Banc of California, Inc. Reports Second Quarter 2026 Financial Results and Announces Strategic Balance Sheet Repositioning to Enhance Long-Term Earnings

Banc of California, Inc. Reports Second Quarter 2026 Financial Results and Announces Strategic Balance Sheet Repositioning to Enhance Long-Term Earnings LOS ANGELES--( BUSINESS WIRE)--Banc of California, Inc. (NYSE: BANC):

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

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 Financial Highlights:

(1) Capital ratios for June 30, 2026 are preliminary

(2) Non-GAAP measure; refer to section “Non-GAAP Measures”

INCOME STATEMENT HIGHLIGHTS

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

Summary Income Statement

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

)

(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

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.

Three Months Ended

Increase (Decrease)

June 30, 2026

March 31, 2026

QoQ

Summary

Interest

Average

Interest

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.

Six Months Ended

Increase (Decrease)

June 30, 2026

June 30, 2025

YoY

Summary

Interest

Average

Interest

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)

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.

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.

BALANCE SHEET HIGHLIGHTS

June 30,

March 31,

June 30,

Increase (Decrease)

Selected Balance Sheet Items

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.

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

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

Multi-family

Other residential

Total real estate mortgage

Real estate construction and land:

Commercial

Residential

Total real estate construction and land

Total real estate

Commercial:

Asset-based

Venture capital

Other commercial

Total commercial

Consumer

Total loans and leases HFI

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.

Credit Quality

June 30,

March 31,

December 31,

September 30,

June 30,

Asset Quality Information and Ratios

2026

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.

Allowance for Credit Losses – Loans

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

Allowance for Credit Losses - Loans

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

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.

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

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

Interest-bearing:

Checking

Money market

Savings

Time deposits:

Non-brokered

Brokered

Total time deposits

Total interest-bearing

Total deposits

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.

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

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.

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, 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.

BANC OF CALIFORNIA, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(UNAUDITED)

June 30,

March 31,

December 31,

September 30,

June 30,

2026

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

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

Common stock

1,580

1,538

1,500

1,509

1,474

Class B non-voting common stock

Non-voting common stock equivalents

—

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.

CONSOLIDATED STATEMENTS OF EARNINGS

(UNAUDITED)

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

2026

2025

2026

2025

(In thousands, except per share amounts)

Interest income:

Loans and leases

354,832

349,943

362,303

704,775

708,406

Investment securities

42,407

41,873

37,616

84,280

75,478

Deposits in financial institutions

17,357

15,626

20,590

32,983

43,280

Total interest income

414,596

407,442

420,509

822,038

827,164

Interest expense:

Deposits

124,270

120,233

144,940

244,503

285,470

Borrowings

26,568

20,177

20,021

46,745

38,442

Subordinated debt

13,257

15,415

15,332

28,672

30,672

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

Net interest income after provision for credit losses

88,721

241,817

201,116

330,538

424,180

Noninterest income:

Service charges on deposit accounts

4,763

4,978

4,456

9,741

8,999

Commissions and fees

9,034

10,980

9,641

20,014

19,599

Leased equipment income

7,820

8,530

10,231

16,350

21,015

(Loss) gain on loans and leases HFS

(12,544

)

(12,534

)

232

Loss on securities AFS

(256,749

)

—

(256,749

)

—

Dividends and gains (loss) on equity investments

3,326

2,002

(114

)

5,328

2,209

Warrant income

896

938

1,227

1,834

932

Other income

9,358

7,890

7,171

17,248

13,297

Total noninterest (loss) income

(234,096

)

35,328

32,633

(198,768

)

66,283

Noninterest expense:

Compensation

85,120

91,100

88,362

176,220

174,779

Occupancy

14,714

14,892

15,473

29,606

30,483

Information technology and data processing

13,769

14,339

13,073

28,108

28,172

Other professional services

5,599

4,236

6,406

9,835

10,919

Insurance and assessments

14,500

6,764

9,403

21,264

16,686

Intangible asset amortization

6,349

6,348

7,159

12,697

14,319

Leased equipment depreciation

5,168

5,304

6,700

10,472

13,441

Customer related expense

24,114

23,737

26,577

47,851

54,328

Loan expense

5,170

4,292

4,050

9,462

6,980

Other expense

15,364

10,379

8,666

25,743

19,415

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

19,894

Net (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

)

0.38

Diluted

(1.61

)

0.39

0.12

(1.22

)

0.38

Weighted average number of common shares outstanding: (1)

Basic

155,803

154,821

158,354

155,315

163,396

Diluted

155,803

160,832

158,462

155,315

163,667

(1)

Common shares outstanding include non-voting common stock equivalents that are participating securities.

SELECTED FINANCIAL DATA

(UNAUDITED)

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

Profitability and Other Ratios

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).

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

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

2,667,140

Total 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

7,583,894

Other liabilities

382,336

415,000

453,748

Total liabilities

31,099,789

30,454,001

30,334,006

Stockholders' equity

3,545,141

3,548,700

3,430,143

Total liabilities and stockholders' equity

34,644,930

34,002,701

33,764,149

Net interest income (1)

250,501

251,617

240,216

Net 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)

AVERAGE BALANCE, AVERAGE YIELD EARNED, AND AVERAGE COST PAID

(UNAUDITED)

Six Months Ended

June 30, 2026

June 30, 2025

Interest

Average

Interest

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

2,682,266

Total 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

7,649,000

Other liabilities

398,577

488,060

Total liabilities

30,778,679

30,060,624

Stockholders' equity

3,546,910

3,476,902

Total liabilities and stockholders' equity

34,325,589

33,537,526

Net interest income (1)

502,118

472,580

Net 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)

(3)

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.

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

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

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)

NON-GAAP MEASURES

(UNAUDITED)

Three Months Ended

Six Months Ended

Return on Average Tangible

June 30,

March 31,

June 30,

Common Equity ("ROATCE")

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

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

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,

Pre-Tax Pre-Provision (Loss) Income

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

BANC OF CALIFORNIA, INC.

NON-GAAP MEASURES

(UNAUDITED)

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

Efficiency Ratio

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

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.