Earnings release
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1 Banc of California, Inc. Reports Second Quarter 2026 Financial Results and Announces Strategic Balance Sheet Repositioning to Enhance Long-Term Earnings Company Release – 7/29/2026 Quarter Results 9% Loan Average Annualized Growth 12%Deposit Annualized Growth $2.3 billion Securities Repositioning $18.38 Book Value Per Share $16.44 Tangible Book Value Per Share(1) $(1.61)Loss Per Share LOS ANGELES, Calif.--(BUSINESS WIRE)--Banc of California, Inc. (NYSE: BANC) (“Banc of California” or the “Company”), the parent company of wholly-owned subsidiary Banc of California (the “Bank”), today reported financial results for the second quarter ended June 30, 2026. During the second quarter, the Company completed a strategic reallocation of capital toward higher return opportunities to further strengthen long-term earnings, expand net interest margin, and increase balance sheet flexibility. The Company took three specific actions including (i) the repositioning of $2.3 billion of lower-yielding securities, (ii) initiating the sale of $827.0 million of selected commercial real estate and multi-family construction loans, and (iii) the retirement of $385.0 million of subordinated debt prior to higher contractual interest reset. The Company transferred $2.3 billion of lower-yielding held-to-maturity securities to available-for-sale, and subsequently sold and redeployed a portion of the proceeds into higher-yielding, shorter-duration available-for-sale securities. The securities repositioning generated a 276 basis point yield pickup on redeployed balances, reduced portfolio duration, and improved the risk-weighted asset profile of the securities portfolio, all while maintaining capital ratios significantly above “well capitalized” regulatory thresholds. The Company also commenced a targeted sale process of $827.0 million of commercial real estate and multi-family construction loans to reduce selected credit exposures and lower the potential for future credit-related earnings volatility. Following a competitive loan sale process, the Company has entered into purchase and sale agreements for the loans transferred to held-for-sale during the quarter and expects the transactions to close in the third quarter. In addition, the Company retired $385.0 million of subordinated debt prior to a significantly higher interest rate reset. Taken together, these actions are expected to immediately improve net interest margin, support higher recurring earnings, and accelerate organic capital generation. The Company reported a net loss available to common and equivalent stockholders of $251.3 million, or $(1.61) per diluted common share, reflecting the near-term impact of these strategic actions. Jared Wolff, Chairman & CEO of Banc of California, commented, “During the second quarter, we made a strategic decision to reallocate capital toward opportunities that we believe will enhance long-term returns for our shareholders. We implemented that strategy through three complementary actions including a securities repositioning, a targeted loan sale and the retirement of higher-cost subordinated debt, that together create a more efficient balance sheet and position the Company for even stronger long-term financial performance." Mr. Wolff continued, "These actions resulted in significant one-time charges, but they increase our long-term earnings power, improve capital efficiency and provide greater financial flexibility to support future growth. Just as importantly, they allow us to focus our capital on the businesses, clients and markets where we see the greatest opportunities to create shareholder value.” (1) Non-GAAP measure; refer to section 'Non-GAAP Measures' Second Quarter 2026 Results Press Release
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2 Second Quarter 2026 Financial Highlights: • Executed a securities repositioning to drive higher recurring earnings power, including the sale of $2.3 billion of lower-yielding securities and partial redeployment of $1.7 billion into higher-yielding shorter-duration securities, with the remaining proceeds expected to be invested in the third quarter of 2026. The repositioning generated a 276 basis point yield pickup on redeployed balances and resulted in a $256.7 million pre-tax loss on securities. • Commenced a targeted loan sale process involving $827.0 million of loans to reduce selected exposures, enhance capital efficiency, and improve the risk profile of the loan portfolio. Total provision expense of $161.8 million includes the impact of transferring these loans to held for sale at the lower of cost or market value. • Retired $385.0 million of subordinated debt prior to a significantly higher interest rate reset, reducing future funding costs and supporting stronger pre-tax pre-provision earnings. • Average loans increased $556.1 million, or 2.3%, during the quarter, driven by $2.8 billion of loan production and disbursements with a weighted average interest rate on production of 6.39%. • Total deposits increased $799.0 million, or 2.9% during the quarter, with average noninterest-bearing deposits comprising 28.5% of average total deposits. • Loan-to-deposit ratio decreased 235 basis points to 89.3%. • Credit quality trends were favorable, as classified loans and leases and special mention loans and leases as a percentage of total loans and leases held for investment declined by 99 basis points, and 154 basis points, respectively. • Capital ratios(1) exceeded the regulatory thresholds for "well capitalized" banks, including an estimated 11.67% Tier 1 capital ratio and 9.25% CET 1 capital ratio. The CET 1 ratio is expected to increase to approximately 9.45-9.50% upon closing of the targeted loan sale and to approximately 9.50-9.60% at the end of the third quarter. • Book value per share and tangible book value per share(2) were $18.38 and $16.44, respectively, reflecting the near-term impact of the strategic balance sheet repositioning actions completed during the quarter. (1) Capital ratios for June 30, 2026 are preliminary(2) Non-GAAP measure; refer to section 'Non-GAAP Measures'
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3 INCOME STATEMENT HIGHLIGHTS Three Months Ended Six Months EndedJune 30, March 31, June 30, June 30, Summary Income Statement 2026 2026 2025 2026 2025 (In thousands) Total interest income $ 414,596 $ 407,442 $ 420,509 $ 822,038 $ 827,164 Total interest expense 164,095 155,825 180,293 319,920 354,584 Net interest income 250,501 251,617 240,216 502,118 472,580 Provision for credit losses 161,780 9,800 39,100 171,580 48,400 (Loss) gain on loans and leases HFS (12,544) 10 21 (12,534) 232 Loss on securities AFS (256,749) — — (256,749) — Other noninterest income 35,197 35,318 32,612 70,515 66,051 Total noninterest (loss) income (234,096) 35,328 32,633 (198,768) 66,283 Total revenue 16,405 286,945 272,849 303,350 538,863 Total noninterest expense 189,867 181,391 185,869 371,258 369,522 (Loss) earnings before income taxes (335,242) 95,754 47,880 (239,488) 120,941 Income tax (benefit) expense (93,895) 23,802 19,495 (70,093) 38,988 Net (loss) earnings (241,347) 71,952 28,385 (169,395) 81,953 Preferred stock dividends 9,947 9,947 9,947 19,894 19,894 Net (loss) earnings available to common and equivalent stockholders $ (251,294) $ 62,005 $ 18,438 $ (189,289) $ 62,059 Diluted (loss) earnings per share $ (1.61) $ 0.39 $ 0.12 $ (1.22) $ 0.38 Net Interest Income and Margin Second Quarter of 2026 Compared to First Quarter of 2026 Net interest income decreased by $1.1 million to $250.5 million for the second quarter, from $251.6 million in the first quarter. This decrease was driven by an $8.3 million increase in total interest expense, offset partially by a $7.2 million increase in total interest income. The increase in interest expense was due to a $4.0 million increase in interest expense on deposits, attributable to higher average balances, and a $4.2 million increase in interest expense on our borrowings driven by higher average balances to fund loan growth and replace subordinated debt funding, following the redemption of the 3.25% Fixed-to-Floating Rate Subordinated Notes due 2031 during the second quarter. The increase in interest income was driven by a $10.4 million increase from higher average loan balances and an additional day in the quarter, and a $2.3 million increase from investments and deposits in financial institutions driven by higher average balances as a result of the securities repositioning. These increases were offset partially by a $4.6 million reduction primarily related to loans placed on nonaccrual status. Net interest margin was 3.13% for the second quarter, down 11 basis points from 3.24% for the first quarter. Upon closing of the targeted loan sale, net interest margin is expected to increase to approximately 3.30%. The decrease was primarily driven by nonaccrual interest impacts and an increase in short-term funding associated with strong loan growth and the redemption of subordinated debt, while core deposit growth strengthened toward quarter-end, improving the Company's funding profile entering the third quarter. The average total cost of funds increased to 2.14% from 2.10%, as a result of a 2 basis point increase in the average total cost of deposits to 1.80%, and a 19 basis point decrease in the average cost of borrowings to 4.44%. The average yield on interest-earning assets decreased to 5.18% from 5.25%, as a result of a 11 basis point decrease in the average yield on loans and leases to 5.63%. Average total deposits increased by $299.1 million, with a $323.5 million increase in average interest-bearing deposits, offset partially by a $24.4 million decrease in average noninterest-bearing deposits. Average noninterest-bearing deposits represented 28.5% of average total deposits in the second quarter, down from 28.9% in the first quarter.
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4 Three Months Ended Increase (Decrease) June 30, 2026 March 31, 2026 QoQ Summary Interest Average Interest Average Average Average Balance Average Income/ Yield/ Average Income/ Yield/ Average Yield/ and Yield/Cost Data Balance Expense Cost Balance Expense Cost Balance Cost (Dollars in thousands) Assets: Loans and leases(1) $ 25,266,712 $ 354,832 5.63%$ 24,710,609 $ 349,943 5.74%$ 556,103 (0.11)% Investment securities 4,938,232 42,407 3.44% 5,018,002 41,873 3.38% (79,770) 0.06% Deposits in financial institutions 1,912,585 17,357 3.64% 1,742,657 15,626 3.64% 169,928 —% Total interest-earning assets $ 32,117,529 $ 414,596 5.18%$ 31,471,268 $ 407,442 5.25%$ 646,261 (0.07)% Liabilities: Noninterest-bearing demand deposits $ 7,866,139 $ 7,890,489 $ (24,350) Total interest-bearing deposits 19,752,609 $ 124,270 2.52% 19,429,112 $ 120,233 2.51% 323,497 0.01% Total deposits $ 27,618,748 124,270 1.80%$ 27,319,601 120,233 1.78%$ 299,147 0.02% Total interest-bearing liabilities $ 22,851,314 $ 164,095 2.88%$ 22,148,512 $ 155,825 2.85%$ 702,802 0.03% Net interest income(1) $ 250,501 $ 251,617 Net interest margin 3.13% 3.24% (0.11)% Total funds(2) $ 30,717,453 $ 164,095 2.14%$ 30,039,001 $ 155,825 2.10%$ 678,452 0.04% ______________ (1) Includes net loan discount accretion of $11.2 million and $12.2 million for the three months ended June 30, 2026 and March 31, 2026, respectively. (2) Total funds is the sum of total interest-bearing liabilities and noninterest-bearing demand deposits. The cost of total funds is calculated as annualized total interest expense divided by average total funds. YTD June 30, 2026 vs YTD June 30, 2025 Net interest income increased $29.5 million to $502.1 million for the six months ended June 30, 2026, from $472.6 million for the six months ended June 30, 2025. The increase was primarily driven by a $41.0 million decrease in interest expense on deposits primarily due to lower interest rates following federal funds rate cuts, and an $8.8 million increase in interest income from investment securities reflecting the benefits of prior balance sheet repositioning actions and reinvestment into higher-yielding assets. These benefits were offset partially by a $10.3 million decrease in interest income from deposits in financial institutions due to lower balances and lower market interest rates, a $6.3 million increase in borrowing costs associated with funding loan growth and the subordinated debt redemption in the second quarter of 2026, and a $3.6 million decrease in loan interest income primarily attributable to a reversal of previously accrued interest on loans placed on nonaccrual status, offset partially by the benefit of higher average loan balances. The net interest margin was 3.18% for the six months ended June 30, 2026, up 9 basis points from 3.09% for the six months ended June 30, 2025. The year-over-year improvement was primarily driven by a 30 basis point decrease in the average total cost of funds to 2.12%, offset partially by a 20 basis point decrease in the average yield on interest-earning assets to 5.21%. The average total cost of funds decreased by 30 basis points to 2.12%, driven mainly by lower market interest rates. The average cost of deposits declined by 33 basis points to 1.79%, reflecting the impact of federal funds rate cuts in the second half of 2025. Average total deposits increased by $356.0 million year over year, as a result of a $229.2 million increase in average noninterest-bearing deposits and a $126.8 million increase in average interest-bearing deposits. Average noninterest-bearing deposits represented 28.7% of average total deposits for the six months ended June 30, 2026, up from 28.2% for the comparable period in 2025. The average cost of borrowings also decreased by 60 basis points to 4.52%, reflecting the paydown of higher-cost borrowings in the prior year and their replacement with lower-cost long-term Federal Home Loan Bank ("FHLB") advances. The average yield on interest-earning assets declined by 20 basis points to 5.21%, due primarily to a 23 basis point decline in the average yield on loans and leases.
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5 Six Months Ended Increase (Decrease) June 30, 2026 June 30, 2025 YoY Summary Interest Average Interest Average Average Average Balance Average Income/ Yield/ Average Income/ Yield/ Average Yield/ and Yield/Cost Data Balance Expense Cost Balance Expense Cost Balance Cost (Dollars in thousands) Assets: Loans and leases(1) $ 24,990,197 $ 704,775 5.69%$ 24,148,460 $ 708,406 5.92%$ 841,737 (0.23)% Investment securities 4,977,896 84,280 3.41% 4,726,957 75,478 3.22% 250,939 0.19% Deposits in financial institutions 1,828,090 32,983 3.64% 1,979,843 43,280 4.41% (151,753) (0.77)% Total interest-earning assets $ 31,796,183 $ 822,038 5.21%$ 30,855,260 $ 827,164 5.41%$ 940,923 (0.20)% Liabilities: Noninterest-bearing demand deposits $ 7,878,247 $ 7,649,000 $ 229,247 Total interest-bearing deposits 19,591,754 $ 244,503 2.52% 19,464,984 $ 285,470 2.96% 126,770 (0.44)% Total deposits $ 27,470,001 244,503 1.79%$ 27,113,984 285,470 2.12%$ 356,017 (0.33)% Total interest-bearing liabilities $ 22,501,855 $ 319,920 2.87%$ 21,923,564 $ 354,584 3.26%$ 578,291 (0.39)% Net interest income(1) $ 502,118 $ 472,580 Net interest margin 3.18% 3.09% 0.09% Total funds(2) $ 30,380,102 $ 319,920 2.12%$ 29,572,564 $ 354,584 2.42%$ 807,538 (0.30)% ______________ (1) Includes net loan discount accretion of $23.4 million and $32.1 million for the six months ended June 30, 2026 and 2025. (2) Total funds is the sum of total interest-bearing liabilities and noninterest-bearing demand deposits. The cost of total funds is calculated as annualized total interest expense divided by average total funds. Provision For Credit Losses Second Quarter of 2026 Compared to First Quarter of 2026 The provision for credit losses was $161.8 million for the second quarter compared to $9.8 million for the first quarter. The increase was primarily driven by $161.6 million of charge-offs, the impact of loan growth and higher loss given default rates on commercial real estate and multi-family construction loans, offset partially by improved risk ratings for our held for investment ("HFI") portfolio. The increase in net charge-offs in the quarter related primarily to the transfer of $827.0 million of loans to held for sale ("HFS") in connection with the targeted loan sale process. The transfer required the loans to be recorded at lower of cost or market value, resulting in charge-offs and additional provision expense during the quarter. The first quarter provision for loan losses and unfunded loan commitments was primarily driven by net charge off activity and changes in loan risk ratings including specific reserves, offset partially by lower balances in the HFI portfolio and lower qualitative reserves. YTD June 30, 2026 vs YTD June 30, 2025 The provision for credit losses was $171.6 million for the six months ended June 30, 2026, compared to $48.4 million for the six months ended June 30, 2025. The provision for 2026 included a provision for loan losses of $171.8 million, including the impact of the proposed targeted loan sale process, offset by a $2.0 million reduction in provision for unfunded loan commitments. The provision for the six months ended June 30, 2025 included the impact of $506.7 million of loans transferred to HFS and recorded at the lower of cost or market value. The remaining increase in the provision for loan losses and unfunded loan commitments was primarily driven by net charge-off activity experienced in the first half of the year, with additional impacts from changes in loan risk ratings, and higher unfunded commitments. These were offset partially by lower qualitative reserves, lower specific reserves, and a favorable shift in the portfolio mix due to growth in loan segments with lower expected credit losses.
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6 Noninterest Income Second Quarter of 2026 Compared to First Quarter of 2026 Noninterest income decreased by $269.4 million, resulting in a loss of $234.1 million for the second quarter, compared to noninterest income of $35.3 million for the first quarter. The decrease was primarily driven by a $256.7 million pre-tax loss recognized as part of the securities repositioning, and a $12.5 million loss recorded as part of the lower of cost or market adjustment on HFS loans. Also included in noninterest income was a $3.1 million loss related to the redemption of $385.0 million aggregate principal amount of subordinated notes during the quarter. The loss was offset partially by a $3.8 million gain recognized on the sale of the Company's single-family mortgage servicing rights portfolio, which serviced approximately $1.35 billion of underlying loans. YTD June 30, 2026 vs YTD June 30, 2025 Noninterest income decreased by $265.1 million to a loss of $198.8 million for the six months ended June 30, 2026, compared to income of $66.3 million for the same period 2025. The year-to-date decrease was primarily attributable to the $256.7 million pre-tax loss recognized as part of the securities repositioning, and a $12.5 million lower of cost or market adjustment on the HFS loans, as discussed above. Noninterest Expense Second Quarter of 2026 Compared to First Quarter of 2026 Noninterest expense increased by $8.5 million to $189.9 million for the second quarter from $181.4 million for the first quarter, primarily reflecting a $7.7 million increase in insurance and assessment due to a higher FDIC assessment rate resulting from the balance sheet repositioning and its effect on assessment-related metrics and a $5.0 million increase in other expense related mainly to software obsolescence charges. These increases were offset partially by a $6.0 million decrease in compensation expense due to seasonal payroll related costs recognized in the first quarter. YTD June 30, 2026 vs YTD June 30, 2025 Noninterest expense increased by $1.7 million to $371.3 million for the six months ended June 30, 2026 from $369.5 million for the six months ended June 30, 2025. The increase is primarily due to a $6.3 million increase in other expense related mainly to software obsolescence charges, a $4.6 million increase in insurance and assessment due to the higher assessment rate resulting from the balance sheet repositioning, and a $2.5 million increase in loans expense related to legal fees. These increases were offset partially by a $6.5 million decrease in customer related expenses primarily due to federal fund rate cuts in the fourth quarter of 2025 and a $3.0 million decrease in leased equipment depreciation. Income Taxes Second Quarter of 2026 Compared to First Quarter of 2026 Income tax benefit of $93.9 million was recorded for the second quarter, resulting in an effective tax rate of 28.0%, compared to income tax expense of $23.8 million and an effective tax rate of 24.9% for the first quarter. The second quarter tax rate reflects the effects of the Company's balance sheet repositioning actions. Due to the significant impact of these actions on projected annual earnings, the Company calculated its second quarter income tax provision using a year to date effective tax rate approach rather than the estimated annual effective tax rate method. YTD June 30, 2026 vs YTD June 30, 2025 Income tax benefit of $70.1 million was recorded for the six months ended June 30, 2026, resulting in an effective tax rate of 29.3%, compared to income tax expense of $39.0 million and effective tax rate of 32.2% for the same period 2025. The decrease in effective tax rate from 2025 to 2026 is due primarily to the impact of deferred tax asset revaluation recorded following the California state tax changes passed as part of the 2025 California budget enacted on June 30, 2025.
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7 BALANCE SHEET HIGHLIGHTS June 30, March 31, June 30, Increase (Decrease) Selected Balance Sheet Items 2026 2026 2025 QoQ YoY (In thousands) Cash and cash equivalents $ 2,818,055 $ 2,217,269 $ 2,353,552 $ 600,786 $ 464,503 Securities available-for-sale 4,484,021 2,656,332 2,246,174 1,827,689 2,237,847 Securities held-to-maturity — 2,313,548 2,316,725 (2,313,548) (2,316,725) Loans held for sale 915,171 259,049 465,571 656,122 449,600 Loans and leases held for investment 24,210,846 24,780,347 24,245,893 (569,501) (35,047) Total loans and leases 25,126,017 25,039,396 24,711,464 86,621 414,553 Total assets 35,030,953 34,724,241 34,250,453 306,712 780,500 Noninterest-bearing deposits $ 7,758,119 $ 7,797,542 $ 7,441,116 $ (39,423) $ 317,003 Total deposits 28,121,182 27,322,134 27,528,433 799,048 592,749 Borrowings 2,460,363 2,551,250 1,917,180 (90,887) 543,183 Total liabilities 31,620,807 31,170,915 30,823,610 449,892 797,197 Total stockholders' equity 3,410,146 3,553,326 3,426,843 (143,180) (16,697) Securities As part of the securities repositioning, the Company reclassified its entire held-to-maturity ("HTM") securities portfolio with an aggregate amortized cost basis of $2.3 billion to available-for-sale ("AFS") securities and subsequently sold primarily all of the securities. The $2.3 billion of securities sold had an average yield of approximately 2.1% and were sold at a pre-tax loss of $251.3 million. The transaction improved the Company's earning-asset mix by facilitating the redeployment of proceeds into higher-yielding assets while enhancing balance sheet flexibility. As of June 30, 2026 we reinvested $1.7 billion at a weighted average yield of 4.87%, which resulted in a 276 basis point yield pickup on redeployed balances. AFS securities increased by $1.8 billion during the second quarter to $4.5 billion at June 30, 2026 compared to $2.7 billion at March 31, 2026, due primarily to the transfer of HTM securities to AFS of $2.3 billion and purchases of $1.9 billion, offset partially by the sale of $2.3 billion, as part of the securities repositioning, $116.9 million of principal paydowns, $16.7 million of maturities, $8.2 million decrease in the fair value of AFS securities, and $2.0 million of net amortization. As of June 30, 2026, AFS securities had aggregate unrealized net after-tax losses in AOCI of $145.3 million, up from $143.3 million at March 31, 2026, driven by higher interest rates. As of June 30, 2026, there are no HTM securities.
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8 Loans and Leases The following table sets forth the composition, by loan category, of our loan and lease portfolio HFI as of the dates indicated: June 30, March 31, December 31, September 30, June 30, 2026 2026 2025 2025 2025 (Dollars in thousands) Composition of Loans and Leases Real estate mortgage: Commercial $ 4,037,229 $ 4,093,386 $ 4,314,637 $ 4,292,625 $ 4,369,401 Multi-family 5,445,475 5,955,102 6,089,417 6,124,673 6,280,791 Other residential 3,793,876 3,458,410 3,346,733 3,162,564 3,157,616 Total real estate mortgage 13,276,580 13,506,898 13,750,787 13,579,862 13,807,808 Real estate construction and land: Commercial 360,392 364,575 379,387 395,150 381,449 Residential 1,114,459 1,527,754 1,568,240 1,759,676 1,920,642 Total real estate construction and land 1,474,851 1,892,329 1,947,627 2,154,826 2,302,091 Total real estate 14,751,431 15,399,227 15,698,414 15,734,688 16,109,899 Commercial: Asset-based 3,318,822 3,209,338 2,951,010 2,742,519 2,462,351 Venture capital 2,440,075 2,322,261 2,222,097 1,907,601 2,002,601 Other commercial 3,353,534 3,501,388 3,804,099 3,356,537 3,288,305 Total commercial 9,112,431 9,032,987 8,977,206 8,006,657 7,753,257 Consumer 346,984 348,133 357,059 369,297 382,737 Total loans and leases HFI $ 24,210,846 $ 24,780,347 $ 25,032,679 $ 24,110,642 $ 24,245,893 Total unfunded loan commitments $ 5,211,632 $ 5,549,325 $ 5,433,357 $ 4,822,917 $ 4,673,596 Composition as % of Total Loans and Leases Real estate mortgage: Commercial 17% 17% 17% 18% 18% Multi-family 22% 24% 24% 25% 26% Other residential 16% 14% 14% 13% 13% Total real estate mortgage 55% 55% 55% 56% 57% Real estate construction and land: Commercial 1% 2% 2% 2% 1% Residential 5% 6% 6% 7% 8% Total real estate construction and land 6% 8% 8% 9% 9% Total real estate 61% 63% 63% 65% 66% Commercial: Asset-based 14% 13% 12% 11% 10% Venture capital 10% 9% 9% 8% 8% Other commercial 14% 14% 15% 14% 14% Total commercial 38% 36% 36% 33% 32% Consumer 1% 1% 1% 2% 2% Total loans and leases HFI 100% 100% 100% 100% 100% Total loans and leases HFI decreased by $569.5 million in the second quarter to $24.2 billion at June 30, 2026. The decline reflected, in part, the transfer of $827.0 million of loans to HFS in connection with the balance sheet repositioning, including $491.9 million of multi-family loans, $300.6 million of multi-family construction loans, and $34.5 million of commercial real estate mortgage loans. Excluding the impact of the loans transferred to HFS, the Company continued to generate loan growth in other residential real estate mortgage loans, venture capital loans, and asset-based lending portfolios. Loan production and disbursements totaled $2.8 billion in the second quarter with a weighted average interest rate on production of 6.39%. Total loans and leases HFS increased by $656.1 million in the second quarter and totaled $915.2 million at June 30, 2026. The increase was primarily driven by the Company's targeted loan sale process discussed above.
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9 Credit Quality June 30, March 31, December 31, September 30, June 30, Asset Quality Information and Ratios 2026 2026 2025 2025 2025 (Dollars in thousands) Delinquent loans and leases held for investment: 30 to 89 days delinquent $ 91,196 $ 263,530 $ 108,303 $ 56,416 $ 53,900 90+ days delinquent 82,457 81,599 92,655 104,952 95,566 Total delinquent loans and leases $ 173,653 $ 345,129 $ 200,958 $ 161,368 $ 149,466 Total delinquent loans and leases to loans and leases HFI 0.72% 1.39% 0.80% 0.67% 0.62% Nonperforming assets, excluding loans held for sale: Nonaccrual loans and leases $ 203,712 $ 185,734 $ 159,168 $ 174,541 $ 167,516 90+ days delinquent loans and still accruing — — — — — Total nonperforming loans and leases ("NPLs") 203,712 185,734 159,168 174,541 167,516 Foreclosed assets, net 16,319 18,055 17,115 4,790 7,806 Total nonperforming assets ("NPAs") $ 220,031 $ 203,789 $ 176,283 $ 179,331 $ 175,322 Classified loans and leases HFI $ 582,790 $ 842,834 $ 800,330 $ 763,582 $ 656,556 Special mention loans and leases HFI 300,542 688,659 458,683 505,979 661,568 Criticized loans and leases HFI $ 883,332 $ 1,531,493 $ 1,259,013 $ 1,269,561 $ 1,318,124 Allowance for loan and lease losses $ 243,319 $ 241,600 $ 245,612 $ 240,501 $ 229,344 Allowance for loan and lease losses to NPLs 119.44% 130.08% 154.31% 137.79% 136.91% NPLs to loans and leases HFI 0.84% 0.75% 0.64% 0.72% 0.69% NPAs to total assets 0.63% 0.59% 0.51% 0.53% 0.51% Classified loans and leases to loans and leases HFI 2.41% 3.40% 3.20% 3.17% 2.71% Special mention loans and leases to loans and leases HFI 1.24% 2.78% 1.83% 2.10% 2.73% Credit quality metrics improved from the first quarter, primarily reflecting the transfer of certain loans to HFS as part of the balance sheet repositioning. Nonperforming, classified, and special mention loans and leases as a percentage of total loans held for investment increased 9 basis points, and decreased 99 basis points and 154 basis points, respectively. At June 30, 2026, total delinquent loans and leases were $173.7 million, compared to $345.1 million at March 31, 2026. The 30 to 89 days delinquent category decreased by $140.7 million in residential real estate construction and land loans, $32.9 million in commercial real estate construction and land loans, and $32.8 million in multi-family real estate mortgage loans, offset partially by increases of $27.9 million in other residential real estate mortgage loans. In the 90 or more days delinquent category, there were increases of $11.8 million in other commercial loans and $9.1 million in multi-family real estate mortgage loans, offset partially by decreases of $23.2 million in commercial real estate loans. At June 30, 2026, nonperforming loans and leases were $203.7 million, compared to $185.7 million at March 31, 2026. During the second quarter, nonperforming loans and leases increased by $18.0 million due to additions of $391.7 million, offset partially by transfers to loans HFS of $248.0 million, charge-offs of $91.8 million, paydowns of $32.4 million, and transfers to accrual status of $1.5 million. At June 30, 2026, nonperforming assets were $220.0 million, or 0.63% of total assets, compared to $203.8 million, or 0.59% of total assets, as of March 31, 2026. At June 30, 2026, nonperforming assets included $16.3 million of foreclosed assets, consisting primarily of single-family residences.
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10 Allowance for Credit Losses – Loans Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, Allowance for Credit Losses - Loans 2026 2026 2025 2026 2025 (Dollars in thousands) Allowance for loan and lease losses ("ALLL"): Balance at beginning of period $ 241,600 $ 245,612 $ 234,986 $ 245,612 $ 239,360 Charge-offs (161,617) (16,097) (46,948) (177,714) (63,499) Recoveries 1,336 2,285 2,726 3,621 5,203 Net charge-offs (160,281) (13,812) (44,222) (174,093) (58,296) Provision for loan losses 162,000 9,800 38,580 171,800 48,280 Balance at end of period $ 243,319 $ 241,600 $ 229,344 $ 243,319 $ 229,344 Reserve for unfunded loan commitments ("RUC"): Balance at beginning of period $ 34,921 $ 34,921 $ 29,571 $ 34,921 $ 29,071 Provision for credit losses (2,000) — (350) (2,000) 150 Balance at end of period $ 32,921 $ 34,921 $ 29,221 $ 32,921 $ 29,221 Allowance for credit losses ("ACL") - Loans: Balance at beginning of period $ 276,521 $ 280,533 $ 264,557 $ 280,533 $ 268,431 Charge-offs (161,617) (16,097) (46,948) (177,714) (63,499) Recoveries 1,336 2,285 2,726 3,621 5,203 Net charge-offs (160,281) (13,812) (44,222) (174,093) (58,296) Provision for credit losses 160,000 9,800 38,230 169,800 48,430 Balance at end of period $ 276,240 $ 276,521 $ 258,565 $ 276,240 $ 258,565 ALLL to loans and leases HFI 1.00% 0.97% 0.95% 1.00% 0.95% ACL to loans and leases HFI 1.14% 1.12% 1.07% 1.14% 1.07% ACL to NPLs 135.60% 148.88% 154.35% 135.60% 154.35% ACL to NPAs 125.55% 135.69% 147.48% 125.55% 147.48% Annualized net charge-offs to average loans and leases 2.54% 0.23% 0.72% 1.40% 0.49% The allowance for credit losses - loans, which includes the reserve for unfunded loan commitments, totaled $276.2 million, or 1.14% of total loans and leases at June 30, 2026, compared to $276.5 million, or 1.12% of total loans and leases at March 31, 2026. The $0.3 million decrease in the allowance was driven by net charge-offs of $160.3 million, largely associated with loans transferred to HFS during the quarter, offset partially by the provision of $160.0 million. Our ability to absorb credit losses is also bolstered by (i) $105.0 million of loss coverage from the credit-linked notes, pursuant to which the bank sold the first 5% of any losses on $2.1 billion of single-family residential mortgage loans in our portfolio; and (ii) unearned credit marks of $12.9 million on approximately $1.2 billion of purchased loans without credit deterioration. When the loss coverage from the credit-linked notes and unearned credit marks is added to our allowance for credit losses, this provides additional economic coverage on top of our ACL ratio. We refer to this adjusted ACL ratio as our economic coverage ratio(1), which equaled 1.63% of total loans and leases at June 30, 2026 compared to 1.60% at March 31, 2026. The ACL coverage of nonperforming loans and leases was 136% at June 30, 2026 compared to 149% at March 31, 2026. Net charge-offs were 2.54% of average loans and leases (annualized) for the second quarter, compared to net charge-offs of 0.23% for the first quarter. (1) Non-GAAP measure; refer to section 'Non-GAAP Measures'
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11 Deposits and Client Investment Funds The following table sets forth the composition of our deposits at the dates indicated: June 30, March 31, December 31, September 30, June 30, 2026 2026 2025 2025 2025 (Dollars in thousands) Composition of Deposits Noninterest-bearing checking $ 7,758,119 $ 7,797,542 $ 7,822,787 $ 7,603,748 $ 7,441,116 Interest-bearing: Checking 8,739,368 8,178,485 8,509,587 7,930,951 7,974,452 Money market 5,136,561 4,643,349 4,917,857 4,974,177 5,375,080 Savings 1,834,517 1,991,010 1,905,863 1,949,369 1,932,906 Time deposits: Non-brokered 2,061,323 2,149,564 2,254,293 2,468,017 2,492,890 Brokered 2,591,294 2,562,184 2,432,970 2,258,503 2,311,989 Total time deposits 4,652,617 4,711,748 4,687,263 4,726,520 4,804,879 Total interest-bearing 20,363,063 19,524,592 20,020,570 19,581,017 20,087,317 Total deposits $ 28,121,182 $ 27,322,134 $ 27,843,357 $ 27,184,765 $ 27,528,433 Composition as % of Total Deposits Noninterest-bearing checking 28% 29% 28% 28% 27% Interest-bearing: Checking 31% 30% 30% 29% 29% Money market 18% 17% 18% 19% 20% Savings 7% 7% 7% 7% 7% Time deposits: Non-brokered 7% 8% 8% 9% 9% Brokered 9% 9% 9% 8% 8% Total time deposits 16% 17% 17% 17% 17% Total interest-bearing 72% 71% 72% 72% 73% Total deposits 100% 100% 100% 100% 100% Total deposits increased by $799.0 million to $28.1 billion at June 30, 2026 from $27.3 billion at March 31, 2026, driven by an increase in interest-bearing deposits of $838.5 million and a decrease in noninterest-bearing deposits of $39.4 million. Interest-bearing deposits increased due mainly to higher balances in checking accounts of $560.9 million and higher money market accounts of $493.2 million, offset partially by lower savings accounts of $156.5 million and lower brokered and non-brokered time deposits of $59.1 million. At June 30, 2026, noninterest-bearing checking deposits totaled $7.8 billion, or 28% of total deposits, compared to $7.8 billion, or 29% of total deposits, at March 31, 2026. At June 30, 2026, uninsured and uncollateralized deposits totaled $7.6 billion, or 27% of total deposits, compared to $7.8 billion, or 28% of total deposits, at March 31, 2026. In addition to deposit products, we also offer alternative, non-depository corporate treasury solutions for select clients to invest excess liquidity. These off-balance sheet client funds totaled $1.0 billion as of June 30, 2026 and $1.2 billion as of March 31, 2026. Borrowings Borrowings decreased by $90.9 million to $2.5 billion at June 30, 2026 from $2.6 billion at March 31, 2026, driven primarily by the repayment of a long-term FHLB advance. Subordinated Debt On May 1, 2026, the Company redeemed all $385 million outstanding aggregate principal amount of its 3.25% Fixed-to-Floating Rate Subordinated Notes due 2031 originally issued by Pacific Western Bank. The remaining unamortized discount and debt issuance costs were recorded as a loss on redemption of subordinated notes in noninterest income. As a result of the redemption, subordinated debt decreased to $573.6 million at June 30, 2026, from $954.1 million at March 31, 2026.
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12 Equity During the second quarter, total stockholders’ equity decreased by $143.2 million to $3.4 billion and tangible common equity(1) decreased by $136.8 million to $2.6 billion at June 30, 2026. The decrease in total stockholders’ equity for the second quarter resulted primarily from net losses of $241.3 million and common and preferred stock dividends of $29.3 million, offset partially by a decrease in the unrealized after-tax net loss in AOCI for AFS and HTM securities of $125.3 million. At June 30, 2026, book value per common share decreased to $18.38 compared to $19.80 at March 31, 2026, and tangible book value per common share(1) decreased to $16.44 compared to $17.77 at March 31, 2026. The decrease primarily reflected the repositioning actions completed during the quarter. For the six-month period ended June 30, 2026, the Company repurchased 1,709,935 shares of common and common equivalent stock at a weighted average price per share of $18.68, or $31.9 million in the aggregate. As of June 30, 2026, $82.6 million remained available under the current stock repurchase authorization, which expires in March 2027. (1) Non-GAAP measure; refer to section 'Non-GAAP Measures' CAPITAL AND LIQUIDITY The following table sets forth our regulatory capital ratios as of the dates indicated: June 30, March 31, December 31, September 30, June 30, 2026 2026 2025 2025 2025 Capital Ratios(1) Banc of California, Inc. Total risk-based capital ratio 14.31% 16.55% 16.31% 16.69% 16.37% Tier 1 risk-based capital ratio 11.67% 12.54% 12.34% 12.56% 12.34% Common equity tier 1 capital ratio 9.25% 10.18% 10.01% 10.14% 9.95% Tier 1 leverage ratio 8.89% 9.97% 9.99% 9.77% 9.74% Banc of California Total risk-based capital ratio 13.74% 15.97% 15.61% 15.94% 15.65% Tier 1 risk-based capital ratio 12.68% 13.50% 13.15% 13.42% 13.21% Common equity tier 1 capital ratio 12.68% 13.50% 13.15% 13.42% 13.21% Tier 1 leverage ratio 9.64% 10.73% 10.65% 10.44% 10.42% ______________ (1) June 30, 2026 capital ratios are preliminary. At June 30, 2026, cash and cash equivalents totaled $2.8 billion, up $600.8 million from March 31, 2026. Our immediately available cash and cash equivalents (excluding restricted cash) were $2.6 billion. Combined with total available borrowing capacity of $7.9 billion and unpledged AFS securities of $3.6 billion, total available liquidity was $14.1 billion at the end of the second quarter.
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13 Conference Call The Company will host a conference call to discuss its second quarter 2026 financial results at 8:00 a.m. Pacific Time (PT) on Wednesday, July 29, 2026. Interested parties are welcome to attend the conference call by dialing (888) 317-6003 and referencing event code 9364475. 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 (855) 669-9658 and referencing event code 7085829. About Banc of California, Inc. Banc of California, Inc. (NYSE: BANC) is a bank holding company with over $34 billion in assets and the parent company of Banc of California. Banc of California is one of the nation’s premier relationship-based business banks, providing banking and treasury management services to small, middle-market, and venture-backed businesses. Banc of California is the largest independent bank headquartered in Los Angeles and the third largest bank headquartered in California and offers a broad range of loan and deposit products and services through 77 full-service branches located throughout California and in Denver, Colorado, and Durham, North Carolina, as well as through regional offices nationwide. The bank also provides full-service payment processing solutions to its clients and serves the Community Association Management industry nationwide with its technology-forward platform, SmartStreet™. The bank is committed to its local communities through the Banc of California Charitable Foundation, and by supporting organizations that provide financial literacy and job training, small business support, affordable housing, and more. Member FDIC. For more information, please visit us at www.bancofcal.com. Forward-Looking Statements This press release includes forward-looking statements within the meaning of the “Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, liquidity and capital ratios; the anticipated benefits of our strategic repositioning including, among others, a strengthened credit profile, possible net interest income and net interest margin expansion and an enhanced earnings profile; and other non-historical statements. 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 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 tariffs and retaliatory tariffs, 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 changes in the FRB benchmark rate, which could adversely affect our revenue and expenses, the value of assets and obligations, the realization of deferred tax assets, the availability and cost of capital and liquidity, and the impacts of continuing or renewed 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, including among our venture banking clients, 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) our ability to achieve or maintain the anticipated benefits of our strategic repositioning due to one or more of the other factors described herein or otherwise, or the failure to complete our anticipated loan sales due to a condition to closing not being satisfied or otherwise; (ix) our ability to raise capital or incur debt on reasonable terms; (x) the costs and effects of litigation; (xi) 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; (xii) the competitive and other impacts on our business of emerging technologies, including stablecoins and other digital currencies, tokenized deposits, blockchain, artificial intelligence, quantum computing, and related innovations affecting both the Company and the banking industry; (xiii) 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,
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14 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; (xiv) 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; (xv) the risk that our enterprise risk management framework may not be effective in mitigating risk and reducing the potential for losses; (xvi) errors in estimates of the fair values of certain of our assets and liabilities, as well as the value of collateral supporting our loans, which may result in significant changes in valuation or recoveries; (xvii) cybersecurity threats and failures or security breaches with respect to the network, applications, vendors and computer systems on which we depend; (xviii) our ability to attract and retain key members of our senior management team; (xix) the effects of climate change, severe weather events, natural disasters such as earthquakes and wildfires, pandemics, epidemics and other public health crises, military activity (including the ongoing Iran war) or acts of terrorism, and other external events on our business; (xx) the impact of bank failures or other adverse developments at other banks on general depositor and investor sentiment regarding the stability and liquidity of banks; (xxi) the possibility that our recorded goodwill could become impaired, which may have an adverse impact on our earnings and capital; (xxii) our existing indebtedness, together with any future incurrence of additional indebtedness, could adversely affect our ability to raise additional capital and to meet our debt obligations; (xxiii) changes in market conditions or strategic balance sheet actions, which may result in realized losses on investment securities or other assets; (xxiv) the effects of any damage to our reputation resulting from developments related to any of the items identified above; and (xxv) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services and the other risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and from time to time in other documents that we file with or furnish to the SEC. Non-GAAP Financial Measures Included in this press release are certain non-GAAP financial measures, such as tangible common equity, tangible book value per common share, return on average tangible common equity, pre-tax pre-provision income, efficiency ratio, and economic coverage ratio, designed to complement the financial information presented in accordance with U.S. GAAP because management believes such measures are useful to investors. These non-GAAP financial measures should be considered only as supplemental to, and not superior to, financial measures provided in accordance with GAAP. Please refer to the “Non-GAAP Measures” section of this release for additional detail including reconciliations of the non-GAAP financial measures included in this press release to the most directly comparable financial measures prepared in accordance with GAAP. Investor Relations Inquiries:Banc of California, Inc. (855) 361-2262 Jared Wolff, (310) 424-1230Joe Kauder, (310) 844-5224 Ann DeVries, (646) 376-7011 Media Contact: Debora Vrana, Banc of California (213) 533-3122 Deb.Vrana@bancofcal.com
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15 BANC OF CALIFORNIA, INC. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) June 30, March 31, December 31, September 30, June 30, 2026 2026 2025 2025 2025 ASSETS: (Dollars in thousands) Cash and due from banks $ 225,343 $ 214,120 $ 181,103 $ 205,364 $ 222,210 Interest-earning deposits in financial institutions 2,592,712 2,003,149 2,126,862 2,192,901 2,131,342 Total cash and cash equivalents 2,818,055 2,217,269 2,307,965 2,398,265 2,353,552 Securities AFS 4,484,021 2,656,332 2,454,058 2,426,734 2,246,174 Securities HTM — 2,313,548 2,308,636 2,303,657 2,316,725 FRB and FHLB stock 181,352 170,342 160,442 159,337 162,243 Total investment securities 4,665,373 5,140,222 4,923,136 4,889,728 4,725,142 Loans HFS 915,171 259,049 182,936 211,454 465,571 Loans and leases HFI 24,210,846 24,780,347 25,032,679 24,110,642 24,245,893 Allowance for loan and lease losses (243,319) (241,600) (245,612) (240,501) (229,344) Total loans and leases HFI, net 23,967,527 24,538,747 24,787,067 23,870,141 24,016,549 Equipment leased to others under operating leases 218,444 223,558 238,232 280,872 288,692 Premises and equipment, net 145,440 146,316 146,698 132,766 138,032 Bank owned life insurance 348,777 352,707 350,083 348,051 346,142 Goodwill 214,521 214,521 214,521 214,521 214,521 Intangible assets, net 92,709 99,091 105,287 111,923 118,930 Deferred tax asset, net 704,467 653,481 656,755 672,159 691,535 Other assets 940,469 879,280 884,762 883,085 891,787 Total assets $ 35,030,953 $ 34,724,241 $ 34,797,442 $ 34,012,965 $ 34,250,453 LIABILITIES: Noninterest-bearing deposits $ 7,758,119 $ 7,797,542 $ 7,822,787 $ 7,603,748 $ 7,441,116 Interest-bearing deposits 20,363,063 19,524,592 20,020,570 19,581,017 20,087,317 Total deposits 28,121,182 27,322,134 27,843,357 27,184,765 27,528,433 Borrowings 2,460,363 2,551,250 2,063,819 2,005,022 1,917,180 Subordinated debt 573,555 954,072 952,740 950,888 949,213 Accrued interest payable and other liabilities 465,707 343,459 396,249 405,551 428,784 Total liabilities 31,620,807 31,170,915 31,256,165 30,546,226 30,823,610 STOCKHOLDERS' EQUITY: Preferred stock 498,516 498,516 498,516 498,516 498,516 Common stock 1,580 1,538 1,500 1,509 1,474 Class B non-voting common stock 5 5 5 5 5 Non-voting common stock equivalents — — 50 41 98 Additional paid-in-capital 3,485,560 3,501,213 3,552,483 3,563,145 3,609,109 Retained deficit (431,305) (180,011) (242,016) (309,460) (369,142) Accumulated other comprehensive loss, net (144,210) (267,935) (269,261) (287,017) (313,217) Total stockholders’ equity 3,410,146 3,553,326 3,541,277 3,466,739 3,426,843 Total liabilities and stockholders’ equity $ 35,030,953 $ 34,724,241 $ 34,797,442 $ 34,012,965 $ 34,250,453 Common shares outstanding (1) 158,432,520 154,262,045 155,533,403 155,522,693 157,647,137 ______________(1) Common shares outstanding include non-voting common stock equivalents that are participating securities. There were no non ‑ voting common stock equivalents outstanding as of June 30, 2026 and March 31, 2026.
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16 BANC OF CALIFORNIA, INC.CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, 2026 2026 2025 2026 2025 (In thousands, except per share amounts) Interest income: Loans and leases $ 354,832 $ 349,943 $ 362,303 $ 704,775 $ 708,406Investment securities 42,407 41,873 37,616 84,280 75,478Deposits in financial institutions 17,357 15,626 20,590 32,983 43,280Total interest income 414,596 407,442 420,509 822,038 827,164Interest expense: Deposits 124,270 120,233 144,940 244,503 285,470Borrowings 26,568 20,177 20,021 46,745 38,442Subordinated debt 13,257 15,415 15,332 28,672 30,672Total interest expense 164,095 155,825 180,293 319,920 354,584Net interest income 250,501 251,617 240,216 502,118 472,580Provision for credit losses 161,780 9,800 39,100 171,580 48,400Net interest income after provision for credit losses 88,721 241,817 201,116 330,538 424,180Noninterest income: Service charges on deposit accounts 4,763 4,978 4,456 9,741 8,999Commissions and fees 9,034 10,980 9,641 20,014 19,599Leased equipment income 7,820 8,530 10,231 16,350 21,015(Loss) gain on loans and leases HFS (12,544) 10 21 (12,534) 232Loss on securities AFS (256,749) — — (256,749) —Dividends and gains (loss) on equity investments 3,326 2,002 (114) 5,328 2,209Warrant income 896 938 1,227 1,834 932Other income 9,358 7,890 7,171 17,248 13,297Total noninterest (loss) income (234,096) 35,328 32,633 (198,768) 66,283Noninterest expense: Compensation 85,120 91,100 88,362 176,220 174,779Occupancy 14,714 14,892 15,473 29,606 30,483Information technology and data processing 13,769 14,339 13,073 28,108 28,172Other professional services 5,599 4,236 6,406 9,835 10,919Insurance and assessments 14,500 6,764 9,403 21,264 16,686Intangible asset amortization 6,349 6,348 7,159 12,697 14,319Leased equipment depreciation 5,168 5,304 6,700 10,472 13,441Customer related expense 24,114 23,737 26,577 47,851 54,328Loan expense 5,170 4,292 4,050 9,462 6,980Other expense 15,364 10,379 8,666 25,743 19,415Total noninterest expense 189,867 181,391 185,869 371,258 369,522(Loss) earnings before income taxes (335,242) 95,754 47,880 (239,488) 120,941Income tax (benefit) expense (93,895) 23,802 19,495 (70,093) 38,988Net (loss) earnings (241,347) 71,952 28,385 (169,395) 81,953Preferred stock dividends 9,947 9,947 9,947 19,894 19,894Net (loss) earnings available to common and equivalent stockholders $ (251,294) $ 62,005 $ 18,438 $ (189,289) $ 62,059(Loss) earnings per common share: Basic $ (1.61) $ 0.40 $ 0.12 $ (1.22) $ 0.38Diluted $ (1.61) $ 0.39 $ 0.12 $ (1.22) $ 0.38Weighted average number of common shares outstanding: (1) Basic 155,803 154,821 158,354 155,315 163,396Diluted 155,803 160,832 158,462 155,315 163,667 ______________ (1) Common shares outstanding include non-voting common stock equivalents that are participating securities.
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17 BANC OF CALIFORNIA, INC. SELECTED FINANCIAL DATA (UNAUDITED) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, Profitability and Other Ratios 2026 2026 2025 2026 2025 Return on average assets (1) (2.79)% 0.86% 0.34% (1.00)% 0.49% Return on average equity (1) (27.31)% 8.22% 3.32% (9.63)% 4.75% Return on average tangible common equity (1)(2) (36.18)% 9.91% 3.70% (13.30)% 5.59% Dividend payout ratio (3) (7.45)% 30.00% 83.33% (19.67)% 52.63% Average yield on loans and leases (1) 5.63% 5.74% 5.93% 5.69% 5.92% Average yield on interest-earning assets (1) 5.18% 5.25% 5.42% 5.21% 5.41% Average cost of interest-bearing deposits (1) 2.52% 2.51% 2.95% 2.52% 2.96% Average total cost of deposits (1) 1.80% 1.78% 2.13% 1.79% 2.12% Average cost of interest-bearing liabilities (1) 2.88% 2.85% 3.24% 2.87% 3.26% Average total cost of funds (1) 2.14% 2.10% 2.42% 2.12% 2.42% Net interest spread 2.30% 2.40% 2.18% 2.34% 2.15% Net interest margin (1) 3.13% 3.24% 3.10% 3.18% 3.09% Noninterest income to total revenue (4) (1426.98)% 12.31% 11.96% (65.52)% 12.30% Noninterest expense to average total assets (1) 2.20% 2.16% 2.21% 2.18% 2.22% Noninterest expense to total revenue (4) 1157.37% 63.21% 68.12% 122.39% 68.57% Efficiency ratio (2)(5) 67.18% 61.00% 65.50% 64.02% 65.92% Loans to deposits ratio 89.30% 91.65% 89.77% 89.30% 89.77% Average loans and leases to average deposits 91.48% 90.45% 89.74% 90.97% 89.06% Average investment securities to average total assets 14.25% 14.76% 13.98% 14.50% 14.09% Average stockholders' equity to average total assets 10.23% 10.44% 10.16% 10.33% 10.37% ______________ (1) Annualized. (2) Non-GAAP measure. (3) Ratio calculated by dividing dividends declared per common and equivalent share by basic (loss) earnings per common and equivalent share. (4) Total revenue equals the sum of net interest income and noninterest income. (5) Ratio calculated by dividing noninterest expense (less intangible asset amortization and acquisition, integration and reorganization costs) by total revenue (the sum of net interest income and noninterest income, less gain (loss) on securities AFS) .
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18 BANC OF CALIFORNIA, INC.AVERAGE BALANCE, AVERAGE YIELD EARNED, AND AVERAGE COST PAID (UNAUDITED) Three Months Ended June 30, 2026 March 31, 2026 June 30, 2025 Interest Average Interest Average Interest Average Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/ Balance Expense Cost Balance Expense Cost Balance Expense Cost (Dollars in thousands) Assets: Loans and leases (1) $ 25,266,712 $ 354,832 5.63%$ 24,710,609 $ 349,943 5.74%$ 24,504,319 $ 362,303 5.93% Investment securities 4,938,232 42,407 3.44% 5,018,002 41,873 3.38% 4,719,954 37,616 3.20% Deposits in financial institutions 1,912,585 17,357 3.64% 1,742,657 15,626 3.64% 1,872,736 20,590 4.41% Total interest-earning assets 32,117,529 414,596 5.18% 31,471,268 407,442 5.25% 31,097,009 420,509 5.42% Other assets 2,527,401 2,531,433 2,667,140Total assets $ 34,644,930 $ 34,002,701 $ 33,764,149 Liabilities and Stockholders' Equity: Interest checking $ 8,313,161 47,694 2.30%$ 8,175,172 46,882 2.33%$ 7,778,882 52,877 2.73% Money market 4,736,107 23,429 1.98% 4,785,691 22,826 1.93% 5,412,681 33,615 2.49% Savings 1,883,240 9,575 2.04% 1,957,831 9,772 2.02% 1,959,987 12,777 2.61% Time 4,820,101 43,572 3.63% 4,510,418 40,753 3.66% 4,569,490 45,671 4.01% Total interest-bearing deposits 19,752,609 124,270 2.52% 19,429,112 120,233 2.51% 19,721,040 144,940 2.95% Borrowings 2,399,546 26,568 4.44% 1,765,661 20,177 4.63% 1,628,584 20,021 4.93% Subordinated debt 699,159 13,257 7.61% 953,739 15,415 6.55% 946,740 15,332 6.50% Total interest-bearing liabilities 22,851,314 164,095 2.88% 22,148,512 155,825 2.85% 22,296,364 180,293 3.24% Noninterest-bearing demand deposits 7,866,139 7,890,489 7,583,894Other liabilities 382,336 415,000 453,748Total liabilities 31,099,789 30,454,001 30,334,006Stockholders' equity 3,545,141 3,548,700 3,430,143Total liabilities and stockholders' equity $ 34,644,930 $ 34,002,701 $ 33,764,149Net interest income (1) $ 250,501 $ 251,617 $ 240,216Net interest spread 2.30% 2.40% 2.18% Net interest margin 3.13% 3.24% 3.10% Total deposits (2) $ 27,618,748 $ 124,270 1.80%$ 27,319,601 $ 120,233 1.78%$ 27,304,934 $ 144,940 2.13% Total funds (3) $ 30,717,453 $ 164,095 2.14%$ 30,039,001 $ 155,825 2.10%$ 29,880,258 $ 180,293 2.42% ______________ (1) Includes net loan discount accretion of $11.2 million, $12.2 million, and $16.1 million for the three months ended June 30, 2026, March 31, 2026, and June 30, 2025. (2) Total deposits is the sum of total interest-bearing deposits and noninterest-bearing demand deposits. The cost of total deposits is calculated as annualized interest expense on total deposits divided by average total deposits. (3) Total funds is the sum of total interest-bearing liabilities and noninterest-bearing demand deposits. The cost of total funds is calculated as annualized total interest expense divided by average total funds.
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19 BANC OF CALIFORNIA, INC.AVERAGE BALANCE, AVERAGE YIELD EARNED, AND AVERAGE COST PAID (UNAUDITED) Six Months Ended June 30, 2026 June 30, 2025 Interest Average Interest Average Average Income/ Yield/ Average Income/ Yield/ Balance Expense Cost Balance Expense Cost (Dollars in thousands) Assets: Loans and leases (1) $ 24,990,197 $ 704,775 5.69%$ 24,148,460 $ 708,406 5.92% Investment securities 4,977,896 84,280 3.41% 4,726,957 75,478 3.22% Deposits in financial institutions 1,828,090 32,983 3.64% 1,979,843 43,280 4.41% Total interest-earning assets 31,796,183 822,038 5.21% 30,855,260 827,164 5.41% Other assets 2,529,406 2,682,266Total assets $ 34,325,589 $ 33,537,526 Liabilities and Stockholders' Equity: Interest checking $ 8,244,548 94,576 2.31%$ 7,562,369 100,756 2.69% Money market 4,760,762 46,255 1.96% 5,414,190 66,618 2.48% Savings 1,920,329 19,347 2.03% 1,954,349 25,634 2.65% Time 4,666,115 84,325 3.64% 4,534,076 92,462 4.11% Total interest-bearing deposits 19,591,754 244,503 2.52% 19,464,984 285,470 2.96% Borrowings 2,084,355 46,745 4.52% 1,513,790 38,442 5.12% Subordinated debt 825,746 28,672 7.00% 944,790 30,672 6.55% Total interest-bearing liabilities 22,501,855 319,920 2.87% 21,923,564 354,584 3.26% Noninterest-bearing demand deposits 7,878,247 7,649,000Other liabilities 398,577 488,060Total liabilities 30,778,679 30,060,624Stockholders' equity 3,546,910 3,476,902Total liabilities and stockholders' equity $ 34,325,589 $ 33,537,526Net interest income (1) $ 502,118 $ 472,580Net interest spread 2.34% 2.15% Net interest margin 3.18% 3.09% Total deposits (2) $ 27,470,001 $ 244,503 1.79%$ 27,113,984 $ 285,470 2.12% Total funds (3) $ 30,380,102 $ 319,920 2.12%$ 29,572,564 $ 354,584 2.42% ______________ (1) Includes net loan discount accretion of $23.4 million and $32.1 million for the six months ended June 30, 2026 and 2025. (2) Total deposits is the sum of total interest-bearing deposits and noninterest-bearing demand deposits. The cost of total deposits is calculated as annualized interest expense on total deposits divided by average total deposits. (3) Total funds is the sum of total interest-bearing liabilities and noninterest-bearing demand deposits. The cost of total funds is calculated as annualized total interest expense divided by average total funds.
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20 BANC OF CALIFORNIA, INC. NON-GAAP MEASURES We refer to certain financial measures that are not recognized under U.S. generally accepted accounting principles (“GAAP”) in this press release, including: tangible common equity, tangible book value per common share, return on average tangible common equity, pre-tax pre-provision income, efficiency ratio, and economic coverage ratio. These non-GAAP measures are used by management in its analysis of the Company's performance. Tangible common equity is calculated by subtracting preferred stock, as applicable, from total common equity. Return on average tangible common equity is calculated by dividing net earnings available to common stockholders, after adjustment for amortization of intangible assets and any goodwill impairment, 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. Pre-tax pre-provision income is calculated by subtracting noninterest expense from total revenue, which is the sum of net interest income and noninterest income. Efficiency ratio is calculated by dividing noninterest expense (less intangible asset amortization and acquisition, integration and reorganization costs) by total revenue (the sum of net interest income and noninterest income, less gain (loss) on securities AFS). Economic coverage ratio is calculated by dividing the allowance for credit losses adjusted for the impact of the credit-linked notes and unearned credit mark from purchase accounting by loans and leases HFI. 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 to financial measures defined by GAAP.
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21 BANC OF CALIFORNIA, INC. NON-GAAP MEASURES (UNAUDITED) Tangible Common Equity June 30, March 31, December 31, September 30, June 30, and Tangible Book Value Per Share 2026 2026 2025 2025 2025 (Dollars in thousands, except per share amounts) Stockholders' equity $ 3,410,146 $ 3,553,326 $ 3,541,277 $ 3,466,739 $ 3,426,843 Less: Preferred stock 498,516 498,516 498,516 498,516 498,516 Total common equity 2,911,630 3,054,810 3,042,761 2,968,223 2,928,327 Less: Goodwill and intangible assets 307,230 313,612 319,808 326,444 333,451 Tangible common equity $ 2,604,400 $ 2,741,198 $ 2,722,953 $ 2,641,779 $ 2,594,876 Book value per common share (1) $ 18.38 $ 19.80 $ 19.56 $ 19.09 $ 18.58 Tangible book value per common share (2) $ 16.44 $ 17.77 $ 17.51 $ 16.99 $ 16.46 Common shares outstanding (3) 158,432,520 154,262,045 155,533,403 155,522,693 157,647,137 ______________ (1) Total common equity divided by common shares outstanding. (2) Tangible common equity divided by common shares outstanding. (3) Common shares outstanding include non-voting common stock equivalents that are participating securities. There were no non ‑ voting common stock equivalents outstanding as of June 30, 2026 and March 31, 2026.
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22 BANC OF CALIFORNIA, INC. NON-GAAP MEASURES (UNAUDITED) Three Months Ended Six Months Ended Return on Average Tangible June 30, March 31, June 30, June 30, Common Equity ("ROATCE") 2026 2026 2025 2026 2025 (Dollars in thousands) Net (loss) earnings $ (241,347) $ 71,952 $ 28,385 $ (169,395) $ 81,953 Adjustments: Intangible asset amortization 6,349 6,348 7,159 12,697 14,319 Tax impact of adjustment above (1) (1,778) (1,596) (1,655) (3,720) (3,311) Adjustment to net (loss) earnings 4,571 4,752 5,504 8,977 11,008 Adjusted net (loss) earnings for ROATCE (236,776) 76,704 33,889 (160,418) 92,961 Less: Preferred stock dividends 9,947 9,947 9,947 19,894 19,894 Adjusted net (loss) earnings available to common and equivalent stockholders for ROATCE $ (246,723) $ 66,757 $ 23,942 $ (180,312) $ 73,067 Average stockholders' equity $ 3,545,141 $ 3,548,700 $ 3,430,143 $ 3,546,910 $ 3,476,902 Less: Average goodwill and intangible assets 311,068 317,215 337,352 314,125 340,961 Less: Average preferred stock 498,516 498,516 498,516 498,516 498,516 Average tangible common equity $ 2,735,557 $ 2,732,969 $ 2,594,275 $ 2,734,269 $ 2,637,425 Return on average equity (2) (27.31)% 8.22% 3.32% (9.63)% 4.75% ROATCE (3) (36.18)% 9.91% 3.70% (13.30)% 5.59% ______________ (1) Effective tax rates of 28.00%, 25.14%, and 23.12% used for the three months ended June 30, 2026, March 31, 2026, and June 30, 2025, respectively. Effective tax rates of 29.30% and 23.12% used for the six months ended June 30, 2026 and 2025. (2) Annualized net (loss) earnings divided by average stockholders' equity. (3) Annualized adjusted net (loss) earnings available to common and equivalent stockholders for ROATCE divided by average tangible common equity. Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, Pre-Tax Pre-Provision (Loss) Income 2026 2026 2025 2026 2025 (Dollars in thousands) Net interest income (GAAP) $ 250,501 $ 251,617 $ 240,216 $ 502,118 $ 472,580 Add: Noninterest (loss) income (GAAP) (234,096) 35,328 32,633 (198,768) 66,283 Total revenues (GAAP) 16,405 286,945 272,849 303,350 538,863 Less: Noninterest expense (GAAP) 189,867 181,391 185,869 371,258 369,522 Pre-tax pre-provision (loss) income (Non-GAAP) $ (173,462) $ 105,554 $ 86,980 $ (67,908) $ 169,341
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23 BANC OF CALIFORNIA, INC. NON-GAAP MEASURES (UNAUDITED) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, Efficiency Ratio 2026 2026 2025 2026 2025 (Dollars in thousands) Noninterest expense $ 189,867 $ 181,391 $ 185,869 $ 371,258 $ 369,522 Less: Intangible asset amortization (6,349) (6,348) (7,159) (12,697) (14,319) Noninterest expense used for efficiency ratio $ 183,518 $ 175,043 $ 178,710 $ 358,561 $ 355,203 Net interest income $ 250,501 $ 251,617 $ 240,216 $ 502,118 $ 472,580 Noninterest (loss) income (234,096) 35,328 32,633 (198,768) 66,283 Total revenue 16,405 286,945 272,849 303,350 538,863 Add: Loss on securities AFS 256,749 — — 256,749 — Total revenue used for efficiency ratio $ 273,154 $ 286,945 $ 272,849 $ 560,099 $ 538,863 Noninterest expense to total revenue 1157.37% 63.21% 68.12% 122.39% 68.57% Efficiency ratio (1) 67.18% 61.00% 65.50% 64.02% 65.92% ______________ (1) Noninterest expense used for efficiency ratio divided by total revenue used for efficiency ratio. June 30, March 31, June 30, Economic Coverage Ratio 2026 2026 2025 (Dollars in thousands) Allowance for credit losses ("ACL") $ 276,240 $ 276,521 $ 258,565 Add: Unearned credit mark from purchase accounting (1) 12,920 14,315 19,199 Add: Credit-linked notes (2) 105,026 104,988 112,887 Adjusted allowance for credit losses $ 394,186 $ 395,824 $ 390,651 Loans and leases HFI $ 24,210,846 $ 24,780,347 $ 24,245,893 ACL to loans and leases HFI (3) 1.14% 1.12% 1.07% Economic coverage ratio (4) 1.63% 1.60% 1.61% ______________ (1) Unearned credit mark from purchase accounting estimated by using the same pro rata split between the credit and yield marks associated with non-PCD loans (purchased loans without credit deterioration at the time of purchase). (2) Credit-linked notes loss coverage equal to 5% of the unpaid principal balance of the pledged loans. (3) Allowance for credit losses divided by loans and leases HFI. (4) Adjusted allowance for credit losses divided by loans and leases HFI.