Equibles

8-K

BANC OF CALIFORNIA, INC. (BANC)

8-K 2021-10-21 For: 2021-10-21
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Added on April 10, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 21, 2021

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
Depositary Shares each representing a 1/40th Interest in a share of 7.00% Non-Cumulative Perpetual Preferred Stock, Series E BANC PRE New York Stock Exchange

Item 2.02 Results of Operations and Financial Condition.

On October 21, 2021, Banc of California, Inc. (the “Company”) issued a press release announcing 2021 third 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 third quarter results at 10:00 A.M. Pacific Time on Thursday, October 21, 2021. Interested parties may attend the conference call by dialing (888) 317-6003, and referencing event code 9764771. 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 October 21, 2021.

99.2    Banc of California, Inc. Earnings Conference Call Presentation Materials dated October 21, 2021.

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.

October 21, 2021 /s/ Lynn M. Hopkins
Lynn M. Hopkins
Executive Vice President and Chief Financial Officer

3

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Banc of California Reports Third Quarter 2021 Financial Results

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

Highlights for the third quarter included:

•Return on average assets of 1.13%

•Annualized loan growth, excluding PPP, of 16%

•Period-end total cost of deposits of 0.08%, a 12 basis point decrease from the end of the second quarter

•Average cost of total deposits of 0.15%, an 8 basis point decrease from the previous quarter

•Net interest margin of 3.28%, a 1 basis point increase from the previous quarter

•Noninterest-bearing deposit balances represented 32% of total deposits at September 30, 2021, up from 24% a year earlier

•Allowance for credit losses at 1.26% of total loans and 173% of non-performing loans

•Total deferrals/forbearances declined to $54.2 million at September 30, 2021 from $86.6 million at June 30, 2021

•Common Equity Tier 1 capital at 10.89%

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

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

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

Merger with Pacific Mercantile Bancorp

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

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

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

Income Statement Highlights

Three Months Ended Nine Months Ended
September 30,2021 June 30,<br>2021 March 31,<br>2021 December 31,<br>2020 September 30,<br>2020 September 30,<br>2021 September 30,<br>2020
( in thousands)
Total interest and dividend income $ 69,677 $ 68,618 $ 73,530 $ 69,666 $ 210,086 $ 217,077
Total interest expense 8,815 9,830 10,702 11,967 13,811 29,347 54,046
Net interest income 62,976 59,847 57,916 61,563 55,855 180,739 163,031
Total noninterest income 5,519 4,170 4,381 6,975 3,954 14,070 11,543
Total revenue 68,495 64,017 62,297 68,538 59,809 194,809 174,574
Total noninterest expense 37,811 40,559 46,735 38,950 40,394 125,105 160,083
Pre-tax / pre-provision income 30,684 23,458 15,562 29,588 19,415 69,704 14,491
(Reversal of) provision for credit losses (1,147) (2,154) (1,107) 991 1,141 (4,408) 28,728
Income tax expense (benefit) 8,661 6,562 2,294 6,894 2,361 17,517 (5,108)
Net income (loss) $ 19,050 $ 14,375 $ 21,703 $ 15,913 $ 56,595 $ (9,129)
Net income (loss) available to common stockholders(1) $ 17,323 $ 7,825 $ 17,706 $ 12,084 $ 46,493 $ (19,265)

All values are in US Dollars.

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

Net interest income

Q3-2021 vs Q2-2021

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

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

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

YTD 2021 vs YTD 2020

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

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

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

Provision for credit losses

Q3-2021 vs Q2-2021

There was a reversal of provision for credit losses of $1.1 million for the third quarter, compared to a reversal of $2.2 million for the second quarter. The third quarter reversal was due primarily to improvements in key macro-economic forecast variables, such as unemployment and gross domestic product, and consideration of credit quality metrics, offset partially by higher period end loan balances of $243.1 million.

YTD 2021 vs YTD 2020

During the nine months ended September 30, 2021, the provision for credit losses was a reversal of $4.4 million, compared to a provision of $28.7 million during the same 2020 period. The lower provision for credit losses was due primarily to improvements in key macro-economic forecast variables, such as unemployment and gross domestic product, lower specific reserves and consideration of credit quality metrics, offset partially by higher period end loan balances of $550.6 million.

Noninterest income

Q3-2021 vs Q2-2021

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

YTD 2021 vs YTD 2020

Noninterest income for the nine months ended September 30, 2021 increased $2.5 million to $14.1 million compared to the same 2020 period. The increase in noninterest income was mainly due to higher customer service fees, lower fair value adjustment for loans held for sale and higher all other income, offset by lower net gain on sale of securities and loans. The $1.8 million increase in customer services fees was due to higher loan fees of $351 thousand and higher deposit activity fees of $1.5 million. The increase in deposit activity fees is attributed to higher average deposit balances and our initiative to bring our service fee schedules more in line with market. Fair value adjustment for loans held for sale improved $1.7 million as the comparable period included valuation losses on loans held for sale due to the impact of the decreases in market interest rates. There were no gains from sale of securities for the nine months ended September 30, 2021, compared to $2.0 million in net gains in the same 2020 period from the sale of $20.7 million in securities, primarily consisting of corporate securities. The $837 thousand increase in all other income is due mostly to the aforementioned gain related to the sale-leaseback transaction, higher rental income, interest rate swap income and processing fees, offset by lower legal settlement income and lower earnout income which ended in 2020.

Noninterest expense

Q3-2021 vs Q2-2021

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

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

YTD 2021 vs YTD 2020

Noninterest expense for the nine months ended September 30, 2021 decreased $35.0 million to $125.1 million compared to the prior year. The decrease was primarily due to: (i) the same 2020 period including a $26.8 million one-time charge related to the termination of our LAFC naming rights agreements, (ii) lower professional fees of $9.0 million, due mostly to a $7.6 million decrease in legal fees, net of insurance recoveries, (iii) lower advertising fees of $2.8 million due to the termination of the LAFC agreements in May 2020, and (iv) lower all other expense of $4.2 million resulting from the previous year including a $2.5 million debt extinguishment fee for the early repayment of certain FHLB term advances and a $1.2 million charge for two legacy legal settlements combined with overall expense reduction efforts. These decreases were partially offset by higher (i) salaries and employee benefits of $4.6 million due to higher commissions and incentive-based compensation due to higher production and financial performance levels, (ii) merger-related costs of $2.4 million associated with the approved merger with PMB, and (iii) net losses in alternative energy partnership investments of $708 thousand.

Income taxes

Q3-2021 vs Q2-2021

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

YTD 2021 vs YTD 2020

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

Balance Sheet

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

Amount Change
September 30,2021 June 30,<br>2021 March 31,<br>2021 December 31,<br>2020 September 30,<br>2020 Q3-21 vs. Q2-21 Q3-21 vs. Q3-20
( in thousands)
Securities available-for-sale $ 1,353,154 $ 1,270,830 $ 1,231,431 $ 1,245,867 $ (49,786) $ 57,501
Loans held-for-investment $ 5,985,477 $ 5,764,401 $ 5,898,405 $ 5,678,002 $ 243,098 $ 550,573
Loans held-for-sale $ 2,853 $ 1,408 $ 1,413 $ 1,849 $ 569 $ 1,573
Total assets $ 8,027,413 $ 7,933,459 $ 7,877,334 $ 7,738,106 $ 251,328 $ 540,635
Noninterest-bearing deposits $ 1,808,918 $ 1,700,343 $ 1,559,248 $ 1,450,744 $ 298,791 $ 656,965
Total deposits $ 6,206,544 $ 6,142,042 $ 6,085,800 $ 6,032,266 $ 336,681 $ 510,959
Borrowings (1) $ 871,973 $ 891,546 $ 796,110 $ 733,105 $ (109,529) $ 29,339
Total liabilities $ 7,198,051 $ 7,128,766 $ 6,980,127 $ 6,863,852 $ 235,887 $ 570,086
Total equity $ 829,362 $ 804,693 $ 897,207 $ 874,254 $ 15,441 $ (29,451)

All values are in US Dollars.

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

Investments

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

Loans

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

September 30,2021 June 30,<br>2021 March 31,<br>2021 December 31,<br>2020 September 30,<br>2020
( in thousands)
Composition of held-for-investment loans
Commercial real estate $ 871,790 $ 839,965 $ 807,195 $ 826,683
Multifamily 1,295,613 1,325,770 1,258,278 1,289,820 1,476,803
Construction 130,536 150,557 169,122 176,016 197,629
Commercial and industrial 773,681 725,596 760,150 748,299 710,667
Commercial and industrial - warehouse lending 1,522,945 1,345,314 1,118,175 1,340,009 876,157
SBA 181,582 253,924 338,903 273,444 320,573
Total commercial loans 4,811,581 4,672,951 4,484,593 4,634,783 4,408,512
Single-family residential mortgage 1,393,696 1,288,176 1,253,251 1,230,236 1,234,479
Other consumer 23,298 24,350 26,557 33,386 35,011
Total consumer loans 1,416,994 1,312,526 1,279,808 1,263,622 1,269,490
Total gross loans $ 5,985,477 $ 5,764,401 $ 5,898,405 $ 5,678,002
Composition percentage of held-for-investment loans
Commercial real estate 14.6 % 14.6 % 14.6 % 13.7 % 14.6 %
Multifamily 20.7 % 22.2 % 21.8 % 21.9 % 26.0 %
Construction 2.1 % 2.5 % 2.9 % 3.0 % 3.5 %
Commercial and industrial 12.4 % 12.1 % 13.2 % 12.7 % 12.5 %
Commercial and industrial - warehouse lending 24.5 % 22.5 % 19.4 % 22.6 % 15.5 %
SBA 2.9 % 4.2 % 5.9 % 4.6 % 5.6 %
Total commercial loans 77.2 % 78.1 % 77.8 % 78.5 % 77.7 %
Single-family residential mortgage 22.4 % 21.5 % 21.7 % 20.9 % 21.7 %
Other consumer 0.4 % 0.4 % 0.5 % 0.6 % 0.6 %
Total consumer loans 22.8 % 21.9 % 22.2 % 21.5 % 22.3 %
Total gross loans 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %

All values are in US Dollars.

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

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

September 30, 2021
Amount % of Portfolio
( in thousands)
C&I Portfolio by Industry
Finance and Insurance - Warehouse Lending 66 %
Real Estate & Rental Leasing 221,541 10 %
Finance and Insurance - Other 84,569 4 %
Gas Stations 73,926 3 %
Healthcare 72,252 3 %
Television / Motion Pictures 51,097 2 %
Manufacturing 47,421 2 %
Wholesale Trade 38,770 2 %
Other Retail Trade 29,950 1 %
Food Services 29,034 1 %
Professional Services 15,339 1 %
Transportation 4,685 — %
Accommodations 2,135 — %
All Other 102,962 4 %
Total 100 %

All values are in US Dollars.

Deposits

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

September 30,2021 June 30,<br>2021 March 31,<br>2021 December 31,<br>2020 September 30,<br>2020
( in thousands)
Composition of deposits
Noninterest-bearing checking $ 1,808,918 $ 1,700,343 $ 1,559,248 $ 1,450,744
Interest-bearing checking 2,214,678 2,217,306 2,088,528 2,107,942 2,045,115
Savings and money market 1,661,013 1,593,724 1,684,703 1,646,660 1,636,062
Non-brokered certificates of deposit 559,825 586,596 668,468 755,727 820,531
Brokered certificates of deposit — — — 16,223 79,814
Total deposits $ 6,206,544 $ 6,142,042 $ 6,085,800 $ 6,032,266
Composition percentage of deposits
Noninterest-bearing checking 32.2 % 29.1 % 27.7 % 25.6 % 24.1 %
Interest-bearing checking 33.8 % 35.7 % 34.0 % 34.6 % 33.9 %
Savings and money market 25.4 % 25.7 % 27.4 % 27.0 % 27.1 %
Non-brokered certificates of deposit 8.6 % 9.5 % 10.9 % 12.4 % 13.6 %
Brokered certificates of deposit — % — % — % 0.4 % 1.3 %
Total deposits 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %

All values are in US Dollars.

Total deposits increased $336.7 million during the third quarter of 2021 to $6.54 billion due to higher noninterest-bearing checking balances of $298.8 million and higher savings and money market balances of $67.3 million, offset by lower interest-bearing checking of $2.6 million, and non-brokered certificates of deposit of $26.8 million. We continue to focus on growing relationship-based deposits, strategically augmented by wholesale funding, as we actively managed down deposit costs in response to the current interest rate environment. Noninterest-bearing deposits totaled $2.11 billion and represented 32% of total deposits at September 30, 2021 compared to $1.81 billion, or 29% of total deposits, at June 30, 2021.

Debt

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

Equity

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

Capital ratios remain strong with total risk-based capital at 14.76% and a tier 1 leverage ratio of 9.80% at September 30, 2021. The interim capital relief related to the adoption of the current expected credit losses (CECL) accounting standard increased the Bank's leverage ratio by approximately 8 basis points at September 30, 2021. The following table sets forth our regulatory capital ratios as of the dates indicated:

September 30,<br>2021 June 30,<br>2021 March 31,<br>2021 December 31,<br>2020 September 30,<br>2020
Capital Ratios(1)
Banc of California, Inc.
Total risk-based capital ratio 14.76 % 15.33 % 15.87 % 17.01 % 16.19 %
Tier 1 risk-based capital ratio 12.38 % 12.71 % 13.17 % 14.35 % 14.94 %
Common equity tier 1 capital ratio 10.89 % 11.14 % 11.50 % 11.19 % 11.59 %
Tier 1 leverage ratio 9.80 % 9.89 % 9.62 % 10.90 % 10.79 %
Banc of California, NA
Total risk-based capital ratio 16.35 % 17.25 % 17.82 % 17.27 % 18.14 %
Tier 1 risk-based capital ratio 15.26 % 16.09 % 16.57 % 16.02 % 16.89 %
Common equity tier 1 capital ratio 15.26 % 16.09 % 16.57 % 16.02 % 16.89 %
Tier 1 leverage ratio 12.08 % 12.52 % 12.13 % 12.19 % 12.21 %

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

Credit Quality

September 30,2021 June 30,<br>2021 March 31,<br>2021 December 31,<br>2020 September 30,<br>2020
Asset quality information and ratios ( in thousands)
Delinquent loans held-for-investment
30 to 89 days delinquent $ 16,983 $ 31,005 $ 13,981 $ 51,229
90+ days delinquent 21,979 17,998 30,292 17,636 31,809
Total delinquent loans $ 34,981 $ 61,297 $ 31,617 $ 83,038
Total delinquent loans to total loans 0.72 % 0.58 % 1.06 % 0.54 % 1.46 %
Non-performing assets, excluding loans held-for-sale
Non-accrual loans $ 51,299 $ 55,920 $ 35,900 $ 66,337
90+ days delinquent and still accruing loans — — — 728 547
Non-performing loans 45,621 51,299 55,920 36,628 66,884
Other real estate owned — 3,253 — — —
Non-performing assets $ 54,552 $ 55,920 $ 36,628 $ 66,884
ALL to non-performing loans 161.16 % 147.93 % 141.90 % 221.22 % 135.95 %
Non-performing loans to total loans held-for-investment 0.73 % 0.86 % 0.97 % 0.62 % 1.18 %
Non-performing assets to total assets 0.55 % 0.68 % 0.70 % 0.46 % 0.86 %
Troubled debt restructurings (TDRs)
Performing TDRs $ 6,029 $ 6,347 $ 4,733 $ 5,408
Non-performing TDRs 2,366 3,120 4,130 4,264 20,002
Total TDRs $ 9,149 $ 10,477 $ 8,997 $ 25,410

All values are in US Dollars.

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

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

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

September 30, 2021 June 30, 2021
Count % of Loans in Category Count Amount % of Loans in Category
( in thousands)
Single-family residential mortgage 40 49,501 4 % 46 $ 52,384 4 %
All other loans 5 — % 10 34,174 1 %
Total 45 54,192 1 % 56 $ 86,558 1 %

All values are in US Dollars.

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

Allowance for Credit Losses

Three Months Ended
September 30,2021 June 30,<br>2021 March 31,<br>2021 December 31,<br>2020 September 30,<br>2020
( in thousands)
Allowance for loan losses (ALL)
Balance at beginning of period $ 79,353 $ 81,030 $ 90,927 $ 90,370
Loans charged off (327) (886) (565) (11,520) (1,821)
Recoveries 532 26 172 609 248
Net recoveries (charge-offs) 205 (860) (393) (10,911) (1,573)
(Reversal of) provision for loan losses (2,566) (2,608) (1,284) 1,014 2,130
Balance at end of period $ 75,885 $ 79,353 $ 81,030 $ 90,927
Reserve for unfunded loan commitments
Balance at beginning of period $ 3,360 $ 3,183 $ 3,206 $ 4,195
Provision for (reversal of) credit losses 1,419 454 177 (23) (989)
Balance at end of period 5,233 3,814 3,360 3,183 3,206
Allowance for credit losses (ACL) $ 79,699 $ 82,713 $ 84,213 $ 94,133
ALL to total loans 1.18 % 1.27 % 1.38 % 1.37 % 1.60 %
ACL to total loans 1.26 % 1.33 % 1.43 % 1.43 % 1.66 %
ACL to total loans, excluding PPP loans 1.29 % 1.38 % 1.51 % 1.48 % 1.74 %
ACL to NPLs 172.63 % 155.36 % 147.91 % 229.91 % 140.74 %
Annualized net loan charge-offs (recoveries) to average total loans held-for-investment (0.01) % 0.06 % 0.03 % 0.77 % 0.12 %
Reserve for loss on repurchased loans
Balance at beginning of period $ 5,383 $ 5,515 $ 5,487 $ 5,567
Initial provision for loan repurchases — — — — 11
(Reversal of) provision for loan repurchases (42) (99) (132) 28 (91)
Utilization of reserve for loan repurchases (30) (189) — — —
Balance at end of period $ 5,095 $ 5,383 $ 5,515 $ 5,487

All values are in US Dollars.

The allowance for expected credit losses (ACL), which includes the reserve for unfunded loan commitments, totaled $78.8 million, or 1.26% of total loans, at September 30, 2021, compared to $79.7 million, or 1.33% of total loans, at June 30, 2021. The $942 thousand decrease in the ACL was due to: (i) lower general reserves of $1.9 million due to improved economic assumptions and asset quality trends, offset by higher period end portfolio balances, (ii) net recoveries of $205 thousand, and (iii) higher specific reserves of $828 thousand. The ACL coverage of non-performing loans was 173% at September 30, 2021 compared to 155% at June 30, 2021.

Our ACL methodology uses a nationally recognized, third-party model that includes many assumptions based on historical and

peer loss data, current loan portfolio risk profile including risk ratings, and economic forecasts including macroeconomic

variables (MEVs) released by our model provider during September 2021. The September 2021 forecasts reflect a more favorable view of the economy (i.e. higher GDP growth rates, higher CRE price indices and lower unemployment rates) compared to the June 2021 forecasts. While the current forecasts generally reflect an improving economy with the availability of the vaccine and other factors, there continues to be uncertainty regarding the impact of inflation (lasting or transitory), COVID-19 variants, further government stimulus, supply chain issues, and the ultimate pace of economic recovery. Accordingly, our economic assumptions, the resulting ACL level and provision reversal consider both the positive assumptions and potential uncertainties.

The Company will host a conference call to discuss its third quarter 2021 financial results at 10:00 a.m. Pacific Time (PT) on Thursday, October 21, 2021. Interested parties are welcome to attend the conference call by dialing (888) 317-6003, and referencing event code 9764771. A live audio webcast will also be available and the webcast link will be posted on the Company’s Investor Relations website at www.bancofcal.com/investor. The slide presentation for the call will also be available on the Company's Investor Relations website prior to the call. A replay of the call will be made available approximately one hour after the call has ended on the Company’s Investor Relations website at www.bancofcal.com/investor or by dialing (877) 344-7529 and referencing event code 10157715.

About Banc of California, Inc.

Banc of California, Inc. (NYSE: BANC) is a bank holding company with $8.3 billion in assets at September 30, 2021 and one wholly-owned banking subsidiary, Banc of California, N.A. (the Bank). With the acquisition of PMBC completed on October 18, 2021, assets total $9.8 billion on a combined proforma basis at September 30, 2021. The Bank has 39 offices including 33 full-service branches located throughout Southern California. Through our dedicated professionals, we provide customized and innovative banking and lending solutions to businesses, entrepreneurs and individuals throughout California. We help to improve the communities where we live and work, by supporting organizations that provide financial literacy and job training, small business support and affordable housing. With a commitment to service and to building enduring relationships, we provide a higher standard of banking. We look forward to helping you achieve your goals. For more information, please visit us at www.bancofcal.com.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the “Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are necessarily subject to risk and uncertainty and actual results could differ materially from those anticipated due to various factors, including those set forth from time to time in the documents filed or furnished by Banc of California, Inc. with the Securities and Exchange Commission (SEC). In addition to those, statements about the potential effects of the COVID-19 pandemic on the business, financial results and condition of Banc of California, Inc. and its subsidiaries may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond the control of Banc of California, Inc., including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on Banc of California, Inc. and its subsidiaries, their customers and third parties. Further, statements about the potential effects of the Pacific Mercantile Bancorp acquisition on the business, financial results and condition of Banc of California, Inc. and its subsidiaries may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond the control of Banc of California, Inc., including (i) the risk that the benefits from the transaction may not be fully realized or may take longer to realize than expected, including as a result of changes in general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which Banc of California Inc. and Pacific Mercantile Bancorp operate; (ii) the ability to promptly and effectively integrate the businesses of Banc of California, Inc. and Pacific Mercantile Bancorp; (iii) the reaction to the transaction of the companies’ customers, employees and counterparties; (iv) diversion of management time on integration-related issues; (v) lower than expected revenues, credit quality deterioration or a reduction in real estate values or a reduction in net earnings; and (vi) other risks that are described in Banc of California, Inc.’s public filings with the SEC. You should not place undue reliance on forward-looking statements and Banc of California, Inc. undertakes no obligation to update any such statements to reflect circumstances or events that occur after the date on which the forward-looking statement is made.

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)

September 30,<br>2021 June 30,<br>2021 March 31,<br>2021 December 31,<br>2020 September 30,<br>2020
ASSETS
Cash and cash equivalents $ 185,840 $ 163,332 $ 379,509 $ 220,819 $ 292,490
Securities available-for-sale 1,303,368 1,353,154 1,270,830 1,231,431 1,245,867
Loans held-for-sale 3,422 2,853 1,408 1,413 1,849
Loans held-for-investment 6,228,575 5,985,477 5,764,401 5,898,405 5,678,002
Allowance for loan losses (73,524) (75,885) (79,353) (81,030) (90,927)
Federal Home Loan Bank and other bank stock 44,604 44,569 44,964 44,506 44,809
Servicing rights, net 1,022 1,162 1,407 1,454 1,621
Other real estate owned, net — 3,253 — — —
Premises and equipment, net 114,011 118,649 120,071 121,520 123,812
Alternative energy partnership investments, net 25,196 24,068 23,809 27,977 27,786
Goodwill 37,144 37,144 37,144 37,144 37,144
Other intangible assets, net 1,787 2,069 2,351 2,633 2,939
Deferred income tax, net 40,659 41,628 47,877 45,957 43,744
Income tax receivable 2,107 4,084 210 1,105 10,701
Bank owned life insurance investment 113,884 113,168 112,479 111,807 111,115
Right of use assets 29,054 20,364 22,069 19,633 18,909
Other assets 221,592 188,324 184,283 192,560 188,245
Total assets $ 8,278,741 $ 8,027,413 $ 7,933,459 $ 7,877,334 $ 7,738,106
LIABILITIES AND STOCKHOLDERS’ EQUITY
Noninterest-bearing deposits $ 2,107,709 $ 1,808,918 $ 1,700,343 $ 1,559,248 $ 1,450,744
Interest-bearing deposits 4,435,516 4,397,626 4,441,699 4,526,552 4,581,522
Total deposits 6,543,225 6,206,544 6,142,042 6,085,800 6,032,266
Advances from Federal Home Loan Bank 405,738 490,419 635,105 539,795 559,482
Other borrowings 100,000 125,000 — — —
Long-term debt, net 256,706 256,554 256,441 256,315 173,623
Reserve for loss on repurchased loans 5,023 5,095 5,383 5,515 5,487
Lease liabilities 30,390 21,588 23,173 20,647 19,938
Accrued expenses and other liabilities 92,856 92,851 66,622 72,055 73,056
Total liabilities 7,433,938 7,198,051 7,128,766 6,980,127 6,863,852
Commitments and contingent liabilities
Preferred stock 94,956 94,956 94,956 184,878 184,878
Common stock 527 527 526 522 522
Common stock, class B non-voting non-convertible 5 5 5 5 5
Additional paid-in capital 631,512 630,654 629,844 634,704 633,409
Retained earnings 147,682 129,307 115,004 110,179 95,001
Treasury stock (40,827) (40,827) (40,827) (40,827) (40,827)
Accumulated other comprehensive income, net 10,948 14,740 5,185 7,746 1,266
Total stockholders’ equity 844,803 829,362 804,693 897,207 874,254
Total liabilities and stockholders’ equity $ 8,278,741 $ 8,027,413 $ 7,933,459 $ 7,877,334 $ 7,738,106

Banc of California, Inc.

Consolidated Statements of Operations (Unaudited)

(Dollars in thousands, except per share data)

Three Months Ended Nine Months Ended
September 30,<br>2021 June 30,<br>2021 March 31,<br>2021 December 31,<br>2020 September 30,<br>2020 September 30,<br>2021 September 30,<br>2020
Interest and dividend income
Loans, including fees $ 63,837 $ 61,900 $ 61,345 $ 66,105 $ 62,019 $ 187,082 $ 191,195
Securities 7,167 6,986 6,501 6,636 6,766 20,654 22,402
Other interest-earning assets 787 791 772 789 881 2,350 3,480
Total interest and dividend income 71,791 69,677 68,618 73,530 69,666 210,086 217,077
Interest expense
Deposits 2,412 3,543 4,286 5,436 7,564 10,241 32,380
Federal Home Loan Bank advances 2,990 2,944 3,112 3,479 3,860 9,046 14,561
Other interest-bearing liabilities 3,413 3,343 3,304 3,052 2,387 10,060 7,105
Total interest expense 8,815 9,830 10,702 11,967 13,811 29,347 54,046
Net interest income 62,976 59,847 57,916 61,563 55,855 180,739 163,031
(Reversal of) provision for credit losses (1,147) (2,154) (1,107) 991 1,141 (4,408) 28,728
Net interest income after (reversal of) provision for credit losses 64,123 62,001 59,023 60,572 54,714 185,147 134,303
Noninterest income
Customer service fees 1,900 1,990 1,758 1,953 1,498 5,648 3,818
Loan servicing income 170 38 268 149 186 476 356
Income from bank owned life insurance 715 690 672 691 629 2,077 1,798
Net gain on sale of securities available for sale — — — — — — 2,011
Fair value adjustment on loans held for sale 160 20 — 36 24 180 (1,537)
Net gain on sale of loans — — — — 272 — 245
All other income 2,574 1,432 1,683 4,146 1,345 5,689 4,852
Total noninterest income 5,519 4,170 4,381 6,975 3,954 14,070 11,543
Noninterest expense
Salaries and employee benefits 24,786 25,042 25,719 25,836 23,277 75,547 70,973
Naming rights termination — — — — — — 26,769
Occupancy and equipment 7,124 7,277 7,196 7,560 7,457 21,597 21,790
Professional fees 892 1,749 4,022 29 5,147 6,663 15,707
Data processing 1,646 1,621 1,655 1,608 1,657 4,922 4,966
Advertising 122 78 118 171 219 318 3,132
Regulatory assessments 812 769 774 748 784 2,355 1,993
(Reversal of) provision for loan repurchase reserves (42) (99) (132) 28 (91) (273) (725)
Amortization of intangible assets 282 282 282 306 353 846 1,212
Merger-related costs 1,000 700 700 — — 2,400 —
All other expense 2,974 3,969 2,771 3,337 3,021 9,714 13,958
Total noninterest expense before (gain) loss in alternative energy partnership investments 39,596 41,388 43,105 39,623 41,824 124,089 159,775
(Gain) loss in alternative energy partnership investments (1,785) (829) 3,630 (673) (1,430) 1,016 308
Total noninterest expense 37,811 40,559 46,735 38,950 40,394 125,105 160,083
Income (loss) before income taxes 31,831 25,612 16,669 28,597 18,274 74,112 (14,237)
Income tax expense (benefit) 8,661 6,562 2,294 6,894 2,361 17,517 (5,108)
Net income (loss) 23,170 19,050 14,375 21,703 15,913 56,595 (9,129)
Preferred stock dividends 1,727 1,727 3,141 3,447 3,447 6,595 10,422
Income allocated to participating securities — — 62 456 281 160 —
Participating securities dividends — — — 94 94 — 282
Impact of preferred stock redemption — — 3,347 — 7 3,347 (568)
Net income (loss) available to common stockholders $ 21,443 $ 17,323 $ 7,825 $ 17,706 $ 12,084 $ 46,493 $ (19,265)
Earnings (loss) per common share:
--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Basic $ 0.42 $ 0.34 $ 0.16 $ 0.35 $ 0.24 $ 0.92 $ (0.38)
Diluted $ 0.42 $ 0.34 $ 0.15 $ 0.35 $ 0.24 $ 0.91 $ (0.38)
Weighted average number of common shares outstanding
Basic 50,716,680 50,650,186 50,350,897 50,125,462 50,108,655 50,573,928 50,201,112
Diluted 50,909,317 50,892,202 50,750,522 50,335,271 50,190,933 50,821,972 50,201,112
Dividends declared per common share $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.18 $ 0.18

Banc of California, Inc.

Selected Financial Data

(Unaudited)

Three Months Ended Nine Months Ended
September 30,<br>2021 June 30,<br>2021 March 31,<br>2021 December 31,<br>2020 September 30,<br>2020 September 30,<br>2021 September 30,<br>2020
Profitability and other ratios of consolidated operations
Return on average assets(1) 1.13 % 0.98 % 0.74 % 1.11 % 0.82 % 0.95 % (0.16) %
Return on average equity(1) 10.84 % 9.38 % 6.56 % 9.67 % 7.32 % 8.90 % (1.39) %
Return on average tangible common equity(1)(2) 12.04 % 10.34 % 4.77 % 10.69 % 7.68 % 9.10 % (3.76) %
Pre-tax pre-provision income (loss) ROAA(1)(2) 1.50 % 1.20 % 0.80 % 1.52 % 1.00 % 1.17 % 0.25 %
Adjusted pre-tax pre-provision income ROAA(1)(2) 1.34 % 1.13 % 1.06 % 1.25 % 0.98 % 1.18 % 0.82 %
Dividend payout ratio(3) 14.29 % 17.65 % 37.50 % 17.14 % 25.00 % 19.57 % (47.37) %
Average loan yield 4.18 % 4.30 % 4.30 % 4.58 % 4.46 % 4.26 % 4.50 %
Average cost of interest-bearing deposits 0.22 % 0.32 % 0.38 % 0.47 % 0.66 % 0.31 % 0.98 %
Average cost of total deposits 0.15 % 0.23 % 0.28 % 0.36 % 0.51 % 0.22 % 0.76 %
Net interest spread 3.06 % 3.04 % 2.95 % 3.15 % 2.84 % 3.02 % 2.72 %
Net interest margin(1) 3.28 % 3.27 % 3.19 % 3.38 % 3.09 % 3.25 % 3.05 %
Noninterest income to total revenue(4) 8.06 % 6.51 % 7.03 % 10.18 % 6.61 % 7.22 % 6.61 %
Noninterest income to average total assets(1) 0.27 % 0.21 % 0.23 % 0.36 % 0.20 % 0.24 % 0.20 %
Noninterest expense to average total assets(1) 1.84 % 2.08 % 2.41 % 2.00 % 2.09 % 2.11 % 2.79 %
Adjusted noninterest expense to average total assets(1)(2) 1.99 % 2.15 % 2.15 % 2.26 % 2.10 % 2.09 % 2.21 %
Efficiency ratio(2)(5) 55.20 % 63.36 % 75.02 % 56.83 % 67.54 % 64.22 % 91.70 %
Adjusted efficiency ratio(2)(6) 59.63 % 65.58 % 66.91 % 64.26 % 68.31 % 63.92 % 72.93 %
Average loans held-for-investment to average deposits 94.99 % 92.74 % 93.74 % 95.65 % 92.86 % 93.84 % 99.64 %
Average securities available-for-sale to average total assets 16.55 % 16.71 % 15.73 % 15.96 % 15.49 % 16.33 % 13.96 %
Average stockholders’ equity to average total assets 10.41 % 10.41 % 11.30 % 11.49 % 11.26 % 10.70 % 11.46 %

(1)Ratio presented on an annualized basis.

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

(3)Ratio calculated by dividing dividends declared per common share by basic earnings (loss) per common share.

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

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

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

Banc of California, Inc.

Average Balance, Average Yield Earned, and Average Cost Paid

(Dollars in thousands)

(Unaudited)

Three Months Ended
September 30, 2021 June 30, 2021 March 31, 2021
Average Yield Average Yield Average Yield
Balance Interest / Cost Balance Interest / Cost Balance Interest / Cost
Interest-earning assets
Commercial real estate, multifamily, and construction $ 2,379,962 $ 26,542 4.42 % $ 2,313,483 $ 27,222 4.72 % $ 2,322,509 $ 26,387 4.61 %
Commercial and industrial and SBA 2,322,372 25,345 4.33 % 2,154,512 22,978 4.28 % 2,221,494 22,910 4.18 %
SFR mortgage 1,331,876 11,683 3.48 % 1,277,552 11,410 3.58 % 1,210,105 11,747 3.94 %
Other consumer 22,164 238 4.26 % 23,881 275 4.62 % 28,520 294 4.18 %
Loans held-for-sale 2,956 29 3.89 % 1,987 15 3.03 % 1,413 7 2.01 %
Gross loans and leases 6,059,330 63,837 4.18 % 5,771,415 61,900 4.30 % 5,784,041 61,345 4.30 %
Securities 1,347,317 7,167 2.11 % 1,308,230 6,986 2.14 % 1,236,138 6,501 2.13 %
Other interest-earning assets 222,274 787 1.40 % 258,915 791 1.23 % 336,443 772 0.93 %
Total interest-earning assets 7,628,921 71,791 3.73 % 7,338,560 69,677 3.81 % 7,356,622 68,618 3.78 %
Allowance for loan losses (76,028) (79,103) (81,111)
BOLI and noninterest-earning assets 588,720 567,549 585,441
Total assets $ 8,141,613 $ 7,827,006 $ 7,860,952
Interest-bearing liabilities
Interest-bearing checking $ 2,280,429 $ 632 0.11 % $ 2,182,419 $ 679 0.12 % $ 2,140,314 $ 901 0.17 %
Savings and money market 1,583,791 1,350 0.34 % 1,638,105 2,244 0.55 % 1,654,525 2,390 0.59 %
Certificates of deposit 571,822 430 0.30 % 633,101 620 0.39 % 720,180 995 0.56 %
Total interest-bearing deposits 4,436,042 2,412 0.22 % 4,453,625 3,543 0.32 % 4,515,019 4,286 0.38 %
FHLB advances 435,984 2,990 2.72 % 418,111 2,944 2.82 % 446,618 3,112 2.83 %
Other borrowings 126,352 34 0.11 % 17,920 4 0.09 % 4,127 2 0.20 %
Long-term debt 256,634 3,379 5.22 % 256,492 3,339 5.22 % 256,361 3,302 5.22 %
Total interest-bearing liabilities 5,255,012 8,815 0.67 % 5,146,148 9,830 0.77 % 5,222,125 10,702 0.83 %
Noninterest-bearing deposits 1,939,912 1,767,711 1,653,517
Noninterest-bearing liabilities 98,748 98,174 97,136
Total liabilities 7,293,672 7,012,033 6,972,778
Total stockholders’ equity 847,941 814,973 888,174
Total liabilities and stockholders’ equity $ 8,141,613 $ 7,827,006 $ 7,860,952
Net interest income/spread $ 62,976 3.06 % $ 59,847 3.04 % $ 57,916 2.95 %
Net interest margin 3.28 % 3.27 % 3.19 %
Ratio of interest-earning assets to interest-bearing liabilities 145 % 143 % 141 %
Total deposits $ 6,375,954 $ 2,412 0.15 % $ 6,221,336 $ 3,543 0.23 % $ 6,168,536 $ 4,286 0.28 %
Total funding (1) $ 7,194,924 $ 8,815 0.49 % $ 6,913,859 $ 9,830 0.57 % $ 6,875,642 $ 10,702 0.63 %

(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
December 31, 2020 September 30, 2020
Average Yield Average Yield
Balance Interest / Cost Balance Interest / Cost
Interest-earning assets
Commercial real estate, multifamily, and construction $ 2,507,950 $ 30,371 4.82 % $ 2,493,408 $ 29,666 4.73 %
Commercial and industrial and SBA 1,978,684 21,984 4.42 % 1,673,548 18,585 4.42 %
SFR mortgage 1,224,865 12,955 4.21 % 1,311,513 13,178 4.00 %
Other consumer 31,856 787 9.83 % 35,563 451 5.05 %
Loans held-for-sale 1,564 8 2.03 % 19,544 139 2.83 %
Gross loans and leases 5,744,919 66,105 4.58 % 5,533,576 62,019 4.46 %
Securities 1,239,295 6,636 2.13 % 1,190,765 6,766 2.26 %
Other interest-earning assets 262,363 789 1.20 % 457,558 881 0.77 %
Total interest-earning assets 7,246,577 73,530 4.04 % 7,181,899 69,666 3.86 %
Allowance for loan losses (83,745) (89,679)
BOLI and noninterest-earning assets 602,165 594,885
Total assets $ 7,764,997 $ 7,687,105
Interest-bearing liabilities
Interest-bearing checking $ 2,086,146 $ 1,131 0.22 % $ 1,919,327 $ 1,660 0.34 %
Savings and money market 1,609,598 2,542 0.63 % 1,630,319 2,998 0.73 %
Certificates of deposit 860,131 1,763 0.82 % 1,030,829 2,906 1.12 %
Total interest-bearing deposits 4,555,875 5,436 0.47 % 4,580,475 7,564 0.66 %
FHLB advances 534,303 3,479 2.59 % 608,169 3,860 2.52 %
Securities sold under repurchase agreements — — — % 1,309 2 0.61 %
Other borrowings 8,026 3 0.15 % 325 2 2.45 %
Long-term debt 230,239 3,049 5.27 % 173,586 2,383 5.46 %
Total interest-bearing liabilities 5,328,443 11,967 0.89 % 5,363,864 13,811 1.02 %
Noninterest-bearing deposits 1,448,422 1,357,411
Noninterest-bearing liabilities 95,567 100,424
Total liabilities 6,872,432 6,821,699
Total stockholders’ equity 892,565 865,406
Total liabilities and stockholders’ equity $ 7,764,997 $ 7,687,105
Net interest income/spread $ 61,563 3.15 % $ 55,855 2.84 %
Net interest margin 3.38 % 3.09 %
Ratio of interest-earning assets to interest-bearing liabilities 136 % 134 %
Total deposits $ 6,004,297 $ 5,436 0.36 % $ 5,937,886 $ 7,564 0.51 %
Total funding (1) $ 6,776,865 $ 11,967 0.70 % $ 6,721,275 $ 13,811 0.82 %

(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.

Nine Months Ended
September 30, 2021 September 30, 2020
Average Yield Average Yield
Balance Interest / Cost Balance Interest / Cost
Interest-earning assets
Commercial real estate, multifamily, and construction $ 2,338,862 $ 80,152 4.58 % $ 2,527,331 $ 89,348 4.72 %
Commercial and industrial and SBA 2,233,162 71,233 4.26 % 1,664,365 57,134 4.59 %
SFR mortgage 1,273,624 34,839 3.66 % 1,419,882 42,660 4.01 %
Other consumer 24,832 807 4.35 % 41,319 1,538 4.97 %
Loans held-for-sale 2,124 51 3.21 % 20,591 515 3.34 %
Gross loans and leases 5,872,604 187,082 4.26 % 5,673,488 191,195 4.50 %
Securities 1,297,636 20,654 2.13 % 1,069,668 22,402 2.80 %
Other interest-earning assets 272,126 2,350 1.15 % 393,495 3,480 1.18 %
Total interest-earning assets 7,442,366 210,086 3.77 % 7,136,651 217,077 4.06 %
Allowance for credit losses (78,729) (76,275)
BOLI and noninterest-earning assets 580,581 603,128
Total assets $ 7,944,218 $ 7,663,504
Interest-bearing liabilities
Interest-bearing checking $ 2,201,568 $ 2,212 0.13 % $ 1,717,483 $ 7,575 0.59 %
Savings and money market 1,625,214 5,985 0.49 % 1,543,291 11,621 1.01 %
Certificates of deposit 641,157 2,044 0.43 % 1,132,058 13,184 1.56 %
Total interest-bearing deposits 4,467,939 10,241 0.31 % 4,392,832 32,380 0.98 %
FHLB advances 433,532 9,046 2.79 % 821,349 14,561 2.37 %
Securities sold under repurchase agreements — — — % 779 4 0.69 %
Other borrowings 49,914 40 0.11 % 469 9 2.56 %
Long-term debt 256,497 10,020 5.22 % 173,512 7,092 5.46 %
Total interest-bearing liabilities 5,207,882 29,347 0.75 % 5,388,941 54,046 1.34 %
Noninterest-bearing deposits 1,788,096 1,280,461
Noninterest-bearing liabilities 98,025 115,582
Total liabilities 7,094,003 6,784,984
Total stockholders’ equity 850,215 878,520
Total liabilities and stockholders’ equity $ 7,944,218 $ 7,663,504
Net interest income/spread $ 180,739 3.02 % $ 163,031 2.72 %
Net interest margin 3.25 % 3.05 %
Ratio of interest-earning assets to interest-bearing liabilities 143 % 132 %
Total deposits $ 6,256,035 $ 10,241 0.22 % $ 5,673,293 $ 32,380 0.76 %
Total funding (1) $ 6,995,978 $ 29,347 0.56 % $ 6,669,402 $ 54,046 1.08 %

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

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures

(Dollars in thousands, except per share data)

(Unaudited)

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

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

Tangible assets and tangible equity are calculated by subtracting goodwill and other intangible assets from total assets and total equity. Tangible common equity is calculated by subtracting preferred stock from tangible equity. Return on average tangible common equity is computed by dividing net income (loss) available to common stockholders, after adjustment for amortization of intangible assets, by average tangible common equity. Banking regulators also exclude goodwill and other intangible assets from stockholders' equity when assessing the capital adequacy of a financial institution.

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

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

Management believes the presentation of these financial measures adjusting the impact of these items provides useful supplemental information that is essential to a proper understanding of the financial results and operating performance of the Company. This disclosure should not be viewed as a substitute for results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.

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

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

September 30,<br>2021 June 30,<br>2021 March 31,<br>2021 December 31,<br>2020 September 30,<br>2020
Tangible common equity, and tangible common equity to tangible assets ratio
Total assets $ 8,278,741 $ 8,027,413 $ 7,933,459 $ 7,877,334 $ 7,738,106
Less goodwill (37,144) (37,144) (37,144) (37,144) (37,144)
Less other intangible assets (1,787) (2,069) (2,351) (2,633) (2,939)
Tangible assets(1) $ 8,239,810 $ 7,988,200 $ 7,893,964 $ 7,837,557 $ 7,698,023
Total stockholders' equity $ 844,803 $ 829,362 $ 804,693 $ 897,207 $ 874,254
Less goodwill (37,144) (37,144) (37,144) (37,144) (37,144)
Less other intangible assets (1,787) (2,069) (2,351) (2,633) (2,939)
Tangible equity(1) 805,872 790,149 765,198 857,430 834,171
Less preferred stock (94,956) (94,956) (94,956) (184,878) (184,878)
Tangible common equity(1) $ 710,916 $ 695,193 $ 670,242 $ 672,552 $ 649,293
Total stockholders' equity to total assets 10.20 % 10.33 % 10.14 % 11.39 % 11.30 %
Tangible equity to tangible assets(1) 9.78 % 9.89 % 9.69 % 10.94 % 10.84 %
Tangible common equity to tangible assets(1) 8.63 % 8.70 % 8.49 % 8.58 % 8.43 %
Common shares outstanding 50,321,096 50,313,228 50,150,447 49,767,489 49,760,543
Class B non-voting non-convertible common shares outstanding 477,321 477,321 477,321 477,321 477,321
Total common shares outstanding 50,798,417 50,790,549 50,627,768 50,244,810 50,237,864
Tangible common equity per common share(1) $ 13.99 $ 13.69 $ 13.24 $ 13.39 $ 12.92
Book value per common share $ 14.76 $ 14.46 $ 14.02 $ 14.18 $ 13.72

(1)Non-GAAP measure.

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended Nine Months Ended
September 30,<br>2021 June 30,<br>2021 March 31,<br>2021 December 31,<br>2020 September 30,<br>2020 September 30,<br>2021 September 30,<br>2020
Return on tangible common equity
Average total stockholders' equity $ 847,941 $ 814,973 $ 888,174 $ 892,565 $ 865,406 $ 850,215 $ 878,520
Less average preferred stock (94,956) (94,956) (164,895) (184,878) (184,910) (118,013) (186,656)
Less average goodwill (37,144) (37,144) (37,144) (37,144) (37,144) (37,144) (37,144)
Less average other intangible assets (1,941) (2,224) (2,517) (2,826) (3,172) (2,226) (3,581)
Average tangible common equity(1) $ 713,900 $ 680,649 $ 683,618 $ 667,717 $ 640,180 $ 692,832 $ 651,139
Net income (loss) available to common stockholders $ 21,443 $ 17,323 $ 7,825 $ 17,706 $ 12,084 $ 46,493 $ (19,265)
Add amortization of intangible assets 282 282 282 306 353 846 1,212
Less tax effect on amortization of intangible assets(2) (59) (59) (59) (64) (74) (178) (255)
Net income (loss) available to common stockholders after adjustments for intangible assets(1) $ 21,666 $ 17,546 $ 8,048 $ 17,948 $ 12,363 $ 47,161 $ (18,308)
Return on average equity 10.84 % 9.38 % 6.56 % 9.67 % 7.32 % 8.90 % (1.39) %
Return on average tangible common equity(1) 12.04 % 10.34 % 4.77 % 10.69 % 7.68 % 9.10 % (3.76) %

(1)Non-GAAP measure.

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

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended Nine Months Ended
September 30,<br>2021 June 30,<br>2021 March 31,<br>2021 December 31,<br>2020 September 30,<br>2020 September 30,<br>2021 September 30,<br>2020
Adjusted noninterest income and expense
Total noninterest income $ 5,519 $ 4,170 $ 4,381 $ 6,975 $ 3,954 $ 14,070 $ 11,543
Noninterest income adjustments:
Net gain on securities available for sale — — — — — — (2,011)
Net gain on sale of legacy SFR loans held for sale — — — — (272) — (272)
Fair value adjustment on legacy SFR loans held for sale (160) (20) — (36) (24) (180) 1,537
Total noninterest income adjustments (160) (20) — (36) (296) (180) (746)
Adjusted noninterest income(1) $ 5,359 $ 4,150 $ 4,381 $ 6,939 $ 3,658 $ 13,890 $ 10,797
Total noninterest expense $ 37,811 $ 40,559 $ 46,735 $ 38,950 $ 40,394 $ 125,105 $ 160,083
Noninterest expense adjustments:
Naming rights termination — — — — — — (26,769)
Extinguishment of debt — — — — — — (2,515)
Professional recoveries (fees) 2,152 1,284 (721) 4,398 (1,172) 2,715 (3,725)
Merger-related costs (1,000) (700) (700) — — (2,400) —
Noninterest expense adjustments before gain (loss) in alternative energy partnership investments 1,152 584 (1,421) 4,398 (1,172) 315 (33,009)
Gain (loss) in alternative energy partnership investments 1,785 829 (3,630) 673 1,430 (1,016) (308)
Total noninterest expense adjustments 2,937 1,413 (5,051) 5,071 258 (701) (33,317)
Adjusted noninterest expense(1) $ 40,748 $ 41,972 $ 41,684 $ 44,021 $ 40,652 $ 124,404 $ 126,766
Average assets $ 8,141,613 $ 7,827,006 $ 7,860,952 $ 7,764,997 $ 7,687,105 $ 7,944,218 $ 7,663,504
Noninterest expense to average total assets 1.84 % 2.08 % 2.41 % 2.00 % 2.09 % 2.11 % 2.79 %
Adjusted noninterest expense to average total assets(1) 1.99 % 2.15 % 2.15 % 2.26 % 2.10 % 2.09 % 2.21 %

(1)Non-GAAP measure.

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended Nine Months Ended
September 30,<br>2021 June 30,<br>2021 March 31,<br>2021 December 31,<br>2020 September 30,<br>2020 September 30,<br>2021 September 30,<br>2020
Adjusted pre-tax pre-provision income
Net interest income $ 62,976 $ 59,847 $ 57,916 $ 61,563 $ 55,855 $ 180,739 $ 163,031
Noninterest income 5,519 4,170 4,381 6,975 3,954 14,070 11,543
Total revenue 68,495 64,017 62,297 68,538 59,809 194,809 174,574
Noninterest expense 37,811 40,559 46,735 38,950 40,394 125,105 160,083
Pre-tax pre-provision income(1) $ 30,684 $ 23,458 $ 15,562 $ 29,588 $ 19,415 $ 69,704 $ 14,491
Total revenue $ 68,495 $ 64,017 $ 62,297 $ 68,538 $ 59,809 $ 194,809 $ 174,574
Total noninterest income adjustments (160) (20) — (36) (296) (180) (746)
Adjusted total revenue(1) 68,335 63,997 62,297 68,502 59,513 194,629 173,828
Noninterest expense 37,811 40,559 46,735 38,950 40,394 125,105 160,083
Total noninterest expense adjustments 2,937 1,413 (5,051) 5,071 258 (701) (33,317)
Adjusted noninterest expense(1) 40,748 41,972 41,684 44,021 40,652 124,404 126,766
Adjusted pre-tax pre-provision income(1) $ 27,587 $ 22,025 $ 20,613 $ 24,481 $ 18,861 $ 70,225 $ 47,062
Average assets $ 8,141,613 $ 7,827,006 $ 7,860,952 $ 7,764,997 $ 7,687,105 $ 7,944,218 $ 7,663,504
Pre-tax pre-provision income ROAA(1) 1.50 % 1.20 % 0.80 % 1.52 % 1.00 % 1.17 % 0.25 %
Adjusted pre-tax pre-provision income ROAA(1) 1.34 % 1.13 % 1.06 % 1.25 % 0.98 % 1.18 % 0.82 %
Efficiency ratio(1) 55.20 % 63.36 % 75.02 % 56.83 % 67.54 % 64.22 % 91.70 %
Adjusted efficiency ratio(1) 59.63 % 65.58 % 66.91 % 64.26 % 68.31 % 63.92 % 72.93 %

(1)Non-GAAP measure.

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended Nine Months Ended
September 30,<br>2021 June 30,<br>2021 March 31,<br>2021 December 31,<br>2020 September 30,<br>2020 September 30,<br>2021 September 30,<br>2020
Adjusted net income (loss)
Net income (loss) $ 23,170 $ 19,050 $ 14,375 $ 21,703 $ 15,913 $ 56,595 $ (9,129)
Adjustments:
Noninterest income 160 20 — 36 296 180 746
Noninterest expense (2,937) (1,413) 5,051 (5,071) (258) 701 33,317
Total adjustments (2,777) (1,393) 5,051 (5,035) 38 881 34,063
Tax impact of adjustments above(1) 694 348 (1,263) 1,259 (10) (220) (8,515)
Tax impact from exercise of stock appreciation rights — — (2,093) — — (2,093) —
Adjustments to net income (2,083) (1,045) 1,695 (3,776) 28 (1,432) 25,548
Adjusted net income(2) $ 21,087 $ 18,005 $ 16,070 $ 17,927 $ 15,941 $ 55,163 $ 16,419
Average assets $ 8,141,613 $ 7,827,006 $ 7,860,952 $ 7,764,997 $ 7,687,105 $ 7,944,218 $ 7,663,504
ROAA 1.13 % 0.98 % 0.74 % 1.11 % 0.82 % 0.95 % (0.16) %
Adjusted ROAA(2) 1.03 % 0.92 % 0.83 % 0.92 % 0.82 % 0.93 % 0.29 %
Adjusted net income available to common stockholders
Net income (loss) available to common stockholders $ 21,443 $ 17,323 $ 7,825 $ 17,706 $ 12,084 $ 46,493 $ (19,265)
Adjustments to net income (loss) (2,083) (1,045) 1,695 (3,776) 28 (1,432) 25,548
Adjustments for impact of preferred stock redemption — — 3,347 — 7 3,347 (568)
Adjusted net income available to common stockholders(2) $ 19,360 $ 16,278 $ 12,867 $ 13,930 $ 12,119 $ 48,408 $ 5,715
Average diluted common shares 50,909,317 50,892,202 50,750,522 50,335,271 50,190,933 50,821,972 50,201,112
Diluted EPS $ 0.42 $ 0.34 $ 0.15 $ 0.35 $ 0.24 $ 0.91 $ (0.38)
Adjusted diluted EPS(2)(3) $ 0.38 $ 0.32 $ 0.25 $ 0.28 $ 0.24 $ 0.95 $ 0.11

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

(2)Non-GAAP measure.

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

24

banc2021q3investordeckfi

INVESTOR PRESENTATION 2021 Third Quarter Earnings bancofcal.com

2 FORWARD LOOKING STATEMENTS 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”), as well as the continuing effects of the COVID-19 pandemic on the Company’s business, operations, financial performance and prospects. 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 effect 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 generally, 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; (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, or changes in financial markets; (viii) continuation of, or changes in, the short-term interest rate environment, changes in the levels of general interest rates, volatility in the interest rate environment, 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, write-down 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) failures or security breaches with respect to the network and computer systems on which we depend, including but not limited to, due to cybersecurity threats; (xviii) our ability to attract and retain key members of our senior management team; (xix) increased competitive pressures among financial services companies; (xx) changes in consumer spending, borrowing and saving habits; (xxi) the effects of severe weather, natural disasters, pandemics, acts of war or terrorism, and other external events on our business; (xxii) the ability of key third-party providers to perform their obligations to us; (xxiii) 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; (xxiv) 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; (xxv) 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; (xxvi) 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 or preferred stock; and (xxvii) 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. Further, statements about the potential effects of the Pacific Mercantile Bancorp acquisition on our business, financial results and condition 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 our control, including (i) the risk that the benefits from the transaction may not be fully realized or may take longer to realize than expected, including as a result of changes in general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which Banc of California, Inc. and Pacific Mercantile Bancorp operate; (ii) the ability to promptly and effectively integrate the businesses of Banc of California, Inc. and Pacific Mercantile Bancorp; (iii) the reaction to the transaction of the companies’ customers, employees and counterparties; (iv) diversion of management time on integration-related issues; (v) lower than expected revenues, credit quality deterioration or a reduction in real estate values or a reduction in net earnings; and (vi) other risks that are described in Banc of California, Inc.’s public filings with the SEC.

3(1) Denotes a non-GAAP financial measure; see “Non-GAAP Reconciliation” slides at end of presentation THIRD QUARTER 2021 RESULTS ($ in Thousands Except EPS) 3Q21 2Q21 3Q20 Net interest income $ 62,976 $ 59,847 $ 55,855 (Reversal of) provision for credit losses $ (1,147) $ (2,154) $ 1,141 Net income $ 23,170 $ 19,050 $ 15,913 Net income available to common stockholders $ 21,443 $ 17,323 $ 12,084 Earnings per diluted common share $ 0.42 $ 0.34 $ 0.24 Adjusted net income available to common stockholders (1) $ 19,360 $ 16,278 $ 12,119 Adjusted earnings per diluted share (1) $ 0.38 $ 0.32 $ 0.24 Pre-tax pre-provision (PTPP) income (1) $ 30,684 $ 23,458 $ 19,415 Adjusted PTPP income (1) $ 27,587 $ 22,025 $ 18,861 Average assets $ 8,141,613 $ 7,827,006 $ 7,687,105 Return on average assets (ROAA) 1.13% 0.98% 0.82% Adjusted ROAA (1) 1.03% 0.92% 0.82% Net interest margin 3.28% 3.27% 3.09% Allowance for credit losses coverage ratio 1.26% 1.33% 1.66% Common equity tier 1 10.89% 11.14% 11.59% Tangible common equity per common share (1) $ 13.99 $ 13.69 $ 12.92 Noninterest-bearing deposits as % of total deposits 32.2% 29.1% 24.1%

4 ENHANCING FRANCHISE VALUE (1) Denotes a non-GAAP financial measure; see “Non-GAAP Reconciliation” slides at end of presentation 3rd Quarter 2021 Summary Significant Increase in Profitability • Net income available to common stockholders up 24% from prior quarter • ROAA up 16% from prior quarter • Adjusted PTPP Income(1) up 25% from prior quarter • Adjusted ROAA(1) improved 11 bps to 1.03% from prior quarter Continued Strong Balance Sheet Growth • Excluding PPP, total loans increased 16% annualized in 3Q21 • The new banking talent added over the past several quarters have quickly built pipelines and contributed to growth in loans and deposits • Total deposits increased 5.4% from end of prior quarter, driven primarily by continued growth in noninterest-bearing deposits Positive Trends in Key Metrics • Improved deposit mix: NIB represented 32% of deposits at the end of 3Q21 versus 29% at the end of 2Q21 • Reduced average cost of deposits to 0.15% for 3Q21 from 0.23% for 2Q21; spot rate of 0.08% at the end of 3Q21 • Increased net interest margin to 3.28% for 3Q21 from 3.27% for 2Q21 • Earning asset growth driving more operating leverage • Adjusted efficiency ratio(1): 59.6% for 3Q21 versus 65.6% for 2Q21 Credit Quality Remains Strong • Non-performing loans declined 11% from end of prior quarter • Net recoveries during 3Q21 • ACL to NPLs increased to 173% from 155% at end of prior quarter Acquisition of Pacific Mercantile Bancorp • Closed October 18, 2021; system conversion scheduled for November 12, 2021 • Integration and system conversion expected to result in most cost savings being in place by the end of 2021

5 STRONG VISIBILITY ON EARNINGS GROWTH Continued Opportunities to Reduce Deposit Costs • Continued strong inflows of low-cost deposits generated from business development efforts across all areas of the bank in conjunction with repricing efforts achieved a deposit spot rate at September 30, 2021 of 0.08% • Transition PMBC’s interest-bearing deposits to BANC’s lower-cost pricing Potential Redemption of Series E Preferred Stock in Early 2022 • Opportunity to redeem $98.7 million of preferred stock paying 7% dividend, subject to regulatory approval • Potential to add ~$7 million per year to net income available to common stockholders Accretive Benefits of Pacific Mercantile Bancorp Acquisition • Estimated cost savings of 40%+ of PMBC’s noninterest expense • Substantially all cost savings expected to be in place by end of 2021 and to be realized starting in 2022 • Additional operating leverage realized with addition of ~$1.5 billion in assets BANC Becoming a Talent Magnet in California • Success in attracting high quality banking talent throughout California has helped to generate significant loan production • Continuing to add talent across the company as BANC is a destination of choice in our markets Four Drivers of Earnings Growth Unrelated to Economic Conditions

6 Progress Report on Franchise Transformation Strong Execution on Franchise Enhancing Initiatives Has Produced Substantial Financial Improvement (1) Denotes a non-GAAP financial measure; see “Non-GAAP Reconciliation” slides at end of presentation 3Q21 1Q19 Improved By Net interest margin 3.28% 2.81% 17% Spot cost of deposits (last day of quarter) 0.08% 1.63% 95% Noninterest-bearing deposits as % of total deposits 32% 15% 113% Return on average assets (ROAA) 1.13% 0.28% 304% Adjusted (ROAA) (1) 1.03% 0.50% 106% Adjusted diluted earnings per share (1) $ 0.38 $ 0.16 138% Adjusted efficiency ratio (1) 59.6% 73.8% 19% Common equity tier 1 capital ratio 10.9% 9.7% 12%

7 NET INCOME AVAILABLE TO COMMON STOCKHOLDERS RECONCILIATION • Net income available to common stockholders growth of 24% • Noninterest expense adjustments relate to merger-related costs, indemnified professional fees, net of recoveries, and gain on alternative energy partnerships • 3Q21 included $1.6 million (after tax) in net recoveries of professional fees versus $1.0 million (after tax) in net recoveries of professional fees in 2Q21 ($ in millions) (1) Denotes a non-GAAP financial measure; see “Non-GAAP Reconciliation” slides at end of presentation (2) Adjustments presented utilizing an effective normalized tax rate of 25%; $21.4 $19.4 $(1.3)$(0.9) Net Income Available to Common Stockholders Noninterest expense adjustments (2) Gain on alternative energy partnerships (2) Adjusted Net Income Available to Common Stockholders (1) Noninterest income adjustments (2) $0.1 $17.3 $16.3 Net Income Available to Common Stockholders Adjusted Net Income Available to Common Stockholders (1) $(0.6)$(0.4) Noninterest expense adjustments (2) Gain on alternative engergy partnerships (2) $0.0 Noninterest income adjustments (2) EPS $0.42 EPS $0.32 EPS $0.34 EPS $0.38 3Q 2021 2Q 2021

8 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 ADJUSTED PRE-TAX PRE-PROVISION INCOME TREND 0.98% 1.25% 1.06% 1.13% 1.34% 2Q211Q21 $18.9 4Q203Q20 $20.6 $24.5 $22.0 $27.6 3Q21 Adjusted PTPP Income Adjusted PTPP Income / Avg. Assets

9 RAPIDLY IMPROVING DEPOSIT FRANCHISE (1) Reflects balance as of period end • $299 million quarterly increase in noninterest- bearing deposits • Large percentage of noninterest-bearing and low-cost deposits • Targeted deposit strategy has transformed deposit mix and contributed to asset-sensitive profile • Deposit spot rate on September 30, 2021 was 8 bps, down from 20 bps at June 30, 2021 Cost of Deposits 0.51% 9% 24% 34% 0%14% 26% 1% 3Q20 0.36% 26% 35% 27% 0% 12% 4Q20 0.28% 27% 36%34% 27% 10%11% 1Q21 0.23% 29% 0%0% 2Q21 34% 0.15% 32% 25% 3Q21 28% Average Cost of deposits Interest-bearing checking Noninterest-bearing Money Market & Savings Brokered CDs CDs Spot Rate 0.08% Category 3Q20 4Q20 1Q21 2Q21 3Q21 $ in millions Noninterest-bearing checking $1,450.7 $1,559.2 $1,700.3 $1,808.9 $2,107.7 Interest-bearing checking 2,045.1 2,107.9 2,088.5 2,217.3 2,214.7 Demand deposits 3,495.9 3,667.2 3,788.9 4,026.2 4,322.4 Money Market & Savings 1,636.1 1,646.7 1,684.7 1,593.7 1,661.0 CDs 820.5 755.7 668.5 586.6 559.8 Brokered CDs 79.8 16.2 00.0 00.0 00.0

10 Period end balances ($ in millions) BUSINESS UNITS GENERATING SOLID DEMAND DEPOSIT GROWTH $2,872 $416 $771 $754 3Q20 $2,282 $2,397 1Q21 $496 $21 4Q20 $824 $2,476 $471 $18 $825 $2,735 $437 $571 $29 2Q21 $848 $32 3Q21 $3,496 $28 $3,667 $3,789 $4,026 $4,322 +24% Community Banking OtherCommercial & Real Estate BankingSpecialty & Business Banking

11 DIVERSIFIED LOAN PORTFOLIO MITIGATES RISK AND GENERATES ATTRACTIVE RISK-ADJUSTED YIELD PPP Loan Overview • As of September 30, 2021, PPP loans (net of fees) comprised $116 million of the SBA portfolio • Of the total 1,128 PPP loans funded in the 1st round, 57 loans remain outstanding and represent $28 million of the PPP loan portfolio balance • Of the total 956 PPP loans funded in the 2nd round, 509 loans remain outstanding and represent $89 million of the PPP loan portfolio balance Real Estate Secured with Low LTVs • 70% of loan portfolio is secured by residential real estate (primary residences) • Weighted average loan-to-values (LTVs) of 64% • ~87% of all real estate secured loans have LTVs of less than 70% • ~75% of the SFR portfolio have LTVs of less than 70% (1) Reflects balance as of period end 3rd Quarter 2021 2nd Quarter 2021 Change Loan Segment $(1) % Avg. Yield $1 % Avg. Yield $1 % Avg. Yield $ in Millions C&I $ 2,297 37% 4.19% $ 2,071 35% 4.34% $ 226 2% -0.15% Multifamily 1,296 21% 4.21% 1,326 22% 4.58% (30) -1% -0.37% CRE 907 15% 4.63% 872 15% 4.83% 35 0% -0.20% Construction 131 2% 5.11% 151 3% 5.22% (20) -1% -0.11% SBA 182 3% 6.05% 254 4% 3.84% (72) -1% 2.21% SFR 1,394 22% 3.48% 1,288 22% 3.58% 106 0% -0.10% Consumer 23 0% 4.26% 24 0% 4.61% (1) 0% -0.35% Total Loans HFI $ 6,229 100% 4.18% $ 5,985 100% 4.30% $ 243 N/A -0.12% The average loan yield decreased to 4.18% for 3Q21 compared to 4.30% for 2Q21 due to lower prepayment penalty fees, offset by a higher level of accelerated PPP fees due to forgiveness.

12 LOAN BALANCES FUNDINGS AND PAYOFFS (1) Includes net change in warehouse lending and loan purchases (2) Includes deferred costs/fees, transfers and sales $253 $351 $487 $533 $503 $109 $151 $63 $87 $82 $204 $464 $227 $178 $566 $966 $550 $847 $763 ($367) ($515) ($321) ($496) ($385) ($149) ($227) ($141) ($138) ($144) ($222)($516) ($742) ($683) ($634) ($528) 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Total Loan Fundings of $763 Million in Q3 2021(1) Fundings Advances Warehouse Net Advances/Paydowns Payoffs Paydowns Warehouse Net Advances/Paydowns Total Loan Yield Rate on Production Rate on Production excl. PPP ($ in millions) Total Loan Fundings of $763 Million in 3Q21(1) ($ in millions) Loans Beginning Balance Total Fundings Total Payoffs Net Difference Other Change(2) Loans Ending Balance Total Loan Yield Rate on Production Rate on Production excl. PPP Q3 2021 5,988$ 763$ 528$ 234$ 9$ 6,232$ 4.18% 3.83% 3.83% Q2 2021 5,766$ 847$ 634$ 213$ 10$ 5,988$ 4.30% 3.86% 3.91% Q1 2021 5,900$ 550$ 683$ (133)$ (1)$ 5,766$ 4.30% 3.16% 3.76% Q4 2020 5,680$ 966$ 742$ 224$ (4)$ 5,900$ 4.58% 3.67% 3.67% Q3 2020 5,647$ 566$ 516$ 50$ (18)$ 5,680$ 4.46% 3.99% 4.07%

13 ($ in millions) Deferrals by Loan Type as of 9/30/21 (1),(2) Total Deferrals $ # Total Portfolio % of Portfolio Deferred Single Family Residential (SFR) $ 49.5 40 $ 1,394 4% Multifamily - 0 1,296 0% CRE - 0 907 0% Construction & Development - 0 131 0% Commercial & Industrial 3.8 1 2,297 0% Other Consumer 0.6 3 23 2% SBA 0.3 1 182 0% 3Q2021 Total $ 54.2 45 $ 6,229 1% 2Q2021 Total $ 86.6 56 $ 5,985 1% FORBEARANCE AND DEFERMENTS DECLINE Total loan deferrals and forbearances declined $32 million from 2Q21 • $50 million, or 91%, of deferments/forbearances at the end of 3Q21 relate to legacy Single Family Residential loans (1) Excludes loans in forbearance that are current and loans delinquent prior to COVID-19 (2) Loans within the SFR portfolio are forbearances or deferments $440 $145 $113 $60 $164 $138 $139 $49 $52 $50 6/30/2021 $252 3/31/20216/30/2020 12/31/20209/30/2020 $34 $5 9/30/2021 $604 $283 $109 $87 $54 -37% SFR Non-SFR

14 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) 2Q21 $12.0 $8.7 $71.1 0.54% 1.46% 3Q213Q20 $22.9 $35.0$31.6 4Q20 $61.3 $47.8 $13.5 1.06% 1Q21 $21.7 $13.3 0.58% $19.1 $26.0 0.72% $83.0 $45.1 Delinquencies (ex-SFR) SFR Delinquencies Delinquencies /Total Loans $111 2Q213Q20 $91 $102 $76 4Q20 $126 1Q21 3Q21 $170 $166 $227 $259 $241 Criticized and Classified Loans Classified Loans $26.3 1.18% 3Q20 $40.6 $55.9 $13.5 0.62% $23.1 4Q20 $32.4 0.73% $23.5 $66.9 0.97% 1Q21 $30.1 $21.2 0.86% 2Q21 $16.5 $29.1 3Q21 $45.6 $36.6 $51.3 NPLs/Total Loans-HFI SFR NPLs NPLs (ex-SFR) 141% 230% 148% 155% 173% 1Q214Q20 2Q21 $94.1 3Q20 $84.2 $82.7 $79.7 $78.8 3Q21 ACL ACL / NPLs

15 TOP 10 RELATIONSHIPS Non-performing & delinquent loans rollforward Non-performing loans • Non-performing loans decreased $5.7 million, or 11%, to $45.6 million due mostly to SFR loans paying off and migrating back to accrual status • $22.7 million, or 50% of total NPLs, are in current status • NPLs include $12.8 million of SBA loans of which $8.7 million are guaranteed Delinquencies • Delinquencies increased $10.1 million, or 29%, due mostly to $24.9 million of additions, offset by $12.4 million returning to current status and $2.3 million in other reductions due to paydowns and or other resolution • Delinquencies include $14.9 million of SBA loans of which $10.6 million are guaranteed Non-performing Loans ($ in thousands) # 3Q21 2Q21 Delta Loan Category 3Q Accrual Status 3Q Delinquency Status 2Q Accrual Status 1 7,011$ 7,175$ (164) $ C&I / CRE Non-Accrual Current Non-Accrual 2 3,837 3,917 (80) C&I Non-Accrual Current Non-Accrual 3 3,709 3,709 - SFR Non-Accrual Current Non-Accrual 4 3,236 587 2,649 SBA Non-Accrual 90+ Non-Accrual 5 3,017 3,036 (19) SBA Non-Accrual 90+ Non-Accrual 6 2,529 2,529 - SFR Non-Accrual 90+ Non-Accrual 7 2,529 2,571 (42) CRE Non-Accrual Current Non-Accrual 8 2,289 2,890 (602) C&I Non-Accrual 90+ Non-Accrual 9 2,037 2,037 - SBA Non-Accrual 90+ Non-Accrual 10 1,940 1,948 (8) SFR Non-Accrual 90+ Non-Accrual 11+ 13,488 20,901 (7,413) Total 45,622$ 51,299$ (5,678) $ Delinquent Loans ($ in thousands) # 3Q21 2Q21 Delta Loan Category 3Q Accrual Status 3Q Delinquency Status 2Q Delinquency Status 1 6,617$ -$ 6,617$ C&I Accrual 60-89 Current 2 3,958 - 3,958 SFR Accrual 30-59 Current 3 3,236 587 2,649 SBA Non-Accrual 90+ 90+ 4 3,017 - 3,017 SBA Non-Accrual 90+ Current 5 2,529 2,529 - SFR Non-Accrual 90+ 90+ 6 2,289 2,890 (602) C&I Non-Accrual 90+ 90+ 7 2,037 2,037 - SBA Non-Accrual 90+ 90+ 8 1,940 1,948 (8) SFR Non-Accrual 90+ 90+ 9 1,924 1,924 - SBA Non-Accrual 90+ 90+ 10 1,573 - 1,573 SFR Accrual 30-59 Current 11+ 16,005 23,067 (7,063) Total 45,123$ 34,982$ 10,141$

16 $79.7 $0.2 $0.8 $78.8 ($1.9) $70.0 $72.0 $74.0 $76.0 $78.0 $80.0 $82.0 ACL (6/30/21) Portfolio Mix Recoveries (net of Charge-offs) Specific Reserves ACL (9/30/21) ALLOWANCE FOR CREDIT LOSSES WALK 3Q21: The ACL reserve decreased $0.9 million due to (1) lower reserves of $1.9 million from portfolio mix, offset by (2) net recoveries of $0.2mm, and (3) higher specific reserves of $0.8mm ACL includes Allowance for Loan Losses (ALL) and Reserve for Unfunded Loan Commitments (RUC) – Our ACL methodology uses a nationally recognized, third-party model that includes many assumptions based on historical and peer loss data, current loan portfolio risk profile including risk ratings, and economic forecasts including macroeconomic variables (MEVs) released by our model provider during September 2021. The September 2021 forecasts reflect a more favorable view of the economy (i.e. higher GDP growth rates, a higher CRE price index and lower unemployment rates) compared to June 2021 forecasts. While the current forecast generally reflects an improving economy with the availability of the vaccine and other factors, there continues to be uncertainty regarding the impact of inflation (lasting or transitory), COVID-19 variants, further government stimulus, supply chain issues, and the ultimate pace of the recovery. Accordingly, our economic assumptions and the resulting ACL level and provision reversal consider both of these positive assumptions and potential uncertainties. (1) Coverage percentage equals ACL to Total Loans. PPP loans improved Coverage ratio by 5 bps at 6/30/21 and 2 bps at 9/30/21 ($ in millions) 1.33% (1) 1.26% (1)

17 CONTINUED FOCUS ON EXPENSE MANAGEMENT Noninterest expense adjustments relate to: (1) timing of indemnified legal costs/recoveries, (2) merger-related costs and (3) loss/gain on investments in alternative energy partnerships(2) Noninterest Expense to Average Assets ($ millions) Adjusted Noninterest Expense(1) to Average Assets ($ millions) 2.00% 2Q21 $41.7$44.0$40.7 -$5.1-$0.3 2.09% 3Q20 $37.8 4Q20 $5.1 2.41% 1Q21 -$1.4 1.84% $42.0 2.08% -$2.9 $40.7 3Q21 $40.4 $39.0 $46.7 $40.6 Noninterest expense adjustments Adjusted Noninterest Expense Noninterest Expense / Average Assets 4Q20 $41.7 3Q21 $40.7 2.10% 2.26% 3Q20 $44.0 2.15% 1Q21 $42.0 2.15% 2Q21 $40.7 1.99% Adjusted Noninterest Expense / Average Assets Adjusted Noninterest Expense

18(1) Denotes a non-GAAP financial measure; see “Non-GAAP Reconciliation” slides at end of presentation 3Q21 2Q21 1Q21 4Q20 3Q20 Common Equity Tier 1 10.89% 11.14% 11.50% 11.19% 11.59% Tier 1 Risk-based Capital 12.38% 12.71% 13.17% 14.35% 14.94% Leverage Ratio 9.80% 9.89% 9.62% 10.90% 10.79% Tangible Equity / Tangible Assets (1) 9.78% 9.89% 9.69% 10.94% 10.84% Tangible Common Equity / Tangible Assets (1) 8.63% 8.70% 8.49% 8.58% 8.43% STRONG CAPITAL BASE Provides buffer to deploy for shareholders’ benefit

19 2021 STRATEGIC OBJECTIVES • Continue adding full banking relationships that provide low-cost transaction deposits • Additional opportunities to reduce deposit costs primarily centered around larger money market contracts and time deposits maturing during the remainder 2021 • Continued focus on earning asset mix to support earning asset yields • Lending teams added over past two years continue to build their books of business with high-quality relationship loans in our footprint • Healthy commercial loan pipeline should lead to production levels exceeding runoff and continued growth in earning assets • Well-underwritten loan portfolio mainly secured by CA-based real estate with relatively low LTVs continues to provide strong defensive positioning in uncertain environment • Maintain a high level of capital, liquidity and reserves • Opportunity to redeem Series E preferred stock at appropriate time and subject to regulatory approval • Completion of announced Pacific Mercantile Bancorp acquisition in Q4 2021 • Redeemed Series D preferred stock in Q1 2021 • Evaluate other strategic opportunities • Generate balance sheet growth while keeping expenses flat to modestly higher in 2021 • Continue to leverage technology to increase efficiencies and enhance business development • Realize cost savings from Pacific Mercantile Bancorp acquisition Maintain Credit and Capital Discipline Strategic Growth in Earning Assets Continue Driving Net Interest Margin Manage Expenses and Realize Additional Operating Leverage Evaluating Use of Capital to Increase Earnings and Improve Franchise Value

20 APPENDIX bancofcal.com

21 78% of total loans in California LOAN PORTFOLIO CHARACTERISTICS Construction $131 2% Consumer $23 <1% SBA(1) $182 3% Northern California $509 8% Central California $213 3% South $748 12% Other West $305 5% Northeast $185 3% Midwest $148 2% • 70% of loan portfolio is secured by residential real estate (primary residences) • ~87% of all real estate secured loans have LTVs of less than 70% • ~75% of the SFR portfolio have LTVs of less than 70% $ in millions$ in millions 91% of RE loans in California Loan Portfolio by Segment Loan Portfolio by Geography (1) Includes $116 million of PPP loans. Key Commentary Southern California $4,114 66% CRE $907 15% Single Family Res. $1,394 22% Multifamily $1,296 21% C&I $2,297 37% Loan Segment Avg. Yield C&I 4.19% Multifamily 4.21% CRE 4.63% Construction 5.11% SBA 6.05% Single Family Res. 3.48% Consumer 4.26% Total Loans HFI 4.18%

22 REAL ESTATE LOAN PORTFOLIO HAS LOW LTVS $ in millions (1) Excludes Warehouse credit facilities Real Estate Loan Balances(1) SFR Portfolio by LTV 66% 3Q20 1Q21 $3,521 59% 2Q214Q20 $3,636 61% 61% 3Q21 $3,736 $3,503 RE Loans / Loans-HFI RE Loans 60% to 70% 50% to 60% <50% 70% to 80% >80% • ~87% of all real estate secured loans have LTVs of less than 70% • Weighted average LTV is 57% Real Estate(1) LTVs $ % Count <50% $ 1,021 27% 834 50% to 60% 956 26% 488 60% to 70% 1,249 33% 500 70% to 80% 469 13% 294 >80% 32 1% 20 Total $ 3,727 100% 2,136 $ in Millions SFR LTVs $ % Count <50% $ 405 29% 479 50% to 60% 322 23% 281 60% to 70% 321 23% 256 70% to 80% 327 23% 259 >80% 19 1% 14 Total $ 1,394 100% 1,289 $ in Millions • ~75% of all existing SFR have LTVs of less than 70% • Weighted average LTV is 58%

23 CALIFORNIA-CENTRIC CRE AND MULTIFAMILY PORTFOLIOS HAVE LOW WEIGHTED-AVERAGE LTV CRE & Multifamily by Collateral Type Multifamily 59% Other 12% 12% Retail 12% Industrial 5% Hospitality 0.1% Owner Occupied 12% Residential 96.7% Mixed Use 3.3% Multi Tenant 40% Single Tenant 16% Strip Center 7% Non Owner Occupied 88% Neighborhood Shopping Center 34% Other 2% Office Collateral Type Count Balance Avg. Loan Size W.A. LTV W.A. DSCR $ in thousands MultiFamily 570 $ 1,295,613 $ 2,273 58.8% 1.5x Office 54 258,457 4,786 56.2% 2.3x Retail 69 271,332 3,932 53.1% 1.7x Hospitality 4 2,595 649 48.0% 1.8x Industrial 44 102,560 2,331 54.4% 1.7x Other 65 272,280 4,189 57.4% 1.6x Total CRE & MF 806 $ 2,202,837 $ 2,733 57.4% 1.6x

24 ~80% C&I Concentration toward Businesses focused on Finance (including Warehouse), and Real Estate and Rental Leasing Limited Exposure to High Stressed Business Industries • 2% Television / Motion Pictures • 1% Food Services • <1% Transportation • <1% in Accommodations All Other C&I includes a diverse mix of industry sectors • 1% Management of Companies • 1% Administrative and Support • 1% Education Services • 1% Professional Services • <1% Construction / Contracting Finance and Insurance: Warehouse 66% Real Estate & Rental Leasing 10% Finance and Insurance: Other 4% Gas Stations 3% Manufacturing 2% Healthcase and Social Assistance 3% Wholesale Trade 2% Other Retail Trade 1% Television / Motion Pictures 2% Food Services 1% Professional Services 1% Transport ation 0.2% Accomodations 0.1% All Other C&I 4% DIVERSIFIED AND LOW AVERAGE BALANCE C&I PORTFOLIO NAICS Industry Count $ Avg. Loan Size Finance: Warehouse 66 $ 1,522,945 $ 23,075 Real Estate & Rental Leasing 137 221,541 1,617 Finance: Other 51 84,569 1,658 Gas Stations 50 73,926 1,479 Healthcare and Social Assistance 73 72,252 990 Wholesale Trade 49 38,770 791 Manufacturing 51 47,421 930 Television / Motion Pictures 33 51,097 1,548 Food Services 21 29,034 1,383 Other Retail Trade 52 29,950 576 Professional Services 89 15,339 172 Transportation 20 4,685 234 Accommodations 5 2,135 427 All Other C&I 155 102,960 664 Total C&I 852 $ 2,296,625 $ 2,696 $ in thousands

25 STRONG ALLOWANCE COVERAGE RATIO; ALLOCATION OF RESERVE BY LOAN TYPE • Allowance for Credit Losses (ACL) includes Reserve for Unfunded Commitments • Excluding PPP loans, the ACL coverage was 1.29% at the end of 3Q21 compared to 1.38% at the end of 2Q21 ACL Composition 3Q21 2Q21 ($ in thousands) Amount % of Loans Amount % of Loans Commercial real estate $ 16,017 1.77% $ 16,424 1.88% Multifamily 18,725 1.45% 21,403 1.61% Construction 4,118 3.15% 4,734 3.14% Commercial and industrial 15,824 2.05% 15,862 2.19% Commercial and industrial - warehouse 4,431 0.29% 4,294 0.32% SBA 4,735 2.61% 3,696 1.46% Total commercial loans 63,850 1.33% 66,413 1.42% Single family residential mortgage 9,304 0.67% 9,108 0.71% Other consumer 370 1.59% 364 1.49% Total consumer loans 9,674 0.68% 9,472 0.72% Allowance for loan losses 73,524 1.18% 75,885 1.27% Reserve for unfunded commitments 5,233 0.08% 3,814 0.06% Allowance for credit losses $ 78,757 1.26% $ 79,699 1.33%

26(1) Dollars in millions. Values that are greater than $0.0 million (or 0.0%) but less than $0.5 million (or 0.5%) are not shown. Portfolio Average Balances & Yields Securities Portfolio Detail(1) SECURITIES PORTFOLIO Portfolio Profile(1) CompositionCredit Rating AA 44% AAA 43% BBB 13% The quarter-over-quarter change in total securities is due to a $35.5 million reduction in the CLO position due to pay-offs resulting from resets, $8.5mm pay-offs in the Agency positions, and a $5.4 million reduction in total fair value. CLOs included an unrealized loss of $2.5 million as of 3Q21, down from an unrealized loss of $3.0 million as of 2Q21. Fair Value Fair Value QoQ Duration 2Q21 3Q21 Change 3Q21 ($ in Millions) Gov’t & Agency (MBS, CMO, & SBA) $ 479 $ 464 $ (15) 8.0 CLOs 584 549 (35) 0.1 Municipal 121 120 (1) 7.9 Corporate Securities 169 170 1 7.0 Total Securities $ 1,353 $ 1,303 $ (50) 4.5 Security Type Gov’t & AGC 36% CLO 42% Corporates 13% Munis 9% 2Q21 2.26% 2.13% $1,239 3Q20 2.13% 4Q20 1Q21 2.14% 2.11% 3Q21 $1,191 $1,236 $1,308 $1,347 Average Balance ($ in millions) Yield

27 CLO Industry Breakdown $549 million at September 30, 2021 (net of $2.5 million unrealized loss) • CLO portfolio has underlying diversified exposure with largest segment in Healthcare & Pharmaceuticals at 13% • Limited exposure to severely stressed industries • AA and AAA holdings provide principal protection – exposure to underlying credit losses would require a combination of lifetime defaults (25- 40% CDR), loss severity (40-50%), and prepayment assumptions (10-20% CPR) • Under these assumptions, the underlying securities would need to take losses of approximately 30% before we would anticipate incurring losses on principal • 3Q21 average CLO portfolio yield of 1.82% • Quarterly reset based on 3 Month Libor + 1.63% CLO PORTFOLIO HAS DIVERSIFIED EXPOSURE CREDIT ENHANCEMENT PROVIDES SIGNIFICANT PRINCIPAL PROTECTION Healthcare & Pharmaceuticals 13% High Tech Industries 10% Services: Business 9% FIRE: Banking, Finance, Insurance & Real Estate 8% Beverage, Food & Tobacco 5%Hotel, Gaming & Leisure 4% Media: Broadcasting & Subscription 4% Telecommunications 4% Services: Consumer 4% Automotive 3% Capital Equipment 3% Chemicals, Plastics, & Rubber 3% Construction & Building 3% Containers, Packaging & Glass 3% Aerospace & Defense 3% Retail 2% Other 19%

28 ACTIVE MANAGEMENT OF DEPOSIT COSTS IS DRIVING DOWN COST OF FUNDS Cost of Funds Drivers 0.22% 0.70% 0.66% 0.23% 0.51% 0.82% 0.36% 3Q20 0.11% 0.47% 4Q20 0.15% 0.38% 0.28% 0.63% 1Q21 0.32% 0.57% 2Q21 0.49% 3Q21 0.17% 0.09% 0.12% Cost of Interest-bearing deposits Cost of total deposits Overnight funding Cost of funds 2.77% 5.46% 2.53% 5.27% 2.86% 5.22% 2.89% 5.22% 2.91% 5.22% Term FHLB borrowings Notes payable, net No Overnight Funding

29 DECLINING DEPOSIT COSTS PROTECT NET INTEREST MARGIN Net Interest Margin Drivers 1.02% 4.04% 3Q21 3.86% 1Q21 0.25% 3Q20 0.25% 3.09% 3.38% 0.25% 3.78% 0.89% 4Q20 3.19% 3.73% 0.25% 0.83% 3.81% 3.27% 3.28% 0.25% 0.77% 2Q21 0.67% Interest-Bearing LiabilitiesFed Funds RateEarning Asset Yield Net Interest Margin

30 INTEREST RATE RISK MANAGEMENT – EARNING ASSETS ANALYSIS Assets Repricing/Maturing by Duration ($ millions) Repricing/Maturity by Product Type ($ millions) • $3.95 billion (51%) of earning assets mature or have rate resets <2 years • Earning assets with effective rate resets <2 years include: • $3,097 million of loans • $670 million of securities (primarily CLOs) • $186 million of interest-bearing cash deposits • $3.77 billion (49%) of earning assets mature or have rate resets >2 years < 1 Year 1 - 2 Years > 2 Years $600 $1,000 $0 $200 $400 $1,400 $800 $1,200 $1,600 SFRMF Securities WH CRE C&I Cash SBA Other < 1 Year 1 - 2 Years > 2 Years Category Total Balance % of Total Interest- Earning Assets

31 BANC FAST FACTS (1) Non-GAAP financial measure; see “Non-GAAP Reconciliation” slides at end of presentation 3Q21 2Q21 1Q21 4Q20 3Q20 $ 8,279 $ 8,027 $ 7,933 $ 7,877 $ 7,738 1,303 1,353 1,271 1,231 1,246 6,229 5,985 5,764 5,898 5,678 6,543 6,207 6,142 6,086 6,032 $ 63.0 $ 59.8 $ 57.9 $ 61.6 $ 55.9 5.5 4.2 4.4 7.0 4.0 68.5 64.0 62.3 68.5 59.8 39.6 41.4 43.1 39.6 41.8 (1.8) (0.8) 3.6 (0.7) (1.4) 37.8 40.6 46.7 39.0 40.4 30.7 23.5 15.6 29.6 19.4 (1.1) (2.2) (1.1) 1.0 1.1 8.7 6.6 2.3 6.9 2.4 23.2 19.1 14.4 21.7 15.9 1.7 1.7 6.6 4.0 3.8 $ 21.4 $ 17.3 $ 7.8 $ 17.7 $ 12.1 $ 0.42 $ 0.34 $ 0.15 $ 0.35 $ 0.24 1.13% 0.98% 0.74% 1.11% 0.82% 59.63% 65.58% 66.91% 64.26% 68.31% CUSIP Issue Date Par Value Dividend Rate ($000) / Coupon (%) Preferred Equity: Non-Cumulative, Perpetual E 05990K874 2/8/2016 98,702$ 7.000% 3/15/2021 Preferred Equity Class / Series Return on average assets Adjusted efficiency ratio(1) First Callable Date Preferred dividend and other adjustments Net income available to common stockholders Diluted earnings per common share Net income (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 Gain (loss) in alternative energy partnership investments Total noninterest expense Pre-tax pre-provision income(1) (Reversal of) provision for credit losses

32 Non-Int. Bearing 35% Int. Bearing Checking 31% MMDA & Sav. 26% CDs 9% C&I (Ex. PPP) 36% PPP 4% CRE 18% Multifamily 20% Consumer 1% SFR 19% C&D 2% MERGER PACIFIC MERCANTILE BANCORP 1) Pro forma excludes purchase accounting adjustments. Balances as of September 30, 2021; Loan yields shown for the quarter ended September 30, 2021; Cost of deposits represents spot rate as of September 30, 2021; Sum of each composition may not add to 100% due to rounding • Approximately 12.9% EPS accretion in 2022 (first full year of cost savings) • TBV per share earnback of 2.3 years (crossover method) • IRR of 15%+ • Adds $5 million+ recurring noninterest income annually • Pro forma capital ratios well in excess of regulatory minimums • Conservative cost savings assumptions of 35% • Closed October 18, 2021 • Acquired a quality deposit franchise with: • 47% noninterest-bearing deposits • 0.15% cost of deposits • Established presence in Los Angeles market • Adds $1.0 billion in total loans • Adds $1.3 billion in total deposits • Adds $1.5 billion in total assets • Complementary business models and cultural fit Key Highlights Loan Composition Deposit Composition Financial Highlights MRQ Yield on Loans: 4.20% MRQ Cost of Deposits: 0.09% Pro Forma 1 ($7.2B) Pro Forma 1 ($7.8B) Original Projection

33 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 common share, return on average tangible common equity, adjusted noninterest income, adjusted noninterest expense, adjusted noninterest expense to average total assets, pre-tax pre-provision (PTPP) income (loss), adjusted PTPP income (loss), PTPP income (loss) ROAA, adjusted PTPP income (loss) ROAA, efficiency ratio, adjusted efficiency ratio, adjusted total revenue, adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share (EPS) and adjusted return on average assets (ROAA) constitute supplemental financial information determined by methods other than in accordance with GAAP. These non-GAAP measures are used by management in its analysis of the Company's performance. Tangible assets and tangible equity are calculated by subtracting goodwill and other intangible assets from total assets and total equity. Tangible common equity is calculated by subtracting preferred stock from tangible equity. Return on average tangible common equity is computed by dividing net income (loss) available to common stockholders, adjusted for amortization of intangible assets, by average tangible common equity. Banking regulators also exclude goodwill and other intangible assets from stockholders' equity when assessing the capital adequacy of a financial institution. PTPP income is calculated by adding net interest income and noninterest income (total revenue) and subtracting noninterest expense. Adjusted PTPP income is calculated by adding net interest income and adjusted noninterest income (adjusted total revenue) and subtracting adjusted noninterest expense. PTPP income ROAA is computed by dividing annualized PTPP income by average assets. Adjusted PTPP income ROAA is computed by dividing annualized adjusted PTPP income by average assets. Efficiency ratio is computed by dividing noninterest expense by total revenue. Adjusted efficiency ratio is computed by dividing adjusted noninterest expense by adjusted total revenue. Adjusted net income (loss) is calculated by adjusting net income (loss) for tax-effected noninterest income and expense adjustments and the tax impact from the exercise of stock appreciation rights. Adjusted ROAA is computed by dividing annualized adjusted net income by average assets. Adjusted net income (loss) available to common shareholders is computed by removing the impact of preferred stock redemptions from adjusted net income (loss). Management believes the presentation of these financial measures adjusting the impact of these items provides useful supplemental information that is essential to a proper understanding of the financial results and operating performance of the Company. This disclosure should not be viewed as a substitute for results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of these measures to measures determined in accordance with GAAP are contained on slides 34-38 of this presentation.

34 NON-GAAP RECONCILIATION (Dollars in thousands) 3Q21 2Q21 1Q21 4Q20 3Q20 Tangible Common Equity to Tangible Assets Ratio Total assets $ 8,278,741 $ 8,027,413 $ 7,933,459 $ 7,877,334 $ 7,738,106 Less: goodwill (37,144) (37,144) (37,144) (37,144) (37,144) Less: other intangible assets (1,787) (2,069) (2,351) (2,633) (2,939) Tangible assets(1) $ 8,239,810 $ 7,988,200 $ 7,893,964 $ 7,837,557 $ 7,698,023 Total stockholders' equity $ 844,803 $ 829,362 $ 804,693 $ 897,207 $ 874,254 Less: goodwill (37,144) (37,144) (37,144) (37,144) (37,144) Less: other intangible assets (1,787) (2,069) (2,351) (2,633) (2,939) Tangible equity(1) 805,872 790,149 765,198 857,430 834,171 Less: preferred stock (94,956) (94,956) (94,956) (184,878) (184,878) Tangible common equity(1) $ 710,916 $ 695,193 $ 670,242 $ 672,552 $ 649,293 Total stockholders' equity to total assets 10.20% 10.33% 10.14% 11.39% 11.30% Tangible equity to tangible assets(1) 9.78% 9.89% 9.69% 10.94% 10.84% Tangible common equity to tangible assets(1) 8.63% 8.70% 8.49% 8.58% 8.43% (1) Non-GAAP measure

35 NON-GAAP RECONCILIATION (Dollars in thousands) 3Q21 2Q21 1Q21 4Q20 3Q20 Return on tangible common equity Average total stockholders' equity $ 847,941 $ 814,973 $ 888,174 $ 892,565 $ 865,406 Less: Average preferred stock (94,956) (94,956) (164,895) (184,878) (184,910) Less: Average goodwill (37,144) (37,144) (37,144) (37,144) (37,144) Less: Average other intangible assets (1,941) (2,224) (2,517) (2,826) (3,172) Average tangible common equity(1) $ 713,900 $ 680,649 $ 683,618 $ 667,717 $ 640,180 Net income available to common stockholders $ 21,443 $ 17,323 $ 7,825 $ 17,706 $ 12,084 Add: Amortization of intangible assets 282 282 282 306 353 Less: Tax effect on amortization of intangible assets (2) (59) (59) (59) (64) (74) Net income available to common stockholders after the adjustments for intangible assets(1) $ 21,666 $ 17,546 $ 8,048 $ 17,948 $ 12,363 Return on average equity 10.84% 9.38% 6.56% 9.67% 7.32% Return on average tangible common equity(1) 12.04% 10.34% 4.77% 10.69% 7.68% (1) Non-GAAP measure (2) Adjustments shown net of a statutory Federal tax rate of 21%

36 NON-GAAP RECONCILIATION (Dollars in thousands) 3Q21 2Q21 1Q21 4Q20 3Q20 1Q19 Adjusted Noninterest Income and Expense Total noninterest income $ 5,519 $ 4,170 $ 4,381 $ 6,975 $ 3,954 $ 6,295 Noninterest income adjustments: Net (gain) on securities available for sale - - - - - (208) Net (gain) on sale of legacy SFR loans held for sale - - - - (272) - Fair Value adjustment on legacy SFR loans held for sale (160) (20) - (36) (24) (1) Total noninterest income adjustments (160) (20) - (36) (296) (209) Adjusted noninterest income(1) $ 5,359 $ 4,150 $ 4,381 $ 6,939 $ 3,658 $ 6,086 Total noninterest expense $ 37,811 $ 40,559 $ 46,735 $ 38,950 $ 40,394 $ 62,249 Noninterest expense adjustments: Professional recoveries (fees) 2,152 1,284 (721) 4,398 (1,172) (2,979) Merger-related costs (1,000) (700) (700) - - - Restructuring expense - - - - - (2,795) Noninterest expense adjustments before gain (loss) in alternative energy partnership investments 1,152 584 (1,421) 4,398 (1,172) (5,774) Gain (loss) in alternative energy partnership investments 1,785 829 (3,630) 673 1,430 (1,950) Total noninterest expense adjustments 2,937 1,413 (5,051) 5,071 258 (7,724) Adjusted noninterest expense(1) $ 40,748 $ 41,972 $ 41,684 $ 44,021 $ 40,652 $ 54,525 Average assets $8,141,613 $7,827,006 $7,860,952 $7,764,997 $7,687,105 $10,301,717 Noninterest expense / Average assets 1.84% 2.08% 2.41% 2.00% 2.09% 2.45% Adjusted noninterest expense / Average assets(1) 1.99% 2.15% 2.15% 2.26% 2.10% 2.15% (1) Non-GAAP measure

37 NON-GAAP RECONCILIATION (Dollars in thousands) 3Q21 2Q21 1Q21 4Q20 3Q20 1Q19 Net interest income $ 62,976 $ 59,847 $ 57,916 $ 61,563 $ 55,855 $ 67,808 Noninterest income 5,519 4,170 4,381 6,975 3,954 6,295 Total revenue 68,495 64,017 62,297 68,538 59,809 74,103 Noninterest expense 37,811 40,559 46,735 38,950 40,394 62,249 Pre-tax pre-provision income(1) $ 30,684 $ 23,458 $ 15,562 $ 29,588 $ 19,415 11,854 Total revenue $ 68,495 $ 64,017 $ 62,297 $ 68,538 $ 59,809 74,103 Total noninterest income adjustments (160) (20) - (36) (296) (209) Adjusted total revenue(1) $ 68,335 $ 63,997 $ 62,297 $ 68,502 $ 59,513 $ 73,894 Noninterest expense $ 37,811 $ 40,559 $ 46,735 $ 38,950 $ 40,394 62,249 Total noninterest expense adjustments 2,937 1,413 (5,051) 5,071 258 (7,724) Adjusted noninterest expense(1) 40,748 41,972 41,684 44,021 40,652 54,525 Adjusted pre-tax pre-provision income $ 27,587 $ 22,025 $ 20,613 $ 24,481 $ 18,861 $ 19,369 Average Assets $ 8,141,613 $ 7,827,006 $ 7,860,952 $ 7,764,997 $ 7,687,105 $ 10,301,717 Pre-tax pre-provision ROAA(1) 1.50% 1.20% 0.80% 1.52% 1.00% 0.47% Adjusted pre-tax pre-provision ROAA(1) 1.34% 1.13% 1.06% 1.25% 0.98% 0.76% Efficiency Ratio(1) 55.20% 63.36% 75.02% 56.83% 67.54% 84.00% Adjusted efficiency ratio(1) 59.63% 65.58% 66.91% 64.26% 68.31% 73.79% (1) Non-GAAP measure

38 NON-GAAP RECONCILIATION (1) Adjustments shown net of an effective tax rate of 25% (2) Non-GAAP measure (3) Represents adjusted net income available to common stockholders divided by average diluted common shares (Dollars in thousands, except per share data) 3Q21 2Q21 1Q21 4Q20 3Q20 1Q19 Adjusted net income (loss) Net income (loss) $ 23,170 $ 19,050 $ 14,375 $ 21,703 $ 15,913 $ 7,037 Adjustments: Noninterest income 160 20 - 36 296 (209) Noninterest expense (2,937) (1,413) 5,051 (5,071) (258) 7,724 Total adjustments (2,777) (1,393) 5,051 (5,035) 38 7,515 Tax impact of adjustments above(1) 694 348 (1,263) 1,259 (10) (1,879) Tax adjustment: tax impact from exercise of stock appreciation rights - - (2,093) - - - Adjustments to net income (2,083) (1,045) 1,695 (3,776) 28 5,636 Adjusted net income(2) $ 21,087 $ 18,005 $ 16,070 $ 17,927 $ 15,941 $ 12,673 Average Assets $ 8,141,613 $ 7,827,006 $ 7,860,952 $ 7,764,997 $ 7,687,105 $ 10,301,717 ROAA 1.13% 0.98% 0.74% 1.11% 0.82% 0.28% Adjusted ROAA(2) 1.03% 0.92% 0.83% 0.92% 0.82% 0.50% Adjusted net income (loss) available to common stockholders Net income (loss) available to common stockholders $ 21,443 $ 17,323 $ 7,825 $ 17,706 $ 12,084 $ 2,527 Adjustments to net income (loss) (2,083) (1,045) 1,695 (3,776) 28 5,636 Adjustments for impact of preferred stock redemption - - 3,347 - 7 - Adjusted net income available to common stockholders(2) $ 19,360 $ 16,278 $ 12,867 $ 13,930 $ 12,119 $ 8,163 Average diluted common shares 50,909,317 50,892,202 50,750,522 50,335,271 50,190,933 50,846,722 Diluted EPS $ 0.42 $ 0.34 $ 0.15 $ 0.35 $ 0.24 $ 0.05 Adjusted diluted EPS(2)(3) $ 0.38 $ 0.32 $ 0.25 $ 0.28 $ 0.24 $ 0.16

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