Banc of California, Inc. Reports First Quarter Diluted Earnings per Share of $0.39, Up 50% Year over Year; Net Interest Margin Expands to 3.24%; Positive Operating Leverage Continues

INCOME STATEMENT HIGHLIGHTS

Net Interest Income and Margin

First Quarter of 2026 Compared to Fourth Quarter of 2025

Net interest income increased by $0.3 million to $251.6 million for the first quarter, up from $251.4 million in the fourth quarter. This increase was primarily driven by a $9.7 million decrease in interest expense on deposits, reflecting lower interest rates due to the full quarter impact of the federal funds rate cuts of 50 basis points in the fourth quarter and two fewer days in the quarter. Additionally, interest income from investment securities rose by $2.3 million, supported by higher average balances from security purchases and a Federal Home Loan Bank (FHLB) special dividend. These positive factors were offset partially by a $9.3 million decrease in interest income from loans, mainly due to two fewer days in the quarter and lower average yields resulting from the federal funds rate cuts. Interest income from deposits in financial institutions also declined by $2.5 million, driven by lower average balances and interest rates.

Net interest margin was 3.24% for the first quarter, up 4 basis points from 3.20% for the fourth quarter primarily driven by lower average total cost of funds, offset partially by lower average yield on interest-earning assets. The average total cost of funds decreased to 2.10% from 2.20%, as a result of an 11 basis point decrease in the average total cost of deposits to 1.78%, and an 11 basis point decrease in the average cost of borrowings to 4.63%. The average yield on interest-earning assets decreased to 5.25% from 5.31%, as a result of a 9 basis point decrease in the average yield on loans and leases to 5.74%. Declines in both funding costs and asset yield reflect the full quarter impact of rate cuts that occurred in fourth quarter.

Average total deposits increased by $103.4 million, with a $81.2 million increase in average noninterest-bearing deposits and $22.2 million increase in average interest-bearing deposits. Average noninterest-bearing deposits represented 28.9% of average total deposits in the first quarter, up from 28.7% in the fourth quarter.

Provision For Credit Losses

First Quarter of 2026 Compared to Fourth Quarter of 2025

The provision for credit losses was $9.8 million for the first quarter compared to $12.5 million for the fourth quarter.

The first quarter provision for loan losses and unfunded loan commitments was primarily driven by net charge off activity and changes in loan risk ratings including specific reserves, offset partially by lower balances in the held for investment (“HFI”) portfolio and lower qualitative reserves.

The fourth quarter provision for loan losses and unfunded loan commitments was primarily driven by changes in loan risk ratings including specific reserves, and higher loan balances and unfunded commitments, offset partially by lower qualitative reserves.

Noninterest Income

First Quarter of 2026 Compared to Fourth Quarter of 2025

Noninterest income decreased by $6.2 million to $35.3 million for the first quarter from $41.6 million for the fourth quarter due mainly to a $7.9 million decrease in leased equipment income, offset partially by the increase of $1.5 million in commission and fees and $1.1 million in other income. The decrease in leased equipment income was due mainly to higher gains on early lease terminations in the fourth quarter.

Noninterest Expense

First Quarter of 2026 Compared to Fourth Quarter of 2025

Noninterest expense increased by $0.7 million to $181.4 million for the first quarter from $180.6 million for the fourth quarter due mainly to a $5.2 million increase in compensation expense, offset partially by the decrease of $2.5 million in other professional services and $1.1 million in customer related expense. The increase in compensation expense was mainly driven by seasonality, reflecting higher incentive compensation and annual reset of payroll related taxes and benefits in the first quarter. The decline in other professional services was driven by lower project spend, while customer related expenses decreased due to lower earnings credit rate payments following the federal funds rate cuts in the fourth quarter.

Income Taxes

First Quarter of 2026 Compared to Fourth Quarter of 2025

Income tax expense of $23.8 million was recorded for the first quarter resulting in an effective tax rate of 24.9% compared to income tax expense of $22.4 million and an effective tax rate of 22.4% for the fourth quarter.

BALANCE SHEET HIGHLIGHTS

Securities

Securities available-for-sale (“AFS”) increased by $202.3 million during the first quarter to $2.7 billion at March 31, 2026. The increase was primarily driven by $343.4 million of purchases, offset partially by $119.8 million of principal paydowns, $10.8 million of maturities, $9.2 million decrease in the fair value of AFS securities, and $1.3 million of net amortization. As of March 31, 2026, AFS securities had aggregate unrealized net after-tax losses in accumulated other comprehensive income (loss) (“AOCI”) of $143.3 million, up from $136.6 million at December 31, 2025, driven by higher interest rates.

The balance of securities held-to-maturity (“HTM”) increased by $4.9 million in the first quarter to $2.3 billion at March 31, 2026. As of March 31, 2026, HTM securities had aggregate unrealized net after-tax losses in AOCI of $127.2 million remaining from the balance established at the time of transfer from AFS.

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:

Total loans and leases HFI decreased by $252.3 million in the first quarter and totaled $24.8 billion at March 31, 2026. The decrease in loans and leases HFI was due primarily to decreased balances in other commercial loans, commercial real estate mortgage loans, and multi-family real estate mortgage loans, offset partially by increases in asset-based loans, other residential real mortgage loans, and venture capital loans. Loan production and disbursements totaled $2.1 billion in the first quarter with a weighted average interest rate on production of 6.65%.

Total loans and leases held for sale (“HFS”) increased by $76.1 million in the first quarter and totaled $259.0 million at March 31, 2026. The increase in loans HFS was primarily driven by a $72.1 million loan transfer during the first quarter that subsequently sold at par in April 2026.

Credit Quality

Asset quality metrics primarily reflect migration in a limited number of loans within a few larger relationships during the quarter. These were largely isolated situations, reflect proactive risk management actions, and the credits are supported by strong collateral and defined resolution paths.

At March 31, 2026, total delinquent loans and leases were $345.1 million, compared to $201.0 million at December 31, 2025. The 30 to 89 days delinquent category increased by $114.1 million in residential real estate construction and land loans, $32.9 million in commercial real estate construction and land loans, and $7.0 million in other residential real estate mortgage loans. In the 90 or more days delinquent category, there were decreases of $5.4 million in commercial real estate mortgage loans and $5.3 million in other residential real estate mortgage loans.

At March 31, 2026, nonperforming loans and leases were $185.7 million, compared to $159.2 million at December 31, 2025. During the first quarter, nonperforming loans and leases increased by $26.6 million due to additions of $54.6 million, offset partially by payoffs and paydowns of $20.0 million, charge-offs of $5.2 million, and transfers to accrual status of $2.8 million.

At March 31, 2026, nonperforming assets were $203.8 million, or 0.59% of total assets, compared to $176.3 million, or 0.51% of total assets, as of December 31, 2025. At March 31, 2026, nonperforming assets included $18.1 million of foreclosed assets, consisting primarily of single-family residences.

Allowance for Credit Losses – Loans

The allowance for credit losses – loans, which includes the reserve for unfunded loan commitments, totaled $276.5 million, or 1.12% of total loans and leases at March 31, 2026, compared to $280.5 million, or 1.12% of total loans and leases at December 31, 2025. The $4.0 million decrease in the allowance was driven by net charge-offs of $13.8 million, offset partially by the provision of $9.8 million.

Our ability to absorb credit losses is also bolstered by (i) $105.0 million of loss coverage from the credit-linked notes, pursuant to which the bank sold the first 5% of any losses on $2.1 billion of single-family residential mortgage loans in our portfolio; and (ii) unearned credit marks of $14.3 million on approximately $1.2 billion of purchased loans without credit deterioration. When the loss coverage from the credit-linked notes and unearned credit marks is added to our allowance for credit losses, this provides additional economic coverage on top of our ACL ratio. We refer to this adjusted ACL ratio as our economic coverage ratio⁽¹⁾, which equaled 1.60% of total loans and leases at March 31, 2026 compared to 1.62% at December 31, 2025.

The ACL coverage of nonperforming loans and leases was 149% at March 31, 2026 compared to 176% at December 31, 2025.

Net charge-offs were 0.23% of average loans and leases (annualized) for the first quarter, compared to net charge-offs of 0.04% for the fourth quarter.

Deposits and Client Investment Funds

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

Total deposits decreased by $521.2 million to $27.3 billion at March 31, 2026 from $27.8 billion at December 31, 2025, driven by a decrease in interest-bearing deposits of $496.0 million and a decrease in noninterest-bearing deposits of $25.2 million. Interest-bearing deposits decreased due mainly to lower balances in checking accounts of $331.1 million and lower money market accounts of $274.5 million, offset partially by higher savings accounts of $85.1 million and higher brokered and non-brokered time deposits of $24.5 million.

At March 31, 2026, noninterest-bearing checking deposits totaled $7.8 billion, or 29% of total deposits, compared to $7.8 billion, or 28% of total deposits, at December 31, 2025.

At March 31, 2026, uninsured and uncollateralized deposits totaled $7.8 billion, or 28% of total deposits, compared to $7.7 billion, or 28% of total deposits, at December 31, 2025.

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 $1.2 billion as of March 31, 2026 and December 31, 2025.

Borrowings

Borrowings increased by $487.4 million to $2.6 billion at March 31, 2026 from $2.1 billion at December 31, 2025, mainly due to higher overnight and short-term borrowings.

Equity

During the first quarter, total stockholders’ equity increased by $12.0 million to $3.6 billion and tangible common equity⁽¹⁾ increased by $18.2 million to $2.7 billion at March 31, 2026. The increase in total stockholders’ equity for the first quarter resulted primarily from net earnings of $72.0 million, offset partially by the repurchase of common stock of $31.9 million and common and preferred stock dividends of $29.1 million.

At March 31, 2026, book value per common share increased to $19.80 compared to $19.56 at December 31, 2025, and tangible book value per common share⁽¹⁾ increased to $17.77 compared to $17.51 at December 31, 2025.

For the three-month period ended March 31, 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 March 31, 2026, $82.6 million remained available under the current stock repurchase authorization, which expires in March 2027.

CAPITAL AND LIQUIDITY

The following table sets forth our regulatory capital ratios as of the dates indicated:

At March 31, 2026, cash and cash equivalents totaled $2.2 billion, down $90.7 million from December 31, 2025.

Our immediately available cash and cash equivalents (excluding restricted cash) were $2.0 billion. Combined with total available borrowing capacity of $9.7 billion and unpledged AFS securities of $2.5 billion, total available liquidity was $14.2 billion at the end of the first quarter.

Conference Call

The Company will host a conference call to discuss its first quarter 2026 financial results at 10:00 a.m. Pacific Time (PT) on Thursday, April 23, 2026. Interested parties are welcome to attend the conference call by dialing (888) 317-6003 and referencing event code 5670833. 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 7930561.

About Banc of California, Inc.

Banc of California, Inc. (NYSE: BANC) is a bank holding company with over $34 billion in assets and the parent company of Banc of California. Banc of California is one of the nation’s premier relationship-based business banks, providing banking and treasury management services to small-, middle-market, and venture-backed businesses. Banc of California is the largest independent bank headquartered in Los Angeles and the third largest bank headquartered in California and offers a broad range of loan and deposit products and services through 79 full-service branches located throughout California and in Denver, Colorado, and Durham, North Carolina, as well as through regional offices nationwide. The bank also provides full-service payment processing solutions to its clients and serves the Community Association Management industry nationwide with its technology-forward platform, SmartStreet™. The bank is committed to its local communities through the Banc of California Charitable Foundation, and by supporting organizations that provide financial literacy and job training, small business support, affordable housing, and more. Member FDIC. For more information, please visit us at www.bancofcal.com.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the “Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, liquidity and capital ratios 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, supply chain disruptions, and the risk of recession or an economic downturn; (ii) changes in the interest rate environment, including the recent and potential future changes in the FRB benchmark rate, which could adversely affect our revenue and expenses, the value of assets and obligations, the realization of deferred tax assets, the availability and cost of capital and liquidity, and the impacts of continuing or renewed inflation; (iii) the credit risks of lending activities, which may be affected by deterioration in real estate markets and the financial condition of borrowers, and the operational risk of lending activities, including the effectiveness of our underwriting practices and the risk of fraud, any of which may lead to increased loan delinquencies, losses, and non-performing assets, and may result in our allowance for credit losses not being adequate; (iv) fluctuations in the demand for loans, and fluctuations in commercial and residential real estate values in our market area; (v) the quality and composition of our securities portfolio; (vi) our ability to develop and maintain a strong core deposit base, including among our venture banking clients, or other low cost funding sources necessary to fund our activities particularly in a rising or high interest rate environment; (vii) the rapid withdrawal of a significant amount of demand deposits over a short period of time; (viii) the costs and effects of litigation; (ix) 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; (x) 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; (xi) 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; (xii) the risk that our enterprise risk management framework may not be effective in mitigating risk and reducing the potential for losses; (xiii) 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; (xiv) failures or security breaches with respect to the network, applications, vendors and computer systems on which we depend, including due to cybersecurity threats; (xv) our ability to attract and retain key members of our senior management team; (xvi) the effects of climate change, severe weather events, natural disasters such as earthquakes and wildfires, pandemics, epidemics and other public health crises, military activity (including the ongoing Iran war) or acts of terrorism, and other external events on our business; (xvii) 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; (xviii) the possibility that our recorded goodwill could become impaired, which may have an adverse impact on our earnings and capital; (xix) 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; (xx) changes in market conditions or strategic balance sheet actions, which may result in realized losses on investment securities or other assets; and (xxi) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services and the other risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and from time to time in other documents that we file with or furnish to the SEC.

Non-GAAP Financial Measures

Included in this press release are certain non-GAAP financial measures, such as tangible common equity, tangible book value per common share, return on average tangible common equity, pre-tax pre-provision income, efficiency ratio, and economic coverage ratio, designed to complement the financial information presented in accordance with U.S. GAAP because management believes such measures are useful to investors. These non-GAAP financial measures should be considered only as supplemental to, and not superior to, financial measures provided in accordance with GAAP. Please refer to the “Non-GAAP Measures” section of this release for additional detail including reconciliations of the non-GAAP financial measures included in this press release to the most directly comparable financial measures prepared in accordance with GAAP.