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Banc of California, Inc. Reports Third Quarter Diluted Earnings per Share of $0.46, Up 21% Year Over Year

October 27, 2026
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Strategic Repositioning and Core Business Performance Drive Higher Earnings and Positive Operating Leverage

LOS ANGELES--(BUSINESS WIRE)--Oct. 27, 2026-- Banc of California, Inc. (NYSE: BANC):

Quarter Results

 

 

 

 

 

 

 

$0.46

Diluted Earnings Per Share

 

6%

Total Revenue Growth

 

16%

Pre-Tax Pre-Provision

Income Growth (1)

 

3.34%

Net Interest Margin

 

6%

Loan Annualized Growth

 

8%

Deposit Average

Annualized Growth

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 third quarter ended September 30, 2026. The Company reported net earnings available to common and equivalent stockholders of $73.1 million, or $0.46 per diluted common share, for the third quarter of 2026, compared to $59.7 million, or $0.38 per diluted common share for the third quarter of 2025. For the second quarter of 2026, 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 previously announced strategic balance sheet repositioning.

Jared Wolff, Chairman & CEO of Banc of California, commented, “Our third quarter results demonstrate the stronger earnings foundation we have created through our second quarter strategic balance sheet repositioning and continued execution across our business. Compared to the first quarter, before the repositioning, diluted earnings per share increased 18%, total revenue increased 6% and pre-tax pre-provision income increased 12%. We also grew deposits, reduced our reliance on brokered funding and increased our CET1 ratio by 45 basis points from the second quarter.”

Mr. Wolff added, “We expect further improvement in profitability in the fourth quarter as we realize a full quarter of earnings from our securities reinvestment and additional benefits from the completed loan sales. We are focused on building on this progress through deeper client relationships, disciplined loan growth, growth in relationship deposits and continued capital generation to deliver sustainable earnings growth and long-term shareholder value.”

Third Quarter 2026 Financial Highlights:

  • The second quarter strategic balance sheet repositioning contributed to increased third quarter earnings, with diluted earnings per share of $0.46, up 21% from $0.38 year-over-year.
  • Total revenue of $303.8 million, up 6% year-over-year, and pre-tax pre-provision income(1) of $118.4 million, up 16% year-over-year, while noninterest expense of $185.4 million remained flat year-over-year.
  • Net interest income increased $21.9 million, or 9%, from prior quarter to $272.4 million, and net interest margin expanded 21 basis points to 3.34%, reflecting higher yields on investment securities following the Company's second quarter strategic balance sheet repositioning activities and continued execution across the business.
  • Loans and leases held for investment increased $379.7 million, or 6% on an annualized basis, driven by $2.6 billion of loan production and disbursements with a weighted average interest rate on production of 6.58%.
  • Average deposits increased $565.3 million, or 8% on an annualized basis, supporting reduced wholesale funding.
  • Credit quality trends were favorable, as nonperforming and classified loans and leases as a percentage of total loans and leases held for investment declined by 12 basis points and 35 basis points, respectively.
  • Capital ratios(2) increased from prior quarter and exceeded the regulatory thresholds for "well capitalized" banks, including an estimated 12.10% Tier 1 capital ratio, up 43 basis points from prior quarter, and 9.70% common equity tier 1 ("CET1") capital ratio, up 45 basis points from the prior quarter, reflecting capital generation following the balance sheet repositioning.

(1)

Non-GAAP measure; refer to section 'Non-GAAP Measures'

(2)

Capital ratios for September 30, 2026 are preliminary

During the second quarter of 2026, the Company entered into targeted loan sales relating to $827 million of commercial real estate and construction loans. Of these loans, approximately $525 million were sold during the third quarter. Of the remaining approximately $300 million of construction loans, $235 million were sold on October 21, 2026, and $65 million were removed prior to sale as construction on the project was completed and the loan converted into permanent financing. We anticipate selling our remaining held for sale loan portfolio over the next several quarters.

INCOME STATEMENT HIGHLIGHTS

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

 

September 30,

Summary Income Statement

 

2026

 

 

 

2026

 

 

 

2025

 

 

 

2026

 

 

 

2025

 

 

(In thousands)

Total interest income

$

442,736

 

 

$

414,596

 

 

$

432,541

 

 

$

1,264,774

 

 

$

1,259,705

 

Total interest expense

 

170,294

 

 

 

164,095

 

 

 

179,097

 

 

 

490,214

 

 

 

533,681

 

Net interest income

 

272,442

 

 

 

250,501

 

 

 

253,444

 

 

 

774,560

 

 

 

726,024

 

Provision for credit losses

 

10,400

 

 

 

161,780

 

 

 

9,700

 

 

 

181,980

 

 

 

58,100

 

Loss on loans and leases HFS

 

(4,199

)

 

 

(12,544

)

 

 

(374

)

 

 

(16,733

)

 

 

(142

)

Gain (loss) on securities AFS

 

728

 

 

 

(256,749

)

 

 

—

 

 

 

(256,021

)

 

 

—

 

Other noninterest income

 

34,827

 

 

 

35,197

 

 

 

34,659

 

 

 

105,342

 

 

 

100,710

 

Total noninterest income (loss)

 

31,356

 

 

 

(234,096

)

 

 

34,285

 

 

 

(167,412

)

 

 

100,568

 

Total revenue

 

303,798

 

 

 

16,405

 

 

 

287,729

 

 

 

607,148

 

 

 

826,592

 

Total noninterest expense

 

185,370

 

 

 

189,867

 

 

 

185,684

 

 

 

556,628

 

 

 

555,206

 

Earnings (loss) before income taxes

 

108,028

 

 

 

(335,242

)

 

 

92,345

 

 

 

(131,460

)

 

 

213,286

 

Income tax expense (benefit)

 

24,971

 

 

 

(93,895

)

 

 

22,716

 

 

 

(45,122

)

 

 

61,704

 

Net earnings (loss)

 

83,057

 

 

 

(241,347

)

 

 

69,629

 

 

 

(86,338

)

 

 

151,582

 

Preferred stock dividends

 

9,947

 

 

 

9,947

 

 

 

9,947

 

 

 

29,841

 

 

 

29,841

 

Net earnings (loss) available to common and equivalent stockholders

$

73,110

 

 

$

(251,294

)

 

$

59,682

 

 

$

(116,179

)

 

$

121,741

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share

$

0.46

 

 

$

(1.61

)

 

$

0.38

 

 

$

(0.74

)

 

$

0.75

 

Net Interest Income and Margin

Third Quarter of 2026 Compared to Second Quarter of 2026

Net interest income increased by $21.9 million to $272.4 million for the third quarter, from $250.5 million in the second quarter. This increase was primarily driven by the $17.7 million increase in interest income on investment securities resulting from the strategic balance sheet repositioning during the second quarter and reinvestment into higher-yielding assets, including a $2.8 million special dividend received on FHLB stock. In addition, interest income on loans increased by $7.7 million primarily driven by lower interest reversals associated with nonaccrual loans compared to the prior quarter and one additional day in the quarter. These increases were offset partially by a $6.0 million increase in interest expense on deposits primarily due to increased market interest rates, one additional day in the quarter, as well as higher average balances.

Net interest margin was 3.34% for the third quarter, up 21 basis points from 3.13% for the second quarter. The increase was primarily driven by the higher yield on average interest earning assets, which increased to 5.43% from 5.18%, reflecting a 142 basis point increase in the average yield on investment securities to 4.86%. The increase in investment securities yield reflects earnings from the strategic balance sheet repositioning and reinvestment activities.

The average total cost of funds increased to 2.16% from 2.14%, primarily due to a 3 basis point increase in the average total cost of deposits to 1.83%. Average total deposits increased by $565.3 million, with a $546.3 million increase in average interest-bearing deposits. The increase in average yield on total interest-bearing deposits reflects the impact of the federal funds rate increases during the quarter. Average noninterest-bearing deposits represented 28.0% of average total deposits in the third quarter, down from 28.5% in the second quarter.

 

Three Months Ended

Increase (Decrease)

 

September 30, 2026

 

June 30, 2026

 

QoQ

Summary

 

 

Average

 

 

 

Average

 

 

Average

Average Balance

Average

 

Yield/

 

Average

 

Yield/

 

Average

Yield/

and Yield/Rate Data

Balance

Interest

Rate

 

Balance

Interest

Rate

 

Balance

Rate

 

(Dollars in thousands)

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

Loans and leases (1)

$

25,274,927

$

362,549

5.69

%

 

$

25,266,712

$

354,832

5.63

%

 

$

8,215

 

0.06

%

Investment securities

 

4,912,701

 

60,125

4.86

%

 

 

4,938,232

 

42,407

3.44

%

 

 

(25,531

)

1.42

%

Deposits in financial institutions

 

2,166,626

 

20,062

3.67

%

 

 

1,912,585

 

17,357

3.64

%

 

 

254,041

 

0.03

%

Total interest-earning assets

$

32,354,254

$

442,736

5.43

%

 

$

32,117,529

$

414,596

5.18

%

 

$

236,725

 

0.25

%

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

$

7,885,157

 

 

 

$

7,866,139

 

 

 

$

19,018

 

 

Total interest-bearing deposits

 

20,298,878

$

130,248

2.55

%

 

 

19,752,609

$

124,270

2.52

%

 

 

546,269

 

0.03

%

Total deposits

$

28,184,035

 

130,248

1.83

%

 

$

27,618,748

 

124,270

1.80

%

 

$

565,287

 

0.03

%

 

 

 

 

 

 

 

 

 

 

 

Total interest-bearing liabilities

$

23,334,658

$

170,294

2.90

%

 

$

22,851,314

$

164,095

2.88

%

 

$

483,344

 

0.02

%

 

 

 

 

 

 

 

 

 

 

 

Net interest income (1)

 

$

272,442

 

 

 

$

250,501

 

 

 

 

Net interest margin

 

 

3.34

%

 

 

 

3.13

%

 

 

0.21

%

 

 

 

 

 

 

 

 

 

 

 

Total funds (2)

$

31,219,815

$

170,294

2.16

%

 

$

30,717,453

$

164,095

2.14

%

 

$

502,362

 

0.02

%

______________

(1)

Includes net loan discount accretion of $8.7 million and $11.2 million for the three months ended September 30, 2026 and June 30, 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 September 30, 2026 vs YTD September 30, 2025

Net interest income increased $48.5 million to $774.6 million for the nine months ended September 30, 2026, from $726.0 million for the nine months ended September 30, 2025. The increase was primarily driven by a $53.8 million decrease in interest expense on deposits due to lower interest rates following federal funds rate cuts in the second half of 2025, and a $30.6 million increase in interest income from investment securities reflecting the benefits of prior balance sheet repositioning and reinvestment activities, including $4.1 million of special dividends received on FHLB stock. These benefits were offset partially by a $15.5 million increase in borrowing costs associated with funding loan growth and the subordinated debt redemption prior to higher repricing in the second quarter of 2026, a $13.8 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, and an $11.8 million decrease in interest income from deposits in financial institutions due to lower balances and lower market interest rates.

The net interest margin was 3.24% for the nine months ended September 30, 2026, up 11 basis points from 3.13% for the nine months ended September 30, 2025. The year-over-year improvement was primarily driven by a 26 basis point decrease in the average total cost of funds due mainly to lower market interest rates and a 69 basis point increase in the average yield on investment securities.

The average total cost of funds decreased by 26 basis points to 2.14%, driven primarily by the decline in average cost of deposits of 30 basis points to 1.81%, reflecting the impact of lower market interest rates. Average total deposits increased by $536.6 million year-over-year, as a result of a $316.6 million increase in average interest-bearing deposits and a $220.1 million increase in average noninterest-bearing deposits. Average noninterest-bearing deposits represented 28.4% of average total deposits for the nine months ended September 30, 2026, up from 28.2% for the comparable period in 2025. The average cost of borrowings also decreased by 49 basis points to 4.50%, reflecting the paydown of higher-cost borrowings in the prior year and their replacement with lower-cost short-term Federal Home Loan Bank ("FHLB") advances.

The average yield on interest-earning assets declined by 15 basis points to 5.29%. The decrease was primarily driven by a 27 basis point decline in average yield on loans and leases to 5.69% and a 74 basis point decline in average yield on deposits in financial institutions, primarily consisting of reserves held at the Federal Reserve Bank, to 3.65%, reflecting lower market rates. These decreases were offset partially by a 69 basis point increase in the average yield on investment securities to 3.90%, reflecting a benefit from the strategic balance sheet repositioning and reinvestment activities.

 

Nine Months Ended

Increase (Decrease)

 

September 30, 2026

 

September 30, 2025

 

YoY

Summary

 

 

Average

 

 

 

Average

 

 

Average

Average Balance

Average

 

Yield/

 

Average

 

Yield/

 

Average

Yield/

and Yield/Rate Data

Balance

Interest

Rate

 

Balance

Interest

Rate

 

Balance

Rate

 

(Dollars in thousands)

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

Loans and leases (1)

$

25,086,150

$

1,067,324

5.69

%

 

$

24,252,860

$

1,081,129

5.96

%

 

$

833,290

 

(0.27

)%

Investment securities

 

4,955,926

 

144,405

3.90

%

 

 

4,745,530

 

113,769

3.21

%

 

 

210,396

 

0.69

%

Deposits in financial institutions

 

1,942,176

 

53,045

3.65

%

 

 

1,972,486

 

64,807

4.39

%

 

 

(30,310

)

(0.74

)%

Total interest-earning assets

$

31,984,252

$

1,264,774

5.29

%

 

$

30,970,876

$

1,259,705

5.44

%

 

$

1,013,376

 

(0.15

)%

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

$

7,880,575

 

 

 

$

7,660,504

 

 

 

$

220,071

 

 

Total interest-bearing deposits

 

19,830,053

 

374,751

2.53

%

 

 

19,513,486

 

428,544

2.94

%

 

 

316,567

 

(0.41

)%

Total deposits

$

27,710,628

$

374,751

1.81

%

 

$

27,173,990

$

428,544

2.11

%

 

$

536,638

 

(0.30

)%

 

 

 

 

 

 

 

 

 

 

 

Total interest-bearing liabilities

$

22,782,506

$

490,214

2.88

%

 

$

22,038,389

$

533,681

3.24

%

 

$

744,117

 

(0.36

)%

 

 

 

 

 

 

 

 

 

 

 

Net interest income (1)

 

$

774,560

 

 

 

$

726,024

 

 

 

 

Net interest margin

 

 

3.24

%

 

 

 

3.13

%

 

 

0.11

%

 

 

 

 

 

 

 

 

 

 

 

Total funds (2)

$

30,663,081

$

490,214

2.14

%

 

$

29,698,893

$

533,681

2.40

%

 

$

964,188

 

(0.26

)%

______________

(1)

Includes net loan discount accretion of $32.2 million and $51.5 million for the nine months ended September 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

Third Quarter of 2026 Compared to Second Quarter of 2026

The provision for credit losses was $10.4 million for the third quarter compared to $161.8 million for the second quarter.

The third quarter provision included an $8.4 million provision for loan losses and a $2.0 million provision for unfunded commitments. The provision was primarily driven by net charge-off activity experienced in the quarter and growth in the held for investment ("HFI") loan portfolio, offset partially by lower specific reserves and changes in the economic factors used in the provision estimate.

The second quarter provision was elevated by the strategic balance sheet repositioning activities related to the targeted loan sale process, 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 in our HFI portfolio.

YTD September 30, 2026 vs YTD September 30, 2025

The provision for credit losses was $182.0 million for the nine months ended September 30, 2026, compared to $58.1 million for the nine months ended September 30, 2025. The provision for the 2026 period included a provision for loan losses of $180.2 million, reflecting the impact of the targeted loan sale process and the impact of loan growth, offset partially by improved risk ratings for our HFI portfolio.

The provision for the nine months ended September 30, 2025 included the impact of $506.7 million of loans transferred to held for sale ("HFS") and recorded at the lower of cost or market value. The remaining increase in the provision for credit losses 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. These were offset partially by lower specific reserves and a favorable shift in the portfolio mix due to growth in loan segments with lower expected credit losses.

Noninterest Income

Third Quarter of 2026 Compared to Second Quarter of 2026

Noninterest income increased by $265.5 million to $31.4 million for the third quarter, compared to a loss of $234.1 million for the second quarter. The increase was primarily driven by a $257.5 million decrease in loss on securities and an $8.3 million decrease in loss on loans and leases HFS, both of which were a result of the strategic balance sheet repositioning actions taken in the second quarter. Also included in noninterest income was a $2.0 million increase in operating lease income, primarily due to new lease fundings and higher lease renewal income, offset partially by a $1.4 million decrease in other income. The decrease in other income was primarily due to the second quarter gain recognized on the sale of the Company's single-family mortgage servicing rights portfolio, offset partially by the second quarter loss on the redemption of the $385 million subordinated note.

YTD September 30, 2026 vs YTD September 30, 2025

Noninterest income decreased by $268.0 million to a loss of $167.4 million for the nine months ended September 30, 2026, compared to income of $100.6 million for the same period in 2025. The decrease was primarily attributable to the $256.0 million pre-tax loss recognized as part of the securities repositioning and a $16.6 million increase in the loss on loans and leases HFS resulting primarily from lower of cost or market adjustments recorded during the second quarter in connection with the strategic balance sheet repositioning actions.

Noninterest Expense

Third Quarter of 2026 Compared to Second Quarter of 2026

Noninterest expense decreased by $4.5 million to $185.4 million for the third quarter from $189.9 million for the second quarter. The decrease was primarily due to a $5.1 million decrease in other expense due to a non-recurring software obsolescence charge taken during the second quarter and a $2.3 million decrease in insurance and assessments due to a lower FDIC assessment rate resulting from favorable mix. These decreases were offset partially by a $2.2 million increase in compensation expense primarily driven by one-time incentive plan adjustments in the second quarter and a $1.6 million increase in operating lease and customer related expenses.

YTD September 30, 2026 vs YTD September 30, 2025

Noninterest expense increased by $1.4 million to $556.6 million for the nine months ended September 30, 2026 from $555.2 million for the nine months ended September 30, 2025. The increase was primarily due to an $8.2 million increase in other expense related mainly to software obsolescence charges, a $7.8 million increase in insurance and assessments due to the higher assessment rate resulting from the balance sheet repositioning and its effect on assessment related metrics, and a $2.2 million increase in loan expense related to legal fees. These increases were offset partially by a $7.9 million decrease in customer related expenses primarily due to federal funds rate cuts in the fourth quarter of 2025 and a $3.6 million decrease in leased equipment depreciation.

Income Taxes

Third Quarter of 2026 Compared to Second Quarter of 2026

Income tax expense of $25.0 million was recorded for the third quarter, resulting in an effective tax rate of 23.1%, compared to an income tax benefit of $93.9 million and an effective tax rate of 28.0% for the second 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, in the second quarter, the Company began calculating its income tax provision using the year-to-date effective tax rate approach rather than the estimated annual effective tax rate method. The decrease in the effective tax rate from the second quarter is due primarily to the recognition of increased income tax benefits in the third quarter.

YTD September 30, 2026 vs YTD September 30, 2025

Income tax benefit of $45.1 million was recorded for the nine months ended September 30, 2026, resulting in an effective tax rate of 34.3%, compared to income tax expense of $61.7 million and an effective tax rate of 28.9% for the same period in 2025. The increase in the effective tax rate from 2025 to 2026 is due primarily to the effects of the Company’s balance sheet repositioning actions taken in the second quarter of 2026.

BALANCE SHEET HIGHLIGHTS

 

September 30,

 

June 30,

 

September 30,

 

Increase (Decrease)

Selected Balance Sheet Items

2026

 

2026

 

2025

 

QoQ

 

YoY

 

(In thousands)

Cash and cash equivalents

$

2,168,707

 

$

2,818,055

 

$

2,398,265

 

$

(649,348

)

 

$

(229,558

)

Securities AFS

 

5,065,839

 

 

4,484,021

 

 

2,426,734

 

 

581,818

 

 

 

2,639,105

 

Securities HTM

 

—

 

 

—

 

 

2,303,657

 

 

—

 

 

 

(2,303,657

)

Loans HFS

 

498,759

 

 

915,171

 

 

211,454

 

 

(416,412

)

 

 

287,305

 

Loans and leases HFI

 

24,590,523

 

 

24,210,846

 

 

24,110,642

 

 

379,677

 

 

 

479,881

 

Total loans and leases

 

25,089,282

 

 

25,126,017

 

 

24,322,096

 

 

(36,735

)

 

 

767,186

 

Total assets

 

34,965,495

 

 

35,030,953

 

 

34,012,965

 

 

(65,458

)

 

 

952,530

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

$

7,690,767

 

$

7,758,119

 

$

7,603,748

 

$

(67,352

)

 

$

87,019

 

Total deposits

 

28,260,309

 

 

28,121,182

 

 

27,184,765

 

 

139,127

 

 

 

1,075,544

 

Borrowings

 

2,408,626

 

 

2,460,363

 

 

2,005,022

 

 

(51,737

)

 

 

403,604

 

Total liabilities

 

31,616,666

 

 

31,620,807

 

 

30,546,226

 

 

(4,141

)

 

 

1,070,440

 

Total stockholders' equity

 

3,348,829

 

 

3,410,146

 

 

3,466,739

 

 

(61,317

)

 

 

(117,910

)

Securities

Available-for-sale ("AFS") securities increased by $0.6 billion during the third quarter to $5.1 billion at September 30, 2026 compared to $4.5 billion at June 30, 2026, due primarily to the remaining reinvestment activities following the securities repositioning in the second quarter. During the third quarter AFS securities were impacted by $997.2 million of purchases offset partially by $209.9 million of principal paydowns, $160.2 million decrease in the fair value of AFS securities, $26.8 million of maturities, and $18.3 million of sales. As of September 30, 2026, AFS securities had aggregate unrealized net after-tax losses in AOCI of $261.4 million, up from $145.3 million at June 30, 2026, driven by higher interest rates.

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:

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

 

2026

 

 

 

2026

 

 

 

2026

 

 

 

2025

 

 

 

2025

 

 

(Dollars in thousands)

Composition of Loans and Leases

 

 

 

 

 

 

 

 

 

Real estate mortgage:

 

 

 

 

 

 

 

 

 

Commercial

$

3,998,683

 

 

$

4,037,229

 

 

$

4,093,386

 

 

$

4,314,637

 

 

$

4,292,625

 

Multi-family

 

5,376,885

 

 

 

5,445,475

 

 

 

5,955,102

 

 

 

6,089,417

 

 

 

6,124,673

 

Other residential

 

4,100,716

 

 

 

3,793,876

 

 

 

3,458,410

 

 

 

3,346,733

 

 

 

3,162,564

 

Total real estate mortgage

 

13,476,284

 

 

 

13,276,580

 

 

 

13,506,898

 

 

 

13,750,787

 

 

 

13,579,862

 

Real estate construction and land:

 

 

 

 

 

 

 

 

 

Commercial

 

358,696

 

 

 

360,392

 

 

 

364,575

 

 

 

379,387

 

 

 

395,150

 

Residential

 

1,116,075

 

 

 

1,114,459

 

 

 

1,527,754

 

 

 

1,568,240

 

 

 

1,759,676

 

Total real estate construction and land

 

1,474,771

 

 

 

1,474,851

 

 

 

1,892,329

 

 

 

1,947,627

 

 

 

2,154,826

 

Total real estate

 

14,951,055

 

 

 

14,751,431

 

 

 

15,399,227

 

 

 

15,698,414

 

 

 

15,734,688

 

Commercial:

 

 

 

 

 

 

 

 

 

Asset-based

 

3,393,000

 

 

 

3,318,822

 

 

 

3,209,338

 

 

 

2,951,010

 

 

 

2,742,519

 

Venture capital

 

2,369,551

 

 

 

2,440,075

 

 

 

2,322,261

 

 

 

2,222,097

 

 

 

1,907,601

 

Other commercial

 

3,541,510

 

 

 

3,353,534

 

 

 

3,501,388

 

 

 

3,804,099

 

 

 

3,356,537

 

Total commercial

 

9,304,061

 

 

 

9,112,431

 

 

 

9,032,987

 

 

 

8,977,206

 

 

 

8,006,657

 

Consumer

 

335,407

 

 

 

346,984

 

 

 

348,133

 

 

 

357,059

 

 

 

369,297

 

Total loans and leases HFI

$

24,590,523

 

 

$

24,210,846

 

 

$

24,780,347

 

 

$

25,032,679

 

 

$

24,110,642

 

 

 

 

 

 

 

 

 

 

 

Total unfunded loan commitments

$

5,565,774

 

 

$

5,211,632

 

 

$

5,549,325

 

 

$

5,433,357

 

 

$

4,822,917

 

 

 

 

 

 

 

 

 

 

 

Composition as % of Total Loans and Leases

 

 

 

 

 

 

 

 

 

Real estate mortgage:

 

 

 

 

 

 

 

 

 

Commercial

 

16

%

 

 

17

%

 

 

17

%

 

 

17

%

 

 

18

%

Multi-family

 

22

%

 

 

22

%

 

 

24

%

 

 

24

%

 

 

25

%

Other residential

 

17

%

 

 

16

%

 

 

14

%

 

 

14

%

 

 

13

%

Total real estate mortgage

 

55

%

 

 

55

%

 

 

55

%

 

 

55

%

 

 

56

%

Real estate construction and land:

 

 

 

 

 

 

 

 

 

Commercial

 

1

%

 

 

1

%

 

 

2

%

 

 

2

%

 

 

2

%

Residential

 

5

%

 

 

5

%

 

 

6

%

 

 

6

%

 

 

7

%

Total real estate construction and land

 

6

%

 

 

6

%

 

 

8

%

 

 

8

%

 

 

9

%

Total real estate

 

61

%

 

 

61

%

 

 

63

%

 

 

63

%

 

 

65

%

Commercial:

 

 

 

 

 

 

 

 

 

Asset-based

 

14

%

 

 

14

%

 

 

13

%

 

 

12

%

 

 

11

%

Venture capital

 

10

%

 

 

10

%

 

 

9

%

 

 

9

%

 

 

8

%

Other commercial

 

14

%

 

 

14

%

 

 

14

%

 

 

15

%

 

 

14

%

Total commercial

 

38

%

 

 

38

%

 

 

36

%

 

 

36

%

 

 

33

%

Consumer

 

1

%

 

 

1

%

 

 

1

%

 

 

1

%

 

 

2

%

Total loans and leases HFI

 

100

%

 

 

100

%

 

 

100

%

 

 

100

%

 

 

100

%

Total loans and leases HFI increased by $379.7 million in the third quarter to $24.6 billion at September 30, 2026. The increase reflected continued growth in the Company's other residential real estate mortgage loans and asset-based lending portfolios, as well as growth in the other commercial portfolio during the quarter. Loan production and disbursements totaled $2.6 billion in the third quarter and were broad-based, with a weighted average interest rate on production of 6.58%.

Total loans and leases HFS decreased by $416.4 million in the third quarter and totaled $498.8 million at September 30, 2026. The decrease was primarily driven by the sale of loans associated with the Company's previously announced $827 million targeted loan sale. Approximately $525 million were sold during the third quarter. Of the remaining approximately $300 million of construction loans, $235 million were sold on October 21, 2026, and $65 million were removed prior to sale as construction on the project was completed and the loan converted into permanent financing. We anticipate selling our remaining held for sale loan portfolio over the next several quarters.

Credit Quality

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

Asset Quality Information and Ratios

 

2026

 

 

 

2026

 

 

 

2026

 

 

 

2025

 

 

 

2025

 

 

(Dollars in thousands)

Delinquent loans and leases HFI:

 

 

 

 

 

 

 

 

 

30 to 89 days delinquent

$

45,096

 

 

$

91,196

 

 

$

263,530

 

 

$

108,303

 

 

$

56,416

 

90+ days delinquent

 

69,704

 

 

 

82,457

 

 

 

81,599

 

 

 

92,655

 

 

 

104,952

 

Total delinquent loans and leases

$

114,800

 

 

$

173,653

 

 

$

345,129

 

 

$

200,958

 

 

$

161,368

 

 

 

 

 

 

 

 

 

 

 

Total delinquent loans and leases to loans and leases HFI

 

0.47

%

 

 

0.72

%

 

 

1.39

%

 

 

0.80

%

 

 

0.67

%

 

 

 

 

 

 

 

 

 

 

Nonperforming assets, excluding loans HFS:

 

 

 

 

 

 

 

 

 

Nonaccrual loans and leases

$

177,233

 

 

$

203,712

 

 

$

185,734

 

 

$

159,168

 

 

$

174,541

 

90+ days delinquent loans and still accruing

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total nonperforming loans and leases ("NPLs")

 

177,233

 

 

 

203,712

 

 

 

185,734

 

 

 

159,168

 

 

 

174,541

 

Foreclosed assets, net

 

21,460

 

 

 

16,319

 

 

 

18,055

 

 

 

17,115

 

 

 

4,790

 

Total nonperforming assets ("NPAs")

$

198,693

 

 

$

220,031

 

 

$

203,789

 

 

$

176,283

 

 

$

179,331

 

 

 

 

 

 

 

 

 

 

 

Classified loans and leases HFI

$

507,368

 

 

$

582,790

 

 

$

842,834

 

 

$

800,330

 

 

$

763,582

 

Special mention loans and leases HFI

 

352,144

 

 

 

300,542

 

 

 

688,659

 

 

 

458,683

 

 

 

505,979

 

Criticized loans and leases HFI

$

859,512

 

 

$

883,332

 

 

$

1,531,493

 

 

$

1,259,013

 

 

$

1,269,561

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan and lease losses

$

234,428

 

 

$

243,319

 

 

$

241,600

 

 

$

245,612

 

 

$

240,501

 

Allowance for loan and lease losses to NPLs

 

132.27

%

 

 

119.44

%

 

 

130.08

%

 

 

154.31

%

 

 

137.79

%

NPLs to loans and leases HFI

 

0.72

%

 

 

0.84

%

 

 

0.75

%

 

 

0.64

%

 

 

0.72

%

NPAs to total assets

 

0.57

%

 

 

0.63

%

 

 

0.59

%

 

 

0.51

%

 

 

0.53

%

Classified loans and leases to loans and leases HFI

 

2.06

%

 

 

2.41

%

 

 

3.40

%

 

 

3.20

%

 

 

3.17

%

Special mention loans and leases to loans and leases HFI

 

1.43

%

 

 

1.24

%

 

 

2.78

%

 

 

1.83

%

 

 

2.10

%

Credit quality trends were favorable in the third quarter reflecting both portfolio actions and underlying migration in the third quarter. Nonperforming and classified loans and leases as a percentage of total loans and leases HFI decreased 12 basis points and 35 basis points, respectively, while special mention loans increased 19 basis points.

At September 30, 2026, total delinquent loans and leases were $114.8 million, compared to $173.7 million at June 30, 2026. The 30 to 89 days delinquent category decreased by $35.4 million in other residential real estate mortgage loans, $5.8 million in asset-based loans, $3.1 million in commercial real estate mortgage loans, and $2.5 million in other commercial loans. In the 90 or more days delinquent category, there were decreases of $11.5 million in other commercial loans, $4.9 million in multi-family real estate mortgage loans, and $1.3 million in commercial real estate mortgage loans, offset partially by an increase of $5.2 million in other residential real estate mortgage loans.

At September 30, 2026, nonperforming loans and leases were $177.2 million, compared to $203.7 million at June 30, 2026. During the third quarter, nonperforming loans and leases decreased by $26.5 million due to transfers to loans HFS of $55.0 million, charge-offs of $17.8 million, paydowns of $11.9 million, and transfers to accrual status of $11.0 million, offset partially by additions of $69.3 million.

At September 30, 2026, nonperforming assets were $198.7 million, or 0.57% of total assets, compared to $220.0 million, or 0.63% of total assets, as of June 30, 2026. At September 30, 2026, nonperforming assets included $21.5 million of foreclosed assets, consisting primarily of single-family residences.

Allowance for Credit Losses – Loans

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

 

September 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

$

243,319

 

 

$

241,600

 

 

$

229,344

 

 

$

245,612

 

 

$

239,360

 

Charge-offs

 

(19,154

)

 

 

(161,617

)

 

 

(6,465

)

 

 

(196,868

)

 

 

(69,964

)

Recoveries

 

1,863

 

 

 

1,336

 

 

 

8,922

 

 

 

5,484

 

 

 

14,125

 

Net (charge-offs) recoveries

 

(17,291

)

 

 

(160,281

)

 

 

2,457

 

 

 

(191,384

)

 

 

(55,839

)

Provision for loan losses

 

8,400

 

 

 

162,000

 

 

 

8,700

 

 

 

180,200

 

 

 

56,980

 

Balance at end of period

$

234,428

 

 

$

243,319

 

 

$

240,501

 

 

$

234,428

 

 

$

240,501

 

 

 

 

 

 

 

 

 

 

 

Reserve for unfunded loan commitments ("RUC"):

 

 

 

 

 

 

 

 

 

Balance at beginning of period

$

32,921

 

 

$

34,921

 

 

$

29,221

 

 

$

34,921

 

 

$

29,071

 

Provision for credit losses

 

2,000

 

 

 

(2,000

)

 

 

1,000

 

 

 

—

 

 

 

1,150

 

Balance at end of period

$

34,921

 

 

$

32,921

 

 

$

30,221

 

 

$

34,921

 

 

$

30,221

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses ("ACL") - Loans:

 

 

 

 

 

 

 

 

 

Balance at beginning of period

$

276,240

 

 

$

276,521

 

 

$

258,565

 

 

$

280,533

 

 

$

268,431

 

Charge-offs

 

(19,154

)

 

 

(161,617

)

 

 

(6,465

)

 

 

(196,868

)

 

 

(69,964

)

Recoveries

 

1,863

 

 

 

1,336

 

 

 

8,922

 

 

 

5,484

 

 

 

14,125

 

Net (charge-offs) recoveries

 

(17,291

)

 

 

(160,281

)

 

 

2,457

 

 

 

(191,384

)

 

 

(55,839

)

Provision for credit losses

 

10,400

 

 

 

160,000

 

 

 

9,700

 

 

 

180,200

 

 

 

58,130

 

Balance at end of period

$

269,349

 

 

$

276,240

 

 

$

270,722

 

 

$

269,349

 

 

$

270,722

 

 

 

 

 

 

 

 

 

 

 

ALLL to loans and leases HFI

 

0.95

%

 

 

1.00

%

 

 

1.00

%

 

 

0.95

%

 

 

1.00

%

ACL to loans and leases HFI

 

1.10

%

 

 

1.14

%

 

 

1.12

%

 

 

1.10

%

 

 

1.12

%

ACL to NPLs

 

151.97

%

 

 

135.60

%

 

 

155.11

%

 

 

151.97

%

 

 

155.11

%

ACL to NPAs

 

135.56

%

 

 

125.55

%

 

 

150.96

%

 

 

135.56

%

 

 

150.96

%

Annualized net charge-offs to average loans and leases

 

0.27

%

 

 

2.54

%

 

 

(0.04

)%

 

 

1.02

%

 

 

0.31

%

The allowance for credit losses - loans, which includes the reserve for unfunded loan commitments, totaled $269.3 million, or 1.10% of total loans and leases HFI at September 30, 2026, compared to $276.2 million, or 1.14% of total loans and leases HFI at June 30, 2026. The $6.9 million decrease in the allowance was driven by net charge-offs of $17.3 million, of which $10.0 million had been specifically reserved as of June 30, 2026, offset partially by the provision of $10.4 million.

In addition to the associated provisions in our ACL, our ability to absorb certain credit losses is also bolstered by (i) $109.9 million of loss coverage from the credit-linked notes associated with the $2.1 billion of single-family residential mortgage loans in our portfolio; and (ii) unearned credit marks of $11.7 million on $1.2 billion of purchased loans without credit deterioration.

The ACL coverage of nonperforming loans and leases was 152% at September 30, 2026 compared to 136% at June 30, 2026. Net charge-offs were 0.27% of average loans and leases (annualized) for the third quarter, compared to net charge-offs of 2.54% for the second quarter. The quarter-over-quarter improvement was primarily attributable to the impact of the targeted loan sale process in the second quarter.

Deposits and Client Investment Funds

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

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

 

2026

 

 

 

2026

 

 

 

2026

 

 

 

2025

 

 

 

2025

 

 

(Dollars in thousands)

Composition of Deposits

 

 

 

 

 

 

 

 

 

Noninterest-bearing checking

$

7,690,767

 

 

$

7,758,119

 

 

$

7,797,542

 

 

$

7,822,787

 

 

$

7,603,748

 

Interest-bearing:

 

 

 

 

 

 

 

 

 

Checking

 

9,024,086

 

 

 

8,739,368

 

 

 

8,178,485

 

 

 

8,509,587

 

 

 

7,930,951

 

Money market

 

5,718,773

 

 

 

5,136,561

 

 

 

4,643,349

 

 

 

4,917,857

 

 

 

4,974,177

 

Savings

 

1,862,512

 

 

 

1,834,517

 

 

 

1,991,010

 

 

 

1,905,863

 

 

 

1,949,369

 

Time deposits:

 

 

 

 

 

 

 

 

 

Non-brokered

 

2,006,617

 

 

 

2,061,323

 

 

 

2,149,564

 

 

 

2,254,293

 

 

 

2,468,017

 

Brokered

 

1,957,554

 

 

 

2,591,294

 

 

 

2,562,184

 

 

 

2,432,970

 

 

 

2,258,503

 

Total time deposits

 

3,964,171

 

 

 

4,652,617

 

 

 

4,711,748

 

 

 

4,687,263

 

 

 

4,726,520

 

Total interest-bearing

 

20,569,542

 

 

 

20,363,063

 

 

 

19,524,592

 

 

 

20,020,570

 

 

 

19,581,017

 

Total deposits

$

28,260,309

 

 

$

28,121,182

 

 

$

27,322,134

 

 

$

27,843,357

 

 

$

27,184,765

 

 

 

 

 

 

 

 

 

 

 

Composition as % of Total Deposits

 

 

 

 

 

 

 

 

 

Noninterest-bearing checking

 

27

%

 

 

28

%

 

 

29

%

 

 

28

%

 

 

28

%

Interest-bearing:

 

 

 

 

 

 

 

 

 

Checking

 

32

%

 

 

31

%

 

 

30

%

 

 

30

%

 

 

29

%

Money market

 

20

%

 

 

18

%

 

 

17

%

 

 

18

%

 

 

19

%

Savings

 

7

%

 

 

7

%

 

 

7

%

 

 

7

%

 

 

7

%

Time deposits:

 

 

 

 

 

 

 

 

 

Non-brokered

 

7

%

 

 

7

%

 

 

8

%

 

 

8

%

 

 

9

%

Brokered

 

7

%

 

 

9

%

 

 

9

%

 

 

9

%

 

 

8

%

Total time deposits

 

14

%

 

 

16

%

 

 

17

%

 

 

17

%

 

 

17

%

Total interest-bearing

 

73

%

 

 

72

%

 

 

71

%

 

 

72

%

 

 

72

%

Total deposits

 

100

%

 

 

100

%

 

 

100

%

 

 

100

%

 

 

100

%

Total deposits increased by $139.1 million to $28.3 billion at September 30, 2026 from $28.1 billion at June 30, 2026, driven primarily by an increase in interest-bearing deposits of $206.5 million and a decrease in noninterest-bearing deposits of $67.4 million. Interest-bearing deposits increased due mainly to higher balances in money market accounts of $582.2 million, checking accounts of $284.7 million, and savings accounts of $28.0 million, offset partially by lower brokered and non-brokered time deposits of $688.4 million.

At September 30, 2026, noninterest-bearing checking deposits totaled $7.7 billion, or 27% of total deposits, compared to $7.8 billion, or 28% of total deposits, at June 30, 2026.

At September 30, 2026, uninsured and uncollateralized deposits totaled $7.3 billion, or 26% of total deposits, compared to $7.6 billion, or 27% of total deposits, at June 30, 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 at September 30, 2026 and June 30, 2026, respectively.

Borrowings

Borrowings decreased by $51.7 million to $2.4 billion at September 30, 2026 from $2.5 billion at June 30, 2026, driven primarily by the repayment of a maturing long-term FHLB advance.

Equity

During the third quarter, total stockholders’ equity decreased by $61.3 million to $3.3 billion and tangible common equity(1) decreased by $55.1 million to $2.5 billion at September 30, 2026. The decrease in total stockholders’ equity for the third quarter resulted primarily from an increase in the aggregate unrealized net after-tax loss in AOCI for AFS securities of $116.1 million and common and preferred stock dividends of $29.3 million, offset partially by net earnings of $83.1 million.

At September 30, 2026, book value per common share decreased to $17.99 compared to $18.38 at June 30, 2026, and tangible book value per common share(1) decreased to $16.09 compared to $16.44 at June 30, 2026. The decrease was primarily driven by the increased aggregate unrealized net after-tax loss in AOCI on our portfolio of AFS securities.

For the nine-month period ended September 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 September 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:

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

2026

 

2026

 

2026

 

2025

 

2025

Capital Ratios (1)

 

 

 

 

 

 

 

 

 

Banc of California, Inc.

 

 

 

 

 

 

 

 

 

Total risk-based capital ratio

14.71

%

 

14.31

%

 

16.55

%

 

16.31

%

 

16.69

%

Tier 1 risk-based capital ratio

12.10

%

 

11.67

%

 

12.54

%

 

12.34

%

 

12.56

%

Common equity tier 1 capital ratio

9.70

%

 

9.25

%

 

10.18

%

 

10.01

%

 

10.14

%

Tier 1 leverage ratio

9.14

%

 

8.89

%

 

9.97

%

 

9.99

%

 

9.77

%

 

 

 

 

 

 

 

 

 

 

Banc of California

 

 

 

 

 

 

 

 

 

Total risk-based capital ratio

13.97

%

 

13.74

%

 

15.97

%

 

15.61

%

 

15.94

%

Tier 1 risk-based capital ratio

12.94

%

 

12.68

%

 

13.50

%

 

13.15

%

 

13.42

%

Common equity tier 1 capital ratio

12.94

%

 

12.68

%

 

13.50

%

 

13.15

%

 

13.42

%

Tier 1 leverage ratio

9.77

%

 

9.64

%

 

10.73

%

 

10.65

%

 

10.44

%

______________

(1)

September 30, 2026 capital ratios are preliminary.

At September 30, 2026, cash and cash equivalents totaled $2.2 billion, down $649.3 million from June 30, 2026, reflecting the full reinvestment of cash generated from the securities repositioning.

Our immediately available cash and cash equivalents (excluding restricted cash) were $2.0 billion. Combined with total available borrowing capacity of $8.7 billion and unpledged AFS securities of $3.9 billion, total available liquidity was $14.6 billion at the end of the third quarter.

Conference Call

The Company will host a conference call to discuss its third quarter 2026 financial results at 8:30 a.m. Pacific Time (PT) on Wednesday, October 28, 2026. Interested parties are welcome to attend the conference call by dialing (888) 317-6003 and referencing event code 7279202. 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 1286998.

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. Through its Private Banking division, the bank also serves individuals and families with personalized banking solutions, dedicated relationship management, and exceptional service. Banc of California is the largest publicly-traded 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 76 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, profitability, 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 and private 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; (ix) our ability to successfully implement new business initiatives, such as our private banking service, and to realize their anticipated benefits; (x) our ability to raise capital or incur debt on reasonable terms; (xi) the costs and effects of litigation; (xii) 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; (xiii) 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; (xiv) 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; (xv) 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; (xvi) the risk that our enterprise risk management framework may not be effective in mitigating risk and reducing the potential for losses; (xvii) 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; (xviii) cybersecurity threats and failures or security breaches with respect to the network, applications, vendors and computer systems on which we depend; (xix) our ability to attract and retain key members of our senior management team; (xx) the effects of climate change, severe weather events, natural disasters such as earthquakes and wildfires, pandemics, epidemics and other public health crises, geopolitical conflicts and military activity (including the ongoing Iran war) or acts of terrorism, and other external events on our business; (xxi) 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; (xxii) the possibility that our recorded goodwill could become impaired, which may have an adverse impact on our earnings and capital; (xxiii) 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; (xxiv) changes in market conditions or strategic balance sheet actions, which may result in realized losses on investment securities or other assets; (xxv) the effects of any damage to our reputation resulting from developments related to any of the items identified above; and (xxvi) 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, and efficiency 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)

 

 

 

 

 

 

 

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

 

2026

 

 

 

2026

 

 

 

2026

 

 

 

2025

 

 

 

2025

 

ASSETS:

(Dollars in thousands)

Cash and due from banks

$

293,680

 

 

$

225,343

 

 

$

214,120

 

 

$

181,103

 

 

$

205,364

 

Interest-earning deposits in financial institutions

 

1,875,027

 

 

 

2,592,712

 

 

 

2,003,149

 

 

 

2,126,862

 

 

 

2,192,901

 

Total cash and cash equivalents

 

2,168,707

 

 

 

2,818,055

 

 

 

2,217,269

 

 

 

2,307,965

 

 

 

2,398,265

 

 

 

 

 

 

 

 

 

 

 

Securities AFS

 

5,065,839

 

 

 

4,484,021

 

 

 

2,656,332

 

 

 

2,454,058

 

 

 

2,426,734

 

Securities HTM

 

—

 

 

 

—

 

 

 

2,313,548

 

 

 

2,308,636

 

 

 

2,303,657

 

FRB and FHLB stock

 

175,691

 

 

 

181,352

 

 

 

170,342

 

 

 

160,442

 

 

 

159,337

 

Total investment securities

 

5,241,530

 

 

 

4,665,373

 

 

 

5,140,222

 

 

 

4,923,136

 

 

 

4,889,728

 

 

 

 

 

 

 

 

 

 

 

Loans HFS

 

498,759

 

 

 

915,171

 

 

 

259,049

 

 

 

182,936

 

 

 

211,454

 

 

 

 

 

 

 

 

 

 

 

Loans and leases HFI

 

24,590,523

 

 

 

24,210,846

 

 

 

24,780,347

 

 

 

25,032,679

 

 

 

24,110,642

 

Allowance for loan and lease losses

 

(234,428

)

 

 

(243,319

)

 

 

(241,600

)

 

 

(245,612

)

 

 

(240,501

)

Total loans and leases HFI, net

 

24,356,095

 

 

 

23,967,527

 

 

 

24,538,747

 

 

 

24,787,067

 

 

 

23,870,141

 

 

 

 

 

 

 

 

 

 

 

Equipment leased to others under operating leases

 

267,883

 

 

 

218,444

 

 

 

223,558

 

 

 

238,232

 

 

 

280,872

 

Premises and equipment, net

 

147,343

 

 

 

145,440

 

 

 

146,316

 

 

 

146,698

 

 

 

132,766

 

Bank owned life insurance

 

352,351

 

 

 

348,777

 

 

 

352,707

 

 

 

350,083

 

 

 

348,051

 

Goodwill

 

214,521

 

 

 

214,521

 

 

 

214,521

 

 

 

214,521

 

 

 

214,521

 

Intangible assets, net

 

86,521

 

 

 

92,709

 

 

 

99,091

 

 

 

105,287

 

 

 

111,923

 

Deferred tax asset, net

 

743,714

 

 

 

704,467

 

 

 

653,481

 

 

 

656,755

 

 

 

672,159

 

Other assets

 

888,071

 

 

 

940,469

 

 

 

879,280

 

 

 

884,762

 

 

 

883,085

 

Total assets

$

34,965,495

 

 

$

35,030,953

 

 

$

34,724,241

 

 

$

34,797,442

 

 

$

34,012,965

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES:

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

$

7,690,767

 

 

$

7,758,119

 

 

$

7,797,542

 

 

$

7,822,787

 

 

$

7,603,748

 

Interest-bearing deposits

 

20,569,542

 

 

 

20,363,063

 

 

 

19,524,592

 

 

 

20,020,570

 

 

 

19,581,017

 

Total deposits

 

28,260,309

 

 

 

28,121,182

 

 

 

27,322,134

 

 

 

27,843,357

 

 

 

27,184,765

 

Borrowings

 

2,408,626

 

 

 

2,460,363

 

 

 

2,551,250

 

 

 

2,063,819

 

 

 

2,005,022

 

Subordinated debt

 

575,024

 

 

 

573,555

 

 

 

954,072

 

 

 

952,740

 

 

 

950,888

 

Accrued interest payable and other liabilities

 

372,707

 

 

 

465,707

 

 

 

343,459

 

 

 

396,249

 

 

 

405,551

 

Total liabilities

 

31,616,666

 

 

 

31,620,807

 

 

 

31,170,915

 

 

 

31,256,165

 

 

 

30,546,226

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY:

 

 

 

 

 

 

 

 

 

Preferred stock

 

498,516

 

 

 

498,516

 

 

 

498,516

 

 

 

498,516

 

 

 

498,516

 

Common stock

 

1,580

 

 

 

1,580

 

 

 

1,538

 

 

 

1,500

 

 

 

1,509

 

Class B non-voting common stock

 

5

 

 

 

5

 

 

 

5

 

 

 

5

 

 

 

5

 

Non-voting common stock equivalents

 

—

 

 

 

—

 

 

 

—

 

 

 

50

 

 

 

41

 

Additional paid-in-capital

 

3,471,958

 

 

 

3,485,560

 

 

 

3,501,213

 

 

 

3,552,483

 

 

 

3,563,145

 

Retained deficit

 

(358,195

)

 

 

(431,305

)

 

 

(180,011

)

 

 

(242,016

)

 

 

(309,460

)

Accumulated other comprehensive loss, net

 

(265,035

)

 

 

(144,210

)

 

 

(267,935

)

 

 

(269,261

)

 

 

(287,017

)

Total stockholders’ equity

 

3,348,829

 

 

 

3,410,146

 

 

 

3,553,326

 

 

 

3,541,277

 

 

 

3,466,739

 

Total liabilities and stockholders’ equity

$

34,965,495

 

 

$

35,030,953

 

 

$

34,724,241

 

 

$

34,797,442

 

 

$

34,012,965

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding (1)

 

158,459,635

 

 

 

158,432,520

 

 

 

154,262,045

 

 

 

155,533,403

 

 

 

155,522,693

 

______________

(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 September 30, 2026, June 30, 2026, and March 31, 2026.

BANC OF CALIFORNIA, INC.

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF EARNINGS

 

 

 

 

 

 

 

 

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

 

September 30,

 

 

2026

 

 

 

2026

 

 

 

2025

 

 

 

2026

 

 

 

2025

 

 

(In thousands, except per share amounts)

Interest income:

 

 

 

 

 

 

 

 

 

Loans and leases

$

362,549

 

 

$

354,832

 

 

$

372,723

 

 

$

1,067,324

 

 

$

1,081,129

 

Investment securities

 

60,125

 

 

 

42,407

 

 

 

38,291

 

 

 

144,405

 

 

 

113,769

 

Deposits in financial institutions

 

20,062

 

 

 

17,357

 

 

 

21,527

 

 

 

53,045

 

 

 

64,807

 

Total interest income

 

442,736

 

 

 

414,596

 

 

 

432,541

 

 

 

1,264,774

 

 

 

1,259,705

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

 

130,248

 

 

 

124,270

 

 

 

143,074

 

 

 

374,751

 

 

 

428,544

 

Borrowings

 

27,623

 

 

 

26,568

 

 

 

20,461

 

 

 

74,368

 

 

 

58,903

 

Subordinated debt

 

12,423

 

 

 

13,257

 

 

 

15,562

 

 

 

41,095

 

 

 

46,234

 

Total interest expense

 

170,294

 

 

 

164,095

 

 

 

179,097

 

 

 

490,214

 

 

 

533,681

 

Net interest income

 

272,442

 

 

 

250,501

 

 

 

253,444

 

 

 

774,560

 

 

 

726,024

 

Provision for credit losses

 

10,400

 

 

 

161,780

 

 

 

9,700

 

 

 

181,980

 

 

 

58,100

 

Net interest income after provision for credit losses

 

262,042

 

 

 

88,721

 

 

 

243,744

 

 

 

592,580

 

 

 

667,924

 

Noninterest income:

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

4,881

 

 

 

4,763

 

 

 

5,109

 

 

 

14,622

 

 

 

14,108

 

Commissions and fees

 

9,307

 

 

 

9,034

 

 

 

9,514

 

 

 

29,321

 

 

 

29,113

 

Leased equipment income

 

9,812

 

 

 

7,820

 

 

 

10,321

 

 

 

26,162

 

 

 

31,336

 

Loss on loans and leases HFS

 

(4,199

)

 

 

(12,544

)

 

 

(374

)

 

 

(16,733

)

 

 

(142

)

Gain (loss) on securities AFS

 

728

 

 

 

(256,749

)

 

 

—

 

 

 

(256,021

)

 

 

—

 

Dividends and gains on equity investments

 

2,675

 

 

 

3,326

 

 

 

2,291

 

 

 

8,003

 

 

 

4,500

 

Warrant income

 

221

 

 

 

896

 

 

 

433

 

 

 

2,055

 

 

 

1,365

 

Other income

 

7,931

 

 

 

9,358

 

 

 

6,991

 

 

 

25,179

 

 

 

20,288

 

Total noninterest income (loss)

 

31,356

 

 

 

(234,096

)

 

 

34,285

 

 

 

(167,412

)

 

 

100,568

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

Compensation

 

87,318

 

 

 

85,120

 

 

 

88,865

 

 

 

263,538

 

 

 

263,644

 

Occupancy

 

14,733

 

 

 

14,714

 

 

 

15,415

 

 

 

44,339

 

 

 

45,898

 

Information technology and data processing

 

13,133

 

 

 

13,769

 

 

 

13,535

 

 

 

41,241

 

 

 

41,707

 

Other professional services

 

5,914

 

 

 

5,599

 

 

 

5,394

 

 

 

15,749

 

 

 

16,313

 

Insurance and assessments

 

12,211

 

 

 

14,500

 

 

 

8,994

 

 

 

33,475

 

 

 

25,680

 

Intangible asset amortization

 

6,188

 

 

 

6,349

 

 

 

7,160

 

 

 

18,885

 

 

 

21,479

 

Leased equipment depreciation

 

6,078

 

 

 

5,168

 

 

 

6,750

 

 

 

16,550

 

 

 

20,191

 

Customer related expense

 

24,834

 

 

 

24,114

 

 

 

26,227

 

 

 

72,685

 

 

 

80,555

 

Loan expense

 

4,709

 

 

 

5,170

 

 

 

4,947

 

 

 

14,171

 

 

 

11,927

 

Other expense

 

10,252

 

 

 

15,364

 

 

 

8,397

 

 

 

35,995

 

 

 

27,812

 

Total noninterest expense

 

185,370

 

 

 

189,867

 

 

 

185,684

 

 

 

556,628

 

 

 

555,206

 

Earnings (loss) before income taxes

 

108,028

 

 

 

(335,242

)

 

 

92,345

 

 

 

(131,460

)

 

 

213,286

 

Income tax expense (benefit)

 

24,971

 

 

 

(93,895

)

 

 

22,716

 

 

 

(45,122

)

 

 

61,704

 

Net earnings (loss)

 

83,057

 

 

 

(241,347

)

 

 

69,629

 

 

 

(86,338

)

 

 

151,582

 

Preferred stock dividends

 

9,947

 

 

 

9,947

 

 

 

9,947

 

 

 

29,841

 

 

 

29,841

 

Net earnings (loss) available to common and equivalent stockholders

$

73,110

 

 

$

(251,294

)

 

$

59,682

 

 

$

(116,179

)

 

$

121,741

 

Earnings (loss) per common share:

 

 

 

 

 

 

 

 

 

Basic

$

0.46

 

 

$

(1.61

)

 

$

0.38

 

 

$

(0.74

)

 

$

0.75

 

Diluted

$

0.46

 

 

$

(1.61

)

 

$

0.38

 

 

$

(0.74

)

 

$

0.75

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding: (1)

 

 

 

 

 

 

 

 

 

Basic

 

158,441

 

 

 

155,803

 

 

 

157,103

 

 

 

156,368

 

 

 

161,276

 

Diluted

 

160,307

 

 

 

155,803

 

 

 

159,051

 

 

 

156,368

 

 

 

161,993

 

______________

(1)

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

BANC OF CALIFORNIA, INC.

 

 

 

 

 

 

 

 

 

SELECTED FINANCIAL DATA

 

 

 

 

 

 

 

 

 

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

 

September 30,

Profitability and Other Ratios

2026

 

2026

 

2025

 

2026

 

2025

Return on average assets (1)

0.94

%

 

(2.79

)%

 

0.82

%

 

(0.33

)%

 

0.60

%

Return on average equity (1)

9.71

%

 

(27.31

)%

 

8.04

%

 

(3.30

)%

 

5.85

%

Return on average tangible common equity (1)(2)

11.93

%

 

(36.18

)%

 

9.87

%

 

(5.17

)%

 

6.99

%

Dividend payout ratio (3)

26.09

%

 

(7.45

)%

 

26.32

%

 

(48.65

)%

 

40.00

%

Average yield on loans and leases (1)

5.69

%

 

5.63

%

 

6.05

%

 

5.69

%

 

5.96

%

Average yield on interest-earning assets (1)

5.43

%

 

5.18

%

 

5.50

%

 

5.29

%

 

5.44

%

Average cost of interest-bearing deposits (1)

2.55

%

 

2.52

%

 

2.89

%

 

2.53

%

 

2.94

%

Average total cost of deposits (1)

1.83

%

 

1.80

%

 

2.08

%

 

1.81

%

 

2.11

%

Average cost of interest-bearing liabilities (1)

2.90

%

 

2.88

%

 

3.19

%

 

2.88

%

 

3.24

%

Average total cost of funds (1)

2.16

%

 

2.14

%

 

2.37

%

 

2.14

%

 

2.40

%

Net interest spread

2.53

%

 

2.30

%

 

2.31

%

 

2.41

%

 

2.20

%

Net interest margin (1)

3.34

%

 

3.13

%

 

3.22

%

 

3.24

%

 

3.13

%

Noninterest income to total revenue (4)

10.32

%

 

(1426.98

)%

 

11.92

%

 

(27.57

)%

 

12.17

%

Noninterest expense to average total assets (1)

2.10

%

 

2.20

%

 

2.18

%

 

2.15

%

 

2.21

%

Noninterest expense to total revenue (4)

61.02

%

 

1157.37

%

 

64.53

%

 

91.68

%

 

67.17

%

Efficiency ratio (2)(5)

59.12

%

 

67.18

%

 

62.05

%

 

62.30

%

 

64.57

%

Loans to deposits ratio

88.78

%

 

89.30

%

 

89.47

%

 

88.78

%

 

89.47

%

Average loans and leases to average deposits

89.68

%

 

91.48

%

 

89.62

%

 

90.53

%

 

89.25

%

Average investment securities to average total assets

14.03

%

 

14.25

%

 

14.14

%

 

14.34

%

 

14.11

%

Average stockholders' equity to average total assets

9.69

%

 

10.23

%

 

10.16

%

 

10.11

%

 

10.30

%

______________

(1)

Annualized.

(2)

Non-GAAP measure.

(3)

Ratio calculated by dividing dividends declared per common and equivalent share by basic earnings (loss) 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).

BANC OF CALIFORNIA, INC.

 

 

 

 

 

 

 

 

 

 

 

AVERAGE BALANCE, AVERAGE YIELD EARNED, AND AVERAGE RATE PAID

 

 

 

 

 

 

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

September 30, 2026

 

June 30, 2026

 

September 30, 2025

 

 

 

Average

 

 

 

Average

 

 

 

Average

 

Average

 

Yield/

 

Average

 

Yield/

 

Average

 

Yield/

 

Balance

Interest

Rate

 

Balance

Interest

Rate

 

Balance

Interest

Rate

 

(Dollars in thousands)

Assets:

 

 

 

 

 

 

 

 

 

 

 

Loans and leases (1)

$

25,274,927

$

362,549

5.69

%

 

$

25,266,712

$

354,832

5.63

%

 

$

24,458,255

$

372,723

6.05

%

Investment securities

 

4,912,701

 

60,125

4.86

%

 

 

4,938,232

 

42,407

3.44

%

 

 

4,782,070

 

38,291

3.18

%

Deposits in financial institutions

 

2,166,626

 

20,062

3.67

%

 

 

1,912,585

 

17,357

3.64

%

 

 

1,958,011

 

21,527

4.36

%

Total interest-earning assets

 

32,354,254

 

442,736

5.43

%

 

 

32,117,529

 

414,596

5.18

%

 

 

31,198,336

 

432,541

5.50

%

Other assets

 

2,666,216

 

 

 

 

2,527,401

 

 

 

 

2,632,881

 

 

Total assets

$

35,020,470

 

 

 

$

34,644,930

 

 

 

$

33,831,217

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

Interest checking

$

8,878,491

 

53,397

2.39

%

 

$

8,313,161

 

47,694

2.30

%

 

$

7,855,639

 

53,995

2.73

%

Money market

 

5,252,893

 

28,127

2.12

%

 

 

4,736,107

 

23,429

1.98

%

 

 

5,154,138

 

30,461

2.34

%

Savings

 

1,865,962

 

10,024

2.13

%

 

 

1,883,240

 

9,575

2.04

%

 

 

1,966,040

 

12,689

2.56

%

Time

 

4,301,532

 

38,700

3.57

%

 

 

4,820,101

 

43,572

3.63

%

 

 

4,633,089

 

45,929

3.93

%

Total interest-bearing deposits

 

20,298,878

 

130,248

2.55

%

 

 

19,752,609

 

124,270

2.52

%

 

 

19,608,906

 

143,074

2.89

%

Borrowings

 

2,461,168

 

27,623

4.45

%

 

 

2,399,546

 

26,568

4.44

%

 

 

1,705,697

 

20,461

4.76

%

Subordinated debt

 

574,612

 

12,423

8.58

%

 

 

699,159

 

13,257

7.61

%

 

 

949,690

 

15,562

6.50

%

Total interest-bearing liabilities

 

23,334,658

 

170,294

2.90

%

 

 

22,851,314

 

164,095

2.88

%

 

 

22,264,293

 

179,097

3.19

%

Noninterest-bearing demand deposits

 

7,885,157

 

 

 

 

7,866,139

 

 

 

 

7,683,136

 

 

Other liabilities

 

408,643

 

 

 

 

382,336

 

 

 

 

446,453

 

 

Total liabilities

 

31,628,458

 

 

 

 

31,099,789

 

 

 

 

30,393,882

 

 

Stockholders' equity

 

3,392,012

 

 

 

 

3,545,141

 

 

 

 

3,437,335

 

 

Total liabilities and stockholders' equity

$

35,020,470

 

 

 

$

34,644,930

 

 

 

$

33,831,217

 

 

Net interest income (1)

 

$

272,442

 

 

 

$

250,501

 

 

 

$

253,444

 

Net interest spread

 

 

2.53

%

 

 

 

2.30

%

 

 

 

2.31

%

Net interest margin

 

 

3.34

%

 

 

 

3.13

%

 

 

 

3.22

%

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits (2)

$

28,184,035

$

130,248

1.83

%

 

$

27,618,748

$

124,270

1.80

%

 

$

27,292,042

$

143,074

2.08

%

Total funds (3)

$

31,219,815

$

170,294

2.16

%

 

$

30,717,453

$

164,095

2.14

%

 

$

29,947,429

$

179,097

2.37

%

______________

(1)

Includes net loan discount accretion of $8.7 million, $11.2 million, and $19.3 million for the three months ended September 30, 2026, June 30, 2026, and September 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.

BANC OF CALIFORNIA, INC.

 

 

 

 

 

 

 

AVERAGE BALANCE, AVERAGE YIELD EARNED, AND AVERAGE RATE PAID

 

 

(UNAUDITED)

 

 

 

 

 

 

 

 

Nine Months Ended

 

September 30, 2026

 

September 30, 2025

 

 

 

Average

 

 

 

Average

 

Average

 

Yield/

 

Average

 

Yield/

 

Balance

Interest

Rate

 

Balance

Interest

Rate

 

(Dollars in thousands)

Assets:

 

 

 

 

 

 

 

Loans and leases (1)

$

25,086,150

$

1,067,324

5.69

%

 

$

24,252,860

$

1,081,129

5.96

%

Investment securities

 

4,955,926

 

144,405

3.90

%

 

 

4,745,530

 

113,769

3.21

%

Deposits in financial institutions

 

1,942,176

 

53,045

3.65

%

 

 

1,972,486

 

64,807

4.39

%

Total interest-earning assets

 

31,984,252

 

1,264,774

5.29

%

 

 

30,970,876

 

1,259,705

5.44

%

Other assets

 

2,575,510

 

 

 

 

2,665,623

 

 

Total assets

$

34,559,762

 

 

 

$

33,636,499

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

Interest checking

$

8,458,185

 

147,973

2.34

%

 

$

7,661,200

 

154,751

2.70

%

Money market

 

4,926,608

 

74,382

2.02

%

 

 

5,326,554

 

97,079

2.44

%

Savings

 

1,902,008

 

29,371

2.06

%

 

 

1,958,289

 

38,323

2.62

%

Time

 

4,543,252

 

123,025

3.62

%

 

 

4,567,443

 

138,391

4.05

%

Total interest-bearing deposits

 

19,830,053

 

374,751

2.53

%

 

 

19,513,486

 

428,544

2.94

%

Borrowings

 

2,211,339

 

74,368

4.50

%

 

 

1,578,462

 

58,903

4.99

%

Subordinated debt

 

741,114

 

41,095

7.41

%

 

 

946,441

 

46,234

6.53

%

Total interest-bearing liabilities

 

22,782,506

 

490,214

2.88

%

 

 

22,038,389

 

533,681

3.24

%

Noninterest-bearing demand deposits

 

7,880,575

 

 

 

 

7,660,504

 

 

Other liabilities

 

401,971

 

 

 

 

474,038

 

 

Total liabilities

 

31,065,052

 

 

 

 

30,172,931

 

 

Stockholders' equity

 

3,494,710

 

 

 

 

3,463,568

 

 

Total liabilities and stockholders' equity

$

34,559,762

 

 

 

$

33,636,499

 

 

Net interest income (1)

 

$

774,560

 

 

 

$

726,024

 

Net interest spread

 

 

2.41

%

 

 

 

2.20

%

Net interest margin

 

 

3.24

%

 

 

 

3.13

%

 

 

 

 

 

 

 

 

Total deposits (2)

$

27,710,628

$

374,751

1.81

%

 

$

27,173,990

$

428,544

2.11

%

Total funds (3)

$

30,663,081

$

490,214

2.14

%

 

$

29,698,893

$

533,681

2.40

%

______________

(1)

Includes net loan discount accretion of $32.2 million and $51.5 million for the nine months ended September 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.

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, and efficiency ratio. These non-GAAP measures are used by management in its analysis of the Company's performance.

Tangible common equity is total stockholders' equity less preferred stock, goodwill and intangible assets. Tangible book value per common share is calculated by dividing tangible common equity by common shares outstanding. 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).

Management believes the presentation of these financial measures provides useful supplemental information that is helpful to an 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

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

and Tangible Book Value Per Share

2026

 

2026

 

2026

 

2025

 

2025

 

(Dollars in thousands, except per share amounts)

Stockholders' equity

$

3,348,829

 

$

3,410,146

 

$

3,553,326

 

$

3,541,277

 

$

3,466,739

Less: Preferred stock

 

498,516

 

 

498,516

 

 

498,516

 

 

498,516

 

 

498,516

Total common equity

 

2,850,313

 

 

2,911,630

 

 

3,054,810

 

 

3,042,761

 

 

2,968,223

Less: Goodwill and intangible assets

 

301,042

 

 

307,230

 

 

313,612

 

 

319,808

 

 

326,444

Tangible common equity

$

2,549,271

 

$

2,604,400

 

$

2,741,198

 

$

2,722,953

 

$

2,641,779

 

 

 

 

 

 

 

 

 

 

Book value per common share (1)

$

17.99

 

$

18.38

 

$

19.80

 

$

19.56

 

$

19.09

Tangible book value per common share (2)

$

16.09

 

$

16.44

 

$

17.77

 

$

17.51

 

$

16.99

Common shares outstanding (3)

 

158,459,635

 

 

158,432,520

 

 

154,262,045

 

 

155,533,403

 

 

155,522,693

______________

(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 September 30, 2026, June 30, 2026, and March 31, 2026.

BANC OF CALIFORNIA, INC.

 

 

 

 

 

 

 

 

 

NON-GAAP MEASURES

 

 

 

 

 

 

 

 

 

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

Return on Average Tangible

September 30,

 

June 30,

 

September 30,

 

September 30,

Common Equity ("ROATCE")

 

2026

 

 

 

2026

 

 

 

2025

 

 

 

2026

 

 

 

2025

 

 

(Dollars in thousands)

Net earnings (loss)

$

83,057

 

 

$

(241,347

)

 

$

69,629

 

 

$

(86,338

)

 

$

151,582

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

Intangible asset amortization

 

6,188

 

 

 

6,349

 

 

 

7,160

 

 

 

18,885

 

 

 

21,479

 

Tax impact of adjustment above (1)

 

(1,431

)

 

 

(1,778

)

 

 

(1,958

)

 

 

(6,481

)

 

 

(5,872

)

Adjustment to net earnings (loss)

 

4,757

 

 

 

4,571

 

 

 

5,202

 

 

 

12,404

 

 

 

15,607

 

 

 

 

 

 

 

 

 

 

 

Adjusted net earnings (loss) for ROATCE

 

87,814

 

 

 

(236,776

)

 

 

74,831

 

 

 

(73,934

)

 

 

167,189

 

Less: Preferred stock dividends

 

9,947

 

 

 

9,947

 

 

 

9,947

 

 

 

29,841

 

 

 

29,841

 

Adjusted net earnings (loss) available to common and equivalent stockholders for ROATCE

$

77,867

 

 

$

(246,723

)

 

$

64,884

 

 

$

(103,775

)

 

$

137,348

 

 

 

 

 

 

 

 

 

 

 

Average stockholders' equity

$

3,392,012

 

 

$

3,545,141

 

 

$

3,437,335

 

 

$

3,494,710

 

 

$

3,463,568

 

Less: Average goodwill and intangible assets

 

304,652

 

 

 

311,068

 

 

 

330,277

 

 

 

310,932

 

 

 

337,361

 

Less: Average preferred stock

 

498,516

 

 

 

498,516

 

 

 

498,516

 

 

 

498,516

 

 

 

498,516

 

Average tangible common equity

$

2,588,844

 

 

$

2,735,557

 

 

$

2,608,542

 

 

$

2,685,262

 

 

$

2,627,691

 

 

 

 

 

 

 

 

 

 

 

Return on average equity (2)

 

9.71

%

 

 

(27.31

)%

 

 

8.04

%

 

 

(3.30

)%

 

 

5.85

%

ROATCE (3)

 

11.93

%

 

 

(36.18

)%

 

 

9.87

%

 

 

(5.17

)%

 

 

6.99

%

______________

(1)

Effective tax rates of 23.12%, 28.00%, and 27.34% used for the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, respectively. Effective tax rates of 34.32% and 27.34% used for the nine months ended September 30, 2026 and 2025.

(2)

Annualized net earnings (loss) divided by average stockholders' equity.

(3)

Annualized adjusted net earnings (loss) available to common and equivalent stockholders for ROATCE divided by average tangible common equity.

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

 

September 30,

Pre-Tax Pre-Provision Income (Loss)

2026

 

2026

 

2025

 

2026

 

2025

 

(Dollars in thousands)

Net interest income (GAAP)

$

272,442

 

$

250,501

 

 

$

253,444

 

$

774,560

 

 

$

726,024

Add: Noninterest income (loss) (GAAP)

 

31,356

 

 

(234,096

)

 

 

34,285

 

 

(167,412

)

 

 

100,568

Total revenues (GAAP)

 

303,798

 

 

16,405

 

 

 

287,729

 

 

607,148

 

 

 

826,592

Less: Noninterest expense (GAAP)

 

185,370

 

 

189,867

 

 

 

185,684

 

 

556,628

 

 

 

555,206

Pre-tax pre-provision income (loss) (Non-GAAP)

$

118,428

 

$

(173,462

)

 

$

102,045

 

$

50,520

 

 

$

271,386

BANC OF CALIFORNIA, INC.

 

 

 

 

 

 

 

 

 

NON-GAAP MEASURES

 

 

 

 

 

 

 

 

 

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

 

September 30,

Efficiency Ratio

 

2026

 

 

 

2026

 

 

 

2025

 

 

 

2026

 

 

 

2025

 

 

(Dollars in thousands)

Noninterest expense

$

185,370

 

 

$

189,867

 

 

$

185,684

 

 

$

556,628

 

 

$

555,206

 

Less: Intangible asset amortization

 

(6,188

)

 

 

(6,349

)

 

 

(7,160

)

 

 

(18,885

)

 

 

(21,479

)

Noninterest expense used for efficiency ratio

$

179,182

 

 

$

183,518

 

 

$

178,524

 

 

$

537,743

 

 

$

533,727

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$

272,442

 

 

$

250,501

 

 

$

253,444

 

 

$

774,560

 

 

$

726,024

 

Noninterest income (loss)

 

31,356

 

 

 

(234,096

)

 

 

34,285

 

 

 

(167,412

)

 

 

100,568

 

Total revenue

 

303,798

 

 

 

16,405

 

 

 

287,729

 

 

 

607,148

 

 

 

826,592

 

Add: (Gain) loss on securities AFS

 

(728

)

 

 

256,749

 

 

 

—

 

 

 

256,021

 

 

 

—

 

Total revenue used for efficiency ratio

$

303,070

 

 

$

273,154

 

 

$

287,729

 

 

$

863,169

 

 

$

826,592

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense to total revenue

 

61.02

%

 

 

1157.37

%

 

 

64.53

%

 

 

91.68

%

 

 

67.17

%

Efficiency ratio (1)

 

59.12

%

 

 

67.18

%

 

 

62.05

%

 

 

62.30

%

 

 

64.57

%

______________

(1)

Noninterest expense used for efficiency ratio divided by total revenue used for efficiency ratio.

 

Investor Relations Inquiries:
Banc of California, Inc.
(855) 361-2262
Jared Wolff, (310) 424-1230
Joe Kauder, (310) 844-5224
Meghan O'Leary, (310) 236-8236

Media Contact:
Debora Vrana, Banc of California
(213) 533-3122
Deb.Vrana@bancofcal.com

Source: Banc of California, Inc.