EX-99.1 2 d142211dex991.htm EX-99.1

EX-99.1

Exhibit 99.1

Banc of California Reports Record First Quarter Earnings

IRVINE, Calif., (April 21, 2016) – Banc of California, Inc. (NYSE: BANC) today reported record quarterly net income of $19.7 million for the first quarter of 2016, resulting in diluted earnings per share of $0.36 for the quarter.

Pre-tax income for the first quarter of 2016 was $33.0 million, an increase of 49% compared to first quarter of 2015. Net income available to common shareholders for the first quarter was $15.1 million, an increase of 30% compared to the first quarter of 2015.

Highlights for the first quarter included:

• Record quarterly non-interest bearing deposit growth of $278 million, or 25%.

• Quarterly commercial banking segment loan and lease originations of $823 million, an increase of 66% from a year ago.

• The Company’s return on average assets for the quarter was 0.9%, and its return on average tangible common equity (ROTCE) for the quarter was 14.5%.

The Company’s consolidated assets totaled $9.6 billion at March 31, 2016, an increase of $1.4 billion, or 17%, compared to the prior quarter, and an increase of $3.5 billion, or 58%, compared to a year ago. The Company’s growth over this period has been entirely organic as Banc of California’s last acquisition occurred in 2014.

“Based on total shareholder return since the beginning of 2015, Banc of California is the #1 performing bank stock amongst Forbes’ Magazine’s list of America’s Top 100 Banks,” said Steven Sugarman, Chairman and Chief Executive Officer of Banc of California. “In the first quarter of 2016 alone, Banc of California’s 21% return outperformed the next closest bank by 7%. As all our employees are shareholders, we are proud and excited by this accomplishment. The continued strength of our financial performance showcases our strategy, focus and execution quarter-over-quarter as we are winning market share and top talent. Banc of California is a business built for the long-term.”

During the first quarter, the Company raised $81 million in common stock, raised $125 million in Perpetual, Non-Cumulative Preferred Stock and liquidated its wholly owned subsidiary PTB Property Holdings LLC. Since the end of the first quarter, the Company has redeemed its $42 million preferred stock from the Small Business Lending Fund (SBLF), redeemed $85 million of 7.50% Senior Notes, announced the sale of its wholly owned subsidiary, The Palisades Group, LLC, and increased its undrawn line of credit to $75 million.

“Banc of California has meaningfully deleveraged and simplified its balance sheet, increased its liquidity and streamlined its businesses and organizational structure during 2016,” said James McKinney, Chief Financial Officer of Banc of California. “We expect these actions will not only make us a safer and stronger financial institution, but they will be accretive to the holders of our debt, preferred stock and common stock. These actions are part of our strategy to strengthen, and increase the durability of, our balance-sheet and liquidity in advance of our growth beyond $10 billion in assets. We will continue to seek opportunities to strengthen our franchise for the benefit of all our clients and other stakeholders.”

During the quarter, Banc of California grew its recurring net interest income by $8 million, built its earning assets by $1.4 billion, and strengthened its liquidity position by $0.9 billion, while maintaining its net interest margin. These results occurred while the yield on the 10-year Treasury fell from 2.27% to 1.78%.

“We are proud that our interest rate risk controls and balance sheet management strategy enabled our bank to successfully navigate a volatile rate environment without impacting the consistency and predictability of our earnings,” Sugarman said. “The negative fair value adjustments on our mortgage servicing rights and SWAPs were offset by concurrent intra-quarter fair value gains recognized in our securities portfolio. We believe this further validates the investments we have made and continue to make in our enterprise risk analytics and controls. Our analytical approach to building our balance sheet and our business continues to support our track record of consistent, growing earnings.”

The Company will host a conference call to discuss its first quarter financial results at 7:00 a.m. Pacific Time (PT) on Thursday, April 21, 2016. Interested parties are welcome to attend the conference call by dialing 888-317-6003, and referencing event code 4042337. 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.

18500 Von Karman Ave. ● Suite 1100 ● Irvine, CA 92612 ● (949) 236-5250 ● www.bancofcal.com

About Banc of California, Inc.

Banc of California, Inc. (NYSE: BANC) provides comprehensive banking services to California’s diverse businesses, entrepreneurs and communities. Banc of California operates over 100 offices in California and the West.

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. 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:		MEDIA INQUIRIES:
Banc of California, Inc.		Vectis Strategies
Timothy Sedabres, (855) 361-2262		David Herbst, (213) 973-4113 x101

Banc of California, Inc.

Consolidated Statements of Financial Condition

(Dollars in thousands)

(Unaudited)

		March 31, 2016				December 31, 2015				September 30, 2015				June 30, 2015				March 31, 2015
ASSETS
Cash and cash equivalents		$	215,012			$	156,124			$	378,963			$	458,990			$	265,402
Time deposits in financial institutions			1,500				1,500				1,900				1,900				1,900
Securities available for sale			1,663,711				833,596				693,219				487,293				393,586
Securities held to maturity			962,262				962,203				529,532				53,414				—
Loans held for sale			863,944				668,841				596,565				746,651				1,240,942
Loans and leases receivable			5,463,068				5,184,394				4,730,077				4,473,095				3,933,715
Allowance for loan and lease losses			(35,845	)			(35,533	)			(34,774	)			(34,787	)			(29,345	)
Federal Home Loan Bank and other bank stock			61,146				59,069				40,643				34,187				39,844
Servicing rights, net			49,406				50,727				41,646				34,942				21,829
Other real estate owned, net			325				1,097				34				50				498
Premises and equipment, net			114,668				111,539				34,689				35,229				78,285
Goodwill			39,244				39,244				39,244				31,591				31,591
Other intangible assets, net			17,836				19,158				20,504				21,905				23,708
Deferred income tax			7,441				11,341				13,388				12,081				14,157
Income tax receivable			—				604				2,649				3,091				—
Bank-owned life insurance investment			100,734				100,171				99,570				19,201				19,154
Other assets			92,520				71,480				68,961				59,049				62,089
Total assets		$	9,616,972			$	8,235,555			$	7,256,810			$	6,437,882			$	6,097,355
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Noninterest-bearing deposits		$	1,398,728			$	1,121,124			$	1,011,169			$	867,930			$	749,129
Interest-bearing deposits			5,438,873				5,181,961				4,410,821				4,184,260				4,112,863
Deposits held for sale			—				—				—				52,820				—
Total deposits			6,837,601				6,303,085				5,421,990				5,105,010				4,861,992
Advances from Federal Home Loan Bank			1,195,000				930,000				830,000				350,000				545,000
Securities sold under repurchase agreements			257,100				—				—				—				—
Other borrowings			—				—				—				—				15,000
Notes payable, net			260,896				261,876				262,779				264,077				92,668
Reserve for loss on repurchased loans			9,781				9,700				9,098				9,411				8,432
Income taxes payable			12,303				1,241				5,939				—				4,488
Accrued expenses and other liabilities			176,761				77,248				83,470				75,502				55,615
Total liabilities			8,749,442				7,583,150				6,613,276				5,804,000				5,583,195
Commitments and contingent liabilities
Preferred stock, Series A, non-cumulative perpetual			31,934				31,934				31,934				31,934				31,934
Preferred stock, Series B, non-cumulative perpetual			10,000				10,000				10,000				10,000				10,000
Preferred stock, Series C, 8.00% non-cumulative perpetual			37,943				37,943				37,943				37,943				37,943
Preferred stock, Series D, 7.375% non-cumulative perpetual			110,873				110,873				110,873				110,873				—
Preferred stock, Series E, 7.00% non-cumulative perpetual			120,258				—				—				—				—
Common stock			454				395				393				372				367
Common stock, class B non-voting non-convertible			1				1				—				—				—
Additional paid-in capital			509,123				429,790				427,599				425,784				424,636
Retained earnings			73,179				63,534				52,277				45,494				36,880
Treasury stock			(29,070	)			(29,070	)			(29,070	)			(29,070	)			(29,798	)
Accumulated other comprehensive income/(loss), net			2,835				(2,995	)			1,585				552				2,198
Total stockholders’ equity			867,530				652,405				643,534				633,882				514,160
Total liabilities and stockholders’ equity		$	9,616,972			$	8,235,555			$	7,256,810			$	6,437,882			$	6,097,355

Banc of California, Inc.

Consolidated Statements of Operations

(Dollars in thousands, except per share data)

(Unaudited)

		Three Months Ended
		March 31, 2016				December 31, 2015				September 30, 2015				June 30, 2015				March 31, 2015
Interest and dividend income
Loans, including fees		$	67,144			$	62,248			$	60,454			$	60,699			$	58,155
Securities			16,047				11,163				5,054				2,119				1,927
Dividends and other interest-earning assets			1,049				788				1,007				2,026				698
Total interest and dividend income			84,240				74,199				66,515				64,844				60,780
Interest expense
Deposits			8,107				6,862				6,395				6,165				6,361
Federal Home Loan Bank advances			1,262				890				587				290				353
Securities sold under repurchase agreements			160				15				3				—				—
Notes payable and other interest-bearing liabilities			4,294				4,366				3,980				4,285				2,069
Total interest expense			13,823				12,133				10,965				10,740				8,783
Net interest income			70,417				62,066				55,550				54,104				51,997
Provision for loan and lease losses			321				1,260				735				5,474				—
Net interest income after provision for loan and lease losses			70,096				60,806				54,815				48,630				51,997
Noninterest income
Customer service fees			848				957				1,118				1,072				910
Loan servicing (loss) income			(5,288	)			3,663				(2,254	)			2,007				(442	)
Net gain on sale of securities available for sale			16,789				1,510				1,750				—				(2	)
Net gain on sale of loans			2,195				15,164				9,737				7,838				4,472
Mortgage banking income			33,684				30,334				37,015				39,403				37,933
Advisory service fees			997				1,942				2,294				4,435				1,197
Loan brokerage income			874				678				660				661				1,141
Gain on sale of building			—				—				—				9,919				—
All other income			1,860				2,571				407				1,358				771
Total noninterest income			51,959				56,819				50,727				66,693				45,980
Noninterest expense
Salaries and employee benefits			57,183				54,008				53,215				56,120				49,771
Occupancy and equipment			11,740				11,200				10,109				10,325				9,771
Professional fees			6,212				4,808				5,261				6,689				3,435
Data processing			2,194				2,104				2,170				2,075				1,835
Amortization of intangible assets			1,322				1,346				1,401				1,545				1,544
All other expenses			10,449				13,193				9,587				11,166				9,523
Total noninterest expense			89,100				86,659				81,743				87,920				75,879
Income before income taxes			32,955				30,966				23,799				27,403				22,098
Income tax (benefit) expense			13,268				11,928				9,263				11,479				9,524
Net income			19,687				19,038				14,536				15,924				12,574
Preferred stock dividends			4,575				3,030				3,040				2,843				910
Net income available to common stockholders		$	15,112			$	16,008			$	11,496			$	13,081			$	11,664
Basic earnings per total common share		$	0.36			$	0.40			$	0.29			$	0.33			$	0.30
Diluted earnings per total common share		$	0.36			$	0.39			$	0.29			$	0.32			$	0.29

Banc of California, Inc.

Selected Financial Data

(Dollars in thousands)

(Unaudited)

		Three Months Ended
		March 31, 2016				December 31, 2015				September 30, 2015				June 30, 2015				March 31, 2015
Average balances
Total assets		$	8,833,176			$	7,590,781			$	6,681,590			$	6,253,350			$	5,931,426
Total gross loans and leases			5,995,436				5,531,539				5,271,293				5,254,729				5,139,399
Investment Securities			2,128,882				1,506,626				828,326				402,366				354,475
Total interest earning assets			8,344,167				7,264,341				6,449,862				5,967,200				5,713,766
Total interest-bearing deposits			5,332,032				4,685,145				4,314,330				4,078,540				4,085,673
Total borrowings			1,219,315				1,141,554				745,959				635,460				583,979
Total interest bearing liabilities			6,641,742				5,826,699				5,060,289				4,714,000				4,669,652
Total stockholders’ equity			762,923				654,106				645,713				630,547				517,335
Profitability and other ratios
Return on average assets (1)			0.90	%			1.00	%			0.86	%			1.02	%			0.86	%
Return on average equity (1)			10.38	%			11.55	%			8.93	%			10.13	%			9.86	%
Return on average tangible common equity (2)			14.46	%			16.57	%			12.25	%			14.52	%			13.48	%
Dividend payout ratio (3)			33.33	%			30.00	%			41.38	%			36.36	%			40.00	%
Net interest spread			3.22	%			3.22	%			3.23	%			3.45	%			3.55	%
Net interest margin (1)			3.39	%			3.39	%			3.42	%			3.64	%			3.69	%
Noninterest income to total revenue (4)			42.46	%			47.79	%			47.73	%			55.21	%			46.93	%
Noninterest income to average total assets (1)			2.37	%			2.97	%			3.01	%			4.28	%			3.14	%
Noninterest expense to average total assets (1)			4.06	%			4.53	%			4.85	%			5.64	%			5.19	%
Efficiency ratio (5)			72.81	%			72.89	%			76.92	%			72.78	%			77.45	%
Average held for investment loans and leases to average deposits			79.76	%			86.88	%			86.03	%			79.87	%			81.72	%
Average investment securities to average total assets			24.10	%			19.85	%			12.40	%			6.43	%			5.98	%
Average stockholders’ equity to average total assets			8.64	%			8.62	%			9.66	%			10.08	%			8.72	%
Allowance for loan and lease losses (ALLL)
Balance at beginning of period		$	35,533			$	34,774			$	34,787			$	29,345			$	29,480
Loans and leases charged off			(102	)			(718	)			(788	)			(79	)			(357	)
Recoveries			93				217				40				47				222
Transfer of loans from (to) held-for-sale			—				—				—				—				—
Provision for loan and lease losses			321				1,260				735				5,474				—
Balance at end of period		$	35,845			$	35,533			$	34,774			$	34,787			$	29,345
Annualized net loan charge-offs to average total gross loans held for investment			0.00	%			0.04	%			0.07	%			0.00	%			0.01	%
Reserve for loss on repurchased loans
Balance at beginning of period		$	9,700			$	9,098			$	9,411			$	8,432			$	8,303
Provision for loan repurchases			379				735				716				1,573				1,328
Change in estimates			—				846				—				—				—
Utilization of reserve for loan repurchases			(298	)			(979	)			(1,029	)			(594	)			(1,199	)
Balance at end of period		$	9,781			$	9,700			$	9,098			$	9,411			$	8,432

(1) Ratios are presented on an annualized basis.

(2) Non-GAAP measure. See Non-GAAP measures section for reconciliation of the calculation.

(3) Dividends declared per common share divided by basic earnings per share.

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

(5) The ratios were calculated by dividing noninterest expense by the sum of net interest income before provision for loan and lease losses and noninterest income.

Banc of California, Inc.

Selected Financial Data, Continued

(Dollars in thousands)

(Unaudited)

		March 31, 2016				December 31, 2015				September 30, 2015				June 30, 2015				March 31, 2015
Asset quality information and ratios
30 to 89 days delinquent, excluding PCI loans		$	36,022			$	39,946			$	48,550			$	46,820			$	40,641
90+ days delinquent, excluding PCI loans			27,469				23,338				23,725				22,855				20,538
Total delinquent loans, excluding PCI loans			63,491				63,284				72,275				69,675				61,179
PCI loans, 30 to 89 days delinquent			44,191				40,291				17,593				17,351				16,375
PCI loans, 90+ days delinquent			9,806				6,894				6,223				8,648				6,986
Total delinquent PCI loans			53,997				47,185				23,816				25,999				23,361
Total delinquent loans		$	117,488			$	110,469			$	96,091			$	95,674			$	84,540
Total delinquent non-PCI loans to total non-PCI loans			1.33	%			1.42	%			1.66	%			1.66	%			1.66	%
Total delinquent loans to gross loans			2.15	%			2.13	%			2.03	%			2.14	%			2.15	%
Non-performing loans, excluding PCI loans		$	44,216			$	45,129			$	45,188			$	42,708			$	42,754
90+ days delinquent and still accruing loans, excluding PCI loans			—				—				—				—				—
Other real estate owned			325				1,097				34				50				498
Non-performing assets		$	44,541			$	46,226			$	45,222			$	42,758			$	43,252
ALLL to non-performing loans			81.07	%			78.74	%			76.95	%			81.45	%			68.64	%
Non-performing loans to gross loans			0.81	%			0.87	%			0.96	%			0.95	%			1.09	%
Non-performing assets to total assets			0.46	%			0.56	%			0.62	%			0.66	%			0.71	%
Troubled Debt Restructurings (TDRs)
Performing TDRs		$	15,128			$	7,842			$	9,378			$	7,402			$	7,431
Non-performing TDRs			2,545				1,970				2,017				1,937				1,964
Total TDRs		$	17,673			$	9,812			$	11,395			$	9,339			$	9,395

Banc of California, Inc.

Selected Financial Data, Continued

(Dollars in thousands)

(Unaudited)

		March 31, 2016				December 31, 2015				September 30, 2015				June 30, 2015				March 31, 2015
Loan and lease breakdown by ALLL evaluation type
Originated loans and leases
Individually evaluated for impairment		$	26,565			$	30,654			$	31,008			$	31,791			$	29,301
Collectively evaluated for impairment			3,484,995				3,117,528				2,776,601				2,489,347				1,947,212
Acquired loans through business acquisitions - non-impaired
Individually evaluated for impairment			3,530				3,629				1,704				8				2,818
Collectively evaluated for impairment			1,079,711				1,124,874				1,174,573				1,294,384				1,358,184
Seasoned SFR mortgage loan pools - non-impaired
Individually evaluated for impairment			9,287				—				—				—				—
Collectively evaluated for impairment			175,004				194,978				373,634				391,193				354,402
Acquired with deteriorated credit quality			683,976				712,731				372,557				266,372				241,798
Total loans		$	5,463,068			$	5,184,394			$	4,730,077			$	4,473,095			$	3,933,715
ALLL breakdown
Originated loans and leases
Individually evaluated for impairment		$	365			$	369			$	512			$	686			$	1,199
Collectively evaluated for impairment			32,202				32,713				31,419				31,440				25,474
Acquired loans through business acquisitions - non-impaired
Individually evaluated for impairment			—				—				—				—				—
Collectively evaluated for impairment			2,061				2,245				2,637				2,455				2,466
Seasoned SFR mortgage loan pools - non-impaired
Individually evaluated for impairment			1,011				—				—				—				—
Collectively evaluated for impairment			—				—				—				—				—
Acquired with deteriorated credit quality			206				206				206				206				206
Total ALLL		$	35,845			$	35,533			$	34,774			$	34,787			$	29,345
Discount on Purchased/Acquired Loans
Acquired loans through business acquisitions - non-impaired		$	20,781			$	21,366			$	21,759			$	15,245			$	16,877
Seasoned SFR mortgage loan pools - non-impaired			11,862				12,545				27,699				29,201				28,967
Acquired with deteriorated credit quality			66,573				68,372				41,280				52,394				53,381
Total Discount		$	99,216			$	102,283			$	90,738			$	96,840			$	99,225
Ratios
To originated loans and leases:
Individually evaluated for impairment			1.37	%			1.20	%			1.65	%			2.16	%			4.09	%
Collectively evaluated for impairment (1)			0.92	%			1.05	%			1.13	%			1.26	%			1.31	%
Total ALLL			0.93	%			1.05	%			1.14	%			1.27	%			1.35	%
To originated loans and leases and acquired loans not impaired at acquisition:
Individually evaluated for impairment			1.21	%			1.08	%			1.57	%			2.16	%			3.73	%
Collectively evaluated for impairment			0.75	%			0.82	%			0.86	%			0.90	%			0.85	%
Total ALLL			0.75	%			0.83	%			0.87	%			0.91	%			0.87	%
Total ALLL and discount (2)			1.21	%			1.33	%			1.41	%			1.31	%			1.38	%
To total loans and leases:
Individually evaluated for impairment			3.49	%			1.08	%			1.57	%			2.16	%			3.73	%
Collectively evaluated for impairment			0.72	%			0.79	%			0.79	%			0.81	%			0.76	%
Total ALLL			0.66	%			0.69	%			0.74	%			0.78	%			0.75	%
Total ALLL and discount (2)			2.47	%			2.66	%			2.65	%			2.94	%			3.27	%

(1) For the three months ended June 30, 2015 and March 31, 2015, the ratios included an unallocated allowance for loan and lease losses of $2.2 million and $364 thousand. Without the unallocated, the ratios are 1.17% and 1.29% for the three months ended June 30, 2015 and March 31, 2015, respectively.

(2) The ratios were calculated by dividing a sum of ALLL and discounts by carrying value of loans.

Banc of California, Inc.

Selected Financial Data, Continued

(Dollars in thousands)

(Unaudited)

		March 31, 2016				December 31, 2015				September 30, 2015				June 30, 2015				March 31, 2015
Composition of held for investment loans and leases
Commercial real estate		$	713,693			$	727,707			$	690,862			$	807,146			$	975,734
Multi-family			1,021,097				904,300				823,415				696,768				940,053
Construction			68,241				55,289				39,475				32,022				38,081
Commercial and industrial			983,961				876,999				822,690				771,477				489,229
SBA			71,640				57,706				52,985				56,887				48,254
Lease financing			212,836				192,424				162,504				131,189				102,012
Total commercial loans			3,071,468				2,814,425				2,591,931				2,495,489				2,593,363
Single family residential mortgage			2,282,445				2,255,584				2,013,450				1,840,924				1,169,134
Other consumer			109,155				114,385				124,696				136,682				171,218
Total consumer loans			2,391,600				2,369,969				2,138,146				1,977,606				1,340,352
Total gross loans and leases		$	5,463,068			$	5,184,394			$	4,730,077			$	4,473,095			$	3,933,715
Composition percentage of held for investment loans and leases
Commercial real estate			13.1	%			14.0	%			14.6	%			18.0	%			24.8	%
Multi-family			18.7	%			17.4	%			17.4	%			15.6	%			23.9	%
Construction			1.2	%			1.1	%			0.8	%			0.7	%			1.0	%
Commercial and industrial			18.0	%			16.9	%			17.4	%			17.2	%			12.4	%
SBA			1.3	%			1.1	%			1.1	%			1.3	%			1.2	%
Lease financing			3.9	%			3.7	%			3.4	%			2.9	%			2.6	%
Total commercial loans			56.2	%			54.2	%			54.7	%			55.7	%			65.9	%
Single family residential mortgage			41.8	%			43.6	%			42.7	%			41.2	%			29.7	%
Other consumer			2.0	%			2.2	%			2.6	%			3.1	%			4.4	%
Total consumer loans			43.8	%			45.8	%			45.3	%			44.3	%			34.1	%
Total gross loans and leases			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%
Composition of deposits
Noninterest-bearing checking		$	1,398,728			$	1,121,124			$	1,011,169			$	880,766			$	749,129
Interest-bearing checking			2,052,507				1,697,055				1,458,208				1,002,443				1,032,482
Money market			1,534,492				1,479,931				1,238,180				1,393,751				1,136,562
Savings			844,177				823,618				814,230				843,274				898,483
Certificates of deposit			1,007,697				1,181,357				900,203				984,776				1,045,336
Total deposits		$	6,837,601			$	6,303,085			$	5,421,990			$	5,105,010			$	4,861,992
Composition percentage of deposits
Noninterest-bearing checking			20.5	%			17.8	%			18.6	%			17.3	%			15.4	%
Interest-bearing checking			30.0	%			26.8	%			26.9	%			19.6	%			21.2	%
Money market			22.4	%			23.5	%			22.8	%			27.3	%			23.4	%
Savings			12.3	%			13.1	%			15.0	%			16.5	%			18.5	%
Certificates of deposit			14.8	%			18.8	%			16.7	%			19.3	%			21.5	%
Total deposits			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%

Banc of California, Inc.

Average Balance, Average Yield Earned, and Average Cost Paid

(Dollars in thousands)

(Unaudited)

		Three Months Ended
		March 31, 2016												December 31, 2015												September 30, 2015
		Average Balance				Interest				Yield / Cost				Average Balance				Interest				Yield / Cost				Average Balance				Interest				Yield / Cost
Interest earning assets
Loans held for sale and SFR mortgage		$	2,144,834			$	19,808				3.71	%		$	1,903,331			$	17,584				3.67	%		$	1,966,373			$	18,123				3.66	%
Seasoned SFR mortgage loan pools			876,142				12,710				5.83	%			858,601				12,098				5.59	%			689,666				10,901				6.27	%
Commercial real estate, multi-family, and construction			1,760,646				19,816				4.53	%			1,638,329				19,006				4.60	%			1,568,975				17,643				4.46	%
Commercial and industrial, SBA, and lease financing			1,105,971				13,665				4.97	%			1,020,306				12,754				4.96	%			914,811				12,125				5.26	%
Other consumer			107,843				1,145				4.27	%			110,972				806				2.88	%			131,468				1,662				5.02	%
Gross loans and leases			5,995,436				67,144				4.50	%			5,531,539				62,248				4.46	%			5,271,293				60,454				4.55	%
Securities			2,128,882				16,047				3.03	%			1,506,626				11,163				2.94	%			828,326				5,054				2.42	%
Other interest-earning assets			219,849				1,049				1.92	%			226,176				788				1.38	%			350,243				1,007				1.14	%
Total interest-earning assets			8,344,167				84,240				4.06	%			7,264,341				74,199				4.05	%			6,449,862				66,515				4.09	%
Allowance for loan and lease losses			(35,575	)											(35,894	)											(34,810	)
BOLI and non-interest earning assets			524,584												362,334												266,538
Total assets		$	8,833,176											$	7,590,781											$	6,681,590
Interest-bearing liabilities
Savings		$	834,965			$	1,572				0.76	%		$	805,445			$	1,538				0.76	%		$	832,006			$	1,575				0.75	%
Interest-bearing checking			1,900,834				3,244				0.69	%			1,475,461				2,663				0.72	%			1,282,066				2,273				0.70	%
Money market			1,437,332				1,679				0.47	%			1,343,683				1,267				0.37	%			1,294,554				1,337				0.41	%
Certificates of deposit			1,158,901				1,612				0.56	%			1,060,556				1,394				0.52	%			905,704				1,210				0.53	%
Total interest-bearing deposits			5,332,032				8,107				0.61	%			4,685,145				6,862				0.58	%			4,314,330				6,395				0.59	%
FHLB advances			955,659				1,262				0.53	%			869,457				890				0.41	%			476,848				587				0.49	%
Securities sold under repurchase agreements			90,395				160				0.71	%			7,010				15				0.85	%			2,681				3				0.44	%
Long-term debt and other interest-bearing liabilities			263,656				4,294				6.55	%			265,087				4,366				6.53	%			266,430				3,980				5.93	%
Total interest-bearing liabilities			6,641,742				13,823				0.84	%			5,826,699				12,133				0.83	%			5,060,289				10,965				0.86	%
Noninterest-bearing deposits			1,230,991												1,037,966												916,670
Non-interest-bearing liabilities			197,520												72,010												58,918
Total liabilities			8,070,253												6,936,675												6,035,877
Total stockholders’ equity			762,923												654,106												645,713
Total liabilities and stockholders’ equity		$	8,833,176											$	7,590,781											$	6,681,590
Net interest income/spread						$	70,417				3.22	%						$	62,066				3.22	%						$	55,550				3.23	%
Net interest margin											3.39	%											3.39	%											3.42	%
Ratio of interest-earning assets to interest-bearing liabilities			125.63	%											124.67	%											127.46	%
Total deposits		$	6,563,023			$	8,107				0.50	%		$	5,723,111			$	6,862				0.48	%		$	5,231,000			$	6,395				0.49	%
Total funding (1)		$	7,872,733			$	13,823				0.71	%		$	6,864,665			$	12,133				0.70	%		$	5,976,959			$	10,965				0.73	%

(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.

Average Balance, Average Yield Earned, and Average Cost Paid, Continued

(Dollars in thousands)

(Unaudited)

		Three Months Ended
		June 30, 2015												March 31, 2015
		Average Balance				Interest				Yield / Cost				Average Balance				Interest				Yield / Cost
Interest earning assets
Loans held for sale and SFR mortgage		$	1,959,738			$	18,984				3.89	%		$	1,868,085			$	17,477				3.79	%
Seasoned SFR mortgage loan pools			591,460				9,690				6.57	%			591,724				9,413				6.45	%
Commercial real estate, multi-family, and construction			1,848,780				21,552				4.68	%			1,956,830				22,508				4.66	%
Commercial and industrial, SBA, and lease financing			697,291				8,871				5.10	%			572,726				7,239				5.13	%
Other consumer			157,460				1,602				4.08	%			150,034				1,518				4.10	%
Gross loans and leases			5,254,729				60,699				4.63	%			5,139,399				58,155				4.59	%
Securities			402,366				2,119				2.11	%			354,475				1,927				2.20	%
Other interest-earning assets			310,105				2,026				2.62	%			219,892				698				1.29	%
Total interest-earning assets			5,967,200				64,844				4.36	%			5,713,766				60,780				4.31	%
Allowance for loan and lease losses			(29,445	)											(29,623	)
BOLI and non-interest earning assets			315,595												247,283
Total assets		$	6,253,350											$	5,931,426
Interest-bearing liabilities
Savings		$	867,532			$	1,606				0.74	%		$	945,530			$	1,748				0.75	%
Interest-bearing checking			1,012,211				1,996				0.79	%			1,042,895				2,041				0.79	%
Money market			1,142,858				1,028				0.36	%			1,092,987				958				0.36	%
Certificates of deposit			1,055,939				1,535				0.58	%			1,004,261				1,614				0.65	%
Total interest-bearing deposits			4,078,540				6,165				0.61	%			4,085,673				6,361				0.63	%
FHLB advances			375,385				290				0.31	%			487,600				353				0.29	%
Securities sold under repurchase agreements			—				—				—				—				—				—
Long-term debt and other interest-bearing liabilities			260,075				4,285				6.61	%			96,379				2,069				8.71	%
Total interest-bearing liabilities			4,714,000				10,740				0.91	%			4,669,652				8,783				0.76	%
Noninterest-bearing deposits			859,420												682,492
Non-interest-bearing liabilities			49,383												61,947
Total liabilities			5,622,803												5,414,091
Total stockholders’ equity			630,547												517,335
Total liabilities and stockholders’ equity		$	6,253,350											$	5,931,426
Net interest income/spread						$	54,104				3.45	%						$	51,997				3.55	%
Net interest margin											3.64	%											3.69	%
Ratio of interest-earning assets to interest-bearing liabilities			126.58	%											122.36	%
Total deposits		$	4,937,960			$	6,165				0.50	%		$	4,768,165			$	6,361				0.54	%
Total funding (1)		$	5,573,420			$	10,740				0.77	%		$	5,352,144			$	8,783				0.67	%

(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.

Capital Ratios

(Unaudited)

		March 31, 2016				December 31, 2015				September 30, 2015				June 30, 2015				March 31, 2015
Capital Ratios
Banc of California, Inc.
Total risk-based capital ratio			13.59	%			11.18	%			12.56	%			14.01	%			11.55	%
Tier 1 risk-based capital ratio			13.17	%			10.71	%			12.06	%			13.19	%			10.83	%
Common equity tier 1 capital ratio			8.14	%			7.36	%			8.19	%			8.96	%			9.01	%
Tier 1 leverage ratio			9.27	%			8.07	%			8.97	%			9.55	%			7.99	%
Banc of California, NA
Total risk-based capital ratio			14.03	%			13.45	%			14.93	%			14.86	%			13.58	%
Tier 1 risk-based capital ratio			13.42	%			12.79	%			14.19	%			14.04	%			12.86	%
Common equity tier 1 capital ratio			13.42	%			12.79	%			14.19	%			14.04	%			12.86	%
Tier 1 leverage ratio			9.44	%			9.64	%			10.53	%			10.26	%			9.49	%

Banc of California, Inc.

Non-GAAP Measures

(Dollars in thousands, except per share data)

(Unaudited)

Non-GAAP performance measure:

Tangible equity to tangible assets and Tangible common equity to tangible assets ratios and return on average tangible common equity are supplemental financial information determined by a method other than in accordance with U.S. generally accepted accounting principles (GAAP). These non-GAAP measures are used by management in the analysis of Banc of California, Inc.’s capital strength and performance of businesses. Tangible equity is calculated by subtracting goodwill and other intangible assets from total stockholders’ equity and tangible common equity is calculated by subtracting preferred stock from tangible equity. Banking and financial institution regulators also exclude goodwill and other intangible assets from total stockholders’ equity when assessing the capital adequacy of a financial institution. Management believes the presentation of this financial measure excluding the impact of these items provides useful supplemental information that is essential to a proper understanding of the capital strength of Banc of California, Inc. This disclosure should not be viewed as a substitution 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 reconcile this non-GAAP performance measures to the GAAP performance measures for the periods indicated:

		March 31, 2016				December 31, 2015				September 30, 2015				June 30, 2015				March 31, 2015
Tangible common equity to tangible assets ratio
Total assets		$	9,616,972			$	8,235,555			$	7,256,810			$	6,437,882			$	6,097,355
Less goodwill			(39,244	)			(39,244	)			(39,244	)			(31,591	)			(31,591	)
Less other intangible assets			(17,836	)			(19,158	)			(20,504	)			(21,905	)			(23,708	)
Tangible assets		$	9,559,892			$	8,177,153			$	7,197,062			$	6,384,386			$	6,042,056
Total stockholders’ equity		$	867,530			$	652,405			$	643,534			$	633,882			$	514,160
Less goodwill			(39,244	)			(39,244	)			(39,244	)			(31,591	)			(31,591	)
Less other intangible assets			(17,836	)			(19,158	)			(20,504	)			(21,905	)			(23,708	)
Tangible equity			810,450				594,003				583,786				580,386				458,861
Less preferred stock			(311,008	)			(190,750	)			(190,750	)			(190,750	)			(79,877	)
Tangible common equity		$	499,442			$	403,253			$	393,036			$	389,636			$	378,984
Total stockholders’ equity to total assets			9.02	%			7.92	%			8.87	%			9.85	%			8.43	%
Tangible equity to tangible assets			8.48	%			7.26	%			8.11	%			9.09	%			7.59	%
Tangible common equity to tangible assets			5.22	%			4.93	%			5.46	%			6.10	%			6.27	%
Common stock outstanding			43,907,587				38,002,267				37,751,445				35,647,476				35,063,199
Class B non-voting non-convertible common stock outstanding			91,066				37,355				—				—				11
Total common stock outstanding			43,998,653				38,039,622				37,751,445				35,647,476				35,063,210
Minimum number of shares issuable under purchase contracts (1)			253,155				601,299				828,246				2,883,892				2,984,367
Total common stock outstanding and shares issuable under purchase contracts			44,251,808				38,640,921				38,579,691				38,531,368				38,047,577
(1) Purchase contracts relating to the tangible equity units
Tangible common equity per common stock		$	11.35			$	10.60			$	10.41			$	10.93			$	10.81
Book value per common stock		$	12.65			$	12.14			$	11.99			$	12.43			$	12.39
Tangible common equity per common stock and shares issuable under purchase contracts		$	11.29			$	10.44			$	10.19			$	10.11			$	9.96
Book value per common stock and shares issuable under purchase contracts		$	12.58			$	11.95			$	11.74			$	11.50			$	11.41

Banc of California, Inc.

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

		Three Months Ended
		March 31, 2016				December 31, 2015				September 30, 2015				June 30, 2015				March 31, 2015
Return on tangible common equity
Average total stockholders’ equity		$	762,923			$	654,106			$	645,713			$	630,547			$	517,335
Less average preferred stock			(260,959	)			(190,750	)			(190,750	)			(182,233	)			(79,877	)
Less average goodwill			(39,244	)			(39,244	)			(31,674	)			(31,591	)			(31,591	)
Less average other intangible assets			(18,601	)			(19,877	)			(21,320	)			(23,032	)			(24,720	)
Average tangible common equity		$	444,119			$	404,235			$	401,969			$	393,691			$	381,147
Net income		$	19,687			$	19,038			$	14,536			$	15,924			$	12,574
Less preferred stock dividends			(4,575	)			(3,030	)			(3,040	)			(2,843	)			(910	)
Add tax-effected amortization of intangible assets (1)			859				875				911				1,004				1,004
Add tax-effected impairment on intangible assets (1)			—				—				—				168				—
Net income available to common stockholders		$	15,971			$	16,883			$	12,407			$	14,253			$	12,668
(1) Utilized a 35% effective tax rate
Return on average equity			10.38	%			11.55	%			8.93	%			10.13	%			9.86	%
Return on average tangible common equity			14.46	%			16.57	%			12.25	%			14.52	%			13.48	%