Tangible common equity is calculated by subtracting preferred stock from tangible equity. Return on average tangible common equity is computed by dividing net income 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 is calculated by adjusting net income for tax-effected noninterest income and noninterest expense adjustments and the tax impact from the exercise of stock appreciation rights for the periods indicated. Adjusted ROAA is computed by dividing annualized adjusted net income by average assets. Adjusted net income available to common stockholders is computed by removing the impact of preferred stock redemptions from adjusted net income. Adjusted diluted earnings per share is computed by dividing adjusted net income available to common stockholders by the weighted average diluted common shares outstanding.

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)

December 31,<br>2022 September 30,<br>2022 June 30,<br>2022 March 31,<br>2022 December 31,<br>2021
Tangible common equity, and tangible common equity to tangible assets ratio
Total assets $ 9,197,016 $ 9,368,578 $ 9,502,113 $ 9,583,540 $ 9,393,743
Less goodwill (114,312) (114,312) (95,127) (95,127) (94,301)
Less other intangible assets (7,526) (8,081) (4,677) (4,990) (6,411)
Tangible assets(1) $ 9,075,178 $ 9,246,185 $ 9,402,309 $ 9,483,423 $ 9,293,031
Total stockholders' equity $ 959,618 $ 951,990 $ 949,130 $ 979,009 $ 1,065,290
Less preferred stock — — — — (94,956)
Total common stockholders' equity $ 959,618 $ 951,990 $ 949,130 $ 979,009 $ 970,334
Total stockholders' equity $ 959,618 $ 951,990 $ 949,130 $ 979,009 $ 1,065,290
Less goodwill (114,312) (114,312) (95,127) (95,127) (94,301)
Less other intangible assets (7,526) (8,081) (4,677) (4,990) (6,411)
Tangible equity(1) 837,780 829,597 849,326 878,892 964,578
Less preferred stock — — — — (94,956)
Tangible common equity(1) $ 837,780 $ 829,597 $ 849,326 $ 878,892 $ 869,622
Total stockholders' equity to total assets 10.43 % 10.16 % 9.99 % 10.22 % 11.34 %
Tangible equity to tangible assets(1) 9.23 % 8.97 % 9.03 % 9.27 % 10.38 %
Tangible common equity to tangible assets(1) 9.23 % 8.97 % 9.03 % 9.27 % 9.36 %
Common shares outstanding 58,544,534 59,679,558 59,985,736 62,077,312 62,188,206
Class B non-voting non-convertible common shares outstanding 477,321 477,321 477,321 477,321 477,321
Total common shares outstanding 59,021,855 60,156,879 60,463,057 62,554,633 62,665,527
Book value per common share $ 16.26 $ 15.83 $ 15.70 $ 15.65 $ 15.48
Tangible common equity per share(1) $ 14.19 $ 13.79 $ 14.05 $ 14.05 $ 13.88

(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 Year Ended
December 31,<br>2022 September 30,<br>2022 June 30,<br>2022 March 31,<br>2022 December 31,<br>2021 December 31,<br>2022 December 31,<br>2021
Return on tangible common equity
Average total stockholders' equity $ 989,414 $ 960,806 $ 969,885 $ 1,049,912 $ 1,035,782 $ 992,252 $ 896,988
Less average preferred stock — — — (75,965) (94,956) (18,731) (112,201)
Average common stockholders' equity 989,414 960,806 969,885 973,947 940,826 973,521 784,787
Less average goodwill (114,312) (98,916) (95,127) (94,307) (86,911) (100,715) (49,688)
Less average other intangible assets (7,869) (4,570) (4,869) (6,224) (4,994) (5,884) (2,924)
Average tangible common equity(1) $ 867,233 $ 857,320 $ 869,889 $ 873,416 $ 848,921 $ 866,922 $ 732,175
Net income available to common stockholders $ 21,519 $ 24,196 $ 26,712 $ 43,345 $ 4,024 $ 115,772 $ 50,563
Add amortization of intangible assets 555 396 313 441 430 1,705 1,276
Less tax effect on amortization of intangible assets(2) (164) (117) (93) (130) (127) (504) (377)
Net income available to common stockholders after adjustments for intangible assets(1) $ 21,910 $ 24,475 $ 26,932 $ 43,656 $ 4,327 $ 116,973 $ 51,462
Return on average equity 8.63 % 9.99 % 11.05 % 18.74 % 2.20 % 12.19 % 6.95 %
Return on average tangible common equity(1) 10.02 % 11.33 % 12.42 % 20.27 % 2.02 % 13.49 % 7.03 %

(1)Non-GAAP measure.

(2)Adjustments shown at a statutory tax rate of 29.6%.

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended Year Ended
December 31,<br>2022 September 30,<br>2022 June 30,<br>2022 March 31,<br>2022 December 31,<br>2021 December 31,<br>2022 December 31,<br>2021
Adjusted noninterest income
Total noninterest income $ (1,427) $ 5,681 $ 7,186 $ 5,910 $ 5,605 $ 17,350 $ 19,376
Noninterest income adjustments:
Net loss (gain) on sale of securities available for sale 7,708 — — (16) — 7,692 —
Adjusted noninterest income(1) $ 6,281 $ 5,681 $ 7,186 $ 5,894 $ 5,605 $ 25,042 $ 19,376
Adjusted noninterest expense
Total noninterest expense $ 48,203 $ 50,962 $ 48,612 $ 46,596 $ 58,872 $ 194,373 $ 183,678
Noninterest expense adjustments:
Indemnified legal recoveries (fees) 869 (1,017) (455) 106 (642) (497) 2,073
Acquisition, integration and transaction costs — (2,080) — — (13,469) (2,080) (15,869)
Noninterest expense adjustments before (loss) gain in alternative energy partnership investments 869 (3,097) (455) 106 (14,111) (2,577) (13,796)
(Loss) gain in alternative energy partnership investments (608) (504) (1,043) (158) 1,220 (2,313) 204
Total noninterest expense adjustments 261 (3,601) (1,498) (52) (12,891) (4,890) (13,592)
Adjusted noninterest expense(1) $ 48,464 $ 47,361 $ 47,114 $ 46,544 $ 45,981 $ 189,483 $ 170,086
Average assets $ 9,257,311 $ 9,408,740 $ 9,342,696 $ 9,392,305 $ 9,331,955 $ 9,350,054 $ 8,294,004
Noninterest income to total revenue(1) (1.81) % 6.68 % 8.41 % 7.18 % 7.13 % 5.23 % 7.09 %
Adjusted noninterest income to adjusted total revenue(1) 7.26 % 6.68 % 8.41 % 7.16 % 7.13 % 7.38 % 7.09 %
Noninterest expense to average total assets(2) 2.07 % 2.15 % 2.09 % 2.01 % 2.50 % 2.08 % 2.21 %
Adjusted noninterest expense to average total assets(1)(2) 2.08 % 2.00 % 2.02 % 2.01 % 1.95 % 2.03 % 2.05 %

(1)Non-GAAP measure.

(2)Ratio presented on an annualized basis.

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended Year Ended
December 31,<br>2022 September 30,<br>2022 June 30,<br>2022 March 31,<br>2022 December 31,<br>2021 December 31,<br>2022 December 31,<br>2021
Adjusted pre-tax pre-provision income
Net interest income $ 80,217 $ 79,408 $ 78,299 $ 76,441 $ 73,039 $ 314,365 $ 253,778
Noninterest income (1,427) 5,681 7,186 5,910 5,605 17,350 19,376
Total revenue 78,790 85,089 85,485 82,351 78,644 331,715 273,154
Noninterest expense 48,203 50,962 48,612 46,596 58,872 194,373 183,678
Pre-tax pre-provision income(1) $ 30,587 $ 34,127 $ 36,873 $ 35,755 $ 19,772 $ 137,342 $ 89,476
Total revenue $ 78,790 $ 85,089 $ 85,485 $ 82,351 $ 78,644 $ 331,715 $ 273,154
Total noninterest income adjustments 7,708 — — (16) — 7,692 —
Adjusted total revenue(1) 86,498 85,089 85,485 82,335 78,644 339,407 273,154
Noninterest expense 48,203 50,962 48,612 46,596 58,872 194,373 183,678
Total noninterest expense adjustments 261 (3,601) (1,498) (52) (12,891) (4,890) (13,592)
Adjusted noninterest expense(1) 48,464 47,361 47,114 46,544 45,981 189,483 170,086
Adjusted pre-tax pre-provision income(1) $ 38,034 $ 37,728 $ 38,371 $ 35,791 $ 32,663 $ 149,924 $ 103,068
Average assets $ 9,257,311 $ 9,408,740 $ 9,342,696 $ 9,392,305 $ 9,331,955 $ 9,350,054 $ 8,294,004
Pre-tax pre-provision income ROAA(1)(2) 1.31 % 1.44 % 1.58 % 1.54 % 0.84 % 1.47 % 1.08 %
Adjusted pre-tax pre-provision income ROAA(1)(2) 1.63 % 1.59 % 1.65 % 1.55 % 1.39 % 1.60 % 1.24 %
Efficiency ratio(1)(2) 61.18 % 59.89 % 56.87 % 56.58 % 74.86 % 58.60 % 67.24 %
Adjusted efficiency ratio(1)(2) 56.03 % 55.66 % 55.11 % 56.53 % 58.47 % 55.83 % 62.27 %

(1)Non-GAAP measure.

(2)Ratio presented on an annualized basis.

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended Year Ended
December 31,<br>2022 September 30,<br>2022 June 30,<br>2022 March 31,<br>2022 December 31,<br>2021 December 31,<br>2022 December 31,<br>2021
Adjusted net income
Net income (1)(2)(3) $ 21,519 $ 24,196 $ 26,712 $ 48,512 $ 5,751 $ 120,939 $ 62,346
Adjustments:
Noninterest income adjustments 7,708 — — (16) — 7,692 —
Noninterest expense adjustments (261) 3,601 1,498 52 12,891 4,890 13,592
Tax impact of adjustments above(4) (2,202) (1,065) (443) (11) (3,811) (3,720) (4,018)
Tax impact from exercise of stock appreciation rights — — — — — — (2,093)
Adjustments to net income 5,245 2,536 1,055 25 9,080 8,862 7,481
Adjusted net income(2)(5) $ 26,764 $ 26,732 $ 27,767 $ 48,537 $ 14,831 $ 129,801 $ 69,827
Average assets $ 9,257,311 $ 9,408,740 $ 9,342,696 $ 9,392,305 $ 9,331,955 $ 9,350,054 $ 8,294,004
ROAA(6) 0.92 % 1.02 % 1.15 % 2.09 % 0.24 % 1.29 % 0.75 %
Adjusted ROAA(5)(6) 1.15 % 1.13 % 1.19 % 2.10 % 0.63 % 1.39 % 0.84 %
Adjusted net income available to common stockholders
Net income available to common stockholders $ 21,519 $ 24,196 $ 26,712 $ 43,345 $ 4,024 $ 115,772 $ 50,563
Adjustments to net income 5,245 2,536 1,055 25 9,080 8,862 7,481
Adjustments for impact of preferred stock redemption — — — 3,747 — 3,747 3,347
Adjusted net income available to common stockholders(5) $ 26,764 $ 26,732 $ 27,767 $ 47,117 $ 13,104 $ 128,381 $ 61,391
Average diluted common shares 59,725,283 60,492,460 61,600,615 62,906,003 60,690,046 61,175,108 53,302,926
Diluted EPS $ 0.36 $ 0.40 $ 0.43 $ 0.69 $ 0.07 $ 1.89 $ 0.95
Adjusted diluted EPS(5)(7) $ 0.45 $ 0.44 $ 0.45 $ 0.75 $ 0.22 $ 2.10 $ 1.15

(1)Net income for the three months and year ended December 31, 2022 includes a $7.7 million pre-tax loss on sale of securities.

(2)Net income and adjusted net income for the three months ended March 31, 2022 and year ended December 31, 2022 includes a $31.3 million pre-tax reversal of credit losses due to the recovery from the settlement of a previously charged-off loan; there is no similar recovery in any of the other periods presented. The Bank previously recognized a $35.1 million charge-off for this loan during the third quarter of 2019.

(3)Net income for the three months and year ended December 31, 2021 includes an $11.3 million pre-tax charge for the expected lifetime credit losses for non-purchased credit deteriorated loans acquired in the PMB Acquisition; there is no similar charge in any of the other periods presented.

(4)Tax impact of adjustments shown at a statutory tax rate of 29.6%.

(5)Non-GAAP measure.

(6)Ratio presented on an annualized basis.

(7)Represents adjusted net income available to common stockholders divided by average diluted common shares.

22

banc2022q4investordeckvf

INVESTOR PRESENTATION 2022 Fourth Quarter Earnings bancofcal.com

2 When used in this report and in documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “believe,” “will,” “should,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the “Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements. These statements may relate to future financial performance, strategic plans or objectives, revenue, expense or earnings projections, or other financial items of Banc of California, Inc. and its affiliates (“BANC,” the “Company”, “we”, “us” or “our”). By their nature, these statements are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the statements. Factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to, the following: (i) the continuing effects of the COVID-19 pandemic and steps taken by governmental and other authorities to contain, mitigate, and combat the pandemic on our business, operations, financial performance and prospects; (ii) the costs and effects of litigation, including legal fees and other expenses, settlements and judgments; (iii) the risk that we will not be successful in the implementation of our capital utilization strategy, new lines of business, new products and services, or other strategic project initiatives; (iv) risks that the Company’s merger and acquisition transactions may disrupt current plans and operations and lead to difficulties in customer and employee retention, risks that the costs, fees, expenses and charges related to these transactions could be significantly higher than anticipated and risks that the expected revenues, cost savings, synergies, and other benefits of these transactions might not be realized to the extent anticipated, within the anticipated timetables, or at all and, in the case of our recent acquisition of Deepstack Technologies, reputational risk, regulatory risk and potential adverse reactions of the Company's or Deepstack's customers, suppliers, vendors, employees or other business partners; (v) the credit risks of lending activities, which may be affected by deterioration in real estate markets and the financial condition of borrowers, and the operational risk of lending activities, including but not limited to, the effectiveness of our underwriting practices and the risk of fraud, any of which may lead to increased loan delinquencies, losses, and nonperforming assets in our loan portfolio, and may result in our allowance for credit losses not being adequate and require us to materially increase our credit loss reserves; (vi) the quality and composition of our securities portfolio; (vii) changes in general economic conditions, either nationally or in our market areas, including the impact of supply chain disruptions, or changes in financial markets, and the risk of recession or an economic downtrun; (viii) changes in the interest rate environment and levels of general interest rates, including the recent and anticipated increases by the FRB in its benchmark rate, the impacts of inflation, the relative differences between short- and long-term interest rates, deposit interest rates, our net interest margin, and funding sources; (ix) fluctuations in the demand for loans, and fluctuations in commercial and residential real estate values in our market area; (x) our ability to develop and maintain a strong core deposit base or other low cost funding sources necessary to fund our activities; (xi) results of examinations of us by regulatory authorities and the possibility that any such regulatory authority may, among other things, limit our business activities, require us to change our business mix, restrict our ability to invest in certain assets, increase our allowance for credit losses, result in write-downs of asset values, increase our capital levels, affect our ability to borrow funds or maintain or increase deposits, or impose fines, penalties or sanctions, any of which could adversely affect our liquidity and earnings; (xii) legislative or regulatory changes that adversely affect our business, including, without limitation, changes in tax laws and policies, changes in privacy laws, and changes in regulatory capital or other rules, and the availability of resources to address or respond to such changes; (xiii) our ability to control operating costs and expenses; (xiv) staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our work force and potential associated charges; (xv) the risk that our enterprise risk management framework may not be effective in mitigating risk and reducing the potential for losses; (xvi) errors in estimates of the fair values of certain of our assets and liabilities, which may result in significant changes in valuation; (xvii) uncertainty regarding the expected discontinuation of the London Interbank Offered Rate (“LIBOR”) and the use of alternative reference rates; (xviii) failures or security breaches with respect to the network, applications, vendors and computer systems on which we depend, including but not limited to, due to cybersecurity threats; (xix) our ability to attract and retain key members of our senior management team; (xx) increased competitive pressures among financial services companies; (xxi) changes in consumer spending, borrowing and saving habits; (xxii) the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, and other external events on our business; (xxiii) the ability of key third-party providers to perform their obligations to us; (xxiv) changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board or their application to our business, including additional guidance and interpretation on accounting issues and details of the implementation of new accounting standards; (xxv) continuing impact of the Financial Accounting Standards Board’s credit loss accounting standard, referred to as Current Expected Credit Loss, which requires financial institutions to determine periodic estimates of lifetime expected credit losses on loans, and provide for the expected credit losses as allowances for loan losses; (xxvi) share price volatility and reputational risks, related to, among other things, speculative trading and certain traders shorting our common shares and attempting to generate negative publicity about us; (xxvii) our ability to obtain regulatory approvals or non-objection to take various capital actions, including the payment of dividends by us or our bank subsidiary, or repurchases of our common stock; and (xxviii) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services and the other risks described in this report and from time to time in other documents that we file with or furnish to the SEC. FORWARD LOOKING STATEMENTS

3 (1) Denotes a non-GAAP financial measure; see “Non-GAAP Reconciliation” slides at end of presentation (2) 4Q22 capital ratios are preliminary FOURTH QUARTER 2022 RESULTS ($ in Thousands Except Per Share Data) 4Q22 3Q22 4Q21 Net interest income $ 80,217 $ 79,408 $ 73,039 Provision for credit losses - - $ 11,262 Net income $ 21,519 $ 24,196 $ 5,751 Net income available to common stockholders $ 21,519 $ 24,196 $ 4,024 Earnings per diluted common share $ 0.36 $ 0.40 $ 0.07 Adjusted net income (1) $ 26,764 $ 26,732 $ 14,831 Adjusted net income available to common stockholders (1) $ 26,764 $ 26,732 $ 13,104 Adjusted earnings per diluted common share (1) $ 0.45 $ 0.44 $ 0.22 Pre-tax pre-provision (PTPP) income (1) $ 30,587 $ 34,127 $ 19,772 Adjusted PTPP income (1) $ 38,034 $ 37,728 $ 32,663 Return on average assets (ROAA) 0.92% 1.02% 0.24% Adjusted ROAA (1) 1.15% 1.13% 0.63% PTPP ROAA (1) 1.31% 1.44% 0.84% Adjusted PTPP ROAA (1) 1.63% 1.59% 1.39% Average assets $ 9,257,311 $ 9,408,740 $ 9,331,955 Net interest margin 3.69% 3.58% 3.28% Allowance for credit losses coverage ratio 1.28% 1.36% 1.35% NIE / Average Assets (1) 2.07% 2.15% 2.50% Adjusted NIE / Average Assets (1) 2.08% 2.00% 1.95% Common equity tier 1 (2) 11.88% 11.43% 11.31% Tangible common equity per share (1) $ 14.19 $ 13.79 $ 13.88 Noninterest-bearing deposits as % of total ending deposits 39.5% 40.4% 37.5%

4 4th Quarter 2022 Summary Consistent Earnings Power • Adjusted ROAA(1) increased to 115 bps for 4Q22 compared to 113 bps for the prior quarter and 63 bps same quarter a year ago • Increase in adjusted net income on a slightly smaller balance sheet • Proactive balance sheet management to reposition securities portfolio, resulting in higher future yields Continued Growth in Targeted Areas • Average noninterest-bearing deposits increased from 38% to 41% of total average deposits • The number of commercial noninterest-bearing deposit accounts increased year-to-date • Total commercial loans, excluding warehouse lending and SBA, increased 3% annualized Asset Sensitivity Expanded Net Interest Margin • 11 basis points of NIM expansion aided by stable base of noninterest-bearing deposits • Remain slightly asset sensitive as we near expected peak rate increases Stable Asset Quality • Lower NPLs excluding SFR loans (which are well-secured with low LTVs) • Extensive stress testing on portfolio indicates asset quality should remain strong if economic conditions deteriorate in near future Continued Growth in Capital • Tangible common equity per share(1) grew 2.9%, or 11.6% annualized, in the quarter to $14.19 • TCE ratio(1) grew 26 bps to 9.23% • CET 1 ratio grew 45 bps to 11.88% • $18.9 million of common shares repurchased in Q4 completing $75 million buyback program announced in Q1 ENHANCING FRANCHISE VALUE (1) Denotes a non-GAAP financial measure; see “Non-GAAP Reconciliation” slides at end of presentation

5 Adjusted Pre-tax Pre-provision (PTPP) Income (1) $16.0 $13.2 $12.2 $18.9 (1) Denotes a non-GAAP financial measure; see “Non-GAAP Reconciliation” slides at end of presentation 0.65% 0.83% 0.98% 1.25% 1.06% 1.35% 1.39% 1.55% 1.65% 1.59% 1.63% 1Q21 2 .0 2Q21 $27.7 3Q21 $32.7 4Q21 $35.8 1Q22 $12.2 2Q22 $37.7 3Q22 $38.0 4Q221Q20 $16.0 2Q20 $18.9 3Q20 $24.5 4Q20 1.13% $20.6 $38.4 +16% +212% Adjusted PTPP Income Adjusted PTPP Income / Avg. Assets CONSISTENT CORE EARNINGS POWER ($ in millions)

6 NET INCOME AVAILABLE TO COMMON STOCKHOLDERS RECONCILIATION • 4Q22 noninterest expense adjustments relate to professional fees, net of recoveries. • 3Q22 noninterest expense adjustments relate to professional fees, net of recoveries, and include merger expenses related to Deepstack ($ in millions) (1) Denotes a non-GAAP financial measure; see “Non-GAAP Reconciliation” slides at end of presentation (2) Adjustments presented utilizing a statutory tax rate of 29.6%; see “Non-GAAP Reconciliation” slides at end of presentation $21.5 $26.8 $5.4 Net Income Available to Common Stockholders $(0.6) Noninterest expense adjustments $0.4 Loss on alternative energy partnerships Loss on Sale of Securities Adjusted Net Income Available to Common Stockholders (1)(2) $24.2 $26.7 Net income available to common stockholders $2.2 Noninterest expense adjustments $0.4 Loss on alternative energy partnerships $(0.0) Loss on Sale of Securities Adjusted Net Income Available to Common Stockholders (1)(2) EPS $0.36 EPS $0.44 EPS $0.40 4Q 2022 3Q 2022 EPS $0.45 Highlights 0.92% 1.15% 1.02% 1.13% Adjusted ROAA(1) ROAA ROAA Adjusted ROAA(1)

7 TBV PER COMMON SHARE GROWTH IN A CHALLENGING ENVIRONMENT $13.39 FY2020 $13.88 FY2021 $14.19 FY2022 Tangible Book Value / Share Solid growth in TBV per common share driven by strong earnings and prudent balance sheet management that more than offset negative AOCI marks, dividends, common stock repurchases and acquisition of Deepstack Technologies 4Q22: Completed $75 million stock buyback authorized in 1Q22 that reduced outstanding shares by 7% 4Q21: Closed $1.5 billion asset PMB acquisition in October 3Q22: Completed $24 million acquisition of Deepstack Technologies in September

8 LOW COST DEPOSIT FRANCHISE (1) Reflects balance as of period end • 39.5% percent of ending total deposits are noninterest-bearing, up from 37.5% a year ago • Targeted deposit strategy has transformed deposit mix and contributed to preserving asset- sensitive profile • 12/31/22 spot rate on deposits of 1.07% Cost of Deposits 0.11% 37.5% 32.2% 23.5% 0.0% 6.8% 4Q21 0.08% 39.6% 32.0% 21.4% 0.0%7.0% 1Q22 0.17% 37.4% 31.2% 21.5% 1.8% 8.1% 2Q22 0.47% 40.4% 26.4% 20.4% 4.4% 8.4% 3Q22 0.79% 39.5% 27.3% 16.5% 8.5% 8.2% 4Q22 Average cost of deposits Noninterest-bearing Interest-bearing checking Money market & savings Brokered CDs CDsHighlights 0.08% 0.12% 0.77% 2.18% 3.65% Average Fed funds rate Category 4Q21 1Q22 2Q22 3Q22 4Q22 $ in millions Noninterest-bearing checking $2,788.2 $2,958.6 $2,826.6 $2,943.6 $2,809.3 Interest-bearing checking 2,393.4 2,395.3 2,359.9 1,921.8 1,947.2 Demand deposits 5,181.6 5,354.0 5,186.5 4,865.4 4,756.6 Money market & savings 1,751.1 1,605.1 1,622.9 1,478.0 1,174.9 CDs 506.7 520.7 615.7 614.6 584.5 Brokered CDs 0.0 0.0 133.6 322.4 604.9 Total(1) $7,439.4 $7,479.7 $7,558.7 $7,280.4 $7,120.9

9 YTD Growth in Number of Accounts and Steady Commercial Noninterest-Bearing Deposits DEPOSIT ENGINE CONSISTENTLY GENERATES LOW-COST COMMERCIAL DEPOSIT RELATIONSHIPS NIB Commercial Deposits Comprise 89% of Total NIB Deposits ($ millions) 9,920 10,945 11,270 11,444 14,244 14,292 14,300 14,541 14,497 2019Y 2020Y 1Q21 2Q21 11,644 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 $1,001 $1,339 $1,519 $1,605 $1,920 $2,550 $2,651 $2,476 $2,592 $2,433 NIB Business Deposits Accounts NIB Business Deposits 4Q21 Includes PMB Acquisition

10 DIVERSIFIED LOAN PORTFOLIO MITIGATES RISK Attractive Risk-Adjusted Yields • Total Commercial Loans, excluding warehouse and SBA, increased $34 million or 3% on an annualized basis • 54% of loans are variable or hybrid • 63% of the loan portfolio is secured by residential real estate • Real estate secured loans weighted average loan-to-values (LTVs) of 57% • 75% of the SFR portfolio have LTVs of less than 70% • 85% of all real estate secured loans have LTVs of less than 70% (1) Reflects balance as of period end 4th Quarter 2022 3rd Quarter 2022 Change Loan Segment $(1) % Avg. Yield $(1) % Avg. Yield $(1) % Avg. Yield $ in Millions C&I: Warehouse $ 603 8% 6.93% $ 766 11% 5.97% $ (164) -3% 0.96% C&I: All Other 1,243 17% 6.35% 1,227 17% 5.09% 16 0% 1.26% Multifamily 1,690 24% 3.98% 1,698 23% 4.00% (9) 1% -0.02% CRE 1,260 18% 4.66% 1,241 17% 4.44% 19 1% 0.22% Construction 244 3% 7.54% 236 3% 6.72% 7 0% 0.82% SBA 68 1% 5.78% 86 1% 3.13% (18) 0% 2.65% Total Commercial Loans 5,107 72% 5.23% 5,255 72% 4.77% (148) 0% 0.46% SFR 1,921 27% 4.04% 1,948 27% 3.85% (27) 0% 0.19% Consumer 87 1% 6.14% 87 1% 6.05% 0 0% 0.09% Total Consumer Loans 2,008 28% 4.13% 2,034 28% 3.94% (27) 0% 0.19% Total Loans HFI $ 7,115 100% 4.92% $ 7,289 100% 4.54% $ (174) N/A 0.38% Construction $244 3% Consumer $87 1% SBA $68 1% CRE $1,260 18% 1-4 Res. $1,921 27% Multifamily $1,690 24% C&I $1,846 25% Q4 Highlights

11 DIVERSIFIED BUSINESS MIX Loan Yields On New Production Continue To Rise (1) PMB acquired loans excluded from chart and Total Loan Fundings (2) Includes deferred costs/fees, transfers, sales and other adjustments $583 $679 $831 $559 $145 $243 $290 $380 $262 $351 $80 $906 $968 $1,211 $821 $496 ($575) ($435) ($459) ($239) ($212) ($254) ($317) ($334) ($347) ($284) ($28) ($414) ($394) ($166) ($828) ($780) ($1,208) ($980) ($662) 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Total Loan Fundings of $496 Million in Q4 2022 Fundings Advances Warehouse Net Advances/Paydowns Payoffs Paydowns Warehouse Net Advances/Paydowns Total Loan Yield Rate on Production ($ in millions) ($ in millions) Loans Beginning Balance Total Fundings PMB Acquired(1) Total Payoffs Net Di fference Other Change (2) Loans Ending Balance Total Loan Yield Rate on Production Q4 2022 7,294$ 496$ -$ 662$ (166)$ (8)$ 7,119$ 4.92% 6.81% Q3 2022 7,455$ 821$ -$ 980$ (159)$ (2)$ 7,294$ 4.54% 5.52% Q2 2022 7,455$ 1,211$ -$ 1,208$ 3$ (2)$ 7,455$ 4.35% 4.20% Q1 2022 7,255$ 968$ -$ 780$ 188$ 12$ 7,455$ 4.26% 3.70% Q4 2021 6,232$ 906$ 963$ 828$ 77$ (17)$ 7,255$ 4.20% 3.74%

12 ASSET QUALITY REMAINS STRONG NPLs, Delinquencies, and Classified Loans Delinquencies ($ in millions) Non-performing Loans (NPLs) ($ in millions) Criticized and Classified Loans ($ in millions) ACL / Non-performing Loans (NPLs) ($ in millions) $19.1 $21.7 1.00% 4Q21 $30.6 0.82% 1Q22 $29.7 0.83% 2Q22 $21.1 0.79% 3Q22 $30.4 1.28% 4Q22 SFR Delinquencies PMBC Acquired Delinquencies Delinquencies (ex-SFR) Delinquencies /Total Loans $101 $60 4Q21 $98 1Q22 $125 2Q22 $111 3Q22 $119 4Q22 $245 $250 $211 $173 $183 Criticized and Classified Loans PMB Acquired Criticized and Classified Loans Classified Loans $21.6 $23.9 0.72% 4Q21 $44.2 0.73% 1Q22 $37.1 0.60% 2Q22 $34.7 0.59% 3Q22 $34.1 0.78% 4Q22 SFR NPLs PMBC Acquired NPLs NPLs (ex-SFR) NPLs/Total Loans-HFI 1.35% $98.2 4Q21 1.32% $98.6 1Q22 1.34% $99.7 2Q22 1.36% $98.8 3Q22 1.28% $91.3 4Q22 ACL / Total Loans ACL (1) 4Q22 SFR average LTV is 57%. Please see slide 19 for additional information (2) The NPL ratio related to BANC originated loans was 0.49% when PMB’s NPLs of $21.6 million and PMB acquired loans outstanding at December 31, 2021 of $905 million are excluded (2) Decline in NPLs excluding SFR loans, which are well-secured with low average LTVs of 57%(1) $31.9 $30.4 $32.5 $36.4 $60.8 $7.1 $10.3 $7.3 $8.0 $21.1

13 ALLOWANCE FOR CREDIT LOSSES WALK 1.33% (1) 1.26% (1) $98.8 $91.3 $(7.6) $(1.1) Net Charge-offsACL (9/30/2022) $0.2 $1.0 Changes in Specific Reserve Provision for RUC Portfolio Mix ACL (12/31/22) 1.36% 1.28% 1.36% • ACL includes the Allowance for Loan Losses (ALL) and Reserve for Unfunded Loan Commitments (RUC) • The $7.6 million decrease in the ACL was due to (i) net charge offs of $7.6 million, of which $7.1 million related to a specific reserve for an acquired PCD loan; and (ii) $1.1 million lower RUC from lower volume of unfunded commitments; offset by (iii) new specific reserves totaling $1.0 million, and (iv) higher general reserves of $0.2 million due to changes in portfolio mix including lower overall balances and the impact of weaker economic forecasts • Total coverage ratio was 1.28% at 4Q22 compared to 1.36% at 3Q22 ($ in millions)

14 Interest Rate Risk Position (within 12 months) Loan & Deposit Mix Rate Sensitive Assets at 31% of Total Assets Loan Portfolio • $2.1 billion mature or reset within 12 months • $432 million are at or below their floors • Given a 50 bps market rate increase, 98% of loans with floors are eligible to reprice Cash & Investments • $229 million in interest bearing cash • $493 million reprice within 12 months, mostly CLOs INTEREST RATE RISK MANAGEMENT Remain slightly asset sensitive with 20% one year positive gap ratio HFI Loans: $7.1 billion Total Deposits: $7.1 billion Noninterest- bearing 39% Interest- bearing, Non-Maturity Non-Time 44% Time 17% Hybrid 24% Variable 30% Fixed 46% LESS Rate Sensitive Liabilities at 11% of Total Assets • $1.0 billion CD’s mature or reprice within 12 months • $20 million in overnight borrowings One Year Positive Gap Ratio was 20% of Total Assets

15(1) 4Q22 capital ratios are preliminary. (2) Denotes a non-GAAP financial measure; see “Non-GAAP Reconciliation” slides at end of presentation STRONG CAPITAL BASE Provides Buffer For Economic Environment • 1Q22 included the Series E Preferred Stock Redemption of $98.7 million • 1Q22, 2Q22, 3Q22 and 4Q22 included $4.3 million, $38.9 million, $13.0 million and $18.9 in common stock repurchases, respectively • 3Q22 included the impact from the Deepstack acquisition and 4Q21 included the impact from the PMB acquisition 4Q21 4Q22 11.31% 11.88% Common Equity Tier 1 4Q21 4Q22 9.36% 9.23% Tangible Common Equity / Tangible Assets(2) BANC is Focused on Key Capital Ratios 4Q22 3Q22 2Q22 1Q22 4Q21 Common Equity Tier 1 (1) 11.88% 11.43% 11.29% 11.40% 11.31% Tier 1 Risk-based Capital (1) 11.88% 11.43% 11.29% 11.40% 12.55% Leverage Ratio (1) 9.71% 9.52% 9.58% 9.72% 10.37% Tangible Equity / Tangible Assets (2) 9.23% 8.97% 9.03% 9.27% 10.38% Tangible Common Equity / Tangible Assets (2) 9.23% 8.97% 9.03% 9.27% 9.36%

16 • Redeemed Series E preferred stock in 1Q22 for annualized savings of $6.9 million • Repurchased $75 million in stock in 2022 • Acquired Deepstack with stock and cash • Shifted a portion of the securities portfolio from AFS to HTM to protect TBVPS • Repositioned a portion of the AFS securities portfolio for a $5.4 million after-tax loss on sales and ~3 year pay-back through reinvestment Fully Realize Synergies of PMB Acquisition Continue Generating Strong Loan Production Capitalize on Asset Sensitivity Accelerate Investment in Technology Continue Optimizing Use of Capital to Increase Earnings and Enhance Franchise Value We delivered on what we said we would do in our Q4 2021 Investor Presentation • Achieved 40%+ cost saves • Compared to 2021: • 2022 adjusted efficiency ratio(1) declined from 62% to 56% • 2022 adjusted noninterest expense to average assets ratio(1) declined from 2.05% to 2.03% • Adjusted ROAA(1) increased to 115 bps for 4Q22 compared to 63 bps for 4Q21 • 2022 core commercial loans increased 13%(2) • Attracted new leaders for ABL, Education and Entertainment • Launched several internal tech initiatives, including the rollout of nCino in 4Q22 • Launched payments vertical including acquisition of Deepstack Technologies • Strategic investment in Finexio • 2022 NIM expanded 33 bps • 2022 average NIB deposits increased 9% to 39% • Margin expansion in first half of year brought earnings forward, and ended the year remaining slightly asset sensitive with strong loan yields and a high percentage of noninterest-bearing deposits (1) Denotes a non-GAAP financial measure; see “Non-GAAP Reconciliation” slides at end of presentation. (2) Core commercial loans include CRE, Multifamily, Construction and C&I 2022 REVIEW: What Did We Say We Would Do and How Did We Do?

17 • Continued focus on noninterest-bearing deposits, credit quality, robust capital and tangible book value growth 2023 STRATEGIC OBJECTIVES Well Positioned to Grow Franchise Value • Build highly-differentiated payment business that will drive fee income and commercial deposits • Continue momentum in media/entertainment, healthcare and selective bridge real estate where we have unique expertise • Options include, but are not limited to: balance sheet growth, investments in people and technology, stock repurchases, debt paydowns, and other targeted ways to enhance yield Protect The Balance Sheet Proactively Manage Asset- Liability Mix Target Opportunistic Growth in our Core Niches Scale Payments Business and Related Initiatives Allocate Capital to Drive Long Term Shareholder Returns • Balance asset sensitivity while also proactively taking advantage of opportunities to enhance earnings for the long term

18 APPENDIX bancofcal.com

19 REAL ESTATE LOAN PORTFOLIO HAS LOW LTVS $ in millions (1) Excludes Warehouse credit facilities Real Estate Loan Balances(1) SFR Portfolio by LTV 59% 4Q21 59% 1Q22 65% 2Q22 70% 3Q22 72% 4Q22 $4,274 $4,424 $4,837 $5,124 $5,114 RE Loans / Loans-HFI RE Loans 60% to 70% 50% to 60% <50% 70% to 80% >80% • ~85% of all real estate secured loans have LTVs of less than 70% • Weighted average LTV is 57% Real Estate(1) LTVs $ % Count <50% $ 1,466 29% 1,124 50% to 60% 1,219 24% 506 60% to 70% 1,677 33% 635 70% to 80% 701 14% 428 >80% 51 1% 38 Total $ 5,114 100% 2,731 $ in Millions SFR LTVs $ % Count <50% $ 611 32% 701 50% to 60% 344 18% 276 60% to 70% 476 25% 375 70% to 80% 457 24% 374 >80% 32 2% 33 Total $ 1,921 100% 1,759 $ in Millions • ~75% of all existing SFR have LTVs of less than 70% • Weighted average LTV is 57%

20 CALIFORNIA-CENTRIC CRE AND MULTIFAMILY PORTFOLIOS HAVE LOW WEIGHTED-AVERAGE LTV CRE & Multifamily by Collateral Type 57% 9% 12% 11% 6% 2% 3% 93% 7% 97% 3% 43% 39% 13% 4% 2% Multifamily 57% Health Facility Retail Industrial Owner Occupied Mixed Use Multi Tenant Single Tenant Strip Center Non Owner Occupied Neighborhood Shopping Center Other Office Other <1% Residential Other Hospitality Collateral Type Count Balance Avg. Loan Size W.A. LTV $ in Millions MultiFamily 602 $ 1,690 $ 2.8 57% Office 74 342 4.6 56% Retail 69 332 4.8 52% Industrial 74 252 3.4 59% Health Facility 8 98 12.2 61% Hospitality 22 54 2.4 40% Other 75 182 2.4 55% Total CRE & MF 924 $ 2,950 $ 3.2 56%

21 ~51% C&I Concentration toward Businesses focused on Finance (including Warehouse), and Real Estate and Rental Leasing Growing concentration in targeted verticals: • 8% Media / Entertainment: • 6% Healthcare • 4% Education & Professional Limited Exposure to: • 2% Food Services • 1% Transportation • <1% in Accommodations All Other C&I includes a diverse mix of industry sectors 33% 9% 9% 8% 6% 5% 3% 3% 2% 2% 2% 2% 2% 2% 1% 1% 10% Finance and Insurance: Warehouse Real Estate & Rental Leasing Finance and Insurance: Other Media / Entertainment Healthcare and Social Assistance Manufacturing Gas Stations Other Retail Trade Construction Professional Services Whole Sale Trade Management of Companies and Enterprises Food Services Educational Services Transportation Accommodations All Other C&I 0% 5% 10% 15% 20% 25% 30% 35% DIVERSIFIED AND LOW AVERAGE BALANCE C&I PORTFOLIO NAICS Industry Count $ Avg. Loan Size $ in Millions Finance: Warehouse 53 $ 603 $ 11.4 Real Estate & Rental Leasing 162 173 1.1 Finance: Other 41 160 3.9 Manufacturing 96 96 1.0 Healthcare and Social Assistance 111 110 1.0 Arts, Entertainment, & Recreation 29 72 2.5 Television / Motion Pictures 28 76 2.7 Gas Stations 39 60 1.5 Other Retail Trade 89 57 0.6 Construction 83 40 0.5 Professional Services 185 39 0.2 Wholesale Trade 75 39 0.5 Management of Companies & 5 35 7.0 Transportation 73 19 0.3 Food Services 18 31 1.7 Educational Services 20 35 1.7 Accommodations 6 9 1.5 All Other C&I 273 193 0.7 Total C&I 1,386 $ 1,846 $ 1.3

22 Net Interest Margin Drivers 0.51% 0.09% 1.02% 3Q20 4.04% 3.38% 0.36% 0.09% 0.89% 4Q20 3.78% 3.19% 0.28% 0.08% 0.83% 1Q21 3.81% 3.27% 0.23% 0.07% 0.77% 2Q21 3.73% 3.28% 0.06% 4.27% 0.09% 2.97% 0.67% 3Q21 3.66% 3.28% 1.11% 0.11% 1.25% 0.08% 1.71% 0.61% 4Q21 3.87% 3.51% 1Q20 0.08% 4.06% 0.12% 0.58% 1Q22 4.04% 3.58% 3.09% 0.17% 0.77%0.71% 0.74% 1.29% 2Q22 4.33% 3.58% 0.47% 2.18% 0.15% 3Q22 4.79% 3.69% 2Q20 0.79% 3.65% 3.86% 1.81% 4Q22 3.09% 1.20% Earning Asset Yield Net Interest Margin Cost of Total Deposits Average Fed Funds Rate Interest-Bearing Liabilities STABLE, LOW COST DEPOSIT GROWS NET INTEREST MARGIN IN RISING RATES

23 STRONG ALLOWANCE COVERAGE RATIO Allocation Of Reserve By Loan Type • Allowance for Credit Losses (ACL) includes Reserve for Unfunded Commitments • ACL coverage ratio of 1.28% at the end of 4Q22 lower than prior quarter due to a $7.4 million partial charge-off, of which $7.1 million was a specific reserve established on a credit-deteriorated loan from the PMB acquisition. This loan has a remaining carrying value of $4.0 million with no specific reserve ACL Composition 12/31/2022 9/30/2022 ($ in thousands) Amount % of Loans Amount % of Loans Commercial real estate $ 15,977 1.27% $ 16,836 1.36% Multifamily 14,696 0.87% 15,953 0.94% Construction 5,850 2.40% 5,423 2.29% Commercial and industrial 31,689 2.55% 36,470 2.97% Commercial and industrial - warehouse 2,467 0.41% 2,355 0.31% SBA 2,648 3.89% 2,960 3.45% Total commercial loans 73,327 1.44% 79,997 1.52% Single family residential mortgage 12,050 0.63% 11,847 0.61% Other consumer 583 0.67% 600 0.69% Total consumer loans 12,633 0.63% 12,447 0.61% Allowance for loan losses 85,960 1.21% 92,444 1.27% Reserve for unfunded commitments 5,305 0.07% 6,405 0.09% Allowance for credit losses $ 91,265 1.28% $ 98,849 1.36%

24 QoQ Effective Duration (Years) 4Q22 3Q22 Change 4Q22 Gov’t & Agency (MBS, CMO, & SBA) $ 144.6 $ 164.0 $ (19.4) 2.8 CLOs 476.6 472.7 3.9 0.1 Corporate Securities 166.6 169.4 (2.8) 2.7 Private Label RMBS 80.5 41.5 39.0 7.5 AFS $ 868.3 $ 847.6 $ 20.7 1.7 Gov’t & Agency (MBS, CMO, & SBA) 214.4 214.6 (0.1) 9.8 Municipal 114.2 114.2 0.0 10.3 HTM $ 328.6 $ 328.8 $ (0.1) 10.0 Total Securities $ 1,196.9 $ 1,176.3 $ 20.6 4.0 Security Type ($ in millions) (1) $329 million of AFS securities were reclassified to HTM during 1Q22 Portfolio Average Balances & Yields Securities Portfolio Detail(1) Portfolio Profile CompositionCredit Rating AAA 44% AA 42% BB 1% BBB 13% Private Label RMBS 7% 2.13% 4Q21 2.29% 1Q22 2.68% 2Q22 3.38% 3Q22 4.19% 4Q22 $1,291 $1,292 $1,217 $1,195 $1,221 Average Balance ($ in millions) Yield CLO 40% Corporates 14% Gov’t & AGC 30% Munis 9% SECURITIES PORTFOLIO Strong Expansion Of Securities Yield

25 CLO Industry Breakdown $477 million at December 31, 2022 (net of $15.6 million unrealized loss) • CLO portfolio has underlying diversified exposure with largest segment in Healthcare & Pharmaceuticals at 12% • AAA and AA holdings provide principal protection • 4Q22 average CLO portfolio yield of 5.64%, up from 4.05% in 3Q22 • Quarterly reset based on 3 Month Libor + 1.62% • CLOs included an unrealized loss of $15.6 million as of 4Q22, down from $20 million as of 3Q22 Healthcare & Pharmaceuticals 12% High Tech Industries 11% Banking, Finance, Insurance & Real Estate 9% Services: Business 8% Beverage, Food & Tobacco 5%Media: Broadcasting & Subscription 5% Hotel, Gaming & Leisure 4% Construction & Building 3% Telecommunications 3% Capital Equipment 3% Retail 3% Chemicals, Plastics, & Rubber 3% Automotive 3% Services: Consumer 3% Aerospace & Defense 2% Other 22% CLO PORTFOLIO HAS DIVERSIFIED EXPOSURE Credit Enhancement Provides Significant Principal Protection

26 BANC FAST FACTS (1) Non-GAAP financial measure; see “Non-GAAP Reconciliation” slides at end of presentation 4Q22 3Q22 2Q22 1Q22 4Q21 $ 9,197 $ 9,369 $ 9,502 $ 9,584 $ 9,394 868 848 865 899 1,316 329 329 329 329 - 7,115 7,289 7,451 7,452 7,251 7,121 7,280 7,559 7,480 7,439 $ 80.2 $ 79.4 $ 78.3 $ 76.4 $ 73.0 (1.4) 5.7 7.2 5.9 5.6 78.8 85.1 85.5 82.4 78.6 47.6 50.5 47.6 46.4 60.1 0.6 0.5 1.0 0.2 (1.2) 48.2 51.0 48.6 46.6 58.9 30.6 34.1 36.9 35.8 19.8 - - - (31.5) 11.3 9.1 9.9 10.2 18.8 2.8 21.5 24.2 26.7 48.5 5.8 - - - 5.2 1.7 $ 21.5 $ 24.2 $ 26.7 $ 43.3 $ 4.0 $ 0.36 $ 0.40 $ 0.43 $ 0.69 $ 0.07 $ 14.19 $ 13.79 $ 14.05 $ 14.05 $ 13.88 0.92% 1.02% 1.15% 2.09% 0.24% 56.03% 55.66% 55.11% 56.53% 58.47% Return on average assets Adjusted efficiency ratio(1) Preferred dividend and other adjustments Net income available to common stockholders Diluted earnings per common share Net income Tangible common equity per common share (1) (Dollars in millions) Income tax expense Net interest income Total noninterest income Total assets Securities available-for-sale Loans held-for-investment Total deposits Total revenue Noninterest expense Loss (gain) in alternative energy partnership investments Total noninterest expense Pre-tax pre-provision income(1) (Reversal of) provision for credit losses Securities held-to-maturity

27 NON-GAAP FINANCIAL INFORMATION This presentation contains certain financial measures determined by methods other than in accordance with U.S. generally accepted accounting principles (GAAP). These measures include tangible assets, tangible equity, tangible common equity, tangible equity to tangible assets, tangible common equity to tangible assets, tangible common equity per 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 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 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 expense adjustments and the tax impact from the exercise of stock appreciation rights for the periods indicated. Adjusted net income is calculated by adjusting net income for tax-effected noninterest income and noninterest expense adjustments and the tax impact from the exercise of stock appreciation rights for the periods indicated. Adjusted ROAA is computed by dividing annualized adjusted net income by average assets. Adjusted net income (loss) available to common stockholders is computed by removing the impact of preferred stock redemptions from adjusted net income (loss). Adjusted diluted earnings per share is computed by dividing adjusted net income (loss) available to common stockholders by the weighted average diluted common shares outstanding. 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. Reconciliations of these measures to measures determined in accordance with GAAP are contained on slides 28-32 of this presentation.

28 NON-GAAP RECONCILIATION (1) Non-GAAP measure (2) Ratio presented on an annualized basis (Dollars in thousands) 4Q22 3Q22 2Q22 1Q22 4Q21 Net interest income $ 80,217 $ 79,408 $ 78,299 $ 76,441 $ 73,039 Noninterest income (1,427) 5,681 7,186 5,910 5,605 Total revenue 78,790 85,089 85,485 82,351 78,644 Noninterest expense 48,203 50,962 48,612 46,596 58,872 Pre-tax pre-provision income(1) $ 30,587 $ 34,127 $ 36,873 $ 35,755 $ 19,772 Total revenue $ 78,790 $ 85,089 $ 85,485 $ 82,351 $ 78,644 Total noninterest income adjustments 7,708 - - (16) - Adjusted total revenue(1) $ 86,498 $ 85,089 $ 85,485 $ 82,335 $ 78,644 Noninterest expense $ 48,203 $ 50,962 $ 48,612 $ 46,596 $ 58,872 Total noninterest expense adjustments 261 (3,601) (1,498) (52) (12,891) Adjusted noninterest expense(1) 48,464 47,361 47,114 46,544 45,981 Adjusted pre-tax pre-provision income(1) $ 38,034 $ 37,728 $ 38,371 $ 35,791 $ 32,663 Average Assets $ 9,257,311 $ 9,408,740 $ 9,342,696 $ 9,392,305 $ 9,331,955 Pre-tax pre-provision ROAA(1),(2) 1.31% 1.44% 1.58% 1.54% 0.84% Adjusted pre-tax pre-provision ROAA(1),(2) 1.63% 1.59% 1.65% 1.55% 1.39% Efficiency Ratio(1) 61.18% 59.89% 56.87% 56.58% 74.86% Adjusted efficiency ratio(1),(2) 56.03% 55.66% 55.11% 56.53% 58.47%

29 NON-GAAP RECONCILIATION (1) Non-GAAP measure (2) Ratio presented on an annualized basis (Dollars in thousands) 4Q22 3Q22 2Q22 1Q22 4Q21 Adjusted Noninterest Income Total noninterest income (1,427) 5,681 7,186 5,910 5,605 Net (gain) on securities available for sale 7,708 - - (16) - Adjusted noninterest income(1) $ 6,281 $ 5,681 $ 7,186 $ 5,894 $ 5,605 Adjusted Noninterest Expense Total noninterest expense $ 48,203 $ 50,962 $ 48,612 $ 46,596 $ 58,872 Noninterest expense adjustments: Indemnified legal recoveries (fees) 869 (1,017) (455) 106 (642) Acquisition, integration and transaction costs - (2,080) - - (13,469) Noninterest expense adjustments before gain (loss) in alternative energy partnership investments 869 (3,097) (455) 106 (14,111) (Loss) gain in alternative energy partnership investments (608) (504) (1,043) (158) 1,220 Total noninterest expense adjustments 261 (3,601) (1,498) (52) (12,891) Adjusted noninterest expense(1) $ 48,464 $ 47,361 $ 47,114 $ 46,544 $ 45,981 Average assets $9,257,311 $9,408,740 $9,342,696 $9,392,305 $9,331,955 Noninterest income to total revenue(1) (1.81%) 6.68% 8.41% 7.18% 7.13% Adjusted noninterest income to adjusted total revenue(1) 7.26% 6.68% 8.41% 7.16% 7.13% Noninterest expense / Average assets(2) 2.07% 2.15% 2.09% 2.01% 2.50% Adjusted noninterest expense / Average assets(1)(2) 2.08% 2.00% 2.02% 2.01% 1.95%

30 NON-GAAP RECONCILIATION (1) Non-GAAP measure (Dollars in thousands) 4Q22 3Q22 2Q22 1Q22 4Q21 Tangible Common Equity to Tangible Assets Ratio Total assets $ 9,197,016 $ 9,368,578 $ 9,502,113 $ 9,583,540 $ 9,393,743 Less: goodwill (114,312) (114,312) (95,127) (95,127) (94,301) Less: other intangible assets (7,526) (8,081) (4,677) (4,990) (6,411) Tangible assets(1) $ 9,075,178 $ 9,246,185 $ 9,402,309 $ 9,483,423 $ 9,293,031 Total stockholders' equity $ 959,618 $ 951,990 $ 949,130 $ 979,009 $ 1,065,290 Less: preferred stock - - - - (94,956) Total common stockholders' equity $ 959,618 $ 951,990 $ 949,130 $ 979,009 $ 970,334 Total stockholders' equity $ 959,618 $ 951,990 $ 949,130 $ 979,009 $ 1,065,290 Less: goodwill (114,312) (114,312) (95,127) (95,127) (94,301) Less: other intangible assets (7,526) (8,081) (4,677) (4,990) (6,411) Tangible equity(1) 837,780 829,597 849,326 878,892 964,578 Less: preferred stock - - - - (94,956) Tangible common equity(1) $ 837,780 $ 829,597 $ 849,326 $ 878,892 $ 869,622 Total stockholders' equity to total assets 10.43% 10.16% 9.99% 10.22% 11.34% Tangible equity to tangible assets(1) 9.23% 8.97% 9.03% 9.27% 10.38% Tangible common equity to tangible assets(1) 9.23% 8.97% 9.03% 9.27% 9.36% Common shares outstanding 58,544,534 59,679,558 59,985,736 62,077,312 62,188,206 Class B non-voting non-convertible common shares outstanding 477,321 477,321 477,321 477,321 477,321 Total common shares outstanding 59,021,855 60,156,879 60,463,057 62,554,633 62,665,527 Book value per common share $ 16.26 $ 15.83 $ 15.70 $ 15.65 $ 15.48 Tangible common equity per common share(1) $ 14.19 $ 13.79 $ 14.05 $ 14.05 $ 13.88

31 NON-GAAP RECONCILIATION (Dollars in thousands) 4Q22 3Q22 2Q22 1Q22 4Q21 Return on tangible common equity Average total stockholders' equity $ 989,414 $ 960,806 $ 969,885 $ 1,049,912 $ 1,035,782 Less: Average preferred stock - - - (75,965) (94,956) Average common stockholders' equity 989,414 960,806 969,885 973,947 940,826 Less: Average goodwill (114,312) (98,916) (95,127) (94,307) (86,911) Less: Average other intangible assets (7,869) (4,570) (4,869) (6,224) (4,994) Average tangible common equity(1) $ 867,233 $ 857,320 $ 869,889 $ 873,416 $ 848,921 Net income available to common stockholders $ 21,519 $ 24,196 $ 26,712 $ 43,345 $ 4,024 Add: Amortization of intangible assets 555 396 313 441 430 Less: Tax effect on amortization of intangible assets(2) (164) (117) (93) (130) (127) Net income available to common stockholders after the adjustments for intangible assets(1) $ 21,910 $ 24,475 $ 26,932 $ 43,656 $ 4,327 Return on average equity 8.63% 9.99% 11.05% 18.74% 2.20% Return on average tangible common equity(1) 10.02% 11.33% 12.42% 20.27% 2.02% (1) Non-GAAP measure (2) Adjustments shown net of a statutory tax rate of 29.6%

32 NON-GAAP RECONCILIATION (1) Net income for the three months and year ended December 31, 2022 includes a $7.7 million pre-tax loss on sale of securities. (2) Net income and adjusted net income for the three months ended March 31, 2022 and year ended December 31, 2022 includes a $31.3 million pre-tax reversal of credit losses due to the recovery from the settlement of a previously charged-off loan; there was no similar recovery in any of the other periods presented. The Bank previously recognized a $35.1 million charge-off for this loan during the third quarter of 2019. (3) Net income for the three months and year ended December 31, 2021 includes an $11.3 million pre-tax charge for the expected lifetime credit losses for non-purchased credit deteriorated loans acquired in the PMB Acquisition; there was no similar charge in any of the other periods presented. (4) Tax impact of adjustments shown at a statutory tax rate of 29.6%. (5) Non-GAAP measure (6) Ratio presented on an annualized basis (7) Represents adjusted net income available to common stockholders divided by average diluted common shares. (Dollars in thousands, except per share data) 4Q22 3Q22 2Q22 1Q22 4Q21 Adjusted net income Net income(1)(2)(3) $ 21,519 $ 24,196 $ 26,712 $ 48,512 $ 5,751 Adjustments: Noninterest income adjustments 7,708 - - (16) - Noninterest expense adjustments (261) 3,601 1,498 52 12,891 Tax impact of adjustments above(4) (2,202) (1,065) (443) (11) (3,811) Adjustments to net income 5,245 2,536 1,055 25 9,080 Adjusted net income(2)(5) $ 26,764 $ 26,732 $ 27,767 $ 48,537 $ 14,831 Average Assets $ 9,257,311 $ 9,408,740 $ 9,342,696 $ 9,392,305 $ 9,331,955 ROAA(6) 0.92% 1.02% 1.15% 2.09% 0.24% Adjusted ROAA(5)(6) 1.15% 1.13% 1.19% 2.10% 0.63% Adjusted net income available to common stockholders Net income available to common stockholders $ 21,519 $ 24,196 $ 26,712 $ 43,345 $ 4,024 Adjustments to net income 5,245 2,536 1,055 25 9,080 Adjustments for impact of preferred stock redemption - - - 3,747 - Adjusted net income available to common stockholders (5) $ 26,764 $ 26,732 $ 27,767 $ 47,117 $ 13,104 Average diluted common shares 59,725,283 60,492,460 61,600,615 62,906,003 60,690,046 Diluted EPS $ 0.36 $ 0.40 $ 0.43 $ 0.69 $ 0.07 Adjusted diluted EPS(5)(7) $ 0.45 $ 0.44 $ 0.45 $ 0.75 $ 0.22

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