Banc of California, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported net earnings available to common and equivalent stockholders of $73.1 million ($0.46 per diluted share) for the third quarter of 2026, compared to $59.7 million ($0.38 per diluted share) in the same period in 2025, representing a 21% year-over-year increase.
• Total revenue was $303.8 million, up 6% year-over-year, compared to a net loss of $251.3 million ($1.61 per diluted share) in the second quarter of 2026.
• Pre-tax pre-provision income was $118.4 million, up 16% year-over-year.
• Net interest income increased 9% quarter-over-quarter to $272.4 million and 8% year-over-year to $774.6 million for the nine months ended September 30, 2026.
• Net interest margin expanded 21 basis points quarter-over-quarter to 3.34% and 11 basis points year-over-year to 3.24% for the nine-month period.
• Noninterest expense remained flat year-over-year at $185.4 million for the third quarter and increased $1.4 million year-over-year to $556.6 million for the nine months ended September 30, 2026.
• Provision for credit losses was $10.4 million for the third quarter, down significantly from $161.8 million in the second quarter and $58.1 million for the same period in 2025.
• Allowance for credit losses (ACL) totaled $269.3 million, or 1.10% of loans and leases held for investment, down from 1.14% in the second quarter.
• Annualized net charge-offs were 0.27% of average loans and leases for the third quarter, compared to 2.54% in the second quarter.

Guidance and Future Outlook:

• Management expects further improvement in profitability in the fourth quarter as they realize a full quarter of earnings from securities reinvestment and additional benefits from completed loan sales.
• The Company anticipates selling its remaining held for sale loan portfolio over the next several quarters.
• Strategic focus remains on building deeper client relationships, disciplined loan growth, growth in relationship deposits, and continued capital generation to deliver sustainable earnings growth.

Business Segments and Product Lines:

• Loans and leases held for investment increased $379.7 million (6% annualized) to $24.6 billion, driven by $2.6 billion in loan production and disbursements with a weighted average interest rate of 6.58%.
• Average deposits increased $565.3 million (8% annualized) to $28.3 billion, supporting reduced reliance on wholesale funding.
• Total deposits increased $139.1 million quarter-over-quarter, driven by a $206.5 million increase in interest-bearing deposits, primarily in money market, checking, and savings accounts, offset by a decrease in brokered and non-brokered time deposits.
• Off-balance sheet client funds for alternative corporate treasury solutions totaled $1.0 billion at September 30, 2026.
• Securities available-for-sale (AFS) increased $0.6 billion to $5.1 billion, driven by $997.2 million in purchases.
• The Company completed targeted loan sales of approximately $525 million of commercial real estate and construction loans during the third quarter, with an additional $235 million sold on October 21, 2026.

Market and Competitive Landscape:

• The Company is the largest publicly-traded bank headquartered in Los Angeles and the third largest bank headquartered in California, operating 76 full-service branches in California, Denver, and Durham, North Carolina.
• Credit quality trends were favorable, with nonperforming loans and leases as a percentage of total loans and leases held for investment declining 12 basis points and classified loans declining 35 basis points quarter-over-quarter.
• Total delinquent loans and leases decreased to $114.8 million at September 30, 2026, from $173.7 million at June 30, 2026.
• Nonperforming assets decreased to $198.7 million (0.57% of total assets) from $220.0 million (0.63% of total assets) in the prior quarter.

Risks and Challenges:

• The press release notes forward-looking risks including changes in general economic conditions, interest rate environments, and real estate market values.
• Specific risks mentioned include credit risks from loan delinquencies, operational risks, and the potential for increased loan losses if the allowance for credit losses is not adequate.
• Risks related to the strategic balance sheet repositioning include the ability to achieve anticipated benefits and the impact of one-time charges on earnings.
• Regulatory risks include potential limitations on business activities, increased allowance requirements, or fines.
• Cybersecurity threats, climate change events, and geopolitical conflicts are identified as potential external risks.

Management Commentary and Tone:

• Jared Wolff, Chairman & CEO, stated that third-quarter results demonstrate a stronger earnings foundation created through the second-quarter strategic balance sheet repositioning.
• Management highlighted a 12% increase in pre-tax pre-provision income compared to the first quarter before repositioning and a 6% increase in total revenue.
• The tone is confident regarding the execution of the repositioning strategy, citing reduced reliance on brokered funding and a 45 basis point increase in the CET1 ratio from the second quarter.
• Management emphasized a focus on disciplined loan growth and capital generation to deliver long-term shareholder value.

Other Key Points:

• Capital ratios exceeded regulatory thresholds for "well capitalized" banks, with a Tier 1 capital ratio of 12.10% (up 43 basis points) and a CET1 ratio of 9.70% (up 45 basis points) at September 30, 2026.
• For the nine months ended September 30, 2026, the Company repurchased 1,709,935 shares of common stock for $31.9 million at a weighted average price of $18.68 per share.
• As of September 30, 2026, $82.6 million remained available under the stock repurchase authorization, which expires in March 2027.
• Total stockholders' equity decreased $61.3 million quarter-over-quarter to $3.3 billion, primarily due to an increase in unrealized net after-tax losses in AOCI on AFS securities of $116.1 million and dividends of $29.3 million.
• Tangible book value per common share decreased to $16.09 from $16.44 in the prior quarter.
• The Company received a $2.8 million special dividend on FHLB stock during the third quarter.
• A conference call to discuss results was scheduled for October 28, 2026, at 8:30 a.m. Pacific Time.