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Second Quarter 2026 Results
Press Release
             
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'
                                              2
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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'
                                              3
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INCOME STATEMENT HIGHLIGHTS
Three Months Ended
Six Months Ended
June 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.
                                              4
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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.
                                              5
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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.
                                              6
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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.
                                              7
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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.
                                              8
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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.
                                              9
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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.
                                              10
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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'
                                              11
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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.
                                              12
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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.
                                              13
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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,
                                              14
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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) 424-1230
Joe Kauder, (310) 844-5224
Ann DeVries, (646) 376-7011
Media Contact:
Debora Vrana, Banc of California
(213) 533-3122
Deb.Vrana@bancofcal.com
                                              15
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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.
                                              16
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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
$708,406
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)
10
21
(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
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
(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.
                                              17
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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) .
                                              18
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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
2,667,140
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) 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.
                                              19
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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
2,682,266
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) 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.
                                              20
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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.
                                              21
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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.
                                              22
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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
                                              23
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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.