Form 425 - Prospectuses and communications, business combinations

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 24, 2023

BANC OF CALIFORNIA, INC.

(Exact name of registrant as specified in its charter)



Maryland	001-35522	04-3639825
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)



3 MacArthur Place,	Santa Ana,	California	92707
(Address of principal executive offices)			(Zip Code)

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

N/A

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

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

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

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

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

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

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

Emerging growth company ☐

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

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

BANC

New York Stock Exchange

Item 2.02 Results of Operations and Financial Condition.

On October 24, 2023, Banc of California, Inc. (the “Company”) issued a press release announcing 2023 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 Tuesday, October 24, 2023. Interested parties may attend the conference call by dialing (888) 317-6003, and referencing event code 5886712. 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 24, 2023.

99.2 Banc of California, Inc. Earnings Conference Call Presentation Materials.

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

Forward-Looking Statements

This document includes forward-looking statements within the meaning of the “Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Words or phrases such as “believe,” “will,” “should,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” “strategy,” or similar expressions are intended to identify these forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements. 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. (the Company) with the Securities and Exchange Commission (SEC). The Company undertakes no obligation to revise or publicly release any revision or update to these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made, except as required by law.

invest in certain assets, refrain from issuing an approval or non-objection to certain capital or other actions, increase our allowance for credit losses, result in write-downs of asset values, restrict our ability or that of our bank subsidiary to pay dividends, or impose fines, penalties or sanctions; (xi) legislative or regulatory changes that adversely affect our business, including changes in tax laws and policies, accounting policies and practices, privacy laws, and regulatory capital or other rules; (xii) the risk that our enterprise risk management framework may not be effective in mitigating risk and reducing the potential for losses; (xiii) errors in estimates of the fair values of certain of our assets and liabilities, which may result in significant changes in valuation; (xiv) failures or security breaches with respect to the network, applications, vendors and computer systems on which we depend, including due to cybersecurity threats; (xv) our ability to attract and retain key members of our senior management team; (xvi) the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, and other external events on our business; (xvii) the impact of bank failures or other adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks; (xviii) the possibility that our recorded goodwill could become impaired, which may have an adverse impact on our earnings and capital; and (xix) the risks, uncertainties and assumptions set forth under the heading “Cautionary Statement Regarding Forward-Looking Statements” in the registration statement (as defined below); and (xx) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services and the other risks described in this document and from time to time in other documents that we file with or furnish to the SEC.

No Offer or Solicitation

This document is not a proxy statement or solicitation or a proxy, consent or authorization with respect to any securities or in respect of the proposed transaction and shall not constitute an offer to sell or a solicitation of an offer to buy the securities of the Company, PacWest Bancorp or the combined company, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be deemed to be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act, and otherwise in accordance with applicable law.

Additional Information and Where to Find It

This document includes information relating to the proposed transaction between the Company and PacWest Bancorp and the proposed investment in the Company by Warburg Pincus LLC and Centerbridge Partners, L.P. The Company filed a registration statement on Form S-4 (the registration statement) with the SEC on August 28, 2023 (as amended on September 29, 2023, further amended on October 16, 2023 and as further amended on October 19, 2023), which includes a joint proxy statement (the joint proxy statement / prospectus) of the Company and PacWest Bancorp distributed to holders of the Company’s common stock and PacWest Bancorp’s common stock in connection with the Company’s and PacWest Bancorp’s solicitation of proxies for the vote by the Company’s stockholders and PacWest Bancorp’s stockholders with respect to the proposed transaction and also constitutes a prospectus of the Company. The registration statement was declared effective by the SEC on October 20, 2023 and the definitive joint proxy statement / prospectus was first mailed on or around October 23, 2023 to the Company’s and PacWest Bancorp’s respective stockholders that, as of the applicable record date, are entitled to vote on the matters being considered at the Company stockholder meeting and at the PacWest Bancorp stockholder meeting, as applicable.

BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS ARE URGED TO CAREFULLY READ THE ENTIRE REGISTRATION STATEMENT AND DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO), AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AND THE DEFINITIVE VERSIONS THEREOF, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO SUCH DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

Investors and security holders may obtain free copies of the registration statement, the definitive joint proxy statement/prospectus and all other relevant documents filed with the SEC by the Company or PacWest Bancorp through the website maintained by the SEC at www.sec.gov.

Attention: Investor Relations, 3 MacArthur Place, Santa Ana, CA 92707 or PacWest Bancorp, Attention: Investor Relations, 9701 Wilshire Boulevard, Suite 700, Beverly Hills, CA 90212, respectively.

Participants in Solicitation

The Company and PacWest Bancorp and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the Company’s stockholders or PacWest Bancorp’s stockholders in connection with the proposed transaction under the rules of the SEC. The Company’s stockholders, PacWest Bancorp’s stockholders and other interested persons may obtain, without charge, more detailed information regarding the names, affiliations and interests of directors and executive officers of the Company and PacWest Bancorp in the registration statement, as well as other documents filed by the Company or PacWest Bancorp from time to time with the SEC. Other information regarding persons who may, under the rules of the SEC, be deemed the participants in the proxy solicitation of the Company’s or PacWest Bancorp’s stockholders in connection with the proposed transaction and a description of their direct and indirect interests, by security holdings or otherwise, is included in the definitive joint proxy statement/prospectus and other relevant materials filed with the SEC regarding the proposed transaction. You may obtain free copies of these documents at the SEC’s website at www.sec.gov. Copies of documents filed with the SEC by the Company or PacWest Bancorp will also be available free of charge from the Company or PacWest Bancorp using the contact information above.

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 24, 2023			/s/ Joseph Kauder
			Joseph Kauder
			Executive Vice President and Chief Financial Officer

www.bancofcal.com Investor Presentation 2023 Third Quarter Earnings

2 This presentation includes forward-looking statements within the meaning of the “Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Words or phrases such as “believe,” “will,” “should,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” “strategy,” or similar expressions are intended to identify these forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements. 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. (the Company) with the Securities and Exchange Commission (SEC). The Company undertakes no obligation to revise or publicly release any revision or update to these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made, except as required by law. Factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to: (i) changes in general economic conditions, either nationally or in our market areas, including the impact of supply chain disruptions, and the risk of recession or an economic downturn; (ii) changes in the interest rate environment, including the recent and potential future increases in the FRB benchmark rate, which could adversely affect our revenue and expenses, the value of assets and obligations, the availability and cost of capital and liquidity, the impacts of continuing inflation; (iii) 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 the effectiveness of our underwriting practices and the risk of fraud, any of which may lead to increased loan delinquencies, losses, and non-performing assets, and may result in our allowance for credit losses not being adequate; (iv) fluctuations in the demand for loans, and fluctuations in commercial and residential real estate values in our market area; (v) the quality and composition of our securities portfolio; (vi) our ability to develop and maintain a strong core deposit base or other low cost funding sources necessary to fund our activities particularly in a rising or high interest rate environment; (vii) the rapid withdrawal of a significant amount of demand deposits over a short period of time; (viii) the costs and effects of litigation; (ix) risks related to the Company’s acquisitions, including disruption to current plans and operations; difficulties in customer and employee retention; fees, expenses and charges related to these transactions being significantly higher than anticipated; and our inability to achieve expected revenues, cost savings, synergies, and other benefits; and in the case of our recent acquisition of Deepstack Technologies, LLC (Deepstack), reputational risk, regulatory risk and potential adverse reactions of the Company's or Deepstack's customers, suppliers, vendors, employees or other business partners; (x) results of examinations by regulatory authorities of the Company and the possibility that any such regulatory authority may, among other things, limit our business activities, restrict our ability to invest in certain assets, refrain from issuing an approval or non-objection to certain capital or other actions, increase our allowance for credit losses, result in write-downs of asset values, restrict our ability or that of our bank subsidiary to pay dividends, or impose fines, penalties or sanctions; (xi) legislative or regulatory changes that adversely affect our business, including changes in tax laws and policies, accounting policies and practices, privacy laws, and regulatory capital or other rules; (xii) the risk that our enterprise risk management framework may not be effective in mitigating risk and reducing the potential for losses; (xiii) errors in estimates of the fair values of certain of our assets and liabilities, which may result in significant changes in valuation; (xiv) failures or security breaches with respect to the network, applications, vendors and computer systems on which we depend, including due to cybersecurity threats; (xv) our ability to attract and retain key members of our senior management team; (xvi) the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, and other external events on our business; (xvii) the impact of bank failures or other adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks; (xviii) the possibility that our recorded goodwill could become impaired, which may have an adverse impact on our earnings and capital; and (xix) the risks, uncertainties and assumptions set forth under the heading “Cautionary Statement Regarding Forward- Looking Statements” in the registration statement (as defined below); and (xx) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services and the other risks described in this presentation and from time to time in other documents that we file with or furnish to the SEC. FORWARD LOOKING STATEMENTS

3 No Offer or Solicitation This presentation is not a proxy statement or solicitation or a proxy, consent or authorization with respect to any securities or in respect of the proposed transaction and shall not constitute an offer to sell or a solicitation of an offer to buy the securities of the Company, PacWest Bancorp or the combined company, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be deemed to be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act, and otherwise in accordance with applicable law. Additional Information and Where to Find It This presentation includes information relating to the proposed transaction between the Company and PacWest Bancorp and the proposed investment in the Company by Warburg Pincus LLC and Centerbridge Partners, L.P. The Company filed a registration statement on Form S-4 (the registration statement) with the SEC on August 28, 2023 (as amended on September 29, 2023, further amended on October 16, 2023 and as further amended on October 19, 2023), which includes a joint proxy statement (the joint proxy statement / prospectus) of the Company and PacWest Bancorp distributed to holders of the Company’s common stock and PacWest Bancorp’s common stock in connection with the Company’s and PacWest Bancorp’s solicitation of proxies for the vote by the Company’s stockholders and PacWest Bancorp’s stockholders with respect to the proposed transaction and also constitutes a prospectus of the Company. The registration statement was declared effective by the SEC on October 20, 2023 and the definitive joint proxy statement / prospectus was first mailed on or around October 23, 2023 to the Company’s and PacWest Bancorp’s respective stockholders that, as of the applicable record date, are entitled to vote on the matters being considered at the Company stockholder meeting and at the PacWest Bancorp stockholder meeting, as applicable. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS ARE URGED TO CAREFULLY READ THE ENTIRE REGISTRATION STATEMENT AND DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO), AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AND THE DEFINITIVE VERSIONS THEREOF, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO SUCH DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders may obtain free copies of the registration statement, the definitive joint proxy statement/prospectus and all other relevant documents filed with the SEC by the Company or PacWest Bancorp through the website maintained by the SEC at www.sec.gov. The documents filed by the Company or PacWest Bancorp with the SEC also may be obtained free of charge at the Company’s or PacWest Bancorp’s website at https://investors.bancofcal.com, under the heading “Financials and Filings” or www.pacwestbancorp.com, under the heading “SEC Filings”, respectively, or upon written request to the Company, Attention: Investor Relations, 3 MacArthur Place, Santa Ana, CA 92707 or PacWest Bancorp, Attention: Investor Relations, 9701 Wilshire Boulevard, Suite 700, Beverly Hills, CA 90212, respectively. Participants in Solicitation The Company and PacWest Bancorp and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the Company’s stockholders or PacWest Bancorp’s stockholders in connection with the proposed transaction under the rules of the SEC. The Company’s stockholders, PacWest Bancorp’s stockholders and other interested persons may obtain, without charge, more detailed information regarding the names, affiliations and interests of directors and executive officers of the Company and PacWest Bancorp in the registration statement, as well as other documents filed by the Company or PacWest Bancorp from time to time with the SEC. Other information regarding persons who may, under the rules of the SEC, be deemed the participants in the proxy solicitation of the Company’s or PacWest Bancorp’s stockholders in connection with the proposed transaction and a description of their direct and indirect interests, by security holdings or otherwise, is included in the definitive joint proxy statement/prospectus and other relevant materials filed with the SEC regarding the proposed transaction. You may obtain free copies of these documents at the SEC’s website at www.sec.gov. Copies of documents filed with the SEC by the Company or PacWest Bancorp will also be available free of charge from the Company or PacWest Bancorp using the contact information above. ADDITIONAL DISCLAIMERS

4 1. Denotes a non-GAAP financial measure; see “Non-GAAP Reconciliation” slides at end of presentation 2. 3Q23 capital ratios are preliminary THIRD QUARTER 2023 RESULTS ($ in Thousands Except Per Share Data) 3Q23 2Q23 3Q22 Net interest income $ 69,218 $ 69,632 $ 79,408 Net income $ 42,574 $ 17,879 $ 24,196 Earnings per diluted common share $ 0.74 $ 0.31 $ 0.40 Adjusted net income (1) $ 17,051 $ 18,383 $ 26,732 Adjusted earnings per diluted common share (1) $ 0.30 $ 0.32 $ 0.44 Pre-tax pre-provision (PTPP) income (1) $ 63,832 $ 26,524 $ 34,127 Adjusted PTPP income (1) $ 27,596 $ 27,240 $ 37,728 Return on average assets (ROAA) 1.82% 0.75% 1.02% Adjusted ROAA (1) 0.73% 0.77% 1.13% PTPP ROAA (1) 2.73% 1.11% 1.44% Adjusted PTPP ROAA (1) 1.18% 1.14% 1.59% Average assets $ 9,261,273 $ 9,611,239 $ 9,408,740 Net interest margin 3.19% 3.11% 3.58% Allowance for credit losses coverage ratio 1.13% 1.19% 1.36% NIE / Average assets 2.41% 2.05% 2.15% Adjusted NIE / Average assets (1) 1.98% 2.02% 2.00% Common equity tier 1 (2) 12.19% 11.88% 11.41% Tangible common equity per share (1) $ 15.34 $ 14.56 $ 13.79 Noninterest-bearing deposits as % of total ending deposits 35.6% 35.6% 40.4%

5 3Q23 Summary Business model built for stability through the cycle, with a focus on high-touch commercial relationships and value-added services and solutions to drive noninterest-bearing deposit growth Announcement of Transformational Merger with PacWest Bancorp • Regulatory approval received from FRB and CA DFPI; no further regulatory approvals are required • Stockholder meetings scheduled for 11/22/23; anticipated merger closing date on or about 11/30/23 • Combination creates the #3 largest California headquartered bank • Deal is expected to provide scale, market position, strong liquidity and funding, robust capital and improved profitability • Transaction includes $400mm of committed capital from leading private equity firms • Merger restructuring plan includes asset sales expected to reduce PACW’s high cost brokered deposits Strength of Deposit Franchise • Stable deposit mix with noninterest-bearing deposits comprising 36% of 3Q23 ending total deposits • Over $50 million in new NIB deposit relationships added in 3Q and over $200 million added year-to-date Well Positioned for Interest Rates • Net interest margin increased 8 bps from prior quarter to 3.19% • Deposit costs stabilizing: 09/30/23 spot rate on deposits of 1.84% compared to average for the quarter of 1.86% High Levels of Liquidity and Capital • Total available liquidity of $3.7 billion, which was 2.1x the level of uninsured and uncollateralized deposits • TCE ratio(1) increased 62 bps to 9.7% and TBV/share increased 5.4% to $15.34(2) • Total risk-based capital ratio of 14.5%, CET1 ratio of 12.2% and leverage ratio of 10.2%(3) Healthy Asset Quality • NPAs declined 39% excluding SFRs, which have low LTVs and minimal loss rates • NPL coverage ratio increased 3% to 129%; NPA coverage ratio increased 3% to 128% • Charge-offs incurred in the current period to reposition the balance sheet post-merger 1. Denotes a non-GAAP financial measure; see “Non-GAAP Reconciliation” slides at end of presentation. 2. Includes a $46.2 million pre-tax mark- to- market gain on derivative instruments entered into to hedge interest rate risks prior to merger closing. 3. 3Q23 capital ratios are preliminary. STRONG DEPOSIT BASE, LIQUIDITY AND CAPITAL

6 Strong YTD growth in NIB deposits from new relationships shows success of BANC’s deposit engine ($ in millions) 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 $44.4 $34.1 $59.3 $66.0 $92.0 $22.0 $74.5 $74.8 $52.2 1Q23 to 3Q23 $202 million New NIB Deposits From New Relationships DEPOSIT ENGINE CONSISTENTLY GENERATES NEW NIB DEPOSITS FROM NEW RELATIONSHIPS Adding new NIB relationships considered key to long-term success of deposit franchise

7 • Stable NIB mix, including 36% ending total deposits, which was flat to 2Q23 ending levels • Through the cycle cumulative deposit beta of 34% since 4Q21 • 74% insured and collateralized deposits • No material depository or industry concentration • 09/30/23 spot rate on deposits of 1.84% Cost of Deposits 40.4% 26.4% 20.4% 4.4% 8.4% 3Q22 0.79% 39.5% 27.3% 16.5% 8.5% 8.2% 4Q22 1.22% 36.1% 26.8% 0.47% 14.4% 8.4% 1Q23 1.67% 35.6% 24.9% 15.4% 15.6% 8.5% 2Q23 1.86% 35.6% 23.1% 17.5% 15.3% 8.5% 3Q23 14.3% Average Cost of deposits Noninterest-bearing Interest-bearing checking Money Market & Savings Brokered CDs CDs Highlights 2.18% 3.65% 4.51% 4.99% 5.26% Average Fed Funds Rate 1. Reflects balance as of period end LOW COST DEPOSIT FRANCHISE Widening spread against Fed funds rate driven by stable NIB deposit % Category 3Q22 4Q22 1Q23 2Q23 3Q23 $ in millions Noninterest-bearing checking $2,943.6 $2,809.3 $2,506.6 $2,446.7 $2,366.5 Interest-bearing checking 1,921.8 1,947.2 1,862.0 1,713.5 1,531.3 Demand deposits 4,865.4 4,756.6 4,368.6 4,160.2 3,897.9 Money market & savings 1,478.0 1,174.9 998.4 1,057.3 1,157.1 CDs 614.6 584.5 585.3 579.8 567.1 Brokered CDs 322.4 604.9 999.7 1,073.8 1,018.5 Total (1) $7,280.4 $7,120.9 $6,952.0 $6,871.1 $6,640.6

8 • 53% of loans are variable or hybrid • 62% of the loan portfolio is secured by residential real estate • Multifamily weighted average LTV of 57% • CRE weighted average LTV of 55% • SFR weighted average LTV of 57% and average FICO 741 • 79% of the SFR loan portfolio have LTVs of less than 70% • 87% of all real estate secured loans have LTVs of less than 70% 3Q23 2Q23 Change Loan Segment $(1) % Avg. Yield $(1) % Avg. Yield $(1) % Avg. Yield $ in Millions C&I: Warehouse $ 648 9.3% 8.81% $ 786 11.0% 8.66% $ (138) -17.6% 0.15% C&I: All Other 1,295 18.6% 6.60% 1,214 17.0% 6.55% 81 6.7% 0.05% Multifamily 1,654 23.8% 4.16% 1,654 23.1% 4.16% 0 0.0% 0.00% CRE 1,173 16.9% 4.94% 1,266 17.7% 4.86% (93) -7.4% 0.08% Construction 263 3.8% 8.96% 265 3.7% 8.80% (2) -0.7% 0.16% SBA 57 0.8% 5.50% 63 0.9% 6.22% (6) -10.0% -0.72% Total Commercial Loans 5,090 73.1% 5.79% 5,249 73.3% 5.69% (159) -3.0% 0.10% SFR 1,783 25.6% 4.18% 1,821 25.4% 4.10% (38) -2.1% 0.08% Consumer 88 1.3% 6.56% 87 1.2% 6.47% 2 1.8% 0.09% Total Consumer Loans 1,871 26.9% 4.29% 1,908 26.7% 4.20% (36) -1.9% 0.09% Total Loans HFI $ 6,961 100% 5.38% $ 7,156 100% 5.28% $ (195) -2.7% 0.10% Construction 4% Consumer 1% SBA 1% CRE 17% 1-4 Res. 26% Multifamily 24% C&I 19% 3Q23 Highlights 1. Reflects balance as of period end. $102.3 million of owner-occupied CRE loans were moved to the commercial and industrial category from the CRE category during the third quarter DIVERSIFIED LOAN PORTFOLIO MITIGATES RISK AND GENERATES ATTRACTIVE RISK-ADJUSTED YIELDS Ware- house 9%

9 CALIFORNIA-CENTRIC CRE PORTFOLIO HAS LOW WEIGHTED-AVERAGE LTV AND SOLID CREDIT QUALITY • General Office CRE comprised of class B/C low-rise with: o LTV of 53% o 1.6x debt service coverage • CRE loan delinquency rate <1% • CRE nonperforming loans <1% • CRE weighted average LTV 55% • Retail is well diversified with 1.9x debt service coverage • Total CRE debt service coverage of 1.6x Multifamily 24% CRE comprises 16.9% of total loans; General Office at only 3.7% of total loans Highlights% of Total CRE Loans 28% 17% 24% 26% C&I CRE Multifamily 4% Construction SFR 2% SBA / Consumer Collateral Type Count Balance % of Total Loans Avg. Loan Size WA LTV ($ millions) (1) ($ millions) General Office 54 $ 256 3.7% $ 4.7 53% Medical Office 10 71 1.0% 7.1 53% Retail 76 335 4.8% 4.4 54% Industrial 68 246 3.5% 3.6 57% Health Facility 6 45 0.6% 7.4 62% Hospitality 6 31 0.4% 5.1 37% Other 117 189 2.7% 1.6 59% Total CRE 337 $ 1,173 16.9% $ 3.5 55% 1. Reflects balance as of period end. $102.3 million of owner-occupied CRE loans were moved to the commercial and industrial category from the CRE category during the third quarter

10 1. Includes deferred costs/fees, transfers, sales and other adjustment Note: Ending loan balance includes loans held for sale DIVERSIFIED BUSINESS MIX LOAN YIELDS ON NEW PRODUCTION CONTINUE TO RISE ($ in millions) Loans Beginning Balance Total Fundings Total Payoffs Net Difference Other Change(1) Loans Ending Balance Total Loan Yield Rate on Production Q3 2023 7,161$ 266$ 450$ (184)$ (12)$ 6,965$ 5.38% 8.36% Q2 2023 7,059$ 441$ 340$ 101$ 1$ 7,161$ 5.28% 8.17% Q1 2023 7,119$ 399$ 454$ (55)$ (6)$ 7,059$ 5.07% 7.72% Q4 2022 7,294$ 496$ 662$ (166)$ (8)$ 7,119$ 4.92% 6.79% Q3 2022 7,455$ 821$ 980$ (159)$ (2)$ 7,294$ 4.54% 5.53% $559 $145 $156 $61 $92 $262 $351 $208 $231 $174 $821 $496 $399 $441 $266 ($239) ($212) ($217) ($134) ($90) ($347) ($284) ($237) ($206) ($224) ($980) ($662) ($454) ($340) ($450) ($394) ($166) ($135)$34 $149 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% $0 $200 $400 $600 $800 $1,000 $1,200 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Total Loan Fundings of $266 Million in Q3 2023 Fundings Advances Warehouse Net Advances/Paydowns Payoffs Paydowns Warehouse Net Advances/Paydowns Total Loan Yield Rate on Production ($ in millions)

11 $13.39 FY2020 $13.88 FY2021 $14.19 FY2022 $15.34 3Q23 1. Denotes a non-GAAP financial measure; see “Non-GAAP Reconciliation” slides at end of presentation 2. 3Q23 includes $46.2 million mark-to-market gain recognized on derivative instruments including $3.1 billion in interest rate swap options to hedge changes in interest rates and a contingent forward asset sale agreement on the SFR loan portfolio of $1.8 billion Tangible common equity per common share(1) Growth in TBV per common share(1) driven by strong earnings, including hedge gains(2) and prudent balance sheet management, that more than offset negative AOCI marks, dividends, common stock repurchases and acquisitions of Pacific Mercantile Bank and Deepstack Technologies 4Q22: Completed $75 million stock buyback authorized in 1Q22 that reduced outstanding shares by 7% 3Q22: Completed $24 million acquisition of Deepstack Technologies in September YTD: Completed $21 million of stock buyback, no repurchases in 3Q23 CONTINUED TBV PER SHARE GROWTH 4Q21: Closed $1.5 billion asset PMB acquisition in October

12 QoQ Effective Duration (yrs) Unrealized Loss 3Q23 2Q23 Change 3Q23 3Q23 Gov’t & Agency (MBS, CMO, & SBA) $ 171.3 $ 180.1 $ (7.8) 4.5 $ (10.8) CLOs 483.8 482.8 1.0 0.1 (6.1) Corporate Securities 155.0 147.6 6.3 1.9 (19.9) Private Label RMBS 105.0 111.5 (6.5) 7.1 (15.1) AFS $ 915.1 $ 922.1 $ (7.0) 2.0 $ (52.0) Gov’t & Agency (MBS, CMO, & SBA) 214.1 214.2 (0.1) 9.2 (51.4) Municipal 114.2 114.2 (0.0) 9.6 (26.6) HTM $ 328.3 $ 328.4 $ (0.1) 9.4 $ (78.0) Total Securities $ 1,243.3 $ 1,250.5 $ (7.2) 3.6 $ (130.0) Security Type ($ in millions) Portfolio Average Balances & Yields Securities Portfolio Detail Portfolio Profile 3.38% 3Q22 4.19% 4Q22 4.66% 1Q23 4.83% 2Q23 5.17% 3Q23 $1,195 $1,221 $1,298 $1,311 $1,252 Average Balance ($ in millions) Yield SECURITIES HAVE SHORT / MODERATE DURATION WITH LOW UNREALIZED AFS AND HTM LOSSES CompositionCredit Rating AA 40% AAA 47% BB 2% BBB 11% CLOs 37% Corporates 13% Gov’t & AGC 31% Munis 9% Private Label 10%

13 (Dollars in millions) 3Q23 AFS (Unrealized Loss Pre-Tax) $51.9 HTM (Unrealized Loss Pre-Tax) $78.0 Total Securities Unrealized Loss Pre-Tax $129.8 Net Unrealized Loss on AFS After-Tax $36.6 3.9% of CET1 Net Unrealized Loss on HTM After-Tax $54.9 5.9% of CET1 Net Unrealized Loss on Securities After-Tax (2) $91.5 Capital Analysis CET 1 Capital $928.9 Net Unrealized Loss on Securities After-Tax (2) $91.5 9.8% of CET1 CET 1 (Deficit) / Surplus $837.4 CET1 Well-Capitalized Guideline 6.50% CET1 Ratio 12.19% CET1 Ratio, assuming AFS losses realized 11.71% CET1 Ratio, assuming AFS & HTM losses realized 10.99% 1. 3Q23 capital ratios are preliminary. 2. Tax rate of 29.6% used for calculation purposes 3. Denotes a non-GAAP financial measure; see “Non-GAAP Reconciliation” slides at end of presentation Total unrealized losses reduce the CET1 ratio by 120 bps LOW UNREALIZED SECURITIES LOSSES AS A % OF CAPITAL(1) • 3Q23 AFS unrealized losses were 3.9% of 3Q23 CET1 Capital • 3Q23 AFS + HTM unrealized losses were 9.8% of 3Q23 CET1 Capital • Including unrealized losses, CET1 remains 4.5% above “Well Capitalized” guidelines(3) Highlights

14 ($ in Millions) September 30, 2023 Current Availability Utilization Capacity Primary Liquidity Cash 311$ AFS Securities (unpledged)* 689 Total Primary Liquidity $ 1,000 Secondary Liquidity FHLB 1,192$ 1,225$ 2,417$ FRB (Discount Window & BIC) 805 200 1,005 FRB (Bank Term Funding Program) 379 - 379 Other 290 - 290 Total Secondary Liquidity $ 2,666 $ 1,425 $ 4,091 Total Primary + Secondary Liquidity** $ 3,666 Total available primary and secondary liquidity ($3.67B) is 2.1x uninsured and uncollateralized deposits ($1.76B) * Includes the unrealized mark which would need to be realized when sold **Excludes term funding, lines of credit and brokered CD capacity HIGH LEVEL OF AVAILABLE LIQUIDITY

15 1. 3Q23 capital ratios are preliminary 2. Denotes a non-GAAP financial measure; see “Non-GAAP Reconciliation” slides at end of presentation • $35 million stock repurchase authorized for 2023, of which $21 million was repurchased by June 30 • No stock repurchases were made in 3Q due to our proposed transaction with PacWest • 2022, 1Q23 and 2Q23 included $75 million, $5.2 million and $16.0 million in common stock repurchases, respectively • 2Q23 Tangible Common Equity Ratio reflects normalized liquidity • 3Q22 included the impact from the Deepstack acquisition STRONG CAPITAL BASE Provides Buffer for Economic Environment 3Q23 2Q23 1Q23 4Q22 3Q22 Regulatory Well- Capitalized Ratios Most Recent Quarter Ratios in Excess of Well-Capitalized Total Risk-Based Capital Ratio (1) 14.48% 14.25% 14.22% 14.19% 13.83% 10.00% 4.48% Tier 1 Risk-based Capital (1) 12.19% 11.88% 11.79% 11.78% 11.41% 8.00% 4.19% Common Equity Tier 1 (CET1) (1) 12.19% 11.88% 11.79% 11.78% 11.41% 6.50% 5.69% Leverage Ratio (1) 10.15% 9.39% 9.65% 9.70% 9.52% 5.00% 5.15% Tangible Common Equity / Tangible Assets (2) 9.66% 9.04% 8.44% 9.23% 8.97% NA NA

16 1.52% 1.67% 1.34% 1.53% 1.48% $156.6 3Q22 $152.3 4Q22 $110.0 1Q23 $123.4 2Q23 $111.8 3Q23 $8.0 $21.1 $24.6 $33.5 $39.8 Delinquencies ($ in millions) Non-performing Loans (NPLs) ($ in millions) Criticized and Classified Loans ($ in millions) ACL / Total Loans ($ in millions) $21.1 0.79% 3Q22 $30.4 1.28% 4Q22 $31.7 1.03% 1Q23 $39.0 1.47% 2Q23 $28.0 1.30% 3Q23 SFR Delinquencies Delinquencies (ex-SFR) Delinquencies /Total Loans $34.7 0.59% 3Q22 $34.1 0.78% 4Q22 $32.0 0.80% 1Q23 $33.8 0.94% 2Q23 $20.7 0.87% 3Q23 SFR NPLs NPLs (ex-SFR) NPLs/Total Loans-HFI 1.36% $98.8 3Q22 1.28% $91.3 4Q22 1.27% $89.4 1Q23 1.19% $84.9 2Q23 1.13% $78.4 3Q23 ACL / Total Loans ACL $36.4 $60.8 $40.9 $65.9 $62.2 NPLs excluding SFR loans down 39% SFR loans have low LTVs and minimal loss exposure ASSET QUALITY REMAINS STRONG NPLs, Delinquencies, and Classified Loans $16.1 $30.9 $36.6 $37.2 $52.3 SFR Criticized and Classified Loans Criticized and Classified Loans (ex SFR) Classified Loans / Total Loans

17 APPENDIX

18 1. Non-GAAP financial measure; see “Non-GAAP Reconciliation” slides at end of presentation 3Q23 2Q23 1Q23 4Q22 3Q22 $ 9,247 $ 9,370 $ 10,039 $ 9,197 $ 9,369 915 922 958 868 848 328 328 329 329 329 6,961 7,156 7,054 7,115 7,289 6,641 6,871 6,952 7,121 7,280 $ 69.2 $ 69.6 $ 73.1 $ 80.2 $ 79.4 50.8 6.0 7.9 (1.4) 5.7 120.0 75.7 80.9 78.8 85.1 56.2 49.2 49.6 47.6 50.5 (0.0) (0.0) 1.6 0.6 0.5 56.2 49.1 51.2 48.2 51.0 63.8 26.5 29.7 30.6 34.1 5.0 1.9 2.0 - - 16.3 6.7 7.4 9.1 9.9 42.6 17.9 20.3 21.5 24.2 $ 42.6 $ 17.9 $ 20.3 $ 21.5 $ 24.2 $ 0.74 $ 0.31 $ 0.34 $ 0.36 $ 0.40 $ 15.34 $ 14.56 $ 14.26 $ 14.19 $ 13.79 1.82% 0.75% 0.88% 0.92% 1.02% 62.62% 63.99% 60.86% 56.03% 55.66% (Dollars in millions) Income tax expense Net interest income Total noninterest income Total assets Securities available-for-sale Loans held-for-investment Total deposits Total revenue Noninterest expense Loss in alternative energy partnership investments Total noninterest expense Pre-tax pre-provision income (1) Provision for credit losses Securities held-to-maturity Net income available to common stockholders Diluted earnings per common share Net income Tangible common equity per common share (1) Return on average assets Adjusted efficiency ratio (1) BANC FAST FACTS

19 1. Excludes Warehouse credit facilities $ in millions Real Estate Loan Balances(1) SFR Portfolio by LTV 70% 3Q22 72% 4Q22 73% 1Q23 70% 2Q23 70% 3Q23 $5,124 $5,114 $5,118 $5,006 $4,873 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 56% Real Estate (1) LTVs $ % Count <50% $ 1,472 30% 1,082 50% to 60% 1,125 23% 509 60% to 70% 1,629 33% 621 70% to 80% 495 10% 311 >80% 152 3% 97 Total $ 4,873 100% 2,620 $ in Millions SFR LTVs $ % Count <50% $ 572 32% 670 50% to 60% 362 20% 311 60% to 70% 467 26% 365 70% to 80% 251 14% 225 >80% 130 7% 89 Total $ 1,783 100% 1,660 $ in Millions • 79% of all existing SFR have LTVs of less than 70% • Weighted average LTV is 57% DIVERSIFIED AND LOW LTV REAL ESTATE PORTFOLIO

20 CLO Industry Breakdown $484 million at September, 2023 (net of $6.1 million unrealized loss)• CLO portfolio has underlying diversified exposure • AAA and AA 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 • 3Q23 average CLO portfolio yield of 7.3%, up from 6.9% in 2Q23 • Quarterly reset based on [3 Month Term SOFR + a credit adjustment of 0.26161%] + 1.62% • CLOs included an unrealized loss of $6.1 million as of 3Q23, down from $7.7 million as of 2Q23 High Tech Industries 12% Healthcare & Pharmaceuticals 12% Banking, Finance, Insurance & Real Estate 9% Services: Business 8% Beverage, Food & Tobacco 5% Media: Broadcasting & Subscription 4% Hotel, Gaming & Leisure 4% Construction & Building 3% Capital Equipment 3% Automotive 3% Services: Consumer 3% Chemicals, Plastics, & Rubber 3% Telecommunications 3% Containers, Packaging & Glass 3% Consumer goods: Non-durable 3% Other 20% CLO PORTFOLIO HAS DIVERSIFIED EXPOSURE Credit Enhancement Provides Significant Principal Protection Highlights

21 Tangible assets, tangible equity, tangible common equity, tangible common equity to tangible assets, tangible common equity per share, return on average tangible common equity, adjusted noninterest income, adjusted noninterest expense, adjusted noninterest income to adjusted total revenue, adjusted noninterest expense to average total assets, pre- tax pre-provision (PTPP) income, adjusted PTPP income, PTPP income ROAA, adjusted PTPP income ROAA, efficiency ratio, adjusted efficiency ratio, adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share (EPS) and adjusted return on average assets (ROAA), adjusted common equity tier 1 (CET 1) and adjusted CET1 ratios 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, as applicable, from tangible equity. Return on average tangible common equity is calculated by dividing net income available to common stockholders, after adjustment for amortization of intangible assets, by average tangible common equity. Banking regulators also exclude goodwill and other intangible assets from stockholders' equity when assessing the capital adequacy of a financial institution. PTPP income is calculated by adding net interest income and noninterest income (total revenue) and subtracting noninterest expense. Adjusted PTPP income is calculated by adding net interest income and adjusted noninterest income (adjusted total revenue) and subtracting adjusted noninterest expense. PTPP income ROAA is calculated by dividing annualized PTPP income by average assets. Adjusted PTPP income ROAA is calculated by dividing annualized adjusted PTPP income by average assets. Efficiency ratio is calculated by dividing noninterest expense by total revenue. Adjusted efficiency ratio is calculated by dividing adjusted noninterest expense by adjusted total revenue. Adjusted net income is calculated by adjusting net income for tax-effected noninterest income and noninterest expense adjustments and the tax impact from the exercise of stock appreciation rights for the periods indicated. Adjusted ROAA is calculated by dividing annualized adjusted net income by average assets. Adjusted net income available to common stockholders is calculated by removing the impact of preferred stock redemptions from adjusted net income. Adjusted diluted earnings per share is calculated by dividing adjusted net income available to common stockholders by the weighted average diluted common shares outstanding. Common equity tier 1 and the common equity tier 1 ratio are defined by regulatory capital rules. Adjusted CET 1 is calculated by subtracting net unrealized losses on securities from CET 1 capital. Adjusted CET 1 ratio is calculated by dividing adjusted CET 1 by total risk-weighted assets. Adjusted CET 1 ratio, assuming AFS losses realized, is calculated by dividing CET 1 capital amount after adjusting for the net unrealized losses on AFS securities, by total risk-weighted assets. Adjusted CET 1 ratio, assuming HTM losses realized, is calculated by dividing CET 1 capital after adjusting for the net unrealized losses on HTM securities, by total risk-weighted assets. Adjusted CET 1 and adjusted CET 1 ratios are provided to reflect management’s assessment of capital impacts from net unrealized losses on securities. Capital amounts and ratios as of the most recent quarter are preliminary. 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 22-27 of this presentation. NON-GAAP FINANCIAL INFORMATION

22 1. Non-GAAP financial measure 2. Tangible Book Value Per Share and Tangible Common Value Per Share are interchangeable measures (Dollars in thousands, except per share data) 3Q23 2Q23 1Q23 4Q22 3Q22 Tangible Common Equity to Tangible Assets Ratio Total assets $ 9,247,072 $ 9,370,265 $ 10,038,901 $ 9,197,016 $ 9,368,578 Less: goodwill (114,312) (114,312) (114,312) (114,312) (114,312) Less: other intangible assets (6,142) (6,603) (7,065) (7,526) (8,081) Tangible assets (1) $ 9,126,618 $ 9,249,350 $ 9,917,524 $ 9,075,178 $ 9,246,185 Total stockholders' equity $ 1,001,720 $ 957,054 $ 958,907 $ 959,618 $ 951,990 Less: goodwill (114,312) (114,312) (114,312) (114,312) (114,312) Less: other intangible assets (6,142) (6,603) (7,065) (7,526) (8,081) Tangible common equity (1) $ 881,266 $ 836,139 $ 837,530 $ 837,780 $ 829,597 Total stockholders' equity to total assets 10.83% 10.21% 9.55% 10.43% 10.16% Tangible common equity to tangible assets (1) 9.66% 9.04% 8.44% 9.23% 8.97% Common shares outstanding 56,959,141 56,944,706 58,237,303 58,544,534 59,679,558 Class B non-voting non-convertible common shares outstanding 477,321 477,321 477,321 477,321 477,321 Total common shares outstanding 57,436,462 57,422,027 58,714,624 59,021,855 60,156,879 Book value per common share $ 17.44 $ 16.67 $ 16.33 $ 16.26 $ 15.83 Tangible Book Value Per Share (2) $ 15.34 $ 14.56 $ 14.26 $ 14.19 $ 13.79 NON-GAAP RECONCILIATION

23 1. Non-GAAP measure 2. Adjustments shown net of a statutory tax rate of 29.6% (Dollars in thousands) 3Q23 2Q23 1Q23 4Q22 3Q22 Return on tangible common equity Average total stockholders' equity $ 977,410 $ 997,049 $ 1,004,794 $ 989,414 $ 960,806 Less: Average goodwill (114,312) (114,312) (114,312) (114,312) (98,916) Less: Average other intangible assets (6,430) (6,885) (7,355) (7,869) (4,570) Average tangible common equity (1) $ 856,668 $ 875,852 $ 883,127 $ 867,233 $ 857,320 Net income available to common stockholders $ 42,574 $ 17,879 $ 20,278 $ 21,519 $ 24,196 Add: Amortization of intangible assets 461 462 461 555 396 Less: Tax effect on amortization of intangible assets (2) (136) (137) (136) (164) (117) Net income available to common stockholders after the adjustments for intangible assets (1) $ 42,899 $ 18,204 $ 20,603 $ 21,910 $ 24,475 Return on average equity 17.28% 7.19% 8.18% 8.63% 9.99% Return on average tangible common equity (1) 19.87% 8.34% 9.46% 10.02% 11.33% NON-GAAP RECONCILIATION

24 1. Non-GAAP measure 2. Ratio presented on an annualized basis NON-GAAP RECONCILIATION (Dollars in thousands) 3Q23 2Q23 1Q23 4Q22 3Q22 Adjusted Noninterest Income Total noninterest income 50,778 6,024 7,859 (1,427) 5,681 Gain on merger-related derivative instruments (46,165) - - - - Net loss on securities available for sale - - - 7,708 - Adjusted noninterest income (1) $ 4,613 $ 6,024 $ 7,859 $ 6,281 $ 5,681 Adjusted Noninterest Expense Total noninterest expense $ 56,164 $ 49,132 $ 51,239 $ 48,203 $ 50,962 Noninterest expense adjustments: Indemnified legal recoveries (fees) (634) (752) (380) 869 (1,017) Acquisition, integration and transaction costs (9,329) - - - (2,080) Noninterest expense adjustments before gain (loss) in alternative energy partnership investments (9,963) (752) (380) 869 (3,097) (Loss) gain in alternative energy partnership investments 34 36 (1,618) (608) (504) Total noninterest expense adjustments (9,929) (716) (1,998) 261 (3,601) Adjusted noninterest expense (1) $ 46,235 $ 48,416 $ 49,241 $ 48,464 $ 47,361 Average assets $ 9,261,273 $ 9,611,239 $ 9,317,209 $ 9,257,311 $ 9,408,740 Noninterest income to total revenue (1) 42.32% 7.96% 9.71% (1.81%) 6.68% Adjusted noninterest income to adjusted total revenue (1) 6.25% 7.96% 9.71% 7.26% 6.68% Noninterest expense / Average assets (2) 2.41% 2.05% 2.23% 2.07% 2.15% Adjusted noninterest expense / Average assets (1)(2) 1.98% 2.02% 2.14% 2.08% 2.00%

25 1. Non-GAAP measure 2. Ratio presented on an annualized basis (Dollars in thousands) 3Q23 2Q23 1Q23 4Q22 3Q22 Adjusted pre-tax pre-provision income Net interest income $ 69,218 $ 69,632 $ 73,053 $ 80,217 $ 79,408 Noninterest income 50,778 6,024 7,859 (1,427) 5,681 Total revenue 119,996 75,656 80,912 78,790 85,089 Noninterest expense 56,164 49,132 51,239 48,203 50,962 Pre-tax pre-provision income (1) $ 63,832 $ 26,524 $ 29,673 $ 30,587 $ 34,127 Total revenue $ 119,996 $ 75,656 $ 80,912 $ 78,790 $ 85,089 Total noninterest income adjustments (46,165) - - $ 7,708 - Adjusted total revenue (1) $ 73,831 $ 75,656 $ 80,912 $ 86,498 $ 85,089 Noninterest expense $ 56,164 $ 49,132 $ 51,239 $ 48,203 $ 50,962 Total noninterest expense adjustments (9,929) (716) (1,998) 261 (3,601) Adjusted noninterest expense (1) 46,235 48,416 49,241 48,464 47,361 Adjusted pre-tax pre-provision income (1) $ 27,596 $ 27,240 $ 31,671 $ 38,034 $ 37,728 Average Assets $ 9,261,273 $ 9,611,239 $ 9,317,209 $ 9,257,311 $ 9,408,740 Pre-tax pre-provision ROAA (1)(2) 2.73% 1.11% 1.29% 1.31% 1.44% Adjusted pre-tax pre-provision ROAA (1)(2) 1.18% 1.14% 1.38% 1.63% 1.59% Efficiency Ratio (2) 46.80% 64.94% 63.33% 61.18% 59.89% Adjusted efficiency ratio (1)(2) 62.62% 63.99% 60.86% 56.03% 55.66% NON-GAAP RECONCILIATION

26 1. Net income for the three months ended September 30, 2023 includes a $46.2 million pre-tax mark-to-market gain on derivative instruments partially offset by acquisition costs of $9.3 million 2. Net income for the three months ended December 31, 2022 includes a $7.7 million pre-tax loss on sale of securities 3. Tax impact of adjustments shown at a statutory tax rate of 29.6% 4. Non-GAAP measure 5. Ratio presented on an annualized basis 6. Represents adjusted net income available to common stockholders divided by average diluted common shares (Dollars in thousands, except per share data) 3Q23 2Q23 1Q23 4Q22 3Q22 Adjusted net income Net income (1)(2)(3) $ 42,574 $ 17,879 $ 20,278 $ 21,519 $ 24,196 Adjustments: Noninterest income adjustments (46,165) - - 7,708 - Noninterest expense adjustments 9,929 716 1,998 (261) 3,601 Total adjustments (36,236) 716 1,998 7,447 3,601 Tax impact of adjustments above (3) 10,713 (212) (591) (2,202) (1,065) Adjustments to net income (25,523) 504 1,407 5,245 2,536 Adjusted net income (1)(2)(4) $ 17,051 $ 18,383 $ 21,685 $ 26,764 $ 26,732 Average Assets $ 9,261,273 $ 9,611,239 $ 9,317,209 $ 9,257,311 $ 9,408,740 ROAA (5) 1.82% 0.75% 0.88% 0.92% 1.02% Adjusted ROAA (4)(5) 0.73% 0.77% 0.94% 1.15% 1.13% Adjusted net income available to common stockholders Net income available to common stockholders $ 42,574 $ 17,879 $ 20,278 $ 21,519 $ 24,196 Adjustments to net income (25,523) 504 1,407 5,245 2,536 Adjusted net income available to common stockholders (4) $ 17,051 $ 18,383 $ 21,685 $ 26,764 $ 26,732 Average diluted common shares 57,521,836 58,026,007 59,206,619 59,725,283 60,492,460 Diluted EPS $ 0.74 $ 0.31 $ 0.34 $ 0.36 $ 0.40 Adjusted diluted EPS (4)(6) $ 0.30 $ 0.32 $ 0.37 $ 0.45 $ 0.44 NON-GAAP RECONCILIATION

27 1. 3Q23 presented to reflect management’s assessment of capital impact from net unrealized losses on securities. Tax rate of 29.6% used for calculation purposes 2. 3Q23 capital ratios are preliminary 3. Non-GAAP measure NON-GAAP RECONCILIATION (Dollars in thousands) 3Q23 Adjusted Common Equity Tier 1 (CET 1) capital (1,3) CET 1 capital $ 928,862 Less unrealized loss on AFS securities, net of tax (36,551) Less unrealized loss on HTM securities, net of tax (54,913) Adjusted CET 1 capital (3) $ 837,398 CET 1 ratio (2) 12.19% Adjusted CET 1 ratio, assuming AFS losses realized (3) 11.71% Adjusted CET 1 ratio, assuming AFS and HTM losses realized (3) 10.99% Unrealized loss on AFS securities, net of tax, to CET 1 capital 3.9% Unrealized loss on HTM securities, net of tax, to CET 1 capital 5.9% Total unrealized loss on AFS and HTM securities, net of tax, to CET 1 capital 9.8%

Banc of California Reports Net Income of $42.6 million, with Stable Deposit Mix and Improved Net Interest Margin in Third Quarter 2023 Financial Results

SANTA ANA, Calif., (October 24, 2023) — Banc of California, Inc. (NYSE: BANC) (“Banc of California”) today reported net income of $42.6 million, or $0.74 per diluted common share, for the third quarter of 2023. This compares to net income of $17.9 million, or $0.31 per diluted common share for the second quarter of 2023. On an adjusted basis, net income was $17.1 million for the quarter, or $0.30 per diluted common share.(1) This compares to adjusted net income of $18.4 million, or $0.32 per diluted common share, for the second quarter of 2023.(1) The third quarter of 2023 included a $46.2 million pre-tax mark-to-market gain on derivative instruments used to hedge the interest rate risk associated with various assets on the Company’s balance sheet, in anticipation of the anticipated sale of such assets in connection with the proposed merger with PacWest Bancorp (“PacWest”). The gain was partly offset by $9.3 million of other transaction costs.

Third quarter highlights:

•Net income of $42.6 million, or $0.74 per diluted common share, up 138% from the prior quarter as the bank strategically positioned the balance sheet ahead of the merger, which included a $46.2 million gain from derivative instruments, partly offset by $9.3 million of transaction costs.

•Stable overall deposit mix, with the period-end noninterest-bearing deposit percentage consistent with the prior quarter at 36% of total deposits.

•Addition of new clients with noninterest-bearing deposits, which contributed inflows of $52.2 million in the quarter and $201.5 million year-to-date.

•Net interest margin improvement of 8 basis points from 3.11% to 3.19% in comparison to the prior quarter, as the increase in the yield on loans and securities exceeded the increase in the cost of funds.

•Disciplined noninterest expense management, with total noninterest expense of $56.2 million reflecting an increase of $7.0 million over the prior quarter. Excluding the impact of $9.3 million of merger-related expenses, adjusted noninterest expense(1) decreased $2.2 million to $46.2 million for the third quarter.

•High liquidity levels, with immediately available on-balance sheet liquidity and unused borrowing capacity of $3.67 billion. Available liquidity was 2.1 times the level of uninsured and uncollateralized deposits, which was consistent with the prior quarter.

•Strong capital ratios(2) well above the regulatory thresholds for "well capitalized" banks, including an estimated 14.48% Total risk-based capital ratio, 12.19% Tier 1 capital ratio, 12.19% CET1 capital ratio and 10.15% Tier 1 leverage ratio.

•Low unrealized losses relative to capital, with AFS unrealized pre-tax losses of $51.9 million on securities of $915.1 million, representing 3.9% of CET1 capital. Total AFS and HTM unrealized pre-tax losses of $129.9 million on total securities of $1.24 billion represented 9.8% of CET1 capital.

•Continued growth in book value and tangible book value, with book value per share of $17.44, up from $16.67, and tangible book value per share of $15.34, up from $14.56.(1)

Jared Wolff, Chairman, President & CEO of Banc of California, commented, "Our third quarter results reflect the impact of our strategic approach to positioning our balance sheet ahead of our merger with PacWest, continuing to bring new relationships to the bank, limiting reliance on high cost deposits, effectively hedging interest rate risk on our balance sheet, and accelerating the resolution of certain acquired credits. Due in large part to this strategic approach, we generated net income of $42.6 million during the quarter, which resulted in increases in all of our capital ratios, a 4.6% increase in our book value per share and a 5.4% increase in our tangible book value per share. We also continue to be active in our new business development efforts with $201.5 million in noninterest-bearing deposits added from new commercial relationships year-to-date.”

Mr. Wolff continued, “As announced last week, we are very pleased to have received regulatory approval for the merger. We expect to close the merger on or about November 30, 2023. We remain focused on our overall strategy for the combined company which includes a strong, liquid balance sheet with strong credit, ample reserves and capital, and growth centered around relationship banking and high quality commercial clients. Our two organizations have made significant progress on our

(1)Non-GAAP measures; refer to section 'Non-GAAP Measures'

(2)Capital ratios are preliminary.

integration planning that will enable our combined institution post-closing to immediately focus on the strategic market opportunities presented by our merger, generate long-term profitable growth, and further enhance the value of our franchise.”

Proposed Merger with PacWest

On July 25, 2023, we announced the signing of a definitive agreement with PacWest pursuant to which the companies will combine in an all-stock merger transaction. Under the terms of the agreement, which was unanimously approved by the boards of directors of both companies, PacWest will merge into Banc of California, and Banc of California, N.A. will merge into Pacific Western Bank (together, the “Merger”). The combined holding company and bank will operate under the Banc of California name and brand following closing of the Merger. Under the terms of the merger agreement, PacWest stockholders will receive 0.6569 of a share of Banc of California common stock for each share of PacWest common stock. On October 19, 2023, we announced that the Board of Governors of the Federal Reserve System granted its approval of the Merger. In addition, on October 5, 2023, the California Department of Financial Protection and Innovation granted its approval of the merger of Banc of California, N.A. and Pacific Western Bank. No further regulatory approvals are required to complete the proposed transaction. Banc of California and PacWest will each hold a special meeting of its respective stockholders in connection with the Merger on November 22, 2023. The consummation of the proposed transaction is expected to close on or about November 30, 2023, subject to the satisfaction of the remaining closing conditions set forth in the merger agreement, including receipt of the requisite stockholder approvals, and the concurrent closing of a $400 million equity capital raise.

We are monitoring the economic environment and its impact on the projected combined company’s opening day and post-restructuring balance sheets and the combined company’s projected performance in future periods as compared to the estimates and projections set forth in the Investor Presentation dated July 25, 2023 (the “Investor Presentation”).

After considering developments occurring subsequent to the issuance of the Investor Presentation, including the volatility and changes in the interest rate environment, the relative performance of the two companies, the potential impacts on the opening day and post-restructuring balance sheets, and refinements to many of the assumptions and estimates used in the creation of projections included in the Investor Presentation, we are not aware of any material changes to the projected 2024 EPS range or CET1 regulatory capital levels for the combined company as stated in the Investor Presentation.

The recent volatility and resulting increase in longer term (7 and 10-year) interest rates decreased the current valuation of PacWest’s portfolio of available-for-sale securities which, with the corresponding increase in unrealized losses included in accumulated other comprehensive income (AOCI), reduced PacWest’s tangible book value. If these conditions persist through the closing date of the merger, there would be a corresponding decrease in the opening day tangible book value of the combined company as compared to the projections included in the Investor Presentation. In addition, PacWest’s third quarter 2023 net income was lower than forecasted in the estimates set forth in the Investor Presentation, which could also negatively impact the opening day tangible book value of the combined company. The noninterest-bearing deposit percentage at PacWest has decreased from the projections used in the Investor Presentation, which could impact the percentage of noninterest-bearing deposits forecasted in the opening day and the post-restructuring balance sheets.

The economic environment remains dynamic with heightened levels of volatility in interest rates, market levels and potentially other economic impacts. Accordingly, we will continue to monitor the effects of these and other potential impacts on the financial projections and estimates included in the Investor Presentation.

Income Statement Highlights


	Three Months Ended										Nine Months Ended
	September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022		September 30, 2023		September 30, 2022
	($ in thousands)
Total interest and dividend income	$	116,222	$	116,151	$	106,919	$	104,112	$	95,973	$	339,292	$	268,660
Total interest expense	47,004		46,519		33,866		23,895		16,565		127,389		34,512
Net interest income	69,218		69,632		73,053		80,217		79,408		211,903		234,148
Net (loss) gain on sale of securities available for sale	—		—		—		(7,708)		—		—		16
Change in fair value of derivative instruments(1)	46,186		10		(24)		(8)		39		46,172		224
Other noninterest income	4,592		6,014		7,883		6,289		5,642		18,489		18,537
Total noninterest income	50,778		6,024		7,859		(1,427)		5,681		64,661		18,777
Total revenue	119,996		75,656		80,912		78,790		85,089		276,564		252,925
Acquisition, integration and transaction costs	9,329		—		—		—		2,080		9,329		2,080
Other noninterest expense	46,835		49,132		51,239		48,203		48,882		147,206		144,090
Total noninterest expense	56,164		49,132		51,239		48,203		50,962		156,535		146,170
Pre-tax / pre-provision income(2)	63,832		26,524		29,673		30,587		34,127		120,029		106,755
Provision for (reversal of) credit losses	5,000		1,900		2,000		—		—		8,900		(31,542)

Income tax expense	16,258		6,745		7,395		9,068		9,931		30,398		38,877


Net income	$	42,574	$	17,879	$	20,278	$	21,519	$	24,196	$	80,731	$	99,420

Net income available to common stockholders(3)	$	42,574	$	17,879	$	20,278	$	21,519	$	24,196	$	80,731	$	94,253

(1)For the three and nine months ended September 30, 2023, balance includes a $46.2 million pre-tax mark-to-market gain on derivative instruments, including interest rate swaptions and a contingent forward sale agreement on the single family residential (SFR) loan portfolio executed concurrently with the announcement of the proposed merger with PacWest

(2)Non-GAAP Measure; refer to section 'Non-GAAP Measures'

(3)For the nine months ended September 30, 2022, balance represents the net income available to common stockholders after subtracting preferred stock dividends and the impact of preferred stock redemption from net income. Refer to the Statements of Operations for additional detail on these amounts.

Net interest income

Q3-2023 vs Q2-2023

Net interest income decreased $0.4 million, or 0.6%, to $69.2 million for the third quarter primarily due to lower average interest-earning assets partially offset by net interest margin expansion.

Average interest-earning assets of $8.61 billion decreased $360.4 million from the prior quarter as the Company used cash to pay down FHLB borrowings and other liabilities reducing the excess liquidity that was carried in the prior quarter. The net interest margin increased 8 basis points to 3.19% for the third quarter as average interest-earning assets yield increased 16 basis points while the average cost of funds increased 9 basis points.

The yield on average interest-earning assets increased 16 basis points to 5.36% for the third quarter from 5.20% in the second quarter mainly due to higher yields on loans, securities and other interest-earning assets. The yield on average loans increased 10 basis points to 5.38% during the third quarter as a result of higher market interest rates and changes in portfolio mix from originations and payoffs. The yield on average investment securities increased 34 basis points to 5.17% due mainly to rate resets in the collateralized loan obligations (CLO) portfolio.

The average cost of funds increased 9 basis points to 2.29% for the third quarter from 2.20% in the second quarter due mainly to higher market interest rates and changes in the balance sheet mix. The average cost of total deposits increased 19 basis points to 1.86% for the third quarter compared to 1.67% in the second quarter. The average cost of interest-bearing liabilities increased 13 basis points to 3.21% for the third quarter from 3.08% in the second quarter. Average noninterest-bearing deposits decreased $80.5 million for the third quarter compared to the second quarter and average total deposits decreased $83.2 million.

YTD 2023 vs YTD 2022

Net interest income decreased $22.2 million, or 9.5%, to $211.9 million for the nine months ended September 30, 2023 from the same period in 2022 due primarily to higher funding costs from higher market interest rates, changes in the balance sheet mix, and the enhanced liquidity management strategies in the first half of 2023 due to the operating environment.

The net interest margin decreased 32 basis points to 3.24% as the average cost of funds increased 150 basis points while the average interest-earning assets yield increased 110 basis points.

The yield on average interest-earning assets increased 110 basis points to 5.18% for the nine months ended September 30, 2023 from 4.08% for the same period in 2022 due mainly to higher market interest rates and changes in the mix of interest-earning assets. The yield on average loans increased 86 basis points to 5.24% for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. The yield on average investment securities increased 211 basis points to 4.89% for the same period. Average loans represented 80% of average earnings assets for the nine months ended September 30, 2023 compared to 83% for the nine months ended September 30, 2022. Average loans decreased by $248.1 million due mainly to lower average warehouse balances, partially offset by organic loan growth in other loan categories.

The average cost of funds increased 150 basis points to 2.06% for the nine months ended September 30, 2023 from 0.56% for the nine months ended September 30, 2022 due mainly to higher market interest rates and changes in the balance sheet mix. The average cost of total deposits increased 134 basis points to 1.58% for the nine months ended September 30, 2023 compared to the same period in 2022. The average cost of interest-bearing liabilities increased 209 basis points to 2.93% for the nine months ended September 30, 2023 compared to 0.84% for the same period in 2022 driven primarily by a 210 basis point increase in the cost of average interest-bearing deposits to 2.49% from 0.39% for the same period in 2022. The increase in the cost of these funding sources was mainly due to the impact of higher market interest rates as the average effective Federal Funds rate increased 389 basis points to 4.92% for the nine months ended September 30, 2023 from 1.03% in the same period in 2022. Average noninterest-bearing deposits decreased $356.8 million for the nine months ended September 30, 2023 compared to the same period in 2022 and average total deposits decreased $670.7 million. Average noninterest-bearing deposits represented 36% of total average deposits for the nine months ended September 30, 2023 compared to 38% for the same period in 2022.

Provision for credit losses

Q3-2023 vs Q2-2023

The provision for credit losses was $5.0 million for the third quarter and related entirely to the provision for loan losses which was driven primarily by net charge-offs of legacy loans from the acquisition of Pacific Mercantile Bank. The provision for credit losses was $1.9 million for the second quarter and included a $1.7 million provision for loan losses and a $1.0 million provision for credit loss for securities available-for-sale, partially offset by an $0.8 million reversal of the provision for credit losses related to lower unfunded commitments.

YTD 2023 vs YTD 2022

During the nine months ended September 30, 2023, the provision for credit losses was $8.9 million and included a $9.2 million provision for loan losses and a $1.0 million provision for credit loss for securities available-for-sale, partially offset by a $1.3 million reversal of the provision for credit losses related to lower unfunded commitments. The provision for credit losses was a reversal of $31.5 million during the nine months ended September 30, 2022, and included a $31.3 million recovery from the settlement of a loan previously charged-off in 2019.

Noninterest income

Q3-2023 vs Q2-2023

Noninterest income increased $44.8 million to $50.8 million for the third quarter primarily due to a $46.2 million mark-to-market gain recognized on derivative instruments, partially offset by a $1.7 million decrease in income from equity investments. Concurrently with the announcement of the proposed merger with PacWest, we entered into an aggregate of $3.1 billion in interest rate swaptions and a contingent forward sale agreement on the SFR loan portfolio of $1.8 billion to hedge the interest rate risk component of the change in fair value of our balance sheet in anticipation of the application of purchase accounting upon the closing of the proposed merger transaction with PacWest. These derivatives were marked to market at the end of the period and reflected an increase in value from the changes in market interest rates.

YTD 2023 vs YTD 2022

Noninterest income for the nine months ended September 30, 2023 increased $45.9 million to $64.7 million compared to the same period in 2022 mainly due to the $46.2 million market-to-market gain recognized on derivative instruments, higher loan servicing income from higher purchased mortgage servicing asset balances and higher rental income due to an increase in subleased facilities, partially offset by lower customer service fees.

Noninterest expense

Q3-2023 vs Q2-2023

Noninterest expense increased $7.0 million to $56.2 million for the third quarter compared to the second quarter. The increase was due mainly to acquisition, integration and transaction costs of $9.3 million incurred related to our proposed merger with PacWest, partially offset by lower salaries and employee benefits of $2.5 million.

Adjusted noninterest expense(1), which represents total operating costs, decreased $2.2 million to $46.2 million for the third quarter compared to $48.4 million for the second quarter mainly due to lower salaries and employee benefits of $2.5 million. Adjusted noninterest expense for the third quarter excludes acquisition, integration and transaction costs of $9.3 million incurred for the proposed merger with PacWest.

YTD 2023 vs YTD 2022

Noninterest expense for the nine months ended September 30, 2023 increased $10.4 million to $156.5 million compared to the same period in 2022. The increase was mainly due to higher (i) acquisition, integration and transaction costs of $7.2 million, (ii) software and technology expense of $1.6 million related to investments in technology infrastructure, (iii) regulatory assessments of $1.2 million as the FDIC increased assessment rates in 2023, (iv) marketing and other expenses of $1.0 million, and (v) professional fees of $0.9 million, including a $0.4 million increase in indemnified legal fees (net of insurance recoveries), partially offset by lower salaries and employee benefits of $1.5 million. Acquisition, integration and transactions costs related to the proposed merger with PacWest were $9.3 million for the nine months ended September 30, 2023, compared to $2.1 million related to the acquisition of Deepstack for the nine months ended September 30, 2022.

Adjusted noninterest expense(1) for the nine months ended September 30, 2023 increased $2.9 million to $143.9 million compared to the same period in 2022. The increase was mainly due to higher (i) software and technology expense of $1.6 million related to investments in technology infrastructure, (ii) regulatory assessments of $1.2 million as the FDIC increased assessment rates in 2023, (iii) marketing and other expenses of $1.0 million, and (iv) professional fees of $0.5 million, partially offset by lower salaries and employee benefits of $1.5 million. Adjusted noninterest expense excludes acquisition, integration and transactions costs, indemnified legal fees and loss in alternative energy partnership investments in both periods.

(1)Non-GAAP measures; refer to section 'Non-GAAP Measures'

Income taxes

Q3-2023 vs Q2-2023

Income tax expense totaled $16.3 million for the third quarter resulting in an effective tax rate of 27.6% compared to $6.7 million for the second quarter and an effective tax rate of 27.4%. The effective tax rate for the full year 2023 is estimated to be 27% to 28%.

YTD 2023 vs YTD 2022

Income tax expense totaled $30.4 million for the nine months ended September 30, 2023, representing an effective tax rate of 27.4%, compared to $38.9 million and an effective tax rate of 28.1% for the nine months ended September 30, 2022.

Balance Sheet

At September 30, 2023, total assets were $9.25 billion, which represented a decrease of $123.2 million from the prior quarter. The following table shows selected balance sheet line items as of the dates indicated:


											Amount Change
	September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022		Q3-23 vs. Q2-23		Q3-23 vs. Q3-22

	($ in thousands)
Cash and cash equivalents	$	310,985	$	283,729	$	1,010,951	$	228,896	$	256,058	$	27,256	$	54,927
Securities held-to-maturity	$	328,287	$	328,405	$	328,520	$	328,641	$	328,757	$	(118)	$	(470)
Securities available-for-sale	$	915,054	$	922,091	$	958,427	$	868,297	$	847,565	$	(7,037)	$	67,489
Loans held-for-investment	$	6,961,032	$	7,156,206	$	7,054,380	$	7,115,038	$	7,289,320	$	(195,174)	$	(328,288)

Total assets	$	9,247,072	$	9,370,265	$	10,038,901	$	9,197,016	$	9,368,578	$	(123,193)	$	(121,506)




Noninterest-bearing deposits	$	2,366,544	$	2,446,693	$	2,506,616	$	2,809,328	$	2,943,585	$	(80,149)	$	(577,041)
Total deposits	$	6,640,630	$	6,871,076	$	6,951,974	$	7,120,921	$	7,280,385	$	(230,446)	$	(639,755)




Borrowings (1)	$	1,468,374	$	1,422,118	$	2,007,665	$	1,002,254	$	1,011,767	$	46,256	$	456,607
Total liabilities	$	8,245,352	$	8,413,211	$	9,079,994	$	8,237,398	$	8,416,588	$	(167,859)	$	(171,236)
Total equity	$	1,001,720	$	957,054	$	958,907	$	959,618	$	951,990	$	44,666	$	49,730

(1)Represents Federal Home Loan Bank (FHLB) advances and Federal Reserve Bank (FRB) borrowings, Other borrowings, and Long-term debt, net.

Investments

Securities held-to-maturity (HTM) totaled $328.3 million at September 30, 2023 and included $214.1 million in agency securities and $114.2 million in municipal securities. As of September 30, 2023, HTM securities had aggregate unrealized net pre-tax losses of $78.0 million, of which $15.0 million related to unrealized losses from the transfer of certain fixed-rate mortgage-backed securities (MBS) and municipal securities from the available-for-sale portfolio to the HTM portfolio in the prior year. These HTM unrealized losses are related to changes in overall interest rates.

Securities available-for-sale (AFS) decreased $7.0 million during the third quarter to $915.1 million at September 30, 2023, primarily due to principal payments of $9.4 million partially offset by a reduction in unrealized net pre-tax losses of $2.2 million. The decrease in unrealized net losses was due to the impact of decreasing credit spreads within corporate debt securities and improvement in the valuation of CLOs, partially offset by the impact of higher market interest rates on agency collateralized mortgage obligations (CMOs) and non-agency residential MBS. AFS securities had aggregate unrealized net pre-tax losses of $51.9 million. These AFS unrealized net losses related primarily to changes in overall interest rates and spreads and the resulting impact on valuations of MBS, CMOs, CLOs and corporate debt securities.

As of September 30, 2023, the AFS securities portfolio included $483.8 million of CLOs, $162.7 million of agency securities, $154.9 million of corporate debt securities, $105.0 million of residential CMOs, and $8.7 million of Small Business Administration (SBA) securities. The CLO portfolio, which is comprised of AAA and AA-rated securities, represented 39% of the total securities portfolio and the carrying value included an unrealized net loss of $6.1 million at September 30, 2023, compared to 39% of the total securities portfolio and an unrealized net loss of $7.7 million at June 30, 2023.

Loans

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


	September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022
	($ in thousands)
Composition of loans
Commercial real estate	$	1,173,332		$	1,266,438		$	1,302,277		$	1,259,651		$	1,240,927
Multifamily	1,654,272			1,654,152			1,678,300			1,689,943			1,698,455
Construction	262,715			264,684			260,167			243,553			236,495
Commercial and industrial	1,295,270			1,214,314			1,150,416			1,243,452			1,227,054
Commercial and industrial - warehouse lending	647,694			786,094			636,731			602,508			766,362
SBA	56,600			62,898			65,040			68,137			85,674

Total commercial loans	5,089,883			5,248,580			5,092,931			5,107,244			5,254,967
Single-family residential mortgage	1,782,655			1,820,721			1,877,114			1,920,806			1,947,652
Other consumer	88,494			86,905			84,335			86,988			86,701
Total consumer loans	1,871,149			1,907,626			1,961,449			2,007,794			2,034,353
Total gross loans	$	6,961,032		$	7,156,206		$	7,054,380		$	7,115,038		$	7,289,320
Composition percentage of loans
Commercial real estate	16.9		%	17.7		%	18.5		%	17.7		%	17.0		%
Multifamily	23.8		%	23.1		%	23.8		%	23.8		%	23.3		%
Construction	3.7		%	3.7		%	3.7		%	3.4		%	3.2		%
Commercial and industrial	18.6		%	17.0		%	16.3		%	17.5		%	16.8		%
Commercial and industrial - warehouse lending	9.3		%	11.0		%	9.0		%	8.4		%	10.6		%
SBA	0.8		%	0.9		%	0.9		%	1.0		%	1.2		%

Total commercial loans	73.1		%	73.4		%	72.2		%	71.8		%	72.1		%
Single-family residential mortgage	25.6		%	25.4		%	26.6		%	27.0		%	26.7		%
Other consumer	1.3		%	1.2		%	1.2		%	1.2		%	1.2		%
Total consumer loans	26.9		%	26.6		%	27.8		%	28.2		%	27.9		%
Total gross loans	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%

Total loans ended the third quarter of 2023 at $6.96 billion, down $195.2 million from $7.16 billion at June 30, 2023, primarily due to decreases in warehouse lending balances of $138.4 million, SFR loans of $38.1 million, commercial and industrial loans of $21.7 million, and SBA loans of $6.3 million, partially offset by an increase in commercial real estate (CRE) loans of $9.2 million. Additionally, $102.3 million of owner-occupied CRE loans were moved to the commercial and industrial category from the CRE category during the third quarter. Loan fundings were $266.0 million in the third quarter and were offset by loan paydowns and payoffs of $314.3 million and net warehouse paydowns of $135.3 million.

Loan concentrations were well-diversified between products and industries. Notably, the CRE portfolio of $1.17 billion had balances related to office loans of $327.6 million, which was 4.7% of total loans. This portfolio was comprised of general office loans of $256.5 million with a weighted average LTV of 53% and debt service coverage ratio of 1.6x and medical office loans of $71.2 million with a weighted average LTV of 53% and debt service coverage ratio of 1.3x.

In connection with our proposed merger with PacWest, we entered into a contingent forward sale agreement on our SFR mortgage portfolio of $1.8 billion. The contingent forward sale agreement was entered to reduce volatility related to the potential sale proceeds by determining a fixed price to be settled on a future date contingent upon completion of the proposed merger. At September 30, 2023, we continue to classify the SFR portfolio as held-for-investment as the sale agreement is contingent upon the closing of the merger with PacWest and should the merger not close for any reason, we intend to continue to hold the SFR portfolio for investment.

Deposits

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


	September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022
	($ in thousands)
Composition of deposits
Noninterest-bearing checking	$	2,366,544		$	2,446,693		$	2,506,616		$	2,809,328		$	2,943,585
Interest-bearing checking	1,531,306			1,713,465			1,862,003			1,947,247			1,921,816


Savings and money market	1,157,126			1,057,326			998,365			1,174,925			1,478,045
Non-brokered certificates of deposit	567,111			579,789			585,272			584,476			614,569
Brokered certificates of deposit	1,018,543			1,073,803			999,718			604,945			322,370
Total deposits	$	6,640,630		$	6,871,076		$	6,951,974		$	7,120,921		$	7,280,385
Composition percentage of deposits
Noninterest-bearing checking	35.6		%	35.6		%	36.1		%	39.5		%	40.4		%
Interest-bearing checking	23.1		%	24.9		%	26.8		%	27.3		%	26.4		%


Savings and money market	17.5		%	15.4		%	14.3		%	16.5		%	20.4		%
Non-brokered certificates of deposit	8.5		%	8.5		%	8.4		%	8.2		%	8.4		%

Brokered certificates of deposit	15.3		%	15.6		%	14.4		%	8.5		%	4.4		%
Total deposits	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%

Total deposits decreased $230.4 million during the third quarter of 2023 to $6.64 billion at September 30, 2023, due to lower interest-bearing checking balances of $182.2 million, noninterest-bearing checking balances of $80.1 million, and certificate of deposit balances of $67.9 million, partially offset by higher savings and money market balances of $99.8 million.

Noninterest-bearing checking totaled $2.37 billion and represented 36% of total deposits at September 30, 2023, compared to $2.45 billion, or 36% of total deposits, at June 30, 2023. Period-end noninterest-bearing deposit percentage remained stable as we continued to focus on growing granular relationship-based deposits and strategically replacing short-term brokered deposits as we actively manage our funding costs.

Insured deposits of $4.57 billion and collateralized deposits of $312.5 million represented 74% of total deposits at September 30, 2023, compared to insured deposits of $4.80 billion and collateralized deposits of $314.8 million, or 74% of total deposits at June 30, 2023.

Debt

Advances from the FHLB and FRB borrowings decreased $139.7 million during the third quarter to $1.01 billion, while other borrowings increased $185.8 million due to higher unsecured overnight borrowings as we continue to actively manage our funding sources and costs.

At September 30, 2023, FHLB advances included $811.0 million in term advances with a weighted average life of 3.1 years and weighted average interest rate of 3.04%. We also utilized available capacity from the FRB through $200.0 million in short-term borrowings.

Equity

During the third quarter, total stockholders’ equity increased $44.7 million to $1.00 billion and tangible common equity(1) increased $45.1 million to $881.3 million at September 30, 2023. The increase in total stockholders’ equity for the third quarter resulted from (i) net income of $42.6 million, (ii) lower accumulated other comprehensive net loss of $6.3 million, and (iii) share-based compensation expense of $1.6 million, partially offset by dividends to common stockholders of $5.8 million.

Book value per common share increased $0.77 during the third quarter to $17.44 as of September 30, 2023 due mainly to net income and lower accumulated other comprehensive net loss, partially offset by dividends. Tangible common equity per share(1) increased $0.78 during the third quarter to $15.34 as of September 30, 2023 due to the same drivers.

(1)Non-GAAP measures; refer to section 'Non-GAAP Measures'

Capital and Liquidity

Capital ratios remain strong with total risk-based capital at 14.48% and a tier 1 leverage ratio of 10.15% at September 30, 2023. The following table sets forth our regulatory capital ratios as of the dates indicated:


	September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022
Capital Ratios(1)
Banc of California, Inc.
Total risk-based capital ratio	14.48	%	14.25	%	14.22	%	14.18	%	13.83	%
Tier 1 risk-based capital ratio	12.19	%	11.88	%	11.79	%	11.78	%	11.41	%
Common equity tier 1 capital ratio	12.19	%	11.88	%	11.79	%	11.78	%	11.41	%
Tier 1 leverage ratio	10.15	%	9.39	%	9.65	%	9.70	%	9.52	%
Banc of California, NA
Total risk-based capital ratio	15.97	%	15.64	%	15.93	%	16.00	%	15.67	%
Tier 1 risk-based capital ratio	15.00	%	14.60	%	14.83	%	14.92	%	14.54	%
Common equity tier 1 capital ratio	15.00	%	14.60	%	14.83	%	14.92	%	14.54	%
Tier 1 leverage ratio(2)	12.47	%	11.56	%	12.14	%	12.25	%	12.12	%

(1)September 30, 2023 capital ratios are preliminary.

(2)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 5 basis points at September 30, 2023.

At September 30, 2023, total cash and cash equivalents were $311.0 million, an increase of $27.3 million from June 30, 2023. Combined with unpledged securities available-for-sale of $717.7 million and total available borrowing capacity of $2.67 billion, total liquid assets and unused borrowing capacity of $3.67 billion was 2.1 times greater than total uninsured and uncollateralized deposits of $1.76 billion.

Credit Quality


	September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022
Asset quality information and ratios	($ in thousands)
Delinquent loans held-for-investment
30 to 89 days delinquent	$	50,558		$	64,746		$	35,581		$	46,666		$	38,694
90+ days delinquent	39,692			40,169			37,060			44,554			18,843
Total delinquent loans	$	90,250		$	104,915		$	72,641		$	91,220		$	57,537
Total delinquent loans to total loans	1.30		%	1.47		%	1.03		%	1.28		%	0.79		%
Non-performing assets, excluding loans held-for-sale
Non-accrual loans	$	60,556		$	67,306		$	56,545		$	55,251		$	42,674
90+ days delinquent and still accruing loans	—			—			—			—			—
Non-performing loans	60,556			67,306			56,545			55,251			42,674
Other real estate owned	882			882			—			—			—
Non-performing assets	$	61,438		$	68,188		$	56,545		$	55,251		$	42,674
ALL to non-performing loans	122.84		%	120.17		%	149.54		%	155.58		%	216.63		%
Non-performing loans to total loans held-for-investment	0.87		%	0.94		%	0.80		%	0.78		%	0.59		%
Non-performing assets to total assets	0.66		%	0.73		%	0.56		%	0.60		%	0.46		%

At September 30, 2023, total delinquent loans were $90.3 million, and included SFR mortgages of $62.2 million, or 68.9% of total delinquent loans. During the third quarter, delinquent loans decreased $14.7 million due to borrowers that became current of $26.3 million and amortization and other removals of $15.6 million, partially offset by total additions of $27.2 million.

At September 30, 2023, non-performing loans were $60.6 million, and included $39.8 million of SFR mortgage loans, $9.7 million of commercial and industrial loans, $7.6 million of SBA loans, $1.9 million of CRE loans and $1.1 million of multifamily loans. During the third quarter, non-performing loans decreased $6.8 million due to charge-offs of $11.6 million, amortization and other removals of $2.4 million and borrowers that became current of $1.8 million, partially offset by additions of $9.2 million. Excluding SFR mortgages, which are well-secured with low loan-to-value ratios, non-performing loans decreased $13.1 million from the prior quarter. At September 30, 2023, there were $7.1 million of non-performing loans, primarily consisting of SFR mortgages, that despite having a current payment status are considered nonaccrual based on other criteria.

At September 30, 2023, non-performing assets included $0.9 million of real estate owned, consisting of one single-family residence we acquired in the second quarter.

Allowance for Credit Losses - Loans


	Three Months Ended
	September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022
	($ in thousands)
Allowance for loan losses (ALL)
Balance at beginning of period	$	80,883		$	84,560		$	85,960		$	92,444		$	93,793


Loans charged off	(11,644)			(5,667)			(3,949)			(7,641)			(912)
Recoveries	151			326			49			57			63
Net (charge-offs) recoveries	(11,493)			(5,341)			(3,900)			(7,584)			(849)
Provision for (reversal of) loan losses	5,000			1,664			2,500			1,100			(500)
Balance at end of period	$	74,390		$	80,883		$	84,560		$	85,960		$	92,444
Reserve for unfunded loan commitments (RUC)
Balance at beginning of period	$	4,005		$	4,805		$	5,305		$	6,405		$	5,905

(Reversal of) provision for credit losses	—			(800)			(500)			(1,100)			500
Balance at end of period	4,005			4,005			4,805			5,305			6,405
Allowance for credit losses (ACL) - Loans	$	78,395		$	84,888		$	89,365		$	91,265		$	98,849

ALL to total loans	1.07		%	1.13		%	1.20		%	1.21		%	1.27		%
ACL to total loans	1.13		%	1.19		%	1.27		%	1.28		%	1.36		%

ACL to NPLs	129.46		%	126.12		%	158.04		%	165.18		%	231.64		%
ACL to NPAs	127.60		%	124.49		%	158.04		%	165.18		%	231.64		%
Annualized net loan charge-offs (recoveries) to average total loans held-for-investment	0.65		%	0.30		%	0.22		%	0.42		%	0.05		%

The allowance for credit losses, which includes the reserve for unfunded loan commitments, totaled $78.4 million, or 1.13% of total loans, at September 30, 2023, compared to $84.9 million, or 1.19% of total loans, at June 30, 2023. The ACL decreased by $6.5 million due to: (i) net charge-offs of $11.5 million of which $5.9 million was specifically reserved for at June 30, 2023, (ii) lower reserves of $1.4 million due to changes in specific reserves, partially offset by (iii) $1.4 million increase related to changes in portfolio mix. ACL provision for the third quarter was $5.0 million. The ACL coverage of non-performing loans was 129% at September 30, 2023 compared to 126% at June 30, 2023.

The ACL methodology uses a nationally recognized, third-party model that includes many assumptions based on historical and peer loss data, current loan portfolio risk profile including risk ratings, and economic forecasts including macroeconomic variables released by the model provider during September 2023. The published forecasts consider the Federal Reserve's monetary policy, labor market constraints, inflation levels, global oil prices and changes in real estate values, among other factors.

Conference Call

The Company will host a conference call to discuss its third quarter 2023 financial results at 10:00 a.m. Pacific Time (PT) on Tuesday, October 24, 2023. Interested parties are welcome to attend the conference call by dialing (888) 317-6003, and referencing event code 5886712. 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 2187312.

About Banc of California, Inc.

Banc of California, Inc. (NYSE: BANC) is a bank holding company with $9.25 billion in assets at September 30, 2023 and one wholly-owned banking subsidiary, Banc of California, N.A. (the Bank). The Bank has 32 offices including 26 full-service branches located throughout Southern California. Through our dedicated professionals, we provide customized and innovative banking and lending solutions to businesses, entrepreneurs and individuals throughout California, and full stack payment processing solution through our subsidiary Deepstack Technologies. We help to improve the communities where we live and work, by supporting organizations that provide financial literacy and job training, small business support and affordable housing. With a commitment to service and to building enduring relationships, we provide a higher standard of banking. We look forward to helping you achieve your goals. For more information, please visit us at www.bancofcal.com.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the “Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Words or phrases such as “believe,” “will,” “should,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” “strategy,” or similar expressions are intended to identify these forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements. 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. (the Company) with the Securities and Exchange Commission (SEC). The Company undertakes no obligation to revise or publicly release any revision or update to these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made, except as required by law.

Factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to: (i) changes in general economic conditions, either nationally or in our market areas, including the impact of supply chain disruptions, and the risk of recession or an economic downturn; (ii) changes in the interest rate environment, including the recent and potential future increases in the FRB benchmark rate, which could adversely affect our revenue and expenses, the value of assets and obligations, the availability and cost of capital and liquidity, the impacts of continuing inflation; (iii) 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 the effectiveness of our underwriting practices and the risk of fraud, any of which may lead to increased loan delinquencies, losses, and non-performing assets, and may result in our allowance for credit losses not being adequate; (iv) fluctuations in the demand for loans, and fluctuations in commercial and residential real estate values in our market area; (v) the quality and composition of our securities portfolio; (vi) our ability to develop and maintain a strong core deposit base or other low cost funding sources necessary to fund our activities particularly in a rising or high interest rate environment; (vii) the rapid withdrawal of a significant amount of demand deposits over a short period of time; (viii) the costs and effects of litigation; (ix) risks related to the Company’s acquisitions, including disruption to current plans and operations; difficulties in customer and employee retention; fees, expenses and charges related to these transactions being significantly higher than anticipated; and our inability to achieve expected revenues, cost savings, synergies, and other benefits; and in the case of our recent acquisition of Deepstack Technologies, LLC (Deepstack), reputational risk, regulatory risk and potential adverse reactions of the Company's or Deepstack's customers, suppliers, vendors, employees or other business partners; (x) results of examinations by regulatory authorities of the Company and the possibility that any such regulatory authority may, among other things, limit our business activities, restrict our ability to invest in certain assets, refrain from issuing an approval or non-objection to certain capital or other actions, increase our allowance for credit losses, result in write-downs of asset values, restrict our ability or that of our bank subsidiary to pay dividends, or impose fines, penalties or sanctions; (xi) legislative or regulatory changes that adversely affect our business, including changes in tax laws and policies, accounting policies and practices, privacy laws, and regulatory capital or other rules; (xii) the risk that our enterprise risk management framework may not be effective in mitigating risk and reducing the potential for losses; (xiii) errors in estimates of the fair values of certain of our assets and liabilities, which may result in significant changes in valuation; (xiv) failures or security breaches with respect to the network, applications, vendors and computer systems on which we depend, including due to cybersecurity threats; (xv) our ability to attract and retain key members of our senior management team; (xvi) the effects of

climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, and other external events on our business; (xvii) the impact of bank failures or other adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks; (xviii) the possibility that our recorded goodwill could become impaired, which may have an adverse impact on our earnings and capital; and (xix) the risks, uncertainties and assumptions set forth under the heading “Cautionary Statement Regarding Forward-Looking Statements” in the registration statement (as defined below); and (xx) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services and the other risks described in this press release and from time to time in other documents that we file with or furnish to the SEC.

No Offer or Solicitation

This press release is not a proxy statement or solicitation or a proxy, consent or authorization with respect to any securities or in respect of the proposed transaction and shall not constitute an offer to sell or a solicitation of an offer to buy the securities of the Company, PacWest Bancorp or the combined company, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be deemed to be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act, and otherwise in accordance with applicable law.

Additional Information and Where to Find It

This press release includes information relating to the proposed transaction between the Company and PacWest Bancorp and the proposed investment in the Company by Warburg Pincus LLC and Centerbridge Partners, L.P. The Company filed a registration statement on Form S-4 (the registration statement) with the SEC on August 28, 2023 (as amended on September 29, 2023, further amended on October 16, 2023 and as further amended on October 19, 2023), which includes a joint proxy statement (the joint proxy statement / prospectus) of the Company and PacWest Bancorp distributed to holders of the Company’s common stock and PacWest Bancorp’s common stock in connection with the Company’s and PacWest Bancorp’s solicitation of proxies for the vote by the Company’s stockholders and PacWest Bancorp’s stockholders with respect to the proposed transaction and also constitutes a prospectus of the Company. The registration statement was declared effective by the SEC on October 20, 2023 and the definitive joint proxy statement / prospectus was first mailed on or around October 23, 2023 to the Company’s and PacWest Bancorp’s respective stockholders that, as of the applicable record date, are entitled to vote on the matters being considered at the Company stockholder meeting and at the PacWest Bancorp stockholder meeting, as applicable.

The documents filed by the Company or PacWest Bancorp with the SEC also may be obtained free of charge at the Company’s or PacWest Bancorp’s website at https://investors.bancofcal.com, under the heading “Financials and Filings” or www.pacwestbancorp.com, under the heading “SEC Filings”, respectively, or upon written request to the Company, Attention: Investor Relations, 3 MacArthur Place, Santa Ana, CA 92707 or PacWest Bancorp, Attention: Investor Relations, 9701 Wilshire Boulevard, Suite 700, Beverly Hills, CA 90212, respectively.

Participants in Solicitation

stockholders in connection with the proposed transaction and a description of their direct and indirect interests, by security holdings or otherwise, is included in the definitive joint proxy statement/prospectus and other relevant materials filed with the SEC regarding the proposed transaction. You may obtain free copies of these documents at the SEC’s website at www.sec.gov. Copies of documents filed with the SEC by the Company or PacWest Bancorp will also be available free of charge from the Company or PacWest Bancorp using the contact information above.



Investor Relations Inquiries:
Banc of California, Inc.
(855) 361-2262
Jared Wolff, (949) 385-8700
Joe Kauder, (310) 844-5224

Media Contact:
Debora Vrana, Banc of California
(213) 999-4141
Deb.Vrana@bancofcal.com

Source: Banc of California, Inc.

Banc of California, Inc.

Consolidated Statements of Financial Condition (Unaudited)

(Dollars in thousands)


	September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022
ASSETS
Cash and cash equivalents	$	310,985	$	283,729	$	1,010,951	$	228,896	$	256,058

Securities held-to-maturity	328,287		328,405		328,520		328,641		328,757
Securities available-for-sale	915,054		922,091		958,427		868,297		847,565

Loans	6,961,032		7,156,206		7,054,380		7,115,038		7,289,320
Allowance for loan losses	(74,390)		(80,883)		(84,560)		(85,960)		(92,444)
Federal Home Loan Bank and other bank stock	60,336		60,281		70,334		57,092		54,428


Premises and equipment, net	109,141		108,235		108,087		107,345		107,728

Goodwill	114,312		114,312		114,312		114,312		114,312
Other intangible assets, net	6,142		6,603		7,065		7,526		8,081
Deferred income tax, net	51,461		64,001		54,450		50,518		56,376

Bank owned life insurance investment	129,939		128,973		128,022		127,122		126,199


Derivative assets	70,625		2,199		1,650		2,292		2,677
Other assets	264,148		276,113		287,263		275,897		269,521

Total assets	$	9,247,072	$	9,370,265	$	10,038,901	$	9,197,016	$	9,368,578

LIABILITIES AND STOCKHOLDERS’ EQUITY
Noninterest-bearing deposits	$	2,366,544	$	2,446,693	$	2,506,616	$	2,809,328	$	2,943,585
Interest-bearing deposits	4,274,086		4,424,383		4,445,358		4,311,593		4,336,800
Total deposits	6,640,630		6,871,076		6,951,974		7,120,921		7,280,385
FHLB advances and FRB borrowings	1,008,293		1,147,997		1,732,670		727,348		727,021
Other borrowings	185,802		—		—		—		10,000
Long-term debt, net	274,279		274,121		274,995		274,906		274,746



Accrued expenses and other liabilities	136,348		120,017		120,355		114,223		124,436

Total liabilities	8,245,352		8,413,211		9,079,994		8,237,398		8,416,588
Commitments and contingent liabilities

Common stock	653		653		653		651		652
Common stock, class B non-voting non-convertible	5		5		5		5		5
Additional paid-in capital	869,565		867,994		866,306		866,478		864,806
Retained earnings	312,219		275,430		263,524		248,988		231,084
Treasury stock	(137,269)		(137,270)		(121,092)		(115,907)		(96,978)
Accumulated other comprehensive loss, net	(43,453)		(49,758)		(50,489)		(40,597)		(47,579)
Total stockholders’ equity	1,001,720		957,054		958,907		959,618		951,990
Total liabilities and stockholders’ equity	$	9,247,072	$	9,370,265	$	10,038,901	$	9,197,016	$	9,368,578

Banc of California, Inc.

Consolidated Statements of Operations (Unaudited)

(Dollars in thousands, except per share data)


	Three Months Ended										Nine Months Ended
	September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022		September 30, 2023		September 30, 2022
Interest and dividend income
Loans, including fees	$	95,613	$	92,889	$	87,418	$	88,717	$	83,699	$	275,920	$	238,828
Securities	16,335		15,804		14,909		12,905		10,189		47,048		25,622
Other interest-earning assets	4,274		7,458		4,592		2,490		2,085		16,324		4,210
Total interest and dividend income	116,222		116,151		106,919		104,112		95,973		339,292		268,660
Interest expense
Deposits	31,360		28,118		20,527		14,278		8,987		80,005		13,555
FHLB advances and FRB borrowings	7,773		14,703		9,648		5,528		3,558		32,124		9,625


Other interest-bearing liabilities	7,871		3,698		3,691		4,089		4,020		15,260		11,332
Total interest expense	47,004		46,519		33,866		23,895		16,565		127,389		34,512
Net interest income	69,218		69,632		73,053		80,217		79,408		211,903		234,148
Provision for (reversal of) credit losses	5,000		1,900		2,000		—		—		8,900		(31,542)
Net interest income after provision for (reversal of) credit losses	64,218		67,732		71,053		80,217		79,408		203,003		265,690
Noninterest income
Customer service fees	2,114		2,022		1,979		2,066		2,462		6,115		7,474
Loan servicing income	563		574		547		561		636		1,684		957

Income from bank owned life insurance	966		951		900		923		873		2,817		2,479

Change in fair value of derivative instruments	46,186		10		(24)		(8)		39		46,172		224
Net (loss) gain on sale of securities available for sale	—		—		—		(7,708)		—		—		16


All other income	949		2,467		4,457		2,739		1,671		7,873		7,627
Total noninterest income	50,778		6,024		7,859		(1,427)		5,681		64,661		18,777
Noninterest expense
Salaries and employee benefits	25,819		28,282		29,656		27,812		27,997		83,757		85,248

Occupancy and equipment	5,804		5,603		5,526		5,740		5,796		16,933		17,174
Professional fees	3,616		4,001		4,072		3,193		3,957		11,689		10,797
Data processing	1,657		1,686		1,563		1,744		1,699		4,906		5,309

Regulatory assessments	1,410		1,301		1,202		905		925		3,913		2,721
Software and technology	3,811		3,579		3,274		3,197		3,659		10,664		9,106
Reversal of loan repurchase reserves	—		(808)		(11)		(17)		(26)		(819)		(987)
Amortization of intangible assets	461		462		461		555		396		1,384		1,150
Acquisition, integration and transaction costs	9,329		—		—		—		2,080		9,329		2,080

All other expense	4,291		5,062		3,878		4,466		3,975		13,231		11,867
Total noninterest expense before loss (gain) in alternative energy partnership investments	56,198		49,168		49,621		47,595		50,458		154,987		144,465
Loss (gain) in alternative energy partnership investments	(34)		(36)		1,618		608		504		1,548		1,705
Total noninterest expense	56,164		49,132		51,239		48,203		50,962		156,535		146,170
Income before income taxes	58,832		24,624		27,673		30,587		34,127		111,129		138,297
Income tax expense	16,258		6,745		7,395		9,068		9,931		30,398		38,877




Net income	42,574		17,879		20,278		21,519		24,196		80,731		99,420
Preferred stock dividends	—		—		—		—		—		—		1,420


Impact of preferred stock redemption	—		—		—		—		—		—		3,747
Net income available to common stockholders	$	42,574	$	17,879	$	20,278	$	21,519	$	24,196	$	80,731	$	94,253

Earnings per common share:


Basic	$	0.74	$	0.31	$	0.34	$	0.36	$	0.40	$	1.39	$	1.54



Diluted	$	0.74	$	0.31	$	0.34	$	0.36	$	0.40	$	1.39	$	1.53
Weighted average number of common shares outstanding
Basic	57,434,374		57,980,534		59,014,187		59,252,995		60,044,403		58,137,245		61,324,119
Diluted	57,521,836		58,026,007		59,206,619		59,725,283		60,492,460		58,230,137		61,659,900
Dividends declared per common share	$	0.10	$	0.10	$	0.10	$	0.06	$	0.06	$	0.30	$	0.18

Banc of California, Inc.

Selected Financial Data

(Unaudited)


	Three Months Ended										Nine Months Ended
	September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022		September 30, 2023		September 30, 2022
Profitability and other ratios of consolidated operations
Return on average assets (ROAA)(1)	1.82	%	0.75	%	0.88	%	0.92	%	1.02	%	1.15	%	1.42	%
Adjusted ROAA(1)(2)	0.73	%	0.77	%	0.94	%	1.15	%	1.13	%	0.81	%	1.47	%
Return on average equity(1)	17.28	%	7.19	%	8.18	%	8.63	%	9.99	%	10.87	%	13.38	%
Return on average tangible common equity(1)(2)	19.87	%	8.34	%	9.46	%	10.02	%	11.33	%	12.53	%	14.66	%
Pre-tax pre-provision income ROAA(1)(2)	2.73	%	1.11	%	1.29	%	1.31	%	1.44	%	1.71	%	1.52	%
Adjusted pre-tax pre-provision income ROAA(1)(2)	1.18	%	1.14	%	1.38	%	1.63	%	1.59	%	1.23	%	1.59	%
Dividend payout ratio(3)	13.51	%	32.26	%	29.41	%	16.67	%	15.00	%	21.58	%	11.69	%
Average loan yield	5.38	%	5.28	%	5.07	%	4.92	%	4.54	%	5.24	%	4.38	%
Average cost of interest-bearing deposits	2.87	%	2.60	%	1.98	%	1.34	%	0.77	%	2.49	%	0.39	%
Average cost of total deposits	1.86	%	1.67	%	1.22	%	0.79	%	0.47	%	1.58	%	0.24	%
Net interest spread	2.15	%	2.12	%	2.52	%	2.98	%	3.13	%	2.25	%	3.24	%
Net interest margin(1)	3.19	%	3.11	%	3.41	%	3.69	%	3.58	%	3.24	%	3.56	%
Noninterest income to total revenue(4)	42.32	%	7.96	%	9.71	%	(1.81)	%	6.68	%	23.38	%	7.42	%
Adjusted noninterest income to adjusted total revenue(2)(4)	6.25	%	7.96	%	9.71	%	7.26	%	6.68	%	8.03	%	7.42	%


Noninterest expense to average total assets(1)	2.41	%	2.05	%	2.23	%	2.07	%	2.15	%	2.23	%	2.08	%
Adjusted noninterest expense to average total assets(1)(2)	1.98	%	2.02	%	2.14	%	2.08	%	2.00	%	2.05	%	2.01	%
Efficiency ratio(2)(5)	46.80	%	64.94	%	63.33	%	61.18	%	59.89	%	56.60	%	57.79	%
Adjusted efficiency ratio(2)(6)	62.62	%	63.99	%	60.86	%	56.03	%	55.66	%	62.45	%	55.76	%
Average loans to average deposits	105.32	%	104.25	%	102.35	%	100.25	%	97.34	%	103.98	%	97.94	%
Average securities to average total assets	13.52	%	13.64	%	13.93	%	13.19	%	12.70	%	13.70	%	13.16	%
Average stockholders’ equity to average total assets	10.55	%	10.37	%	10.78	%	10.69	%	10.21	%	10.57	%	10.59	%

(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 per common share.

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

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

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

Banc of California, Inc.

Average Balance, Average Yield Earned, and Average Cost Paid

(Dollars in thousands)

(Unaudited)


	Three Months Ended
	September 30, 2023							June 30, 2023							March 31, 2023
	Average					Yield		Average					Yield		Average					Yield
	Balance			Interest		/ Cost		Balance			Interest		/ Cost		Balance			Interest		/ Cost
Interest-earning assets
Commercial real estate, multifamily, and construction	$	3,175,592		$	38,304	4.79	%	$	3,240,280		$	38,350	4.75	%	$	3,242,780		$	37,066	4.64	%
Commercial and industrial and SBA	1,976,919			36,778		7.38	%	1,882,673			34,222		7.29	%	1,765,299			29,544		6.79	%
SFR mortgage	1,802,091			18,980		4.18	%	1,848,747			18,901		4.10	%	1,897,763			19,441		4.15	%
Other consumer	86,978			1,437		6.55	%	84,916			1,371		6.48	%	84,786			1,308		6.26	%
Loans held-for-sale	4,112			114		11.00	%	4,400			45		4.10	%	4,330			59		5.53	%
Gross loans and leases	7,045,692			95,613		5.38	%	7,061,016			92,889		5.28	%	6,994,958			87,418		5.07	%
Securities	1,252,361			16,335		5.17	%	1,311,362			15,804		4.83	%	1,297,640			14,909		4.66	%
Other interest-earning assets	309,159			4,274		5.48	%	595,234			7,458		5.03	%	389,051			4,592		4.79	%
Total interest-earning assets	8,607,212			116,222		5.36	%	8,967,612			116,151		5.20	%	8,681,649			106,919		4.99	%
Allowance for loan losses	(79,883)							(82,282)							(84,267)
BOLI and noninterest-earning assets	733,944							725,909							719,827
Total assets	$	9,261,273						$	9,611,239						$	9,317,209

Interest-bearing liabilities
Interest-bearing checking	$	1,663,803		$	10,240	2.44	%	$	1,761,341		$	9,751	2.22	%	$	1,951,618		$	8,514	1.77	%


Savings and money market	1,024,127			3,075		1.19	%	1,015,181			2,609		1.03	%	1,070,911			2,001		0.76	%
Certificates of deposit	1,652,445			18,045		4.33	%	1,566,636			15,758		4.03	%	1,189,658			10,012		3.41	%
Total interest-bearing deposits	4,340,375			31,360		2.87	%	4,343,158			28,118		2.60	%	4,212,187			20,527		1.98	%
FHLB advances and FRB borrowings	897,020			7,773		3.44	%	1,441,244			14,703		4.09	%	1,067,125			9,648		3.67	%

Other borrowings	304,138			4,136		5.40	%	358			3		3.36	%	4,773			57		4.84	%
Long-term debt	274,199			3,735		5.40	%	275,012			3,695		5.39	%	274,939			3,634		5.36	%
Total interest-bearing liabilities	5,815,732			47,004		3.21	%	6,059,772			46,519		3.08	%	5,559,024			33,866		2.47	%
Noninterest-bearing deposits	2,345,262							2,425,719							2,617,973
Noninterest-bearing liabilities	122,869							128,699							135,418
Total liabilities	8,283,863							8,614,190							8,312,415
Total stockholders’ equity	977,410							997,049							1,004,794
Total liabilities and stockholders’ equity	$	9,261,273						$	9,611,239						$	9,317,209

Net interest income/spread				$	69,218	2.15	%				$	69,632	2.12	%				$	73,053	2.52	%
Net interest margin						3.19	%						3.11	%						3.41	%

Ratio of interest-earning assets to interest-bearing liabilities	148		%					148		%					156		%
Total deposits	$	6,685,637		$	31,360	1.86	%	$	6,768,877		$	28,118	1.67	%	$	6,830,160		$	20,527	1.22	%
Total funding (1)	$	8,160,994		$	47,004	2.29	%	$	8,485,491		$	46,519	2.20	%	$	8,176,997		$	33,866	1.68	%

(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, 2022							September 30, 2022
	Average					Yield		Average					Yield
	Balance			Interest		/ Cost		Balance			Interest		/ Cost
Interest-earning assets
Commercial real estate, multifamily, and construction	$	3,223,614		$	36,214	4.46	%	$	3,142,772		$	34,269	4.33	%
Commercial and industrial and SBA	1,909,144			31,492		6.54	%	2,151,511			29,296		5.40	%
SFR mortgage	1,932,397			19,661		4.04	%	1,927,694			18,699		3.85	%
Other consumer	86,273			1,335		6.14	%	87,335			1,331		6.05	%
Loans held-for-sale	4,352			15		1.37	%	4,207			104		9.81	%
Gross loans and leases	7,155,780			88,717		4.92	%	7,313,519			83,699		4.54	%
Securities	1,221,147			12,905		4.19	%	1,194,942			10,189		3.38	%
Other interest-earning assets	239,336			2,490		4.13	%	292,819			2,085		2.82	%
Total interest-earning assets	8,616,263			104,112		4.79	%	8,801,280			95,973		4.33	%
Allowance for loan losses	(91,606)							(93,517)
BOLI and noninterest-earning assets	732,654							700,977
Total assets	$	9,257,311						$	9,408,740

Interest-bearing liabilities
Interest-bearing checking	$	1,854,333		$	4,998	1.07	%	$	2,285,071		$	3,880	0.67	%


Savings and money market	1,308,383			2,379		0.72	%	1,536,438			2,236		0.58	%
Certificates of deposit	1,072,953			6,901		2.55	%	832,506			2,871		1.37	%
Total interest-bearing deposits	4,235,669			14,278		1.34	%	4,654,015			8,987		0.77	%
FHLB advances	684,177			5,528		3.21	%	482,842			3,558		2.92	%

Other borrowings	41,075			414		4.00	%	70,431			412		2.32	%
Long-term debt	274,812			3,675		5.31	%	274,665			3,608		5.21	%
Total interest-bearing liabilities	5,235,733			23,895		1.81	%	5,481,953			16,565		1.20	%
Noninterest-bearing deposits	2,897,755							2,855,220
Noninterest-bearing liabilities	134,409							110,761
Total liabilities	8,267,897							8,447,934
Total stockholders’ equity	989,414							960,806
Total liabilities and stockholders’ equity	$	9,257,311						$	9,408,740

Net interest income/spread				$	80,217	2.98	%				$	79,408	3.13	%
Net interest margin						3.69	%						3.58	%

Ratio of interest-earning assets to interest-bearing liabilities	165		%					161		%
Total deposits	$	7,133,424		$	14,278	0.79	%	$	7,509,235		$	8,987	0.47	%
Total funding (1)	$	8,133,488		$	23,895	1.17	%	$	8,337,173		$	16,565	0.79	%


	Nine Months Ended
	September 30, 2023							September 30, 2022
	Average					Yield		Average					Yield
	Balance			Interest		/ Cost		Balance			Interest		/ Cost
Interest-earning assets
Commercial real estate, multifamily, and construction	$	3,219,304		$	113,720	4.72	%	$	2,962,148		$	96,926	4.37	%
Commercial and industrial and SBA	1,875,739			100,545		7.17	%	2,473,666			88,672		4.79	%
SFR mortgage	1,849,183			57,321		4.14	%	1,749,968			48,767		3.73	%
Other consumer	85,568			4,116		6.43	%	92,633			4,305		6.21	%
Loans held-for-sale	4,280			218		6.81	%	3,754			158		5.63	%
Gross loans and leases	7,034,074			275,920		5.24	%	7,282,169			238,828		4.38	%
Securities	1,286,955			47,048		4.89	%	1,234,188			25,622		2.78	%
Other interest-earning assets	430,855			16,324		5.07	%	284,725			4,210		1.98	%
Total interest-earning assets	8,751,884			339,292		5.18	%	8,801,082			268,660		4.08	%
Allowance for credit losses	(82,124)							(93,454)
BOLI and noninterest-earning assets	726,608							673,679
Total assets	$	9,396,368						$	9,381,307

Interest-bearing liabilities
Interest-bearing checking	$	1,791,200		$	28,505	2.13	%	$	2,352,067		$	5,978	0.34	%


Savings and money market	1,036,568			7,685		0.99	%	1,602,280			3,606		0.30	%
Certificates of deposit	1,471,275			43,815		3.98	%	658,576			3,971		0.81	%
Total interest-bearing deposits	4,299,043			80,005		2.49	%	4,612,923			13,555		0.39	%
FHLB advances	1,134,507			32,124		3.79	%	476,158			9,625		2.70	%

Other borrowings	104,186			4,195		5.38	%	101,369			792		1.04	%
Long-term debt	274,714			11,065		5.39	%	274,533			10,540		5.13	%
Total interest-bearing liabilities	5,812,450			127,389		2.93	%	5,464,983			34,512		0.84	%
Noninterest-bearing deposits	2,461,985							2,818,795
Noninterest-bearing liabilities	128,949							104,321
Total liabilities	8,403,384							8,388,099
Total stockholders’ equity	992,984							993,208
Total liabilities and stockholders’ equity	$	9,396,368						$	9,381,307

Net interest income/spread				$	211,903	2.25	%				$	234,148	3.24	%
Net interest margin						3.24	%						3.56	%

Ratio of interest-earning assets to interest-bearing liabilities	151		%					161		%
Total deposits	$	6,761,028		$	80,005	1.58	%	$	7,431,718		$	13,555	0.24	%
Total funding (1)	$	8,274,435		$	127,389	2.06	%	$	8,283,778		$	34,512	0.56	%

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 common equity to tangible assets, tangible common equity per share, return on average tangible common equity, adjusted noninterest income, adjusted noninterest expense, adjusted noninterest income to adjusted total revenue, adjusted noninterest expense to average total assets, pre-tax pre-provision (PTPP) income, adjusted PTPP income, PTPP income ROAA, adjusted PTPP income ROAA, efficiency ratio, adjusted efficiency ratio, adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share (EPS), adjusted return on average assets (ROAA) and adjusted common equity tier 1 (CET 1) 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, as applicable, from tangible equity. Return on average tangible common equity is calculated by dividing net income available to common stockholders, after adjustment for amortization of intangible assets, by average tangible common equity. Banking regulators also exclude goodwill and other intangible assets from stockholders' equity when assessing the capital adequacy of a financial institution.

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

Adjusted net income is calculated by adjusting net income for tax-effected noninterest income and noninterest expense adjustments and the tax impact from the exercise of stock appreciation rights for the periods indicated. Adjusted ROAA is calculated by dividing annualized adjusted net income by average assets. Adjusted net income available to common stockholders is calculated by removing the impact of preferred stock redemptions from adjusted net income. Adjusted diluted earnings per share is calculated by dividing adjusted net income available to common stockholders by the weighted average diluted common shares outstanding.

Common equity tier 1 and the common equity tier 1 ratio are defined by regulatory capital rules. Adjusted CET 1 is calculated by subtracting net unrealized losses on securities from CET 1 capital and provided to reflect management’s assessment of capital impacts from net unrealized losses on securities. Capital ratios as of September 30, 2023 are preliminary.

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, 2023			June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022
Tangible common equity, and tangible common equity to tangible assets ratio
Total assets	$	9,247,072		$	9,370,265		$	10,038,901		$	9,197,016		$	9,368,578
Less goodwill	(114,312)			(114,312)			(114,312)			(114,312)			(114,312)
Less other intangible assets	(6,142)			(6,603)			(7,065)			(7,526)			(8,081)
Tangible assets(1)	$	9,126,618		$	9,249,350		$	9,917,524		$	9,075,178		$	9,246,185





Total stockholders' equity	$	1,001,720		$	957,054		$	958,907		$	959,618		$	951,990
Less goodwill	(114,312)			(114,312)			(114,312)			(114,312)			(114,312)
Less other intangible assets	(6,142)			(6,603)			(7,065)			(7,526)			(8,081)
Tangible common equity(1)	881,266			836,139			837,530			837,780			829,597



Total stockholders' equity to total assets	10.83		%	10.21		%	9.55		%	10.43		%	10.16		%
Tangible common equity to tangible assets(1)	9.66		%	9.04		%	8.44		%	9.23		%	8.97		%


Common shares outstanding	56,959,141			56,944,706			58,237,303			58,544,534			59,679,558
Class B non-voting non-convertible common shares outstanding	477,321			477,321			477,321			477,321			477,321
Total common shares outstanding	57,436,462			57,422,027			58,714,624			59,021,855			60,156,879

Book value per common share	$	17.44		$	16.67		$	16.33		$	16.26		$	15.83
Tangible common equity per share(1)	$	15.34		$	14.56		$	14.26		$	14.19		$	13.79

(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, 2023			June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022			September 30, 2023			September 30, 2022
Return on tangible common equity
Average total stockholders' equity	$	977,410		$	997,049		$	1,004,794		$	989,414		$	960,806		$	992,984		$	993,208
Less average preferred stock	—			—			—			—			—			—			(25,043)
Average common stockholders' equity	977,410			997,049			1,004,794			989,414			960,806			992,984			968,165
Less average goodwill	(114,312)			(114,312)			(114,312)			(114,312)			(98,916)			(114,312)			(96,133)
Less average other intangible assets	(6,430)			(6,885)			(7,355)			(7,869)			(4,570)			(6,887)			(5,216)
Average tangible common equity(1)	$	856,668		$	875,852		$	883,127		$	867,233		$	857,320		$	871,785		$	866,816




Net income available to common stockholders	$	42,574		$	17,879		$	20,278		$	21,519		$	24,196		$	80,731		$	94,253
Add amortization of intangible assets	461			462			461			555			396			1,384			1,150

Less tax effect on amortization of intangible assets(2)	(136)			(137)			(136)			(164)			(117)			(409)			(340)
Net income available to common stockholders after adjustments for intangible assets(1)	$	42,899		$	18,204		$	20,603		$	21,910		$	24,475		$	81,706		$	95,063

Return on average equity	17.28		%	7.19		%	8.18		%	8.63		%	9.99		%	10.87		%	13.38		%
Return on average tangible common equity(1)	19.87		%	8.34		%	9.46		%	10.02		%	11.33		%	12.53		%	14.66		%

(1)Non-GAAP measure.

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

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)


	Three Months Ended															Nine Months Ended
	September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022			September 30, 2023			September 30, 2022
Adjusted noninterest income
Total noninterest income	$	50,778		$	6,024		$	7,859		$	(1,427)		$	5,681		$	64,661		$	18,777
Noninterest income adjustments:
Net loss (gain) on sale of securities available for sale	—			—			—			7,708			—			—			(16)
Gain on merger-related derivative instruments(1)	(46,165)			—			—			—			—			(46,165)			—


Total noninterest income adjustments	(46,165)			—			—			7,708			—			(46,165)			(16)
Adjusted noninterest income(2)	$	4,613		$	6,024		$	7,859		$	6,281		$	5,681		$	18,496		$	18,761

Adjusted noninterest expense
Total noninterest expense	$	56,164		$	49,132		$	51,239		$	48,203		$	50,962		$	156,535		$	146,170
Noninterest expense adjustments:




Indemnified legal (fees) recoveries	(634)			(752)			(380)			869			(1,017)			(1,766)			(1,366)

Acquisition, integration and transaction costs	(9,329)			—			—			—			(2,080)			(9,329)			(2,080)


Noninterest expense adjustments before (loss) gain in alternative energy partnership investments	(9,963)			(752)			(380)			869			(3,097)			(11,095)			(3,446)
(Loss) gain in alternative energy partnership investments	34			36			(1,618)			(608)			(504)			(1,548)			(1,705)
Total noninterest expense adjustments	(9,929)			(716)			(1,998)			261			(3,601)			(12,643)			(5,151)
Adjusted noninterest expense(2)	$	46,235		$	48,416		$	49,241		$	48,464		$	47,361		$	143,892		$	141,019

Average assets	$	9,261,273		$	9,611,239		$	9,317,209		$	9,257,311		$	9,408,740		$	9,396,368		$	9,381,307
Noninterest income to total revenue(2)	42.32		%	7.96		%	9.71		%	(1.81)		%	6.68		%	23.38		%	7.42		%
Adjusted noninterest income to adjusted total revenue(2)	6.25		%	7.96		%	9.71		%	7.26		%	6.68		%	8.03		%	7.42		%


Noninterest expense to average total assets(3)	2.41		%	2.05		%	2.23		%	2.07		%	2.15		%	2.23		%	2.08		%
Adjusted noninterest expense to average total assets(2)(3)	1.98		%	2.02		%	2.14		%	2.08		%	2.00		%	2.05		%	2.01		%

(1)Presents the mark-to-market gain on derivative instruments, including interest rate swaptions and a contingent forward sale agreement on the SFR loan portfolio executed concurrently with the announcement of the proposed merger with PacWest.

(2)Non-GAAP measure.

(3)Ratio presented on an annualized basis.

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)


	Three Months Ended															Nine Months Ended
	September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022			September 30, 2023			September 30, 2022
Adjusted pre-tax pre-provision income
Net interest income	$	69,218		$	69,632		$	73,053		$	80,217		$	79,408		$	211,903		$	234,148
Noninterest income	50,778			6,024			7,859			(1,427)			5,681			64,661			18,777
Total revenue	119,996			75,656			80,912			78,790			85,089			276,564			252,925
Noninterest expense	56,164			49,132			51,239			48,203			50,962			156,535			146,170
Pre-tax pre-provision income(1)	$	63,832		$	26,524		$	29,673		$	30,587		$	34,127		$	120,029		$	106,755

Total revenue	$	119,996		$	75,656		$	80,912		$	78,790		$	85,089		$	276,564		$	252,925
Total noninterest income adjustments	(46,165)			—			—			7,708			—			(46,165)			(16)
Adjusted total revenue(1)	73,831			75,656			80,912			86,498			85,089			230,399			252,909

Noninterest expense	56,164			49,132			51,239			48,203			50,962			156,535			146,170
Total noninterest expense adjustments	(9,929)			(716)			(1,998)			261			(3,601)			(12,643)			(5,151)
Adjusted noninterest expense(1)	46,235			48,416			49,241			48,464			47,361			143,892			141,019
Adjusted pre-tax pre-provision income(1)	$	27,596		$	27,240		$	31,671		$	38,034		$	37,728		$	86,507		$	111,890

Average assets	$	9,261,273		$	9,611,239		$	9,317,209		$	9,257,311		$	9,408,740		$	9,396,368		$	9,381,307
Pre-tax pre-provision income ROAA(1)(2)	2.73		%	1.11		%	1.29		%	1.31		%	1.44		%	1.71		%	1.52		%
Adjusted pre-tax pre-provision income ROAA(1)(2)	1.18		%	1.14		%	1.38		%	1.63		%	1.59		%	1.23		%	1.59		%
Efficiency ratio(1)(2)	46.80		%	64.94		%	63.33		%	61.18		%	59.89		%	56.60		%	57.79		%
Adjusted efficiency ratio(1)(2)	62.62		%	63.99		%	60.86		%	56.03		%	55.66		%	62.45		%	55.76		%

(1)Non-GAAP measure.

(2)Ratio presented on an annualized basis.

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)


	Three Months Ended															Nine Months Ended
	September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022			September 30, 2023			September 30, 2022
Adjusted net income
Net income (1)(2)(3)	$	42,574		$	17,879		$	20,278		$	21,519		$	24,196		$	80,731		$	99,420
Adjustments:
Noninterest income adjustments	(46,165)			—			—			7,708			—			(46,165)			(16)
Noninterest expense adjustments	9,929			716			1,998			(261)			3,601			12,643			5,151

Tax impact of adjustments above(4)	10,713			(212)			(591)			(2,202)			(1,065)			9,910			(1,518)

Adjustments to net income	(25,523)			504			1,407			5,245			2,536			(23,612)			3,617
Adjusted net income(3)(5)	$	17,051		$	18,383		$	21,685		$	26,764		$	26,732		$	57,119		$	103,037

Average assets	$	9,261,273		$	9,611,239		$	9,317,209		$	9,257,311		$	9,408,740		$	9,396,368		$	9,381,307
ROAA(6)	1.82		%	0.75		%	0.88		%	0.92		%	1.02		%	1.15		%	1.42		%
Adjusted ROAA(5)(6)	0.73		%	0.77		%	0.94		%	1.15		%	1.13		%	0.81		%	1.47		%

Adjusted net income available to common stockholders
Net income available to common stockholders (1)(2)(3)	$	42,574		$	17,879		$	20,278		$	21,519		$	24,196		$	80,731		$	94,253
Adjustments to net income	(25,523)			504			1,407			5,245			2,536			(23,612)			3,617
Adjustments for impact of preferred stock redemption	—			—			—			—			—			—			3,747
Adjusted net income available to common stockholders (5)	$	17,051		$	18,383		$	21,685		$	26,764		$	26,732		$	57,119		$	101,617

Average diluted common shares	57,521,836			58,026,007			59,206,619			59,725,283			60,492,460			58,230,137			61,659,900
Diluted EPS	$	0.74		$	0.31		$	0.34		$	0.36		$	0.40		$	1.39		$	1.53
Adjusted diluted EPS(5)(7)	$	0.30		$	0.32		$	0.37		$	0.45		$	0.44		$	0.98		$	1.65

(1)Net income for the three months ended September 30, 2023 includes a $46.2 million pre-tax mark-to-market gain on derivative instruments partially offset by acquisition costs of $9.3 million.

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

(3)Net income and adjusted net income for the nine months ended September 30, 2022 include a $31.3 million pre-tax reversal of credit losses due to the recovery from the settlement of a previously charged-off loan; there is no similar recovery in any of the other periods presented. The Bank previously recognized a $35.1 million charge-off for this loan during the third quarter of 2019.

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

(5)Non-GAAP measure.

(6)Ratio presented on an annualized basis.

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

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands)

(Unaudited)


	September 30, 2023
Adjusted Common Equity Tier 1 (CET 1) capital(1)
CET 1 capital	$	928,862
Less unrealized loss on AFS securities, net of tax	(36,551)
Less unrealized loss on HTM securities, net of tax	(54,913)
Adjusted CET 1 capital(2)	$	837,398

Unrealized loss on AFS securities, net of tax, to CET 1 capital	3.9		%
Unrealized loss on HTM securities, net of tax, to CET 1 capital	5.9		%
Total unrealized loss on AFS and HTM securities, net of tax, to CET 1 capital	9.8		%

(1)September 30, 2023 presented to reflect management’s assessment of capital impact from net unrealized losses on securities. Statutory tax rate of 29.6% used for calculation purposes.

(2)Non-GAAP measure.

PacWest Bancorp (NASDAQ:PACW)
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