BANC OF CALIFORNIA, INC. - FORM 8-K - EX-99.1

Attached files

file	filename
8-K - FORM 8-K - BANC OF CALIFORNIA, INC.	d811421d8k.htm
EX-10.2 - EX-10.2 - BANC OF CALIFORNIA, INC.	d811421dex102.htm
EX-3.1 - EX-3.1 - BANC OF CALIFORNIA, INC.	d811421dex31.htm
EX-10.1 - EX-10.1 - BANC OF CALIFORNIA, INC.	d811421dex101.htm
EX-99.2 - EX-99.2 - BANC OF CALIFORNIA, INC.	d811421dex992.htm
EX-14.1 - EX-14.1 - BANC OF CALIFORNIA, INC.	d811421dex141.htm

Exhibit 99.1

LOGO

Banc of California Reports Third Quarter Results

IRVINE, Calif., (October 30, 2014) – Banc of California, Inc. (NYSE: BANC) today reported net income of $11.2 million and net income available to common shareholders of $10.3 million, or $0.31 per diluted common share for the quarter ended September 30, 2014. This compares to net income available to common shareholders of $7.2 million, or $0.27 per diluted common share, for the quarter ended June 30, 2014, and a net loss to common shareholders of $9.5 million, or $(0.53) per diluted common share, for the year ago quarter ended September 30, 2013.

“This quarter’s performance is the result of our employees continuing to successfully execute on our key strategic initiatives with the goal of building California’s Bank,” said Steven Sugarman, President and Chief Executive Officer. “We remain focused on closing the acquisition and integration of Popular Community Bank’s California banking operations on November 7, which will expand our franchise and provide us additional scale to further leverage our infrastructure and deliver increasing value to shareholders.”

The Company’s consolidated assets totaled $4.54 billion at September 30, 2014, an increase of $151 million compared to the prior quarter, and an increase of $820 million compared to a year ago.

Return on average assets for the third quarter was 1.0%, up from 0.8% for the prior quarter. Return on average tangible common equity was 13.2% for the third quarter, up from 12.0% for the prior quarter.

Total loans and leases, representing both loans held for investment and held for sale, of $3.84 billion at September 30, 2014 increased $141 million compared to $3.70 billion at June 30, 2014, and have increased by $876 million compared to the year ago quarter ending September 30, 2013.

Loans held for investment increased by $110 million, or 4.2% from the prior quarter to $2.71 billion.

Total deposits of $3.63 billion at September 30, 2014 represented an increase of $284 million compared to $3.35 billion at June 30, 2014, and an increase of $372 million compared to $3.26 billion at September 30, 2013.

Total revenue of $82.3 million increased by $11.3 million compared with the prior quarter, and was $37.1 million higher compared to the third quarter 2013.

Net interest income for the third quarter was $38.2 million, an increase of $2.6 million, or 7.3%, compared to the prior quarter. Net interest margin for the third quarter was 3.58%.

Noninterest income for the third quarter totaled $44.1 million, compared to $35.4 million for the prior quarter and $18.2 million for the year ago quarter. The increase in third quarter noninterest income was primarily driven by the net gain on sale of loans of $10.3 million, compared to $3.0 million in the prior quarter. The third quarter increase in net gain on sale of loans was driven by the sale of $202 million of jumbo loans and seasoned SFR mortgage loans with a carrying value of $50 million. Mortgage banking income was $26.9 million for the quarter, an increase of $0.8 million compared to the prior quarter, and an increase of $10.7 million compared to a year ago.

18500 Von Karman Ave. — Suite 1100 — Irvine, CA 92612 — (949) 236-5250 — www.bancofcal.com

Total noninterest expense for the quarter ending September 30, 2014 totaled $67.6 million, an increase of $7.1 million compared to the prior quarter. Third quarter noninterest expense included approximately $2.4 million of non-recurring costs. Additionally, volume-related loan origination expense of $13.2 million for the quarter, increased by $0.9 million compared to the prior quarter.

During the third quarter, the Company implemented certain enhancements to its allowance for loan and lease losses (ALLL) methodology which resulted in a total ALLL of $25.3 million for the third quarter, equal to 1.33% of originated loans, and represents a coverage ratio of 66% of nonperforming loans at September 30, 2014. The provision for loan losses for the third quarter was $2.8 million. Total delinquent loans of $74.0 million for the third quarter declined by 26% compared to $99.3 million from the prior quarter. Nonperforming assets declined 8% to $38.9 million compared to the prior quarter. The ratio of nonperforming assets to total assets declined from 0.96% at the prior quarter and stands at 0.86% for the third quarter. Net charge offs for the third quarter were $0.2 million, compared to a net recovery of $0.2 million during the prior quarter.

Capital ratios remain strong with a Tier 1 Risk-Based Capital Ratio of 14.0% and a Tangible Common Equity to Tangible Assets Ratio (TCE/TA) of 7.2% as of September 30, 2014.

The Company also announced today certain agreements relating to the imminent closing of its previously announced direct registered sale of common stock to entities managed by Oaktree Capital Management and Patriot Financial Partners, LP. As a result of these sales, the Company expects to receive proceeds, before offering-related expenses, of $52 million for 5,187,954 shares concurrent with the closing of the Popular Community Bank branch acquisition, which the Company expects to occur at the close of business on November 7, 2014. The transactions include a new purchase and sale agreement with Patriot that enables Patriot to increase its previously announced investment commitment by 824,000 shares at a per share price equal to $11.55 for each incremental share to be purchased.

Upon closing of the Popular Community Bank transaction, as well as the sales of common stock to Oaktree and Patriot, the Company expects a pro-forma Tangible Common Equity to Tangible Assets Ratio (TCE/TA) of 6.4% and a pro-forma Tier 1 Leverage Ratio of 8.0%.

The Company will host a conference call to discuss its third quarter earnings at 8:00 a.m. Pacific Time (PT) today, October 30, 2014. Interested parties are welcome to attend the conference call by dialing 877-474-9506, and referencing event code 83328951. The slide presentation for the call will be available on the Company’s website prior to the call.

About Banc of California, Inc.

Since 1941, Banc of California, Inc. (NYSE:BANC) through its banking subsidiary Banc of California, National Association, has provided banking services and loans to businesses and families in California and the West. Today, Banc of California, Inc. has over $4 billion in consolidated assets and more than 80 banking locations.

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 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 Banc of California, Inc. with the Securities and Exchange Commission. You should not place undue reliance on forward-looking statements and Banc of California, Inc. undertakes no obligation to update any such statements to reflect circumstances or events that occur after the date on which the forward-looking statement is made.

Source: Banc of California, Inc.


INVESTOR RELATIONS INQUIRIES:		MEDIA INQUIRIES:
Banc of California, Inc.		Vectis Strategies
Timothy Sedabres, (855) 361-2262		David Herbst, (213) 973-4113 x101

- 2 -

Banc of California, Inc

Consolidated Statements of Financial Condition

(Dollars in thousands)

(Unaudited)


	September 30,			June 30,			December 31,			September 30,
	2014			2014			2013			2013
ASSETS
Cash and due from banks	$	5,646		$	5,764		$	4,937		$	7,951
Interest-bearing deposits		179,339			252,287			105,181			408,059

Total cash and cash equivalents		184,985			258,051			110,118			416,010
Time deposits in financial institutions		1,900			2,145			1,846			2,938
Securities available for sale		310,385			233,013			170,022			167,998
Loans held for sale		1,127,339			1,095,741			716,733			367,111
Loans and leases receivable		2,712,068			2,602,213			2,446,111			2,596,188
Allowance for loan and lease losses		(25,283	)		(22,627	)		(18,805	)		(19,130	)
Federal Home Loan Bank and other bank stock		35,432			34,392			22,600			14,789
Servicing rights, net		11,745			10,191			13,883			7,603
Other real estate owned, net		605			605			—			1,383
Premises and equipment, net		67,323			67,457			66,260			61,443
Premises and equipment held for sale		—			—			—			3,080
Goodwill		31,591			32,150			30,143			22,086
Other intangible assets, net		10,829			10,959			12,152			13,191
Deferred income tax		8,663			2,546			—			5,515
Income tax receivable		—			—			2,995			4,077
Bank-owned life insurance investment		19,038			18,984			18,881			18,834
Other assets		41,376			40,702			35,084			35,257

Total assets	$	4,537,996		$	4,386,522		$	3,628,023		$	3,718,373

LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Noninterest-bearing deposits	$	457,743		$	408,404		$	429,158		$	418,759
Interest-bearing deposits		3,173,967			2,938,951			2,489,486			2,377,847
Deposits held for sale		—			—			—			462,768

Total deposits		3,631,710			3,347,355			2,918,644			3,259,374
Advances from Federal Home Loan Bank		305,000			450,000			250,000			25,000
Federal funds purchased		—			—			—			—
Notes payable, net		95,549			96,481			82,320			82,224
Reserve for loss reimbursements on sold loans		7,045			6,174			5,427			4,282
Income taxes payable		2,158			31			—			—
Accrued expenses and other liabilities		49,653			47,163			46,763			44,913

Total liabilities		4,091,115			3,947,204			3,303,154			3,415,793
Commitments and contingent liabilities

Preferred stock, Series A, non-cumulative perpetual preferred stock		31,934			31,934			31,934			31,934
Preferred stock, Series B, non-cumulative perpetual preferred stock		10,000			10,000			10,000			10,000
Preferred stock, Series C, 8.00% non-cumulative perpetual preferred stock		37,943			37,943			37,943			37,943
Common stock		297			287			210			188
Common stock, class B non-voting non-convertible		6			6			6			5
Additional paid-in capital		371,738			369,530			256,306			230,804
Retained earnings		24,862			18,779			16,981			17,027
Treasury stock		(29,798	)		(29,652	)		(27,911	)		(25,455	)
Accumulated other comprehensive (loss)/income, net		(101	)		491			(600	)		134

Total shareholders’ equity		446,881			439,318			324,869			302,580

Total liabilities and shareholders’ equity	$	4,537,996		$	4,386,522		$	3,628,023		$	3,718,373

Banc of California, Inc

Consolidated Statements of Operations

(Dollars in thousands, except per share data)

(Unaudited)


	Three months ended							Nine months ended
	September 30,		June 30,		September 30,			September 30,		September 30,
	2014		2014		2013			2014		2013
Interest and dividend income
Loans, including fees	$	44,555	$	42,077	$	32,061		$	128,162	$	76,751
Securities		1,460		993		1,292			3,377		2,159
Dividends and other interest-earning assets		634		564		493			1,520		845

Total interest and dividend income		46,649		43,634		33,846			133,059		79,755
Interest expense
Deposits		6,165		6,071		5,084			17,971		10,386
Federal Home Loan Bank advances		118		99		56			317		177
Notes payable and other interest-bearing liabilities		2,180		1,889		1,763			5,825		5,265

Total interest expense		8,463		8,059		6,903			24,113		15,828

Net interest income		38,186		35,575		26,943			108,946		63,927
Provision for loan and lease losses		2,780		2,108		2,109			6,817		6,195

Net interest income after provision for loan and lease losses		35,406		33,467		24,834			102,129		57,732
Noninterest income
Customer service fees		230		356		621			839		1,676
Net gain on sale of loans		10,260		3,038		484			15,901		4,520
Mortgage banking income		26,943		26,133		16,231			70,400		52,862
All other income		6,665		5,845		890			17,608		3,168

Total noninterest income		44,098		35,372		18,226			104,748		62,226
Noninterest expense
Salaries and employee benefits		41,094		39,130		30,179			114,905		74,570
Occupancy and equipment		7,969		7,425		5,247			23,931		12,070
All other expenses		18,494		13,910		16,878			46,954		34,816

Total noninterest expense		67,557		60,465		52,304			185,790		121,456

Income before income taxes		11,947		8,374		(9,244	)		21,087		(1,498	)
Income tax expense		721		253		(710	)		983		1,744

Net income		11,226		8,121		(8,534	)		20,104		(3,242	)
Preferred stock dividends		910		910		946			2,730		1,234

Net income (loss) available to common shareholders	$	10,316	$	7,211	$	(9,480	)	$	17,374	$	(4,476	)

Basic earnings (loss) per total common share	$	0.31	$	0.27	$	(0.53	)	$	0.64	$	(0.32	)
Diluted earnings (loss) per total common share	$	0.31	$	0.27	$	(0.53	)	$	0.63	$	(0.32	)

Banc of California, Inc

Selected Financial Data

(Dollars in thousands)

(Unaudited)


	Three months ended									Nine months ended
	September 30,			June 30,			September 30,			September 30,			September 30,
	2014			2014			2013			2014			2013
Average balances:
Total assets	$	4,391,523		$	4,034,447		$	3,439,433		$	4,053,810		$	2,509,750
Total gross loans and leases		3,829,204			3,553,693			2,530,856			3,559,505			1,934,555
Securities available for sale		257,067			168,230			221,245			196,446			147,459
Total interest earning assets		4,228,555			3,858,772			3,286,840			3,887,559			2,397,486
Total interest-bearing deposits		3,070,130			2,855,650			2,534,767			2,841,303			1,864,342
Total borrowings		378,671			319,774			124,419			349,794			131,513
Interest bearing liabilities		3,448,801			3,175,424			2,659,186			3,191,097			1,995,855
Total shareholders’ equity		449,392			385,098			336,963			388,474			244,778
Profitability and other ratios:
Return on average assets⁽¹⁾		1.01	%		0.81	%		-0.98	%		0.66	%		-0.17	%
Return on average equity ⁽¹⁾		9.91	%		8.46	%		-10.05	%		6.92	%		-1.77	%
Dividend payout ratio ⁽²⁾		38.71	%		44.44	%		—			56.25	%		—
Net interest spread		3.41	%		3.52	%		3.06	%		3.57	%		3.39	%
Net interest margin⁽¹⁾		3.58	%		3.70	%		3.25	%		3.75	%		3.56	%
Noninterest income to total revenue ⁽³⁾		53.59	%		49.86	%		40.35	%		49.02	%		49.33	%
Noninterest income to average total assets⁽¹⁾		3.98	%		3.52	%		2.10	%		3.45	%		3.31	%
Noninterest expense to average total assets⁽¹⁾		6.10	%		6.01	%		6.03	%		6.13	%		6.47	%
Efficiency ratio⁽⁴⁾		82.10	%		85.23	%		115.80	%		86.94	%		96.28	%
Average held for investment loans and leases to average deposits		75.39	%		74.60	%		75.86	%		76.60	%		83.11	%
Average securities available for sale to average total assets		5.85	%		4.17	%		6.43	%		4.85	%		5.88	%
Average shareholders’ equity to average total assets		10.23	%		9.55	%		9.80	%		9.58	%		9.75	%
Allowance for loan and lease losses (ALLL):
Balance at beginning of period	$	22,627		$	20,003		$	16,979		$	18,805		$	14,448
Loans and leases charged off		(312	)		(383	)		(211	)		(898	)		(2,145	)
Recoveries of loans and leases previously charged off		96			641			253			1,172			632
Transfer of loans from (to) held-for-sale		92			258			—			(613	)		—
Provision for loan and lease losses		2,780			2,108			2,109			6,817			6,195

Balance at end of period	$	25,283		$	22,627		$	19,130		$	25,283		$	19,130

Reserve for loss on repurchased loans
Balance at beginning of period	$	6,174		$	5,866		$	3,974		$	5,427		$	3,485
Provision for loan repurchases		1,556			968			375			3,094			1,363
Payment made for loss reimbursement on sold loans		(685	)		(660	)		(67	)		(1,476	)		(566	)

Balance at end of period	$	7,045		$	6,174		$	4,282		$	7,045		$	4,282

(1)

Ratios are presented on an annualized basis

(2)

Dividends declared per common share divided by basic earnings per share. Not applicable for the three and nine months ended September 30, 2013, due to the net loss attributable to shareholders.

(3)

Total revenue is equal to the sum of net interest income before provision and noninterest income.

(4)

The ratios were calculated by dividing noninterest expense by the sum of net interest income before provision for loan and lease losses and noninterest income.

Banc of California, Inc

Selected Financial Data, Continued

(Dollars in thousands)

(Unaudited)


	September 30,			June 30,			December 31,			September 30,
	2014			2014			2013			2013
Asset quality information and ratios:
30 to 89 days delinquent, excluding PCI loans	$	35,531		$	44,894		$	37,699		$	30,964
90+ days delinquent, excluding PCI loans		15,672			16,925			13,441			14,100

Total delinquent loans, excluding PCI loans		51,203			61,819			51,140			45,064

PCI loans, 30 to 89 days delinquent		18,743			25,109			30,514			25,538
PCI loans, 90+ days delinquent		4,017			12,398			12,205			9,168

Total delinquent PCI loans		22,760			37,507			42,719			34,706

Total delinquent loans	$	73,963		$	99,326		$	93,859		$	79,770

Total delinquent non-PCI loans to total non-PCI loans		2.08	%		2.69	%		2.43	%		2.01	%
Total delinquent loans to gross loans		2.73	%		3.82	%		3.84	%		3.07	%

Non-performing loans, excluding PCI loans	$	38,333		$	41,611		$	31,648		$	15,408
90+ days delinquent and still accruing loans, excluding PCI loans		—			—			—			—
Other real estate owned		605			605			—			1,383

Non-performing assets		38,938			42,216			31,648			16,791
ALLL to non-performing loans		65.96	%		54.38	%		59.42	%		124.16	%
Non-performing loans to gross loans		1.41	%		1.60	%		1.29	%		0.59	%
Non-performing assets to total assets		0.86	%		0.96	%		0.87	%		0.45	%
Loan breakdown by ALLL evaluation type:
Originated loans
Individually evaluated for impairment	$	29,030		$	29,763		$	16,704		$	18,027
Collectively evaluated for impairment		1,668,004			1,447,077			1,168,195			1,234,648
Acquired loans through business acquisitions - non-impaired
Individually evaluated for impairment		8,004			6,173			2,243			2,207
Collectively evaluated for impairment		377,554			409,745			469,916			523,590
Seasoned SFR mortgage loan pools - non-impaired		376,575			404,398			449,767			468,590
Acquired with deteriorated credit quality		252,901			305,057			339,286			349,126

Total loans	$	2,712,068		$	2,602,213		$	2,446,111		$	2,596,188

ALLL breakdown:
Originated loans
Individually evaluated for impairment	$	517		$	309		$	96		$	1,377
Collectively evaluated for impairment		22,011			19,427			17,103			15,999
Acquired loans through business acquisitions - non-impaired
Individually evaluated for impairment		7			—			—			22
Collectively evaluated for impairment		2,748			2,570			1,410			1,420
Seasoned SFR mortgage loan pools - non-impaired		—			—			—			—
Acquired with deteriorated credit quality		—			321			196			312

Total ALLL	$	25,283		$	22,627		$	18,805		$	19,130

Discount on Purchased/Acquired Loans:
Acquired loans through business acquisitions - non-impaired	$	6,512		$	6,536		$	8,354		$	9,003
Seasoned SFR mortgage loan pools - non-impaired		30,811			33,044			38,240			38,002
Acquired with deteriorated credit quality		57,961			84,876			105,650			110,081

Total Discount	$	95,284		$	124,456		$	152,244		$	157,086

Ratios:
To originated loans:
Individually evaluated for impairment		1.78	%		1.04	%		0.57	%		7.64	%
Collectively evaluated for impairment		1.32	%		1.34	%		1.46	%		1.30	%
Total ALLL		1.33	%		1.34	%		1.45	%		1.39	%
To originated and acquired non-impaired loans:
Individually evaluated for impairment		1.41	%		0.86	%		0.51	%		6.91	%
Collectively evaluated for impairment		1.21	%		1.18	%		1.13	%		0.99	%
Total ALLL		1.21	%		1.18	%		1.12	%		1.06	%
Total ALLL and discount ⁽¹⁾		1.53	%		1.52	%		1.63	%		1.56	%
To total loans:
Individually evaluated for impairment		1.41	%		0.86	%		0.51	%		6.91	%
Collectively evaluated for impairment		1.02	%		0.97	%		0.89	%		0.78	%
Total ALLL		0.93	%		0.87	%		0.77	%		0.74	%
Total ALLL and discount ⁽¹⁾		4.45	%		5.65	%		6.99	%		6.79	%

(1)

The ratios were calculated by dividing a sum of ALLL and discounts by carrying value of loans.

Banc of California, Inc

Selected Financial Data, Continued

(Dollars in thousands)

(Unaudited)


	September 30,			June 30,			December 31,			September 30,
	2014			2014			2013			2013
Composition of held for investment loans and leases
Commercial real estate	$	521,867		$	535,744		$	529,883		$	482,260
Multi-family		367,364			234,179			141,580			131,280
Construction		25,997			30,761			24,933			22,838
Commercial and industrial		366,416			368,540			287,771			250,749
SBA		25,729			28,684			27,428			27,669
Lease financing		72,027			57,754			31,949			21,340

Total commercial loans		1,379,400			1,255,662			1,043,544			936,136

Single family residential mortgage		1,191,021			1,212,813			1,286,541			1,550,068
Other consumer		141,647			133,738			116,026			109,984

Total consumer loans		1,332,668			1,346,551			1,402,567			1,660,052

Total gross loans and leases	$	2,712,068		$	2,602,213		$	2,446,111		$	2,596,188

Composition percentage of held for investment loans and leases
Commercial real estate		19.2	%		20.6	%		21.7	%		18.6	%
Multi-family		13.5	%		9.0	%		5.8	%		5.1	%
Construction		1.0	%		1.2	%		1.0	%		0.9	%
Commercial and industrial		13.5	%		14.2	%		11.8	%		9.7	%
SBA		0.9	%		1.1	%		1.1	%		1.1	%
Lease financing		2.7	%		2.2	%		1.3	%		0.8	%

Total commercial loans		50.8	%		48.3	%		42.7	%		36.2	%

Single family residential mortgage		44.0	%		46.6	%		52.6	%		59.6	%
Other consumer		5.2	%		5.1	%		4.7	%		4.2	%

Total consumer loans		49.2	%		51.7	%		57.3	%		63.8	%

Total gross loans and leases		100.0	%		100.0	%		100.0	%		100.0	%

Composition of deposits
Noninterest-bearing checking	$	457,743		$	408,404		$	429,158		$	441,081
Interest-bearing checking		779,704			688,699			539,098			534,476
Money market		769,291			618,231			518,696			574,111
Savings		932,133			985,028			963,536			1,105,360
Certificates of deposit		692,839			646,993			468,156			604,346

Total deposits	$	3,631,710		$	3,347,355		$	2,918,644		$	3,259,374

Composition percentage of deposits
Noninterest-bearing checking		12.6	%		12.2	%		14.7	%		13.5	%
Interest-bearing checking		21.5	%		20.6	%		18.5	%		16.4	%
Money market		21.2	%		18.5	%		17.8	%		17.6	%
Savings		25.6	%		29.4	%		33.0	%		34.0	%
Certificates of deposit		19.1	%		19.3	%		16.0	%		18.5	%

Total deposits		100.0	%		100.0	%		100.0	%		100.0	%

Banc of California, Inc

Average Balance, Average Yield Earned, and Average Cost Paid

(Dollars in thousands)

(Unaudited)


	Three months ended
	September 30, 2014								June 30, 2014								September 30, 2013
	Average					Yield			Average					Yield			Average					Yield
	Balance			Interest		/ Cost			Balance			Interest		/ Cost			Balance			Interest		/ Cost
Interest earning assets:
Loans held for sale and SFR mortgage	$	1,757,890		$	16,979		3.83	%	$	1,590,982		$	15,158		3.82	%	$	1,055,646		$	11,151		4.19	%
Seasoned SFR mortgage loan pools		675,083			11,753		6.91	%		701,006			11,723		6.71	%		453,214			8,081		7.07	%
Commercial real estate, multi-family, and construction		827,934			9,592		4.60	%		734,472			8,689		4.75	%		624,632			7,503		4.77	%
Commercial and industrial, SBA, and lease financing		451,992			5,060		4.44	%		418,170			5,413		5.19	%		300,162			4,411		5.83	%
Other consumer		116,305			1,171		3.99	%		109,063			1,094		4.02	%		97,202			915		3.73	%

Gross loans and leases		3,829,204			44,555		4.62	%		3,553,693			42,077		4.75	%		2,530,856			32,061		5.03	%
Securities		257,067			1,460		2.25	%		168,230			993		2.37	%		221,245			1,292		2.32	%
Other interest-earning assets		142,284			634		1.77	%		136,849			564		1.65	%		534,739			493		0.37	%

Total interest-earning assets		4,228,555			46,649		4.38	%		3,858,772			43,634		4.54	%		3,286,840			33,846		4.09	%
Allowance for loan and lease losses		(23,266	)							(20,567	)							(17,524	)
BOLI and non-interest earning assets		186,234								196,242								170,117

Total assets	$	4,391,523							$	4,034,447							$	3,439,433

Interest-bearing liabilities:
Savings		953,925			2,215		0.92	%		990,894			2,425		0.98	%		907,413			2,471		1.08	%
Interest-bearing checking		745,635			2,037		1.08	%		660,341			1,864		1.13	%		447,961			995		0.88	%
Money market		681,576			673		0.39	%		603,917			639		0.42	%		599,971			556		0.37	%
Certificates of deposit		688,994			1,240		0.71	%		600,498			1,143		0.76	%		579,422			1,062		0.73	%
FHLB advances		276,739			118		0.17	%		226,429			99		0.18	%		40,183			56		0.55	%
Long-term debt and other interest-bearing liabilities		101,932			2,180		8.48	%		93,345			1,889		8.12	%		84,236			1,763		8.30	%

Total interest-bearing liabilities		3,448,801			8,463		0.97	%		3,175,424			8,059		1.02	%		2,659,186			6,903		1.03	%
Noninterest-bearing deposits		448,825								428,221								413,877
Non-interest-bearing liabilities		44,505								45,704								29,407

Total liabilities		3,942,131								3,649,349								3,102,470
Total shareholders’ equity		449,392								385,098								336,963

Total liabilities and shareholders’ equity	$	4,391,523							$	4,034,447							$	3,439,433

Net interest income/spread				$	38,186		3.41	%				$	35,575		3.52	%				$	26,943		3.06	%

Net interest margin							3.58	%							3.70	%							3.25	%

Banc of California, Inc

Average Balance, Average Yield Earned, and Average Cost Paid, Continued

(Dollars in thousands)

(Unaudited)


	Nine months ended September 30,
	2014								2013
	Average					Yield			Average					Yield
	Balance			Interest		/ Cost			Balance			Interest		/ Cost
Interest earning assets:
Loans held for sale and SFR mortgage	$	1,583,494		$	45,527		3.84	%	$	844,479		$	25,985		4.11	%
Seasoned SFR mortgage loan pools		708,814			36,548		6.89	%		325,906			20,103		8.25	%
Commercial real estate, multi-family, and construction		749,350			26,501		4.73	%		523,795			19,477		4.97	%
Commercial and industrial, SBA, and lease financing		409,624			16,367		5.34	%		203,322			10,120		6.65	%
Other consumer		108,223			3,219		3.98	%		37,053			1,066		3.85	%

Gross loans and leases		3,559,505			128,162		4.81	%		1,934,555			76,751		5.30	%
Securities		196,446			3,377		2.30	%		147,459			2,159		1.96	%
Other interest-earning assets		131,608			1,520		1.54	%		315,472			845		0.36	%

Total interest-earning assets		3,887,559			133,059		4.58	%		2,397,486			79,755		4.45	%
Allowance for loan and lease losses		(21,089	)							(16,446	)
BOLI and non-interest earning assets		187,340								128,710

Total assets	$	4,053,810							$	2,509,750

Interest-bearing liabilities:
Savings		970,348			7,156		0.99	%		571,830			4,342		1.02	%
Interest-bearing checking		666,926			5,552		1.11	%		280,352			1,712		0.82	%
Money market		600,818			1,948		0.43	%		423,672			1,042		0.33	%
Certificates of deposit		603,211			3,315		0.73	%		588,488			3,290		0.75	%
FHLB advances		254,322			317		0.17	%		46,721			177		0.51	%
Long-term debt and other interest-bearing liabilities		95,472			5,825		8.16	%		84,792			5,265		8.30	%

Total interest-bearing liabilities		3,191,097			24,113		1.01	%		1,995,855			15,828		1.06	%
Noninterest-bearing deposits		431,160								239,379
Non-interest-bearing liabilities		43,079								29,738

Total liabilities		3,665,336								2,264,972
Total shareholders’ equity		388,474								244,778

Total liabilities and shareholders’ equity	$	4,053,810							$	2,509,750

Net interest income/spread				$	108,946		3.57	%				$	63,927		3.39	%

Net interest margin							3.75	%							3.56	%

Banc of California, Inc

Capital Ratios

(Unaudited)


	September 30,			June 30,			December 31,			September 30,
	2014			2014			2013			2013
Capital Ratios:
Banc of California, Inc.
Total risk-based capital ratio:		14.97	%		15.19	%		12.45	%		12.64	%
Tier 1 risk-based capital ratio:		14.03	%		14.10	%		11.41	%		11.58	%
Tier 1 leverage ratio:		9.28	%		9.89	%		8.02	%		7.82	%
Banc of California, NA ⁽¹⁾
Total risk-based capital ratio:		15.75	%		14.88	%		14.65	%		15.39	%
Tier 1 risk-based capital ratio:		14.81	%		13.79	%		13.60	%		14.14	%
Tier 1 leverage ratio:		9.80	%		9.72	%		9.58	%		8.11	%
The Private Bank of California⁽¹⁾
Total risk-based capital ratio:		N/A			N/A			N/A			11.55	%
Tier 1 risk-based capital ratio:		N/A			N/A			N/A			11.06	%
Tier 1 leverage ratio:		N/A			N/A			N/A			8.34	%

(1)

On October 11, 2013, The Private Bank of California was merged with the Company’s other wholly owned banking subsidiary, Banc of California, NA.

Banc of California, Inc

Non-GAAP Measures

(Dollars in thousands, except per share data)

(Unaudited)

Non-GAAP performance measure:

Tangible common equity to tangible assets ratio and return on average tangible common equity are supplemental financial information determined by a method other than in accordance with U.S. generally accepted accounting principles (“GAAP”). These non-GAAP measures are used by management in the analysis of Banc of California, Inc.’s capital strength and performance of businesses. Tangible equity is calculated by subtracting goodwill and other intangible assets from total stockholders’ equity. Banking and financial institution regulators also exclude goodwill and other intangible assets from total stockholders’ equity when assessing the capital adequacy of a financial institution. Management believes the presentation of this financial measure excluding the impact of these items provides useful supplemental information that is essential to a proper understanding of the capital strength of Banc of California, Inc. This disclosure should not be viewed as a substitution 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 reconcile this non-GAAP performance measures to the GAAP performance measures for the periods indicated:


	September 30,			June 30,			December 31,			September
	2014			2014			2013			2013
Tangible common equity to tangible assets ratio
Total assets	$	4,537,996		$	4,386,522		$	3,628,023		$	3,718,373
Less goodwill		(31,591	)		(32,150	)		(30,143	)		(22,086	)
Less other intangible assets		(10,829	)		(10,959	)		(12,152	)		(13,191	)

Tangible assets	$	4,495,576		$	4,343,413		$	3,585,728		$	3,683,096

Total shareholders’ equity	$	446,881		$	439,318		$	324,869		$	302,580
Less preferred stock		(79,877	)		(79,877	)		(79,877	)		(79,877	)
Less goodwill		(31,591	)		(32,150	)		(30,143	)		(22,086	)
Less other intangible assets		(10,829	)		(10,959	)		(12,152	)		(13,191	)

Tangible common equity	$	324,584		$	316,332		$	202,697		$	187,426

Total shareholders’ equity to total assets		9.85	%		10.02	%		8.95	%		8.14	%
Tangible common equity to tangible assets		7.22	%		7.28	%		5.65	%		5.09	%

Common stock outstanding		28,023,701			27,032,464			19,561,469			17,439,562
Class B non-voting non-convertible common stock outstanding		602,783			596,018			584,674			579,490

Total common stock outstanding		28,626,484			27,628,482			20,146,143			18,019,052

Minimum number of shares issuable under purchase contracts⁽¹⁾		4,198,425			5,101,326			—			—

Total common stock outstanding and shares issuable under purchase contracts		32,824,909			32,729,808			20,146,143			18,019,052


(1) Purchase contracts relating to the tangible equity units

Tangible common equity per common stock	$	11.34		$	11.45		$	10.06		$	10.40
Book value per common stock	$	12.82		$	13.01		$	12.16		$	12.36
Tangible equity per common stock and shares issuable under purchase contracts	$	9.89		$	9.66		$	10.06		$	10.40
Book value per common stock and shares issuable under purchase contracts	$	11.18		$	10.98		$	12.16		$	12.36


	Three months ended									Nine months ended
	September 30,			June 30,			September 30,			September 30,			September 30,
	2014			2014			2013			2014			2013
Return on tangible common equity
Average total shareholders’ equity	$	449,392		$	385,098		$	336,963		$	388,474		$	244,778
Less average preferred stock		(79,877	)		(79,877	)		(80,302	)		(79,877	)		(48,331	)
Less average goodwill		(32,209	)		(33,020	)		(21,722	)		(32,056	)		(11,993	)
Less average other intangible assets		(10,634	)		(10,871	)		(15,009	)		(11,108	)		(8,474	)

Average tangible common equity	$	326,672		$	261,330		$	219,930		$	265,433		$	175,980

Net income	$	11,226		$	8,121		$	(8,534	)	$	20,104		$	(3,242	)
Less preferred stock dividends		(910	)		(910	)		(946	)		(2,730	)		(1,234	)
Add tax-effected amortization of intangible assets ⁽¹⁾		579			614			632			1,802			1,110
Add tax-effected impairment on intangible assets ⁽¹⁾		—			—			634			—			634

Net income (loss) available to common shareholders	$	10,895		$	7,825		$	(8,214	)	$	19,176		$	(2,732	)


(1) Utilized a 35% effective tax rate

Return on average equity		9.91	%		8.46	%		-10.05	%		6.92	%		-1.77	%
Return on average tangible common equity		13.23	%		12.01	%		-14.82	%		9.66	%		-2.08	%

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BANC OF CALIFORNIA, INC. Reports