BANC

Image source: The Motley Fool. Wednesday, July 29, 2026, at 8 a.m. ET Investor Relations - Ann DeVries Chairman and Chief Executive Officer - Jared Wolff Chief Financial Officer - Joseph Kauder Operator: Good day, and welcome to the Banc of California Second Quarter 2026 Earnings Call. Please note this event is being recorded. I would now like to turn the conference over to Ann DeVries. Please go ahead. Ann DeVries: Good morning, and thank you for joining Banc of California's second quarter earnings call. Today's call is being recorded, and a copy of the recording will be available later today on our Investor Relations website. Today's presentation will also include non-GAAP measures. The reconciliations for these measures and additional required information are available in the earnings press release and earnings presentation, which are available on our Investor Relations website. Before we begin, we would like to remind everyone that today's call will include forward-looking statements, including statements about our targets, goals, strategies and outlook for 2026 and beyond, which are subject to risks, uncertainties and other factors outside of our control, and actual results may differ materially. For a discussion of some of the risks that could affect our results, please see our safe harbor statement on forward-looking statements included in both the earnings release and the earnings presentation as well as the Risk Factors section of our most recent 10-K. Joining me on today's call are Jared Wolff, Chairman and Chief Executive Officer; and Joe Kauder, Chief Financial Officer. After our prepared remarks, we'll be taking questions from the analyst community. I would like to now turn the call over to Jared. Jared Wolff: Thanks, Ann, and good morning, everyone. The second quarter was another strong quarter for Banc of California. Our loan and deposit growth shined with 9% annualized loan growth and 12% annualized deposit growth. Loan production of $2.8 billion was particularly strong. I mentioned these items at the outset, so they are not overshadowed by the important strategic moves that we made in the quarter. In fact, the strength of the underlying franchise is one of the key reasons we decided to take the strategic actions we did. In order for the true earnings power of our team and this franchise to show up quarter after quarter, we felt it was time to remove some of the weights hanging over us, namely over $2 billion yielding long-duration securities in our held-to-maturity portfolio. Accordingly, the second quarter was an important step for Banc of California as we made a strategic decision to allocate capital towards opportunities that we believe will enhance stronger long-term returns for our shareholders and allow the true earnings power of this franchise and team to come through. We implemented that strategy through 3 complementary actions, which included: first, the repositioning of $2.3 billion of lower-yielding securities; two, a targeted loan sale of approximately $825 million of select loans; and three, the retirement of $385 million of subordinated debt ahead of a significantly higher contractual reset rate. Together, we believe these actions will create a more efficient balance sheet, increase recurring earnings power and accelerate capital generation. The securities repositioning was the largest and most impactful component of this strategy. We sold $2.3 billion of lower-yielding securities, which we partially redeployed into higher-yielding, shorter duration securities with the remaining proceeds expected to be reinvested in this quarter. The repositioning generated a 276 basis point yield pickup, which will drive net interest margin expansion and higher recurring earnings power. Importantly, we executed this sale without raising equity and maintained capital ratios well above well-capitalized regulatory thresholds. At a time when many banks are managing margin pressure, this strategic repositioning puts us in a favorable position with early benefits to net interest margin already visible. We expect our NIM following the targeted loan sale close and full reinvestment of the securities repositioning proceeds to come in above 3.30% and to expand further in the second half of the year. We also used favorable market conditions to sell approximately $825 million of select commercial real estate and multifamily construction loans. After a competitive sale process, we have executed purchase and sale agreements for the entire $825 million. We expect closings to be completed by the end of the third quarter. The loans chosen for sale fell into 2 buckets. The first group, about $300 million were construction loans to a single borrower that were personally guaranteed but showing signs of weakness. The second group, about $525 million were all performing CRE loans, but on average, carry lower interest rates. The blended interest rate of all $825 million is around 4.6%. The sale allows us to redeploy funds into market rate loans, reduce concentration risk and lower the risk of future credit-related volatility. Combined with other actions taken in the quarter, credit metrics improved meaningfully quarter-over-quarter with a reduction in special mention loans by 56%, classified loans by 31% and delinquent loans by 50%. These changes provide a positive glide path for the strong earnings trajectory we expect going into the second half of the year. Finally, retiring $385 million of subordinated debt ahead of a much higher reset rate lowers our future funding costs and together with the securities repositioning and the impact of the anticipated loan sales supports immediate expansion of net interest margin, higher recurring earnings and accelerated organic capital generation. Capital remains solid, and we expect CET1 to build as the loan sale closes and retained earnings increase with expected CET1 of approximately 9.5% to 9.6% in the third quarter, 9.8% to 9.9% by year-end and above 10% in early 2027. This assumes no regulatory capital reform, which, if implemented, is expected to increase capital by roughly 60 basis points. Our expected capital generation, combined with a larger earnings base and stronger margin trajectory, gives us greater flexibility as we evaluate future capital allocation, including for the potential to redeem our preferred stock in 2027. As I noted at the outset, our franchise continues to perform very well. In addition to our strong deposit and loan growth, new loan production was broad-based and continued to support our remix toward higher return categories. We continue to add new noninterest-bearing business deposit relationships, which is one of the clearest indicators that our franchise is gaining traction. Our cumulative new noninterest-bearing deposits from relationships opened in the last 2 years reached approximately $1.2 billion at quarter end. That reflects the strength of our teams, the quality of our client relationships and the continued value of our relationship-based banking model. Having taken these important balance sheet steps, we entered the second half of the year with a higher margin trajectory, strong franchise momentum and a clear focus on execution. Our updated outlook reflects the earnings power created by the actions we took this quarter. By year-end, we are now targeting our NIM, ROA and ROTCE to be in the higher range and fourth quarter pretax pre-provision income of $125 million to $130 million. These targets are conservative and reflect stronger earnings profile driven by more productive securities portfolio, continued balance sheet remixing, disciplined expense management and higher recurring net interest income. We believe these actions position Banc of California to generate stronger returns, build capital organically and create meaningful long-term value for shareholders. Now let me turn the call over to Joe for a financial update, and then I'll return back at the end. Joe? Joseph Kauder: Thank you, Jared. Second quarter reported results reflect the impact of the strategic balance sheet actions that Jared discussed. Let me note at the outset that we have provided in our earnings materials a page on noteworthy items affecting second quarter financial results. This page is intended to provide a road map to normalizing our earnings with the prior quarter. For the quarter, we reported a net loss available to common and equivalent shareholders of $251.3 million or $1.61 per diluted share. The reported loss reflects the near-term accounting impact of the securities repositioning, the targeted loan sale process and the retirement of subordinated debt. The largest item was the $2.3 billion securities repositioning transfer from held-to-maturity to available-for-sale and subsequent sale of most of these securities. The transaction resulted in a $256.7 million pretax loss on sale of the securities. The securities sold had an average yield of approximately 2.1%. As of June 30, we had reinvested $1.7 billion of proceeds at a weighted average yield of 4.87%, resulting in a 276 basis point yield pickup on redeployed balances. As of today, we have reinvested most of the proceeds with about $100 million remaining to invest. Based on the proceeds that have been reinvested so far, we expect tangible book value earn-back to be relatively short at about 1.4 years. In addition to the yield pickup, the repositioning provides further balance sheet efficiency by taking duration of the overall securities portfolio down from 5 years to 4 years and also lowers the risk weighting profile of the portfolio from 19.5% to 9.5%. Most importantly, it is expected to increase recurring net interest income as the benefits of the reinvestment are realized. Net interest income of $250.5 million was down from the first quarter, partially due to nonaccrual loan interest reversals, which negatively impacted interest income by $5 million. Excluding that item, net interest income would have increased by approximately $3.9 million quarter-over-quarter, reflecting average balance sheet growth, partially offset by higher funding costs. Reported net interest margin was 3.13% for the second quarter, down 11 basis points quarter-over-quarter. Approximately 7 basis points of the decline was attributable to the nonaccrual interest impact. The remainder was driven primarily by loan growth outpacing core deposit growth early in the quarter, which required greater use of wholesale funding as well as the replacement of $385 million of subordinated debt with higher cost borrowings. The replacement of funding increased borrowing costs in the quarter, but it was well below the subordinated debt contractual reset rate, creating a meaningful reduction in future interest expense. Core deposit growth strengthened late in the quarter, which helped our funding profile as we entered the third quarter. New production pricing remained attractive at 6.39%, which continues to support the portfolio remix over time. Average loan yield declined 11 basis points to 5.63%, largely reflecting the nonaccrual interest impact. On the funding side, the total loss of -- the total cost of deposits increased 2 basis points to 1.80%, while total cost of funds increased 4 basis points to 2.14% due to the dynamics I mentioned earlier around late quarter deposit growth and subordinated debt replacement funding. Importantly, the quarter reflected only a partial benefit from the securities repositioning. As the remaining securities proceeds are invested and the targeted loan sale closes, we expect the go-forward margin to come in around 3.30%. Margin expansion is expected to continue building through the second half of the year, supporting our year-end NIM target between 3.30% and 3.40%. Our interest rate sensitivity -- on interest rate sensitivity, our balance sheet remains positioned to perform across a range of rate environments. The HTM repositioning was largely net interest income neutral as greater asset sensitivity from shorter duration securities was offset by a higher net interest income base and significantly higher reinvestment yields. When adjusted for deposit repricing betas, our net interest income sensitivity remains relatively neutral, while ongoing balance sheet remixing should continue to support net interest income expansion over time. Noninterest income was a loss of $234.1 million for the quarter, driven by the $256.7 million securities loss and a $12.5 million lower of cost or market adjustment on loans held for sale. Excluding those items, noninterest income was $35.2 million, which was stable with prior quarters and consistent with our normal monthly run rate of approximately $11 million to $12 million a month. Noninterest expense was $189.9 million compared with $181.4 million in the first quarter. The increase was primarily driven by temporarily elevated FDIC assessment expenses resulting from our strategic actions this quarter and a nonrecurring charge for software obsolescence. These were partially offset by lower compensation expenses following elevated first quarter seasonality. Expense discipline remains a priority, and we expect operating leverage to strengthen as the revenue benefit of the repositionings come through. Turning to provision and credit. Provision expense was $161.8 million for the quarter, driven primarily by the transfer of $827 million of select loans to held for sale in connection with the pending loan sale process. These loans were recorded at the lower cost to market value, which resulted in charge-offs and additional provision expense during the quarter. While the provision impact creates some noise in our reported results, the anticipated targeted loan sales enhanced capital efficiency and strengthen our portfolio composition. During the quarter, classified loans declined 31%, special mention loans declined 56% and delinquent loans declined 50% from first quarter. Our allowance position remained stable with the ACL ratio up 2 basis points to 1.14%. We believe overall loan reserve levels are appropriate, particularly given the continued shift in growth towards historically lower loss categories, which now represent 37% of loans held for investment, up from 34% in the first quarter. Capital remained well above well-capitalized regulatory thresholds. CET1 was 9.25% at June 30 and is expected to increase to approximately 9.5% upon closing of the targeted loan sale. We expect CET1 to continue building to approximately 9.5% to 9.6% by the end of third quarter and 9.8% to 9.9% by the end of the fourth quarter and 10% early in 2027. As we move through the second half of the year, we expect the benefit of the strategic actions taken this quarter to come through more clearly in recurring net interest income, expanding margins, accelerated profitability and organic capital generation. With that, I'll turn the call back to Jared. Jared Wolff: Thanks, Joe. As we enter the second half of the year, our priorities are straightforward: Execute against the higher earnings profile we created this quarter through our strategic actions, continue growing high-quality client relationships and maintain the credit and expense discipline that supports consistent returns. The balance sheet is more productive today and our updated outlook reflects that. We expect the benefits of the securities repositioning, targeted loan sales and debt retirement to become increasingly visible through stronger recurring net interest income, a higher margin, greater operating leverage and faster organic capital generation. We have clear financial targets, strong franchise momentum and the flexibility to allocate capital toward the businesses and relationships where we see the best risk-adjusted returns. That is the work ahead, and our team is focused on delivering on it. I want to thank our employees across Banc of California for their hard work and execution this quarter. They completed a significant set of balance sheet actions while continuing to serve our clients, build relationships and support one another. I am very proud of the team and grateful for their continued commitment to our clients, communities and shareholders. Operator, we're ready to open the line for questions. Operator: The first question comes from Ben Gerlinger with Citi. Benjamin Gerlinger: If you could unpack the loan sale a bit here with a charge-off perspective, like roughly took, let's call it, 20%. How much of that was rate? And how much of that was actual kind of credit itself? And then kind of dovetail off of that if you could into more of like nonperforming was still up despite all the changes. It's just quite a bit going on. I was wondering if you could just unpack a little bit. Jared Wolff: Yes. Let me unpack the last piece first. In terms of NPAs, there was one loan that was part of the loan sale that got kicked out that we moved that came out of held for sale. That loan has since been sold. It will be off our books this quarter. So NPAs will drop by about $34 million, which is the reflection of that increase. So NPAs will be down, and that loan was sold at par. So let me put that to bed, NPAs will be down and could have been down, but there was one loan that lagged. And so that loan is off the books -- will be off the books this quarter. In terms of how the buyers valued credit versus interest rate, that's hard for me to say. What I feel good about is that we got very strong bids. We conservatively marked them. I think we marked them more -- I know we mark them more conservatively than the bids received. So that could flow back to us. I'm going to be conservative there because you need to give room for the buyers to maybe retrade or look for something and still have the loan sales close as expected. So we were pretty conservative here, but it's hard for me to say how they value the loans in terms of what amount they applied to interest versus credit. But what I tried to give was a description of what the loans were, $525 million, all performing, $300 million was one relationship in process construction. It was the same loans that we had highlighted in the first quarter that we said we were going south and that caused the uptick in problems. And so we just took the opportunity to get rid of it. Benjamin Gerlinger: Got you. Okay. And then when you gave the guide of kind of the 4Q ROTCE, can you unpack like provisioning and/or tax rate just because there's -- I mean, it is what it is, but just kind of how you got there? Jared Wolff: To the -- our guide for 11.5% to 12.5% ROTCE by the end of the year? Benjamin Gerlinger: Yes. Jared Wolff: I'm not sure how to answer that specifically. Can you rephrase your question in terms of exactly what you're asking for? Because obviously, that's a calculation of what our returns are going to be and what our capital is going to be. Benjamin Gerlinger: Right. No, I understand that because we can kind of get the NII, but what would you assume for average provisioning or what would you assume for the tax rate because the 2Q? Jared Wolff: Joe, do you want to touch on that, Joe? Joseph Kauder: Yes. Yes. So on provisioning, I go back to a normalized provision run rate, what you saw from us prior to this quarter, which was like somewhere in like, say, $9 million to $11 million, $12 million range depending on individual quarter. And then on the tax rate, you'll see it come down just -- I think you'll see it come down a little bit as we go by 1 or 2 basis -- 1% or 2% as we go through the year in each of the remaining quarters. Operator: The next question comes from Gary Tenner with D.A. Davidson. Gary Tenner: Jared, I wanted to go back to the loan sale. Last year, in the second quarter, you did a loan sale of, I think, or you transferred and eventually sold about $475 million of loans and the thought at the time was you wanted to kind of remove a credit overhang and there were some characteristics of those loans you didn't care for longer term. How do you kind of give investors in the market kind of confidence that this is it. Now it's $1.3 billion in total over those 2 transactions? Jared Wolff: Well, one thing I'll point to, Gary, is our earnings keep going up and our tangible book value has grown pretty aggressively and our stock price has reflected that. So I'm never going to say that's it because that's a setup for -- and I know you didn't mean it that way, but I want to be clear, like we're going to maintain flexibility to do what's right for shareholders. And I feel really good about the fact that we've been able to grow earnings through various restructurings and have grown earnings per shareholders in a meaningful way, and I think this is a continuation of that. I'd like to think that I've been trying to preview with shareholders that there are certain actions that we want to take. PacWest was very comfortable having large relationships. And I have talked multiple times about how I've tried to reduce concentrations in those relationships and try to have more granular lending that reflects kind of the bank that we want to be versus the bank that PacWest was, and they did many, many things very, very well. But they had some very large relationships, which I think is different than the way we're operating going forward. So I think we're pretty much through that. I don't ever want to take off the table that I wouldn't sell loans in the future if I thought it was the right thing for shareholders in any given quarter. So I don't want to say that's not a tool that we have to use. But I think to your question about -- from what we can identify today, is this kind of -- do we think we've gotten through the things we need to get through? I think the answer is yes. I understand the idea and appreciate completely that people don't want to see this multiple quarters in a row. They want to have some sort of steadiness to where we go. And I think one thing that we've been able to point to is the fact that earnings do keep growing. And one of the things we're really excited about in this quarter is how much this is going to accelerate our pace of earnings. We gave up a little bit of tangible book value, but we're earning it back in 1.4 years. I think -- and most of the banks that I'm familiar with that did a HTM restructuring raised capital around it. We didn't raise capital around it. We can see how quickly we're building up capital. The earn-back is incredibly low. And one of the reasons the earn-back is so low is because we -- the timing was good to sell. Most of the AOCI had already been captured in HTM. So there wasn't a meaningful uptick in AOCI since the securities have been moved to HTM. That's one -- that's the first piece of it is that the loss was contained. And second is the timing for reinvestment was really good. And we were able to get a pickup that was pretty meaningful, and our team did a great job executing. So I know I'm expanding beyond your question, but we feel good about kind of the different things that we did this quarter. And hopefully, we don't see loan sales anytime in the near future. Gary Tenner: I appreciate the thoughts there. And then... Jared Wolff: Gary, just to clarify, when I say we don't see loans, we don't see any problem loan sales anytime in the near future. I just want to -- I think that's what you're asking about, and I just want to clarify that. Gary Tenner: Yes. Got it. And then just a quick expense question. Elevated FDIC assessment just given, I guess, the process this quarter. What's the time line for that normalizing? How long does that take? Jared Wolff: I'm going to let Joe. I think it starts in the third quarter and then by the end of the year, it normalizes. Joe, go ahead. Joseph Kauder: Yes. It's going to start to come down in both the third and fourth quarter, and it will probably fully normalize sometime in early 2027 when we get back when the capital fully rebuilds. Operator: The next question comes from David Chiaverini with Jefferies. David Chiaverini: So I wanted to ask about the net interest margin and the outlook. I hear you on the guide of 3.30% to 3.40%. It sounds like -- just to clarify, it sounds like 3.30% is what you're pointing to for the third quarter. Is that right? Jared Wolff: We believe that when the loan sales are concluded and the securities are fully invested, then our margin should be around 3.30%. So the margin for Q3, at this point, we think we'll be in the 3.30% range. That is correct. Joe, is that accurate? Joseph Kauder: That is accurate. That is accurate. Jared Wolff: Okay. David Chiaverini: Got it. And in your prepared comments, you mentioned about expanding further in the back half of the year. Can you talk through some of the drivers there between fixed asset repricing, whether there's any kind of rate sensitivity? And what are you included in that? Can you tell us what you're assuming in terms of rate activity from the Fed? Jared Wolff: So we're relatively neutral. We did not assume any rate hikes. And this is -- it's going to start expanding because we're going to have a full quarter benefit of all the securities repositioning, full quarter benefit of having lower-yielding loans off our books and higher-yielding loans on our books and continuing to make loans at the rates that we are currently making them. We don't assume that loan yields are going to go down. We assume that they're going to stay flat, even though we are not expecting any rate hikes. Joe, anything else that you would add there? Joseph Kauder: Yes. I would also say that I think that our deposit cost trajectory should return towards our normal. We've been taking that deposit cost down every quarter. And aspirationally, we had a strong deposit inflows at the end of the second quarter. We've had continued strong inflows so far in the third quarter. So I'd like to think that our cost of funds will continue to come down a bit, contribute to that. Operator: The next question comes from Matthew Clark with Piper Sandler. Adam Kroll: This is Adam Kroll on for Matthew Clark. Maybe starting on loan growth. It looks like overall production was pretty strong in this quarter. So I guess I'd be curious to hear your overall expectations for loan growth in the back half of the year and where the pipelines stand today? Jared Wolff: Loans have been holding up remarkably well. So we gave guidance of mid-single-digit loan growth for the year. I think, obviously, it looks like we're outpacing that. I don't know what the back half of the year is going to be. I don't know what the Fed is going to do today in terms of -- and how that's going to affect the economy. Everything seems to be holding up remarkably well. And I'm a little bit surprised by it because it feels like there's -- the underlying signals of the economy seem mediocre to me. They don't seem outstanding to me, they seem just mediocre. But restaurants are still full. There's a lot of loan demand. We're competing really, really well. Our teams are getting a lot of looks in the areas that we want to get it. And we're choosing which loans we want to do. One of the dynamics that I'm seeing right now, which is very positive, is that there's stuff we're turning down and that's not affecting kind of our loan volume. We're proactively saying, yes, that's probably not for us. Let's move past that. And our teams have a lot of opportunities. We're not looking to do that, but we do believe that we can be selective and make the loans that we want to do, and our teams are working really hard. So I would just say that it looks good right now from a loan perspective. And I would think that mid-single digits is something that we should be able to achieve reasonably well this year and hopefully outpace that. Adam Kroll: Got it. I appreciate the color there, Jared. And then maybe moving to expenses. They ticked up this quarter, even stripping out the $5 million or so of nonrecurring items. But I guess I was just curious, how should we think about the expense run rate in the back half? Jared Wolff: Joe, you want to take that? Joseph Kauder: Yes. So I think we put out guidance at the beginning of the year, which was, I think, a 3% increase year-over-year. And I think you can expect us from a total perspective to come in well below that. And I think you could expect to see our expense levels be flat to down from the level what you see here in the second quarter as we move through the third and fourth quarter. Operator: The next question comes from David Feaster with Raymond James. David Feaster: Look, we've spent a lot of managerial bandwidth working on these balance sheet optimization initiatives. You've accomplished a lot, clearly. Obviously, there's still some left to do, but you've done most of the heavy lifting. What's next for you as you like refocus management's attention towards -- like what are some of the key initiatives that you're working on to deliver some of those targets that you laid out over time that we've talked about? Jared Wolff: Well, thank you for the question. The good news is, is that all the pieces are in place, and we're executing. I think what we've been doing quarter-over-quarter has been working exceptionally well. But when you've got $2 billion of assets on your balance sheet that are not earning any money, because they're at 2% funded by 4%, they're holding you back and you're not making as much money as you should. And fortunately, we had plenty of excess capital, didn't need to raise any capital to do something like this and the timing was right. So the short story to your answer is that in order to achieve our goals, we need to keep doing what we've been doing and the earnings are going to show up because we've already been doing it. And our teams have done an exceptional job on the loan and deposit front. That said, there are initiatives that we have in place that I expect to play an important role in the future, not this year, but we've talked about payments and really excited what the team is doing there on cards and acquiring. We've got a Board presentation on it this quarter because it's -- the prospects are looking really good. We have a private banking initiative that we're rolling out, that is going to be serving high net worth individuals with really high-quality tailored banking solutions. We don't need to provide mortgages. We don't need to provide wealth management. We need to provide really high-quality tailored solutions, and there's a huge demand for it in our markets, and that's being rolled out. These are some interesting things that we're doing that complement what we're already doing. And I think those things are going to bear fruit. But the short answer is we're doing all the things already, David, and our teams are executing really well. David Feaster: Okay. That's helpful. And one of the things... Jared Wolff: I should have mentioned, David, that the preferred stock is obviously going to be an accelerant. So when you think about what are other levers that we have to pull, when that is redeemable in the third quarter of next year, as of now, we would love to do that. And we've said that it's $40 million of net income after tax that we have to pay. It's a tax on the common. We're going to have to fund it somehow. But our expectation is that we're going to get at least a 50% pickup. So at least $20 million is going to come back to the common from that transaction alone. David Feaster: Okay. That's helpful. And then I wanted to follow up kind of on Joe's commentary about improving the funding side, right, and some deposit cost leverage potentially. I mean you guys have been very active managing this. Obviously, core deposit -- could you touch on some of the initiatives you got in place, how you think about opportunities -- there are some core deposit growth as we look forward. Obviously, you've had success on the NIB side and the new accounts like you talked about. But how do you think about additional opportunities to optimize the funding base? Jared Wolff: Well, we have a project called Project Stay, which is intended to capture deposits that might leave for higher rate. One of the things that we found is we're able to retain depositors at a lower rate who might be looking for rate than going out and finding new ones. And so that project has yielded a lot of fruit of -- these are generally rate-sensitive customers that don't have a huge relationship with us, but we made an active campaign to retain those customers and our teams through the branches and otherwise have done an outstanding job of executing on that, and that had an impact this quarter. We saw that outflows were much lower. So you don't want to be bringing in deposits in the front door while they're leaving out of the back door. And so you want to make sure you have a clear understanding of all the movements on deposits. Second is we found that we are -- our teams are very good at speaking with clients about rate and figuring out where there's opportunity to maybe lower rate. So we're not always assuming that rates need to stay where they are. We can go to clients and actively manage the relationship and say, "Hey, we'd like to lower the rate a little bit here and there, and our teams have done a really good job with that. It's not on all clients, but we've figured that out. Third is, I would say that we have some institutional relationships that we tap that tend to be less expensive than brokered. And those are larger relationships that we've been able to bring in. And our treasury team and our deposit solutions team do a really good job of bringing those in. Those are 3 things that we're doing to make it look that I think have helped our deposit narrative quite a bit. One of the things that we have done on the technology side that makes us more attractive is we've added APIs and solutions that will allow us to be more attractive to future clients, clients to prospects and also make sure that we're tied more closely to existing clients. So they are more embedded with us. It makes it harder for them to leave, but it makes them more reliant on our services. And those APIs can be very valuable. And so we've been investing in doing that with more and more clients. And Joe, thank you for that comment. He was texting me that I should mention that. Anything else we should mention? Joseph Kauder: No, I think you hit them. Operator: The next question comes from Jared Shaw with Barclays. Jonathan Rau: This is Jon Rau on for Jared. Just thinking about the loan sale a little bit more. What are the proceeds from that expected fees for? And also, are there any deposit or fee relationships with these borrowers or any impact we should watch there? Jared Wolff: Yes. There is no expected impact on the deposit side. And in fact, some of the loans that we had that we sold were tied to larger relationships, and we told the borrowers that are good relationships that we were selling the loans and make sure that they knew that they weren't surprised. And so we don't expect any change in our deposit relationships as a result of the loan sale. In terms of what we're going to do with the proceeds, it's a function of deposits and loan growth, and we'll just play it by ear. We can -- obviously, as we're making loans, we'll reinvest at higher rates. If loan growth slows, we're going to pay off borrowings, pay off broker deposits. But we would expect to make loans at higher yields, and that's kind of what we've modeled. Jonathan Rau: Okay. That's helpful. And then just thinking about the CET1 guidance, what impact is there to RWA tends to be or just RWA dollars after the loan sale goes through? Jared Wolff: Joe, you want to take that? Joseph Kauder: Yes. So there was $827 million on the loan sale, and those are, for the most part, 100% or 100%, even in some cases, even a little bit over 100% risk weighted. So those all come off our sheet. And that's an immediate benefit to our capital. And so we should see an uptick when those come off. Now as we redeploy those proceeds into loans or maybe even Day 1 they will probably allocated into some cash securities or something like that until loan growth kind of absorbs them, you should see a significant improvement in the risk RWA and CET1s. And in fact, just the loan sales coming off our books, that immediately will add up to 30 basis points of CET1, and we have that in our -- we have that on Page 8 of our investor deck. Jared Wolff: There's kind of a CET1 walk on Page 8 that shows how we get to and what the components of it are in terms of how it's going to end up for the year. Operator: The next question comes from Chris McGratty with KBW. Christopher McGratty: Going to your comments, Jared, about you're optimistic about the PPNR exit. I guess the question would be, if you look at consensus numbers, they're kind of at the low end already. And so I was hoping you could unpack the conservatism that you described in your prepared remarks. And then again, where if you do get that, that would show up in the PPNR as you exit '26? Jared Wolff: Yes. So I would say the first thing is, I think I went back and I looked at consensus, and we try to keep the range within reason, although we don't control what people write. And I think there was a pretty wide range. I think that there were some outliers in terms of the expectations. So I need to kind of keep the consensus front and center, but there were a couple of ones that were really high outliers. So I think that's driving the consensus to be higher. There is a much tighter range among many, and then there's a couple that are way up. And I think that, that pushes the consensus a little bit higher. So let me start off by saying that I don't know that maybe we need to do a better job of managing that range, but we can't always control it, and we obviously don't control what numbers the analysts put out. They're doing it based on their own models, which we try to help inform. Joe, do you want to speak to what some of the assumptions are for our pretax pre-provision going forward? Joseph Kauder: Yes. So Chris, I'd start by saying you asked with conservatism. We try to do our best to forecast income with a level of humility and moderation because we don't know what the back half of the year is going to hold in terms of the economic environment. There is still a war going on. There could be higher rates, there could be inflation, et cetera. So I would start by saying that. But if you look out through the year, you see some continued loan growth in the mid-single digits that we've talked about. You see deposit growth keeping up a little bit -- lagging behind a little bit behind the loan growth, but still being fairly strong. And then we hope to bring expenses down, keep our provision stable. Our tax rate goes down a little bit. And so as we look out into where we might have opportunities, if we can do a better job of -- if we outperform on loan growth or bringing in more deposits, obviously, that will fall to the bottom line. And expense is something that we have control over, and we always try to strive to optimize that. Jared Wolff: And just to put a finer point on it, Chris, to answer more directly now that we've put in all the assumptions, we believe that our outlook is conservative. We've said the margin should be the third quarter at 3.30%. We obviously hope to beat that. We have said $125 million to $130 million by the end of the year. I think with our expected margin expansion and the conservatism that Joe laid out, we think these numbers are conservative. Christopher McGratty: Okay. And then, Jared, on the 60 basis points with Basel. How do we think about like urgency to use like stack ranking, what have? Like how do you foresee that playing out? Jared Wolff: In terms of what we would do with excess capital? Christopher McGratty: With the 60 basis points from Basel III, if you get the helper, I know it's not in your guide, but if you get the 60 basis points. Jared Wolff: Yes. So I mean it matters where our stock is trading. Yes, it's the same capital allocation, Chris. So now we're in excess capital land, right? We're going to get back to 10. We're in excess capital land, everything is going well. We have a buyback program that's still active where we have a whole bunch of authorized but not yet utilized buyback. And depending on where we're trading, I don't think we would hesitate to pull the trigger there. It's not mutually exclusive from doing other things. We obviously have the ability to buy back the preferred and we have liquidity sources that we've identified to do that. But I think buyback is not out of question. Operator: The next question comes from Anthony Elian with JPMorgan. Anthony Elian: Jared, just following up on Chris' question. You note that the balance sheet actions are going to support higher recurring earnings over time. There's a lot of moving pieces here. Can you help us quantify how much of a benefit to run rate earnings you expect all these actions to contribute, right? If I just look at consensus for next year earnings, it's about $2 per share. Jared Wolff: That's the consensus number for the full year for 2027? Anthony Elian: That's right. I see somewhere in the low 2s. Jared Wolff: Yes. So I'm not going to put a number out there, Tony, but that's -- we should beat that. I mean we -- look, we gave up -- let me try to put this in context without putting a specific number on that because that would be a forward guidance number that we haven't given, but this context may help. We diluted tangle book value by about 7%. We're not diluting tangible book value by 7% to grow earnings by 7%. We want to grow earnings double the percentage of dilution of tangible book. So you could say mid-double digits, right, on that, you could say mid-teens would be a reasonable expectation for how we're going to grow earnings relative to the dilution of tangible book. That's why tangible book value is going to grow back so quickly. And people will be able to calculate that when they see how quickly we're building up CET1. And so -- and the ROA, ROTCE expectations also have embedded in there. We didn't really shrink the bank. So we didn't -- we're not getting to a higher ROA and ROTCE because we shrunk the bank. We have to grow earnings. And so if all of a sudden our earnings -- if our return and profitability expectations are up, that means that we're growing earnings faster. And hopefully, that puts it into context. Anthony Elian: Fair. Okay. And then in the prepared remarks, you mentioned that the balance sheet actions were done to remove some weights from the company. Any other weights you see across the franchise, including balance sheet actions, loan portfolios or anything on the expense side? Jared Wolff: Yes. I don't know that there's anything clear on the expense side. I mean one thing that people have asked about is multifamily. I mean we've got $6 billion at 4%. That -- we put -- one of the reasons that we put in our deck every quarter is the burn rate on that, so people can see how quickly that's coming off. That seems to be taking care of itself. There is some longer duration multifamily. I mean one of the things that we found out in this loan sales, there's a really active market for loan sales. I mean -- and when you look at multifamily, it's completely capital-neutral if we wanted to sell it. But that's not something that I have teed up as of right now. And that's -- we think that we have some pretty high recurring earnings power right now, and we're building up tangible book value. And we want to show this out and make sure people see what we're doing here. But people ask about it all the time, so it's not wrong of me to put it out there and people say, what are you going to do about that? That's one of the reasons we put that information in the deck so that people can see what the repricing time line is for that multifamily book and when the accretion will kind of come on. Operator: The next question comes from Timothy Coffey with Brean Capital. Timothy Coffey: So a question on the loan yields, right? So if you were to back out the loans that you plan to offload this quarter, was there a material change to the overall average loan yield? Jared Wolff: Were to back out the loans that yielded 4.6%. Well, our new production yield was 6.4%. So I mean, we are putting on loans at much higher rates than loans that are coming off. Our loan yield -- our weighted average yield for the quarter, see here I'm looking at -- our loan yield is 5.78%, 5.8% was the average for the quarter. Last quarter, 5.74%. So it upticked a little bit. And so it's just -- it's a volume question from the production side and payoffs. But I would say that there's probably when you take away $800 million of loans at 4.6% when we're generating 6.5% or whatever it is, it's probably going to help the overall loan yields for the portfolio a little bit. We have $24 billion of loans. So whatever that is as a percentage. Timothy Coffey: Okay. Okay. And do you have a sense -- and I apologize if I missed this, of what the provision would have been excluding the marks on the loans moved to held for sale? Jared Wolff: I think we're looking at our provisioning just being normalized going forward. So it's 9% to 11%, 10% to 12%, something like that is where we're estimating it's going to be going forward. And I think it's hard to break out this one quarter because there's just a lot of pieces, and we're not actually allowed to -- that's why we had to have those noteworthy items in there is because we're not allowed from SEC purposes to kind of remove provision expense to try to come up with a core number, but we've tried to provide the groundwork for that. Timothy Coffey: Yes. It does. And you can probably see what I'm trying to get to with that question, just to give an idea of what the core earnings power was. Jared Wolff: We think -- for the quarter, we were kind of -- if you work out the numbers, we were at $0.39 or $0.40. I mean, it was -- in my view, that's where we were, just that's why we provided those noteworthy items. But -- it's going to be different this quarter because our margin is going up. And so we -- it's $10 million core provision is generally what we think it's going to be kind of -- that's probably the average going forward. Timothy Coffey: Right. Okay. Okay. I appreciate that. And then on the buyback, I understand what you're saying about the expected capital generation over time. But given that you're starting from a lower capital spot, the near-term buyback -- does that -- I mean, is it reasonable to think that there might not be any near-term buybacks? Jared Wolff: Yes. I mean the question that was asked about Basel was -- and Basel is not expected to go into effect until next year. And so I was -- and we're not at 10% yet. And we've said that 10% is kind of where we want to maintain capital for buybacks. Now I want to remind people that there were a lot of shareholders who said, "Hey, why wouldn't you go below 10% to buy back shares? And I said, I don't know that it makes sense. The securities repositioning, it made a ton of sense. It's a 1.4-year earn-back. It's and wildly accretive. And so that made a ton of sense. But buybacks have a much longer duration in terms of earn-back. They're not as accretive. That doesn't mean you shouldn't do it. So yes, we wouldn't be buying back our stock until we're back above 10% and then it just matters what other things are on the table. I shouldn't say -- I shouldn't put a bright line on it because you never know. But I think that's the general guidance we've given, and I think that general guidance is still reasonable. Timothy Coffey: I think so too. I think so too. And could there be upside -- on the PPNR question one more time. Could there be upside to that estimate if you're able to deploy the proceeds from the loan sale quicker into new loans, given that -- really strong. Jared Wolff: I think we believe that our PTPP guidance is reasonable and probably conservative. Operator: We have a follow-up question from Ben Gerlinger with Citi. Benjamin Gerlinger: For the loan sale, you kind of gave the implication that the price is not fully determined. Maybe I'm just reading it too much. Are we in a cool-off period or is it like more just closing time line? Jared Wolff: Closing time line. So we've signed executed purchase and sale agreements. The buyers have the ability to kick out loans if during now and there's a reasonable period for diligence that's more diligence than what they were able to do before signing a purchase sale agreement. They have the ability to due diligence. But if they kick out loans or change pricing, we don't have to close with them. We have backup buyers. There's -- this was a very competitive process, and there were multiple bids. And so there is some competitive tension. We think that the pricing is fairly strict. And even if there were some price changes, we've reserved at levels that we think are in our numbers already. So I don't see any impact to our numbers if that helps. Yes, it sounds like you're asking whether or not we could have a bigger charge if the pricing came in differently. Benjamin Gerlinger: Kind of I'm a little more worried like if part of them don't actually sell. Jared Wolff: Yes, I feel good about it. And if they didn't sell to these buyers, they'd sell to somebody else, and we had multiple bids. So we feel good about it. And as I mentioned, one loan that we didn't sell through the loan sale process sold after the quarter ended and will come out of our numbers of $34 million this quarter. Operator: This concludes our question-and-answer session. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Before you buy stock in Banc Of California, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Banc Of California wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Banc of California (BANC) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

LOS ANGELES, August 07, 2026--(BUSINESS WIRE)--Banc of California, Inc. (the "Company") (NYSE: BANC) announced today that its Board of Directors declared a quarterly cash dividend of $0.12 per share on its outstanding common stock. The dividend will be payable October 1, 2026, to stockholders of record as of September 15, 2026. The Board of Directors also declared a quarterly cash dividend of $0.4845 per depositary share on its 7.75% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series F. The dividend will be payable September 1, 2026, to stockholders of record as of August 20, 2026. The Series F depositary shares are traded on the New York Stock Exchange under the "Banc/PF" symbol. The Company maintains a Dividend Reinvestment Plan (DRIP) which allows common stockholders to automatically acquire common shares at a 3% discount from the applicable market price. All registered common stockholders with holdings maintained at the Company’s transfer agent, Computershare, are eligible to participate in the DRIP program. For more information on the Company’s DRIP program, please contact Investor Relations at [email protected] or (855) 361-2262. About Banc of California, Inc. Banc of California, Inc. (NYSE: BANC) is a bank holding company with over $34 billion in assets and the parent company of Banc of California. Banc of California is one of the nation’s premier relationship-based business banks, providing banking and treasury management services to small, middle-market, and venture-backed businesses. Banc of California is the largest independent bank headquartered in Los Angeles and the third largest bank headquartered in California and offers a broad range of loan and deposit products and services through 77 full-service branches located throughout California and in Denver, Colorado, and Durham, North Carolina, as well as through regional offices nationwide. The Bank also provides full-service payment processing solutions to its clients and serves the Community Association Management industry nationwide with its technology-forward platform, SmartStreet™. The Bank is committed to its local communities 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20260807343071/en/ Contacts Investor Relations Inquiries: Banc of California, Inc.(855) 361-2262Jared Wolff, (310) 424-1230Joe Kauder, (310) 844-5224Ann DeVries, (646) 376-7011 Media Contact: Debora Vrana, Banc of California(213) [email protected]

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management executed a three-pronged strategy involving a $2.3 billion securities repositioning, an $825 million targeted loan sale, and $385 million in subordinated debt retirement to remove 'weights' hindering franchise earnings power. The securities repositioning replaced lower-yielding (2.1%) long-duration assets with higher-yielding (4.87%) shorter-duration instruments, generating a 276 basis point yield pickup. Loan sales targeted $300 million in weakening construction loans and $525 million in low-rate performing CRE loans to reduce concentration risk and redeploy capital into market-rate production. Strong underlying franchise momentum was evidenced by 9% annualized loan growth and 12% annualized deposit growth, with $1.2 billion in new noninterest-bearing deposits over the last two years. Strategic actions significantly improved credit quality metrics, with special mention loans declining 56% and classified loans down 31% quarter-over-quarter. Management emphasized that these actions were completed without raising external equity, maintaining capital ratios well above regulatory 'well-capitalized' thresholds. Net Interest Margin (NIM) is projected to reach approximately 3.30% in Q3 and expand further to a range of 3.30% to 3.40% by year-end as reinvestment benefits fully materialize. Common Equity Tier 1 (CET1) capital is expected to build from 9.25% to approximately 9.8%-9.9% by year-end, with a target of exceeding 10% in early 2027. Management is targeting Q4 pretax pre-provision income of $125 million to $130 million, which they characterize as a conservative estimate of the bank's new earnings profile. The bank anticipates a relatively short tangible book value earn-back period of approximately 1.4 years following the strategic repositioning losses. Future capital allocation priorities include the potential redemption of preferred stock in Q3 2027, which is expected to return at least $20 million to common shareholders. Reported a net loss of $251.3 million primarily due to a $256.7 million pretax loss on the sale of securities and a $12.5 million adjustment on loans held for sale. Provision expense of $161.8 million was driven by the transfer of loans to held-for-sale status, recorded at the lower of cost or market value. FDIC assessment expenses were temporarily elevated due to strategic actions but are expected to normalize by early 2027 as capital rebuilds. A nonrecurring charge for software obsolescence contributed to higher noninterest expenses during the quarter. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted it was difficult to distinguish the exact buyer valuation split between interest rate and credit risk, but confirmed they marked the loans more conservatively than the bids received. One $34 million NPA that lagged the initial sale process has since been sold at par and will be removed from the books in Q3. Management clarified that while they maintain flexibility, they do not anticipate further problem loan sales in the near future as they have addressed the large-relationship concentrations inherited from PacWest. The focus has shifted toward more granular, relationship-based lending that reflects the current bank's operating model. The bank is utilizing 'Project Stay' to retain rate-sensitive depositors at lower costs than acquiring new ones, contributing to a stabilized funding profile. Management is also leveraging APIs to embed the bank more deeply into client workflows, increasing switching costs and relationship stickiness. While a buyback program is authorized, management indicated they likely would not resume repurchases until the CET1 ratio is back above the 10% threshold. The 60 basis point capital benefit from potential Basel III reform is not included in current guidance but represents future upside for capital allocation.

LOS ANGELES, July 29, 2026--(BUSINESS WIRE)--Banc of California, Inc. (NYSE: BANC): Banc of California, Inc. (NYSE: BANC) ("Banc of California" or the "Company"), the parent company of wholly-owned subsidiary Banc of California (the "Bank"), today reported financial results for the second quarter ended June 30, 2026. During the second quarter, the Company completed a strategic reallocation of capital toward higher return opportunities to further strengthen long-term earnings, expand net interest margin, and increase balance sheet flexibility. The Company took three specific actions including (i) the repositioning of $2.3 billion of lower-yielding securities, (ii) initiating the sale of $827.0 million of selected commercial real estate and multi-family construction loans, and (iii) the retirement of $385.0 million of subordinated debt prior to higher contractual interest reset. The Company transferred $2.3 billion of lower-yielding held-to-maturity securities to available-for-sale, and subsequently sold and redeployed a portion of the proceeds into higher-yielding, shorter-duration available-for-sale securities. The securities repositioning generated a 276 basis point yield pickup on redeployed balances, reduced portfolio duration, and improved the risk-weighted asset profile of the securities portfolio, all while maintaining capital ratios significantly above "well capitalized" regulatory thresholds. The Company also commenced a targeted sale process of $827.0 million of commercial real estate and multi-family construction loans to reduce selected credit exposures and lower the potential for future credit-related earnings volatility. Following a competitive loan sale process, the Company has entered into purchase and sale agreements for the loans transferred to held-for-sale during the quarter and expects the transactions to close in the third quarter. In addition, the Company retired $385.0 million of subordinated debt prior to a significantly higher interest rate reset. Taken together, these actions are expected to immediately improve net interest margin, support higher recurring earnings, and accelerate organic capital generation. The Company reported a net loss available to common and equivalent stockholders of $251.3 million, or $(1.61) per diluted common share, reflecting the near-term impact of these strategic actions. Jared Wolff, Chairman & CEO of Banc of California, commented, "During the second quarter, we made a strategic decision to reallocate capital toward opportunities that we believe will enhance long-term returns for our shareholders. We implemented that strategy through three complementary actions including a securities repositioning, a targeted loan sale and the retirement of higher-cost subordinated debt, that together create a more efficient balance sheet and position the Company for even stronger long-term financial performance." Mr. Wolff continued, "These actions resulted in significant one-time charges, but they increase our long-term earnings power, improve capital efficiency and provide greater financial flexibility to support future growth. Just as importantly, they allow us to focus our capital on the businesses, clients and markets where we see the greatest opportunities to create shareholder value." Second Quarter 2026 Financial Highlights: Executed a securities repositioning to drive higher recurring earnings power, including the sale of $2.3 billion of lower-yielding securities and partial redeployment of $1.7 billion into higher-yielding shorter-duration securities, with the remaining proceeds expected to be invested in the third quarter of 2026. The repositioning generated a 276 basis point yield pickup on redeployed balances and resulted in a $256.7 million pre-tax loss on securities. Commenced a targeted loan sale process involving $827.0 million of loans to reduce selected exposures, enhance capital efficiency, and improve the risk profile of the loan portfolio. Total provision expense of $161.8 million includes the impact of transferring these loans to held for sale at the lower of cost or market value. Retired $385.0 million of subordinated debt prior to a significantly higher interest rate reset, reducing future funding costs and supporting stronger pre-tax pre-provision earnings. Average loans increased $556.1 million, or 2.3%, during the quarter, driven by $2.8 billion of loan production and disbursements with a weighted average interest rate on production of 6.39%. Total deposits increased $799.0 million, or 2.9% during the quarter, with average noninterest-bearing deposits comprising 28.5% of average total deposits. Loan-to-deposit ratio decreased 235 basis points to 89.3%. Credit quality trends were favorable, as classified loans and leases and special mention loans and leases as a percentage of total loans and leases held for investment declined by 99 basis points, and 154 basis points, respectively. Capital ratios(1) exceeded the regulatory thresholds for "well capitalized" banks, including an estimated 11.67% Tier 1 capital ratio and 9.25% CET 1 capital ratio. The CET 1 ratio is expected to increase to approximately 9.45-9.50% upon closing of the targeted loan sale and to approximately 9.50-9.60% at the end of the third quarter. Book value per share and tangible book value per share(2) were $18.38 and $16.44, respectively, reflecting the near-term impact of the strategic balance sheet repositioning actions completed during the quarter. INCOME STATEMENT HIGHLIGHTS Net Interest Income and Margin Second Quarter of 2026 Compared to First Quarter of 2026 Net interest income decreased by $1.1 million to $250.5 million for the second quarter, from $251.6 million in the first quarter. This decrease was driven by an $8.3 million increase in total interest expense, offset partially by a $7.2 million increase in total interest income. The increase in interest expense was due to a $4.0 million increase in interest expense on deposits, attributable to higher average balances, and a $4.2 million increase in interest expense on our borrowings driven by higher average balances to fund loan growth and replace subordinated debt funding, following the redemption of the 3.25% Fixed-to-Floating Rate Subordinated Notes due 2031 during the second quarter. The increase in interest income was driven by a $10.4 million increase from higher average loan balances and an additional day in the quarter, and a $2.3 million increase from investments and deposits in financial institutions driven by higher average balances as a result of the securities repositioning. These increases were offset partially by a $4.6 million reduction primarily related to loans placed on nonaccrual status. Net interest margin was 3.13% for the second quarter, down 11 basis points from 3.24% for the first quarter. Upon closing of the targeted loan sale, net interest margin is expected to increase to approximately 3.30%. The decrease was primarily driven by nonaccrual interest impacts and an increase in short-term funding associated with strong loan growth and the redemption of subordinated debt, while core deposit growth strengthened toward quarter-end, improving the Company's funding profile entering the third quarter. The average total cost of funds increased to 2.14% from 2.10%, as a result of a 2 basis point increase in the average total cost of deposits to 1.80%, and a 19 basis point decrease in the average cost of borrowings to 4.44%. The average yield on interest-earning assets decreased to 5.18% from 5.25%, as a result of a 11 basis point decrease in the average yield on loans and leases to 5.63%. Average total deposits increased by $299.1 million, with a $323.5 million increase in average interest-bearing deposits, offset partially by a $24.4 million decrease in average noninterest-bearing deposits. Average noninterest-bearing deposits represented 28.5% of average total deposits in the second quarter, down from 28.9% in the first quarter. YTD June 30, 2026 vs YTD June 30, 2025 Net interest income increased $29.5 million to $502.1 million for the six months ended June 30, 2026, from $472.6 million for the six months ended June 30, 2025. The increase was primarily driven by a $41.0 million decrease in interest expense on deposits primarily due to lower interest rates following federal funds rate cuts, and an $8.8 million increase in interest income from investment securities reflecting the benefits of prior balance sheet repositioning actions and reinvestment into higher-yielding assets. These benefits were offset partially by a $10.3 million decrease in interest income from deposits in financial institutions due to lower balances and lower market interest rates, a $6.3 million increase in borrowing costs associated with funding loan growth and the subordinated debt redemption in the second quarter of 2026, and a $3.6 million decrease in loan interest income primarily attributable to a reversal of previously accrued interest on loans placed on nonaccrual status, offset partially by the benefit of higher average loan balances. The net interest margin was 3.18% for the six months ended June 30, 2026, up 9 basis points from 3.09% for the six months ended June 30, 2025. The year-over-year improvement was primarily driven by a 30 basis point decrease in the average total cost of funds to 2.12%, offset partially by a 20 basis point decrease in the average yield on interest-earning assets to 5.21%. The average total cost of funds decreased by 30 basis points to 2.12%, driven mainly by lower market interest rates. The average cost of deposits declined by 33 basis points to 1.79%, reflecting the impact of federal funds rate cuts in the second half of 2025. Average total deposits increased by $356.0 million year over year, as a result of a $229.2 million increase in average noninterest-bearing deposits and a $126.8 million increase in average interest-bearing deposits. Average noninterest-bearing deposits represented 28.7% of average total deposits for the six months ended June 30, 2026, up from 28.2% for the comparable period in 2025. The average cost of borrowings also decreased by 60 basis points to 4.52%, reflecting the paydown of higher-cost borrowings in the prior year and their replacement with lower-cost long-term Federal Home Loan Bank ("FHLB") advances. The average yield on interest-earning assets declined by 20 basis points to 5.21%, due primarily to a 23 basis point decline in the average yield on loans and leases. Provision For Credit Losses Second Quarter of 2026 Compared to First Quarter of 2026 The provision for credit losses was $161.8 million for the second quarter compared to $9.8 million for the first quarter. The increase was primarily driven by $161.6 million of charge-offs, the impact of loan growth and higher loss given default rates on commercial real estate and multi-family construction loans, offset partially by improved risk ratings for our held for investment ("HFI") portfolio. The increase in net charge-offs in the quarter related primarily to the transfer of $827.0 million of loans to held for sale ("HFS") in connection with the targeted loan sale process. The transfer required the loans to be recorded at lower of cost or market value, resulting in charge-offs and additional provision expense during the quarter. The first quarter provision for loan losses and unfunded loan commitments was primarily driven by net charge off activity and changes in loan risk ratings including specific reserves, offset partially by lower balances in the HFI portfolio and lower qualitative reserves. YTD June 30, 2026 vs YTD June 30, 2025 The provision for credit losses was $171.6 million for the six months ended June 30, 2026, compared to $48.4 million for the six months ended June 30, 2025. The provision for 2026 included a provision for loan losses of $171.8 million, including the impact of the proposed targeted loan sale process, offset by a $2.0 million reduction in provision for unfunded loan commitments. The provision for the six months ended June 30, 2025 included the impact of $506.7 million of loans transferred to HFS and recorded at the lower of cost or market value. The remaining increase in the provision for loan losses and unfunded loan commitments was primarily driven by net charge-off activity experienced in the first half of the year, with additional impacts from changes in loan risk ratings, and higher unfunded commitments. These were offset partially by lower qualitative reserves, lower specific reserves, and a favorable shift in the portfolio mix due to growth in loan segments with lower expected credit losses. Noninterest Income Second Quarter of 2026 Compared to First Quarter of 2026 Noninterest income decreased by $269.4 million, resulting in a loss of $234.1 million for the second quarter, compared to noninterest income of $35.3 million for the first quarter. The decrease was primarily driven by a $256.7 million pre-tax loss recognized as part of the securities repositioning, and a $12.5 million loss recorded as part of the lower of cost or market adjustment on HFS loans. Also included in noninterest income was a $3.1 million loss related to the redemption of $385.0 million aggregate principal amount of subordinated notes during the quarter. The loss was offset partially by a $3.8 million gain recognized on the sale of the Company's single-family mortgage servicing rights portfolio, which serviced approximately $1.35 billion of underlying loans. YTD June 30, 2026 vs YTD June 30, 2025 Noninterest income decreased by $265.1 million to a loss of $198.8 million for the six months ended June 30, 2026, compared to income of $66.3 million for the same period 2025. The year-to-date decrease was primarily attributable to the $256.7 million pre-tax loss recognized as part of the securities repositioning, and a $12.5 million lower of cost or market adjustment on the HFS loans, as discussed above. Noninterest Expense Second Quarter of 2026 Compared to First Quarter of 2026 Noninterest expense increased by $8.5 million to $189.9 million for the second quarter from $181.4 million for the first quarter, primarily reflecting a $7.7 million increase in insurance and assessment due to a higher FDIC assessment rate resulting from the balance sheet repositioning and its effect on assessment-related metrics and a $5.0 million increase in other expense related mainly to software obsolescence charges. These increases were offset partially by a $6.0 million decrease in compensation expense due to seasonal payroll related costs recognized in the first quarter. YTD June 30, 2026 vs YTD June 30, 2025 Noninterest expense increased by $1.7 million to $371.3 million for the six months ended June 30, 2026 from $369.5 million for the six months ended June 30, 2025. The increase is primarily due to a $6.3 million increase in other expense related mainly to software obsolescence charges, a $4.6 million increase in insurance and assessment due to the higher assessment rate resulting from the balance sheet repositioning, and a $2.5 million increase in loans expense related to legal fees. These increases were offset partially by a $6.5 million decrease in customer related expenses primarily due to federal fund rate cuts in the fourth quarter of 2025 and a $3.0 million decrease in leased equipment depreciation. Income Taxes Second Quarter of 2026 Compared to First Quarter of 2026 Income tax benefit of $93.9 million was recorded for the second quarter, resulting in an effective tax rate of 28.0%, compared to income tax expense of $23.8 million and an effective tax rate of 24.9% for the first quarter. The second quarter tax rate reflects the effects of the Company's balance sheet repositioning actions. Due to the significant impact of these actions on projected annual earnings, the Company calculated its second quarter income tax provision using a year to date effective tax rate approach rather than the estimated annual effective tax rate method. YTD June 30, 2026 vs YTD June 30, 2025 Income tax benefit of $70.1 million was recorded for the six months ended June 30, 2026, resulting in an effective tax rate of 29.3%, compared to income tax expense of $39.0 million and effective tax rate of 32.2% for the same period 2025. The decrease in effective tax rate from 2025 to 2026 is due primarily to the impact of deferred tax asset revaluation recorded following the California state tax changes passed as part of the 2025 California budget enacted on June 30, 2025. BALANCE SHEET HIGHLIGHTS Securities As part of the securities repositioning, the Company reclassified its entire held-to-maturity ("HTM") securities portfolio with an aggregate amortized cost basis of $2.3 billion to available-for-sale ("AFS") securities and subsequently sold primarily all of the securities. The $2.3 billion of securities sold had an average yield of approximately 2.1% and were sold at a pre-tax loss of $251.3 million. The transaction improved the Company's earning-asset mix by facilitating the redeployment of proceeds into higher-yielding assets while enhancing balance sheet flexibility. As of June 30, 2026 we reinvested $1.7 billion at a weighted average yield of 4.87%, which resulted in a 276 basis point yield pickup on redeployed balances. AFS securities increased by $1.8 billion during the second quarter to $4.5 billion at June 30, 2026 compared to $2.7 billion at March 31, 2026, due primarily to the transfer of HTM securities to AFS of $2.3 billion and purchases of $1.9 billion, offset partially by the sale of $2.3 billion, as part of the securities repositioning, $116.9 million of principal paydowns, $16.7 million of maturities, $8.2 million decrease in the fair value of AFS securities, and $2.0 million of net amortization. As of June 30, 2026, AFS securities had aggregate unrealized net after-tax losses in AOCI of $145.3 million, up from $143.3 million at March 31, 2026, driven by higher interest rates. As of June 30, 2026, there are no HTM securities. 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 $569.5 million in the second quarter to $24.2 billion at June 30, 2026. The decline reflected, in part, the transfer of $827.0 million of loans to HFS in connection with the balance sheet repositioning, including $491.9 million of multi-family loans, $300.6 million of multi-family construction loans, and $34.5 million of commercial real estate mortgage loans. Excluding the impact of the loans transferred to HFS, the Company continued to generate loan growth in other residential real estate mortgage loans, venture capital loans, and asset-based lending portfolios. Loan production and disbursements totaled $2.8 billion in the second quarter with a weighted average interest rate on production of 6.39%. Total loans and leases HFS increased by $656.1 million in the second quarter and totaled $915.2 million at June 30, 2026. The increase was primarily driven by the Company's targeted loan sale process discussed above. Credit Quality Credit quality metrics improved from the first quarter, primarily reflecting the transfer of certain loans to HFS as part of the balance sheet repositioning. Nonperforming, classified, and special mention loans and leases as a percentage of total loans held for investment increased 9 basis points, and decreased 99 basis points and 154 basis points, respectively. At June 30, 2026, total delinquent loans and leases were $173.7 million, compared to $345.1 million at March 31, 2026. The 30 to 89 days delinquent category decreased by $140.7 million in residential real estate construction and land loans, $32.9 million in commercial real estate construction and land loans, and $32.8 million in multi-family real estate mortgage loans, offset partially by increases of $27.9 million in other residential real estate mortgage loans. In the 90 or more days delinquent category, there were increases of $11.8 million in other commercial loans and $9.1 million in multi-family real estate mortgage loans, offset partially by decreases of $23.2 million in commercial real estate loans. At June 30, 2026, nonperforming loans and leases were $203.7 million, compared to $185.7 million at March 31, 2026. During the second quarter, nonperforming loans and leases increased by $18.0 million due to additions of $391.7 million, offset partially by transfers to loans HFS of $248.0 million, charge-offs of $91.8 million, paydowns of $32.4 million, and transfers to accrual status of $1.5 million. At June 30, 2026, nonperforming assets were $220.0 million, or 0.63% of total assets, compared to $203.8 million, or 0.59% of total assets, as of March 31, 2026. At June 30, 2026, nonperforming assets included $16.3 million of foreclosed assets, consisting primarily of single-family residences. Allowance for Credit Losses – Loans The allowance for credit losses - loans, which includes the reserve for unfunded loan commitments, totaled $276.2 million, or 1.14% of total loans and leases at June 30, 2026, compared to $276.5 million, or 1.12% of total loans and leases at March 31, 2026. The $0.3 million decrease in the allowance was driven by net charge-offs of $160.3 million, largely associated with loans transferred to HFS during the quarter, offset partially by the provision of $160.0 million. Our ability to absorb credit losses is also bolstered by (i) $105.0 million of loss coverage from the credit-linked notes, pursuant to which the bank sold the first 5% of any losses on $2.1 billion of single-family residential mortgage loans in our portfolio; and (ii) unearned credit marks of $12.9 million on approximately $1.2 billion of purchased loans without credit deterioration. When the loss coverage from the credit-linked notes and unearned credit marks is added to our allowance for credit losses, this provides additional economic coverage on top of our ACL ratio. We refer to this adjusted ACL ratio as our economic coverage ratio(1), which equaled 1.63% of total loans and leases at June 30, 2026 compared to 1.60% at March 31, 2026. The ACL coverage of nonperforming loans and leases was 136% at June 30, 2026 compared to 149% at March 31, 2026. Net charge-offs were 2.54% of average loans and leases (annualized) for the second quarter, compared to net charge-offs of 0.23% for the first quarter. Deposits and Client Investment Funds The following table sets forth the composition of our deposits at the dates indicated: Total deposits increased by $799.0 million to $28.1 billion at June 30, 2026 from $27.3 billion at March 31, 2026, driven by an increase in interest-bearing deposits of $838.5 million and a decrease in noninterest-bearing deposits of $39.4 million. Interest-bearing deposits increased due mainly to higher balances in checking accounts of $560.9 million and higher money market accounts of $493.2 million, offset partially by lower savings accounts of $156.5 million and lower brokered and non-brokered time deposits of $59.1 million. At June 30, 2026, noninterest-bearing checking deposits totaled $7.8 billion, or 28% of total deposits, compared to $7.8 billion, or 29% of total deposits, at March 31, 2026. At June 30, 2026, uninsured and uncollateralized deposits totaled $7.6 billion, or 27% of total deposits, compared to $7.8 billion, or 28% of total deposits, at March 31, 2026. In addition to deposit products, we also offer alternative, non-depository corporate treasury solutions for select clients to invest excess liquidity. These off-balance sheet client funds totaled $1.0 billion as of June 30, 2026 and $1.2 billion as of March 31, 2026. Borrowings Borrowings decreased by $90.9 million to $2.5 billion at June 30, 2026 from $2.6 billion at March 31, 2026, driven primarily by the repayment of a long-term FHLB advance. Subordinated Debt On May 1, 2026, the Company redeemed all $385 million outstanding aggregate principal amount of its 3.25% Fixed-to-Floating Rate Subordinated Notes due 2031 originally issued by Pacific Western Bank. The remaining unamortized discount and debt issuance costs were recorded as a loss on redemption of subordinated notes in noninterest income. As a result of the redemption, subordinated debt decreased to $573.6 million at June 30, 2026, from $954.1 million at March 31, 2026. Equity During the second quarter, total stockholders’ equity decreased by $143.2 million to $3.4 billion and tangible common equity(1) decreased by $136.8 million to $2.6 billion at June 30, 2026. The decrease in total stockholders’ equity for the second quarter resulted primarily from net losses of $241.3 million and common and preferred stock dividends of $29.3 million, offset partially by a decrease in the unrealized after-tax net loss in AOCI for AFS and HTM securities of $125.3 million. At June 30, 2026, book value per common share decreased to $18.38 compared to $19.80 at March 31, 2026, and tangible book value per common share(1) decreased to $16.44 compared to $17.77 at March 31, 2026. The decrease primarily reflected the repositioning actions completed during the quarter. For the six-month period ended June 30, 2026, the Company repurchased 1,709,935 shares of common and common equivalent stock at a weighted average price per share of $18.68, or $31.9 million in the aggregate. As of June 30, 2026, $82.6 million remained available under the current stock repurchase authorization, which expires in March 2027. CAPITAL AND LIQUIDITY The following table sets forth our regulatory capital ratios as of the dates indicated: At June 30, 2026, cash and cash equivalents totaled $2.8 billion, up $600.8 million from March 31, 2026. Our immediately available cash and cash equivalents (excluding restricted cash) were $2.6 billion. Combined with total available borrowing capacity of $7.9 billion and unpledged AFS securities of $3.6 billion, total available liquidity was $14.1 billion at the end of the second quarter. Conference Call The Company will host a conference call to discuss its second quarter 2026 financial results at 8:00 a.m. Pacific Time (PT) on Wednesday, July 29, 2026. Interested parties are welcome to attend the conference call by dialing (888) 317-6003 and referencing event code 9364475. A live audio webcast will also be available, and the webcast link will be posted on the Company’s Investor Relations website at www.bancofcal.com/investor. The slide presentation for the call will also be available on the Company's Investor Relations website prior to the call. A replay of the call will be made available approximately one hour after the call has ended on the Company’s Investor Relations website at www.bancofcal.com/investor or by dialing (855) 669-9658 and referencing event code 7085829. About Banc of California, Inc. Banc of California, Inc. (NYSE: BANC) is a bank holding company with over $34 billion in assets and the parent company of Banc of California. Banc of California is one of the nation’s premier relationship-based business banks, providing banking and treasury management services to small, middle-market, and venture-backed businesses. Banc of California is the largest independent bank headquartered in Los Angeles and the third largest bank headquartered in California and offers a broad range of loan and deposit products and services through 77 full-service branches located throughout California and in Denver, Colorado, and Durham, North Carolina, as well as through regional offices nationwide. The bank also provides full-service payment processing solutions to its clients and serves the Community Association Management industry nationwide with its technology-forward platform, SmartStreet™. The bank is committed to its local communities through the Banc of California Charitable Foundation, and by supporting organizations that provide financial literacy and job training, small business support, affordable housing, and more. Member FDIC. For more information, please visit us at www.bancofcal.com. Forward-Looking Statements This press release includes forward-looking statements within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, liquidity and capital ratios; the anticipated benefits of our strategic repositioning including, among others, a strengthened credit profile, possible net interest income and net interest margin expansion and an enhanced earnings profile; and other non-historical statements. Words or phrases such as "believe," "will," "should," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "plans," "strategy," or similar expressions are intended to identify these forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements. These statements are necessarily subject to risk and uncertainty and actual results could differ materially from those anticipated due to various factors, including those set forth from time to time in the documents filed or furnished by the Company with the Securities and Exchange Commission ("SEC"). The Company undertakes no obligation to revise or publicly release any revision or update to these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made, except as required by law. Factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to: (i) changes in general economic conditions, either nationally or in our market areas, including the impact of tariffs and retaliatory tariffs, supply chain disruptions, and the risk of recession or an economic downturn; (ii) changes in the interest rate environment, including the recent and potential future changes in the FRB benchmark rate, which could adversely affect our revenue and expenses, the value of assets and obligations, the realization of deferred tax assets, the availability and cost of capital and liquidity, and the impacts of continuing or renewed inflation; (iii) the credit risks of lending activities, which may be affected by deterioration in real estate markets and the financial condition of borrowers, and the operational risk of lending activities, including the effectiveness of our underwriting practices and the risk of fraud, any of which may lead to increased loan delinquencies, losses, and non-performing assets, and may result in our allowance for credit losses not being adequate; (iv) fluctuations in the demand for loans, and fluctuations in commercial and residential real estate values in our market area; (v) the quality and composition of our securities portfolio; (vi) our ability to develop and maintain a strong core deposit base, including among our venture banking clients, or other low cost funding sources necessary to fund our activities particularly in a rising or high interest rate environment; (vii) the rapid withdrawal of a significant amount of demand deposits over a short period of time; (viii) our ability to achieve or maintain the anticipated benefits of our strategic repositioning due to one or more of the other factors described herein or otherwise, or the failure to complete our anticipated loan sales due to a condition to closing not being satisfied or otherwise; (ix) our ability to raise capital or incur debt on reasonable terms; (x) the costs and effects of litigation; (xi) risks related to the Company’s acquisitions, including disruption to current plans and operations; difficulties in customer and employee retention; fees, expenses and charges related to these transactions being significantly higher than anticipated; and our inability to achieve expected revenues, cost savings, synergies, and other benefits; (xii) the competitive and other impacts on our business of emerging technologies, including stablecoins and other digital currencies, tokenized deposits, blockchain, artificial intelligence, quantum computing, and related innovations affecting both the Company and the banking industry; (xiii) results of examinations by regulatory authorities of the Company and the possibility that any such regulatory authority may, among other things, limit our business activities, restrict our ability to invest in certain assets, refrain from issuing an approval or non-objection to certain capital or other actions, increase our allowance for credit losses, result in write-downs of asset values, restrict our ability or that of our bank subsidiary to pay dividends, or impose fines, penalties or sanctions; (xiv) legislative or regulatory changes that adversely affect our business, including changes in tax laws and policies, accounting policies and practices, privacy laws, and regulatory capital or other rules; (xv) the risk that our enterprise risk management framework may not be effective in mitigating risk and reducing the potential for losses; (xvi) errors in estimates of the fair values of certain of our assets and liabilities, as well as the value of collateral supporting our loans, which may result in significant changes in valuation or recoveries; (xvii) cybersecurity threats and failures or security breaches with respect to the network, applications, vendors and computer systems on which we depend; (xviii) our ability to attract and retain key members of our senior management team; (xix) the effects of climate change, severe weather events, natural disasters such as earthquakes and wildfires, pandemics, epidemics and other public health crises, military activity (including the ongoing Iran war) or acts of terrorism, and other external events on our business; (xx) the impact of bank failures or other adverse developments at other banks on general depositor and investor sentiment regarding the stability and liquidity of banks; (xxi) the possibility that our recorded goodwill could become impaired, which may have an adverse impact on our earnings and capital; (xxii) our existing indebtedness, together with any future incurrence of additional indebtedness, could adversely affect our ability to raise additional capital and to meet our debt obligations; (xxiii) changes in market conditions or strategic balance sheet actions, which may result in realized losses on investment securities or other assets; (xxiv) the effects of any damage to our reputation resulting from developments related to any of the items identified above; and (xxv) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services and the other risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and from time to time in other documents that we file with or furnish to the SEC. Non-GAAP Financial Measures Included in this press release are certain non-GAAP financial measures, such as tangible common equity, tangible book value per common share, return on average tangible common equity, pre-tax pre-provision income, efficiency ratio, and economic coverage ratio, designed to complement the financial information presented in accordance with U.S. GAAP because management believes such measures are useful to investors. These non-GAAP financial measures should be considered only as supplemental to, and not superior to, financial measures provided in accordance with GAAP. Please refer to the "Non-GAAP Measures" section of this release for additional detail including reconciliations of the non-GAAP financial measures included in this press release to the most directly comparable financial measures prepared in accordance with GAAP. BANC OF CALIFORNIA, INC. NON-GAAP MEASURES We refer to certain financial measures that are not recognized under U.S. generally accepted accounting principles ("GAAP") in this press release, including: tangible common equity, tangible book value per common share, return on average tangible common equity, pre-tax pre-provision income, efficiency ratio, and economic coverage ratio. These non-GAAP measures are used by management in its analysis of the Company's performance. Tangible common equity is calculated by subtracting preferred stock, as applicable, from total common equity. Return on average tangible common equity is calculated by dividing net earnings available to common stockholders, after adjustment for amortization of intangible assets and any goodwill impairment, by average tangible common equity. Banking regulators also exclude goodwill and other intangible assets from stockholders' equity when assessing the capital adequacy of a financial institution. Pre-tax pre-provision income is calculated by subtracting noninterest expense from total revenue, which is the sum of net interest income and noninterest income. Efficiency ratio is calculated by dividing noninterest expense (less intangible asset amortization and acquisition, integration and reorganization costs) by total revenue (the sum of net interest income and noninterest income, less gain (loss) on securities AFS). Economic coverage ratio is calculated by dividing the allowance for credit losses adjusted for the impact of the credit-linked notes and unearned credit mark from purchase accounting by loans and leases HFI. Management believes the presentation of these financial measures adjusting the impact of these items provides useful supplemental information that is essential to a proper understanding of the financial results and operating performance of the Company. This disclosure should not be viewed as a substitute for results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. The following tables provide reconciliations of the non-GAAP measures to financial measures defined by GAAP. View source version on businesswire.com: https://www.businesswire.com/news/home/20260729757807/en/ Contacts Investor Relations Inquiries:Banc of California, Inc.(855) 361-2262Jared Wolff, (310) 424-1230Joe Kauder, (310) 844-5224Ann DeVries, (646) 376-7011 Media Contact:Debora Vrana, Banc of California(213) [email protected]

Banc of California (BANC) reported $273.15 million in revenue for the quarter ended June 2026, representing a year-over-year increase of 0.1%. EPS of $0.13 for the same period compares to $0.31 a year ago. The reported revenue represents a surprise of -8.03% over the Zacks Consensus Estimate of $297.02 million. With the consensus EPS estimate being $0.40, the EPS surprise was -67.5%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Banc of California performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Efficiency Ratio: 67.2% versus the four-analyst average estimate of 61.9%. Net Interest Margin: 3.1% versus 3.3% estimated by four analysts on average. Total Nonperforming loans: $203.71 million versus $181.63 million estimated by three analysts on average. Average Balance - Total interest-earning assets: $32.12 billion versus $32.13 billion estimated by three analysts on average. Total Nonperforming assets: $220.03 million versus $199.12 million estimated by three analysts on average. Annualized net loan charge-offs (recoveries) to average total loans held-for-investment: 2.5% compared to the 0.1% average estimate based on three analysts. Total NonInterest Income: $22.65 million versus the four-analyst average estimate of $35.92 million. Net Interest Income: $250.5 million versus the four-analyst average estimate of $258.84 million. Service charges on deposit accounts: $4.76 million versus $5.04 million estimated by two analysts on average. Leased equipment income: $7.82 million versus the two-analyst average estimate of $8.57 million. Commissions and fees: $9.03 million compared to the $10.44 million average estimate based on two analysts. View all Key Company Metrics for Banc of California here>>> Shares of Banc of California have returned +3.7% over the past month versus the Zacks S&P 500 composite's +1.9% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Banc of California, Inc. (BANC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Banc of California (BANC) came out with quarterly earnings of $0.13 per share, missing the Zacks Consensus Estimate of $0.4 per share. This compares to earnings of $0.31 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -67.50%. A quarter ago, it was expected that this banking service and lending company would post earnings of $0.38 per share when it actually produced earnings of $0.39, delivering a surprise of +2.63%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Banc of California, which belongs to the Zacks Banks - Southwest industry, posted revenues of $273.15 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 8.03%. This compares to year-ago revenues of $272.85 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Banc of California shares have added about 9.8% since the beginning of the year versus the S&P 500's gain of 8.5%. While Banc of California has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Banc of California was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.45 on $307.09 million in revenues for the coming quarter and $1.71 on $1.21 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Southwest is currently in the top 18% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the broader Zacks Finance sector, NexPoint Residential Trust Inc. (NXRT), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 4. This real estate investment trust is expected to post quarterly earnings of $0.61 per share in its upcoming report, which represents a year-over-year change of -23.8%. The consensus EPS estimate for the quarter has been revised 9.8% higher over the last 30 days to the current level. NexPoint Residential Trust Inc.'s revenues are expected to be $63.91 million, up 1.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Banc of California, Inc. (BANC) : Free Stock Analysis Report NexPoint Residential Trust, Inc. (NXRT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

BancFirst (BANF) came out with quarterly earnings of $1.96 per share, beating the Zacks Consensus Estimate of $1.79 per share. This compares to earnings of $1.85 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +9.50%. A quarter ago, it was expected that this Oklahoma financial services holding company would post earnings of $1.77 per share when it actually produced earnings of $1.85, delivering a surprise of +4.52%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. BancFirst, which belongs to the Zacks Banks - Southwest industry, posted revenues of $187.49 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 4.80%. This compares to year-ago revenues of $169.3 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. BancFirst shares have added about 8.8% since the beginning of the year versus the S&P 500's gain of 9.6%. While BancFirst has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for BancFirst was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.86 on $182.4 million in revenues for the coming quarter and $7.38 on $726.7 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Southwest is currently in the top 18% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Banc of California (BANC), is yet to report results for the quarter ended June 2026. The results are expected to be released on July 29. This banking service and lending company is expected to post quarterly earnings of $0.40 per share in its upcoming report, which represents a year-over-year change of +29%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Banc of California's revenues are expected to be $297.02 million, up 8.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BancFirst Corporation (BANF) : Free Stock Analysis Report Banc of California, Inc. (BANC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Wall Street expects a year-over-year decline in earnings on higher revenues when First Bank (FRBA) reports results for the quarter ended June 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The earnings report, which is expected to be released on July 23, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This company is expected to post quarterly earnings of $0.40 per share in its upcoming report, which represents a year-over-year change of -2.4%. Revenues are expected to be $37.68 million, up 2.6% from the year-ago quarter. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For FIRST BANK, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +2.50%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination indicates that FIRST BANK will most likely beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that FIRST BANK would post earnings of $0.47 per share when it actually produced earnings of $0.30, delivering a surprise of -36.17%. Over the last four quarters, the company has beaten consensus EPS estimates just once. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. FIRST BANK appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Another stock from the Zacks Banks - Southwest industry, Banc of California (BANC), is soon expected to post earnings of $0.4 per share for the quarter ended June 2026. This estimate indicates a year-over-year change of +29%. Revenues for the quarter are expected to be $297.02 million, up 8.9% from the year-ago quarter. The consensus EPS estimate for Banc of California has remained unchanged over the last 30 days. However, a lower Most Accurate Estimate has resulted in an Earnings ESP of -5.47%. When combined with a Zacks Rank of #3 (Hold), this Earnings ESP makes it difficult to conclusively predict that Banc of California will beat the consensus EPS estimate. The company beat consensus EPS estimates in each of the trailing four quarters. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First Bank (FRBA) : Free Stock Analysis Report Banc of California, Inc. (BANC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research