Banc of California, Inc. (NASDAQ:PACW) Q3 2023 Results Conference Call October 24, 2023 10:00 AM ET Company Participants Jared Wolff - Chairman, President and Chief Executive Officer Joe Kauder - Chief Financial Officer Bill Black - Head of Strategy, PacWest Conference Call Participants Timur Braziler - Wells Fargo Matthew Clark - Piper Sandler Gary Tenner - D.A. Davidson Kelly Motta - KBW Andrew Terrell - Stephens David Feaster - Raymond James Operator Hello, and welcome to Banc of California's Third Quart ...

Financial Performance - The company reported a net income of $XX thousand for the quarter ended June 30, 2023, compared to $XX thousand for the same period last year, reflecting a year-over-year change of XX%[20] - Net income for Q2 2023 was $17,879,000, down from $20,278,000 in Q1 2023 and $26,712,000 in Q2 2022, representing a year-over-year decline of 33.0%[21] - Basic earnings per common share for the three months ended June 30, 2023, was $0.31, consistent with the same period in 2022[170] - Adjusted net income for Q2 2023 was $18.4 million, or $0.32 per diluted share, compared to $21.7 million, or $0.37 per diluted share in Q1 2023, and $27.8 million, or $0.45 per diluted share in Q2 2022[195] - The total risk-based capital ratio was 14.26%, well above regulatory thresholds for "well capitalized" banks[195] Asset and Liability Management - Total assets increased to $9,370,265 thousand as of June 30, 2023, up from $9,197,016 thousand at December 31, 2022, representing a growth of 1.88%[18] - The company’s total liabilities increased to $8,413,211 thousand from $8,237,398 thousand, marking a rise of 2.14%[18] - Total deposits decreased to $6,871,076 thousand from $7,120,921 thousand, reflecting a decline of 3.50%[18] - The company’s retained earnings increased to $275,430 thousand as of June 30, 2023, up from $248,988 thousand at the end of 2022, a growth of 10.65%[18] - The total carrying value of collateralized loan obligations is $482,831,000, with non-agency residential mortgage-backed securities valued at $111,508,000 as of June 30, 2023[45] Loan Portfolio - Loans receivable rose to $7,156,206 thousand, compared to $7,115,038 thousand at the end of 2022, indicating an increase of 0.58%[18] - The allowance for loan losses decreased to $80,883 thousand from $85,960 thousand, indicating improved credit quality[75] - The commercial and industrial loan portfolio grew to $2,000,408 thousand, up from $1,845,960 thousand, representing an increase of about 8.4%[75] - The total loans reported were $7,156,206, with a pass category of $121,607, indicating a significant portion of loans are performing well[83] - The total amount of substandard loans across all categories was $100,035, indicating potential risk in the loan portfolio[83] Income and Expenses - Total interest and dividend income for Q2 2023 was $116,151,000, an increase of 9.5% from $106,919,000 in Q1 2023 and up 31.4% from $88,418,000 in Q2 2022[21] - Net interest income after provision for credit losses was $67,732,000 for Q2 2023, down from $71,053,000 in Q1 2023 and $78,299,000 in Q2 2022[21] - Noninterest income decreased to $6,024,000 in Q2 2023 from $7,859,000 in Q1 2023 and $7,186,000 in Q2 2022[21] - Total noninterest expense for Q2 2023 was $49,132,000, a decrease from $51,239,000 in Q1 2023 and an increase from $48,612,000 in Q2 2022[21] - The company reported a provision for credit losses of $1.7 million for the three months ended June 30, 2023[97] Mergers and Acquisitions - The proposed merger with PacWest Bancorp is subject to various risks, including the potential for delays or failure to complete the transaction[16] - The company announced a merger with PacWest, where PacWest stockholders will receive 0.6569 shares of the company's common stock for each share held[186] - The shares issued to PacWest stockholders in the merger are expected to represent approximately 47% of the outstanding shares of the combined company[192] - The merger is expected to result in the combined company repaying approximately $13 billion in wholesale borrowings and high-cost deposits using proceeds from asset sales[192] Market and Economic Conditions - The Federal Reserve raised the federal funds target rate by 525 basis points from the beginning of 2022 through July 2023, impacting the company's performance[191] - The company believes that the decline in fair value of securities is primarily due to changes in interest rates and market volatility, with no credit impairment expected for the majority of the portfolio[65] Stockholder Information - The company repurchased 1,348,545 shares of treasury stock during the quarter, resulting in a reduction of $16,178 thousand in equity[27] - Dividends declared for the quarter were $0.10 per common share, totaling $5,880 thousand[27] - The company has authorized a common stock repurchase program of up to $35 million, with 1,348,545 shares repurchased at a weighted average price of $11.85 during the three months ended June 30, 2023[152] Risk Management - The allowance for credit losses was $1,036 thousand as of June 30, 2023, compared to $0 at December 31, 2022, indicating a proactive approach to risk management[18] - The company has entered into $3.5 billion in interest rate swap options to hedge interest rate risk, costing $15.7 million[186] - The company recognized a loss of $165 on single family residential real estate owned in the three months ended June 30, 2023[51] Taxation - For the three months ended June 30, 2023, the income tax expense was $6.7 million, resulting in an effective tax rate of 27.4%[135] - The total unrecognized tax benefit that could impact the effective tax rate was $0.6 million as of June 30, 2023[137]

Financial Data and Key Metrics Changes - The net income for Q2 2023 was $17.9 million or $0.31 per diluted share, with adjusted net income totaling $18.4 million or $0.32 per diluted common share, compared to adjusted net income of $21.7 million or $0.37 per diluted common share in the prior quarter [11][12] - The net interest margin decreased by 30 basis points from the prior quarter to 3.11%, largely due to higher levels of cash carried during the first two months of the quarter [12] - Total assets decreased by approximately 7% to $9.4 billion, primarily due to a reduction in excess liquidity held in cash [15] Business Line Data and Key Metrics Changes - Total loans increased by approximately $102 million, primarily due to increases in core C&I and warehouse portfolios [16] - Noninterest income decreased by $1.8 million from prior quarters, mainly due to nonrecurring items in the first quarter [14] - Adjusted noninterest expense decreased by $825,000 from the prior quarter, reflecting cost savings from headcount reductions [14] Market Data and Key Metrics Changes - The average loan yield increased by 21 basis points to 5.28%, attributed to variable rate loans repricing higher [13] - The total cost of funds increased by 52 basis points to 2.20%, with the average cost of deposits rising by 45 basis points [13] Company Strategy and Development Direction - The merger with PacWest is expected to create the third largest bank headquartered in California, enhancing capital and liquidity while being accretive to EPS and tangible book value [5][24] - The combined strategy will focus on in-market relationship banking, providing superior customer service and robust treasury management solutions [24][25] - The company aims to reduce reliance on wholesale funding and improve profitability through strategic asset sales and operational efficiencies [18][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the merger's potential to create significant value for stakeholders, citing a favorable competitive environment in California due to other banks exiting the market [25][26] - The company anticipates a slow economic growth environment, with projections for loan growth being conservative until 2025 [75] Other Important Information - The merger is accompanied by a $400 million capital raise from sophisticated bank investors, which will support the transformation of the combined company [5][26] - The company plans to sell liquid assets and utilize excess cash to pay down $13 billion of wholesale funding, aiming for a loan-to-deposit ratio of approximately 85% [27][28] Q&A Session Summary Question: Cost savings from the merger - The $130 million in cost savings is derived from temporary elevated expenses at PacWest and identified overlaps in expenses for the combined company [36][37] Question: Deposit assumptions and growth - The plan is to achieve approximately 30% noninterest-bearing deposits at close, with expectations for growth [49][50] Question: Credit quality and portfolio management - The credit quality remains solid, with a focus on de-risking the balance sheet and improving the credit profile through asset sales [51][54] Question: Timing of merger approval - The company expects to close the transaction by the end of Q4 or early Q1, having previewed the transaction with regulators [84]

www.bancofcal.com Investor Presentation 2023 Second Quarter Earnings FORWARD LOOKING STATEMENTS When used in this report and in documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “believe,” “will,” “should,” “will likely result,” “are expected to,” “will continue,” “is anticipat ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | |--------------------------------------------------------------------------------------------------------------------------------------------------------| | | | Fo ...

Financial Data and Key Metrics Changes - Net income for Q1 2023 was $20.3 million or $0.34 per diluted share, with adjusted net income at $21.7 million or $0.37 per diluted share, down from $26.8 million or $0.45 per diluted share in the previous quarter [18] - Net interest margin decreased by 28 basis points to 3.41%, while overall earning asset yield increased by 20 basis points to 4.99% [18] - Average loan yield increased by 15 basis points to 5.07%, and average cost of deposits rose by 43 basis points to 122 basis points [19] Business Line Data and Key Metrics Changes - Total loans decreased by approximately $61 million, primarily due to three loan payoffs in the C&I portfolio [22] - Non-interest income increased by $9.3 million from the prior quarter, driven by a recovery on a loan acquired and higher income from equity investments [20] - Non-interest expense increased by approximately $800,000, mainly due to higher salaries and benefits [21] Market Data and Key Metrics Changes - Total assets increased by approximately 9% to $10 billion, reflecting an increase in liquidity [22] - Total deposits decreased by $169 million, primarily due to outflows in January and February, but increased since mid-March [23] - Delinquent loans declined by $19 million or 20%, indicating stable credit quality [23] Company Strategy and Development Direction - The company aims to maintain strong capital levels while focusing on prudent risk management amid challenging economic conditions [25] - Plans to enhance the value proposition through a new payments processing business expected to onboard clients in the second half of the year [26] - The company is positioned to capitalize on market disruptions, focusing on relationship-oriented business clients and attractive lending opportunities [25][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the franchise and the ability to attract new clients amid recent banking turmoil [6][25] - The outlook remains cautious, with expectations of low single-digit loan growth and a focus on optimizing earnings and shareholder value [44] - Management noted that the current environment is temporary, and they expect to emerge stronger by building on fundamental strengths [26] Other Important Information - The company repurchased approximately 1% of its common shares and increased its quarterly cash dividend by 67% [14] - The allowance for credit losses at the end of Q1 totaled $89.4 million, with a coverage ratio of 1.27% [24] - The company has significant excess liquidity, with cash balances reaching approximately $1 billion at quarter end [20] Q&A Session Summary Question: Competitive landscape in California post-bank failures - Management noted a strong inflow of core deposits and a solid pipeline, emphasizing the importance of safety and depositor confidence in the current environment [30][31] Question: Loan and deposit ratio dynamics - Management indicated comfort with the current loan-to-deposit ratio around 100%, with new lending opportunities being funded primarily through core deposits [34][36] Question: Consolidation activity in California - Management believes it is early to predict consolidation trends but sees potential benefits from smaller banks seeking scale [39][40] Question: Lending appetite and risk-adjusted returns - Management stated that they could shrink the loan portfolio if attractive risk-adjusted returns are not available, focusing on optimizing earnings [42][44] Question: New commercial accounts and non-interest bearing balances - Management highlighted the importance of sophisticated treasury management solutions in attracting new clients and maintaining non-interest bearing balances [46][50] Question: Interest rate risk management - Management discussed a recent $300 million hedge to manage rate sensitivity, indicating a rate-neutral position currently [51][54]

www.bancofcal.com Investor Presentation 2023 First Quarter Earnings FORWARD LOOKING STATEMENTS When used in this report and in documents filed with or furnished to the Securities and Exchange Commission (the "SEC"), in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases "believe," "will," "should," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "pla ...

```markdown Part I [Business](index=7&type=section&id=Item%201.%20Business) Banc of California, Inc. is the holding company for Banc of California, N.A., a relationship-focused business bank serving California since 1941, providing loan and deposit products through 28 branches, with strategic acquisitions of Pacific Mercantile Bancorp and Deepstack Technologies, and is extensively regulated by the FRB and OCC - The company operates as a relationship-focused business bank in California, serving clients through **28 full-service branches** from San Diego to Santa Barbara[13](index=13&type=chunk) - The company's strategy is to be the premier business bank in California by delivering customized solutions and superior service, including investing in technology to improve client experience and operational efficiency[14](index=14&type=chunk) - Completed the acquisition of Deepstack Technologies on September 15, 2022, a software-led payments platform, to offer full-stack payment processing solutions to its clients[15](index=15&type=chunk)[36](index=36&type=chunk) Loan Portfolio Composition (December 31, 2022) | Loan Category | Amount (Billions) | Percentage of Total Assets | | :--- | :--- | :--- | | Total Loans Held-for-Investment | $7.12 | 77.4% | Deposit Market Share (June 30, 2022) | County | Market Share | | :--- | :--- | | Orange County | 2.17% | | Los Angeles County | 0.51% | | Santa Barbara County | 0.28% | | San Diego County | 0.19% | - The company and its bank subsidiary are extensively regulated by federal agencies, including the Federal Reserve Board (FRB) for the holding company and the Office of the Comptroller of the Currency (OCC) for the bank[47](index=47&type=chunk) [Risk Factors](index=20&type=section&id=Item%201A.%20Risk%20Factors) The company faces a wide range of risks that could adversely affect its business and financial results, categorized into operational, interest rate, credit, funding, liquidity, legal, compliance, market, and external event risks - Operational risks include challenges with new business lines like payment processing, cybersecurity threats, reliance on third-party vendors, and potential difficulties in integrating acquisitions such as Deepstack[72](index=72&type=chunk)[80](index=80&type=chunk)[85](index=85&type=chunk) - Credit and interest rate risks are significant, stemming from potential loan losses exceeding allowances, deterioration in economic conditions, declining property values, and the transition away from LIBOR[73](index=73&type=chunk)[101](index=101&type=chunk)[121](index=121&type=chunk) - Funding and liquidity risks involve the ability to maintain a stable, low-cost core deposit base and access to additional capital, with the holding company's dividend payments dependent on its bank subsidiary's regulatory-restricted dividends[76](index=76&type=chunk)[122](index=122&type=chunk)[124](index=124&type=chunk) - The company operates in a highly regulated environment, facing legal and compliance risks from potential changes in laws, fair lending regulations, and anti-money laundering requirements[77](index=77&type=chunk)[129](index=129&type=chunk)[132](index=132&type=chunk) - External risks include the potential negative impact of climate change, severe weather events, economic downturns concentrated in its California market, and intense competition from other financial institutions[78](index=78&type=chunk)[135](index=135&type=chunk)[137](index=137&type=chunk) [Unresolved Staff Comments](index=36&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments[145](index=145&type=chunk) [Properties](index=36&type=section&id=Item%202.%20Properties) As of December 31, 2022, the company operates from 34 offices, which include its main executive offices in Santa Ana, California, and 28 branch offices across Los Angeles, Orange, San Diego, and Santa Barbara counties - The company conducts its operations from **34 offices**, including **28 branch offices** in Southern California[145](index=145&type=chunk) [Legal Proceedings](index=36&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal actions arising in the normal course of business, with management believing any resulting liability would not materially adversely affect its financial statements or operations - The company is party to various legal actions in the normal course of business, but management does not expect them to have a material adverse effect on its financial condition[146](index=146&type=chunk) [Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[146](index=146&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=37&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Banc of California's common stock trades on the NYSE under the symbol BANC, and in 2022, the company redeemed all outstanding Series E Preferred Stock, paid **$14.5 million** in common stock dividends, and completed a **$75 million** stock repurchase program - The company's voting common stock is listed on the New York Stock Exchange under the symbol BANC[148](index=148&type=chunk) - In 2022, all outstanding Series E Preferred Stock and its corresponding depositary shares were redeemed[148](index=148&type=chunk) - The holding company paid **$14.5 million** in dividends to common stockholders in 2022, while the Bank paid dividends of **$126.0 million** to the holding company during the same period[149](index=149&type=chunk) - A stock repurchase program of up to **$75 million** was announced on March 15, 2022, and was completed by December 31, 2022, with the company repurchasing **4,212,882 shares** at a weighted average price of **$17.80 per share**[152](index=152&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2022, Banc of California's net income available to common stockholders significantly increased to **$115.8 million** from **$50.6 million** in 2021, driven by a **23.9%** rise in net interest income and a **$31.5 million** reversal of credit losses, which included a **$31.3 million** recovery on a previously charged-off loan, while total assets decreased slightly to **$9.20 billion** - Management identifies the allowance for credit losses (ACL), business combinations, valuation of acquired loans, goodwill, and deferred income taxes as its most critical accounting estimates, requiring complex and subjective judgments[158](index=158&type=chunk) Financial Highlights for 2022 | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Diluted EPS | $1.89 | $0.95 | | Adjusted Diluted EPS | $2.10 | $1.15 | | Net Interest Margin | 3.59% | 3.26% | | Return on Average Assets (ROAA) | 1.29% | 0.75% | | Book Value per Share | $16.26 | $15.48 | | Tangible Common Equity per Share | $14.19 | $13.88 | - Net interest income increased by **$60.6 million** (**23.9%**) to **$314.4 million** in 2022, driven by higher average balances and yields on interest-earning assets, which outpaced the rise in funding costs[196](index=196&type=chunk) - The company recorded a reversal of provision for credit losses of **$31.5 million** in 2022, compared to a provision of **$6.9 million** in 2021, primarily due to a **$31.3 million** recovery from the settlement of a loan previously charged-off in 2019[203](index=203&type=chunk) - Total loans decreased by **1.9%** to **$7.12 billion** at year-end 2022, mainly due to a **$1.00 billion** reduction in warehouse lending balances, partially offset by **$814.3 million** in SFR loan purchases and organic growth in other commercial loan categories[224](index=224&type=chunk) - Total deposits decreased by **$318.5 million** to **$7.12 billion**, with a shift in composition from savings and money market accounts to higher-cost certificates of deposit, while noninterest-bearing deposits remained stable and constituted **39.5%** of total deposits[268](index=268&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=75&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's most significant market risk is interest rate risk, managed by its Asset/Liability Committees (ALCOs), using simulation models to measure the potential impact of interest rate changes on Net Interest Income (NII) and Economic Value of Equity (EVE), with the balance sheet mildly "asset sensitive" as of December 31, 2022 - The company's primary market risk is interest rate risk, which is the risk associated with changes in interest rates and the ability to adapt to these changes[295](index=295&type=chunk) - As of December 31, 2022, the company's interest rate risk profile reflects a mildly "asset sensitive" position, meaning an increase in short-term interest rates is expected to slightly expand net interest margin[297](index=297&type=chunk) Interest Rate Sensitivity Analysis (as of December 31, 2022) | Change in Interest Rates (bps) | Change in Economic Value of Equity (%) | Change in Net Interest Income (%) | | :--- | :--- | :--- | | +200 | (0.1)% | +2.1% | | +100 | +0.2% | +1.1% | | -100 | (1.6)% | (2.0)% | | -200 | (4.6)% | (5.0)% | [Financial Statements and Supplementary Data](index=78&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the consolidated financial statements of Banc of California, Inc. for the fiscal year ended December 31, 2022, audited by Ernst & Young LLP, including the Consolidated Statements of Financial Condition, Operations, Comprehensive Income, Stockholders' Equity, and Cash Flows, along with detailed notes - The financial statements were audited by Ernst & Young LLP, which issued an unqualified opinion, stating the financials are presented fairly in all material respects in conformity with U.S. GAAP[308](index=308&type=chunk) - A critical audit matter identified was the Allowance for Loan Losses (ALL), due to the high degree of subjectivity and judgment involved in determining the probabilities assigned to forecast scenarios used to estimate future credit losses[312](index=312&type=chunk)[314](index=314&type=chunk) [Consolidated Statements of Financial Condition](index=81&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) The consolidated balance sheet shows a slight decrease in total assets from **$9.39 billion** in 2021 to **$9.20 billion** in 2022, driven by a decrease in securities available-for-sale and a modest decline in net loans receivable, while total stockholders' equity declined from **$1.07 billion** to **$959.6 million** Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Assets | $9,197,016 | $9,393,743 | | Loans Receivable, Net | $7,029,078 | $7,158,896 | | Total Deposits | $7,120,921 | $7,439,435 | | Total Liabilities | $8,237,398 | $8,328,453 | | Total Stockholders' Equity | $959,618 | $1,065,290 | [Consolidated Statements of Operations](index=82&type=section&id=Consolidated%20Statements%20of%20Operations) The company's net income nearly doubled to **$120.9 million** in 2022 from **$62.3 million** in 2021, primarily driven by a significant increase in net interest income to **$314.4 million** and a reversal of provision for credit losses of **$31.5 million**, resulting in diluted earnings per share rising to **$1.89** from **$0.95** Consolidated Income Statement Highlights (in thousands) | Account | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net Interest Income | $314,365 | $253,778 | $224,594 | | (Reversal of) Provision for Credit Losses | $(31,542) | $6,854 | $29,719 | | Noninterest Income | $17,350 | $19,376 | $18,870 | | Noninterest Expense | $194,373 | $183,678 | $199,385 | | Net Income | $120,939 | $62,346 | $12,574 | | Diluted EPS | $1.89 | $0.95 | $(0.02) | [Notes to Consolidated Financial Statements](index=89&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures supporting the consolidated financial statements, covering significant accounting policies, acquisitions, loan portfolio composition, credit quality, deposit and borrowing structures, stockholders' equity changes, and regulatory capital adequacy - **Note 2 (Business Combinations):** Details the acquisition of Deepstack for **$24.0 million** in 2022, resulting in **$18.2 million** of goodwill, and the 2021 acquisition of Pacific Mercantile Bancorp for **$225.4 million**, resulting in **$59.0 million** of goodwill[350](index=350&type=chunk)[353](index=353&type=chunk)[355](index=355&type=chunk) - **Note 5 (Loans and ACL):** Total loans decreased to **$7.12 billion** in 2022 from **$7.25 billion** in 2021, with a significant reduction in warehouse lending, while non-traditional mortgage (NTM) loans, primarily interest-only, increased to **$862.3 million** (**12.1% of total loans**)[393](index=393&type=chunk)[439](index=439&type=chunk) - **Note 18 (Stockholders' Equity):** In Q1 2022, the company redeemed all outstanding Series E Preferred Stock for **$98.7 million**, and completed a **$75 million** common stock repurchase program, buying back **4.2 million shares**[521](index=521&type=chunk)[522](index=522&type=chunk) Regulatory Capital Ratios (as of Dec 31, 2022) | Ratio | Banc of California, Inc. | Banc of California, NA | Well-Capitalized Requirement (Bank) | | :--- | :--- | :--- | :--- | | Total risk-based capital | 14.21% | 16.02% | 10.00% | | Tier 1 risk-based capital | 11.80% | 14.94% | 8.00% | | Common equity tier 1 | 11.80% | 14.94% | 6.50% | | Tier 1 leverage | 9.70% | 12.25% | 5.00% | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=148&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure - None reported[566](index=566&type=chunk) [Controls and Procedures](index=148&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of December 31, 2022, with the independent auditor also issuing an unqualified opinion on the effectiveness of internal control over financial reporting - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of December 31, 2022[567](index=567&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2022, an assessment concurred with by Ernst & Young LLP[568](index=568&type=chunk)[571](index=571&type=chunk) - There were no changes in internal control over financial reporting during the fourth quarter of 2022 that materially affected, or are reasonably likely to materially affect, internal controls[569](index=569&type=chunk) [Other Information](index=150&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[575](index=575&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=151&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information required for this item, including details on directors, executive officers, the audit committee, and the code of ethics, is incorporated by reference from the company's definitive proxy statement for its 2023 Annual Meeting of Stockholders - Information regarding directors, executive officers, and corporate governance is incorporated by reference from the 2023 Annual Meeting of Stockholders proxy statement[577](index=577&type=chunk) [Executive Compensation](index=151&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's definitive proxy statement for its 2023 Annual Meeting of Stockholders - Information regarding executive compensation is incorporated by reference from the 2023 Annual Meeting of Stockholders proxy statement[578](index=578&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=151&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership by certain beneficial owners and management, as well as details on equity compensation plans, is incorporated by reference from the company's definitive proxy statement for its 2023 Annual Meeting of Stockholders - Information regarding security ownership is incorporated by reference from the 2023 Annual Meeting of Stockholders proxy statement[579](index=579&type=chunk) Equity Compensation Plan Information (as of Dec 31, 2022) | Plan Category | Securities to be issued upon exercise | Weighted-average exercise price | Securities remaining available for future issuance | | :--- | :--- | :--- | :--- | | Approved by security holders | 14,904 | $13.05 | 2,131,185 | | Not approved by security holders | — | — | — | [Certain Relationships and Related Transactions, and Director Independence](index=152&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related party transactions, and director independence is incorporated by reference from the company's definitive proxy statement for its 2023 Annual Meeting of Stockholders - Information regarding related transactions and director independence is incorporated by reference from the 2023 Annual Meeting of Stockholders proxy statement[582](index=582&type=chunk) [Principal Accountant Fees and Services](index=152&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the company's definitive proxy statement for its 2023 Annual Meeting of Stockholders - Information regarding principal accountant fees and services is incorporated by reference from the 2023 Annual Meeting of Stockholders proxy statement[583](index=583&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=153&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Form 10-K report, including corporate governance documents, material contracts, and required certifications - This item provides a comprehensive list of all exhibits filed with the Form 10-K, including corporate governance documents, material contracts, and required certifications[585](index=585&type=chunk)[586](index=586&type=chunk) [Form 10-K Summary](index=154&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports no information for this item - None[592](index=592&type=chunk) ```

Banc of California, Inc. (NYSE:BANC) Q4 2022 Earnings Conference Call January 19, 2023 1:00 PM ET Company Participants Jared Wolff - President, Chief Executive Officer Lynn Hopkins - Chief Financial Officer Conference Call Participants Matthew Clark - Piper Sandler Timur Braziler - Wells Fargo Gary Tenner - D.A. Davidson David Feaster - Raymond James Andrew Terrell - Stephens Kelly Motta - KBW Operator Hello, and welcome to Banc of California's Fourth Quarter Earnings Conference Call. All participants will ...

INVESTOR PRESENTATION 2022 Fourth Quarter Earnings bancofcal.com FORWARD LOOKING STATEMENTS When used in this report and in documents filed with or furnished to the Securities and Exchange Commission (the "SEC"), in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases "believe," "will," "should," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "plans, ...