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

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8-K - FORM 8-K - BANC OF CALIFORNIA, INC.	d885911d8k.htm
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Exhibit 99.1

LOGO

Banc of California Reports Fourth Quarter and

Full Year 2014 Financial Results

IRVINE, Calif., (March 5, 2015) – Banc of California, Inc. (NYSE: BANC) today reported net income of $30.3 million and net income available to common shareholders of $26.7 million, or $0.91 per diluted common share for the year ended December 31, 2014. This compares to net income of $0.1 million and a net loss attributable to common shareholders of $2.1 million, or $(0.14) per diluted common share, for the year ended December 31, 2013.

For the quarter ended December 31, 2014, the Company reported net income available to common shareholders of $9.3 million, or $0.25 per diluted common share. This compares to net income available to common shareholders of $2.4 million, or $0.12 per diluted common share, for the quarter ended December 31, 2013.

“Over the past three years, Banc of California has emerged as California’s Bank,” said Steven Sugarman, President and Chief Executive Officer. “We are now a $6 billion financial institution with the scale to serve California’s diverse private businesses, entrepreneurs and homeowners. As we look to 2015, we believe there are compelling economics for continued growth and we are well situated to deliver on our stated financial targets.”

The Company’s consolidated assets totaled $6.0 billion at December 31, 2014, an increase of $1.4 billion compared to the prior quarter, and an increase of $2.3 billion compared to a year ago.

Return on average assets for the fourth quarter was 0.8%, and 0.7% for the full year ended December 31, 2014. Return on average tangible common equity was 11.2% for the fourth quarter, and 10.1% for the full year ended December 31, 2014. Both the full year and fourth quarter results included the release of the remaining $8.3 million deferred tax asset valuation allowance which resulted in a net tax benefit of $4.5 million and $5.5 million, for the full year and fourth quarter, respectively.

Total loans and leases, representing both loans held for investment and held for sale, of $5.1 billion at December 31, 2014 increased by $1.3 billion, compared to $3.8 billion at September 30, 2014, and have increased by $2.0 billion compared to the year ended December 31, 2013.

Total deposits of $4.7 billion at December 31, 2014 represented an increase of $1.0 billion compared to $3.6 billion at September 30, 2014, and an increase of $1.8 billion compared to $2.9 billion at December 31, 2013.

Growth in both total loans and deposits during the fourth quarter was primarily driven by the branch transaction with Popular Community Bank in November which resulted in the acquisition of $1.1 billion of loan balances and $1.1 billion of deposit balances.

Total revenue for the year ended December 31, 2014 of $300.9 million increased by $106.9 million, or 55%, compared to the full year ended December 31, 2013. Revenue of $87.2 million for the fourth quarter increased by $4.9 million compared with the prior quarter, and was $19.4 million higher compared to the fourth quarter 2013.

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

Net interest income of $155.3 million for 2014 increased by $58.0 million, or 60%, from 2013. Fourth quarter net interest income of $46.3 million increased 21% from the prior quarter, and increased by $13.0 million, or 39% compared to the year ago quarter.

Net interest margin of 3.72% for 2014 increased by 5 basis points compared to 3.67% for 2013. Fourth quarter net interest margin was 3.65%, an increase of 7 basis points from 3.58% reported in the third quarter. Lower deposit costs contributed to the margin expansion during the quarter.

Noninterest income for 2014 totaled $145.6 million, an increase of $48.9 million, compared to $96.7 million for 2013. Noninterest income for the fourth quarter totaled $40.9 million, compared to $44.1 million for the prior quarter and $34.5 million for the year ago quarter.

Total noninterest expense for the fourth quarter totaled $78.4 million, an increase of $10.8 million compared to the prior quarter. Fourth quarter noninterest expense included approximately $5.9 million of non-recurring costs including from the acquisition of branches from Popular Community Bank as well as an increase of $2.1 million of ongoing operating expense from the acquired branch locations.

The Company’s allowance for loan and lease losses (ALLL) increased to $29.5 million for the fourth quarter, and equaled 1.38% of originated loans, and represented a coverage ratio of 77% of nonperforming loans at December 31, 2014. The provision for loan losses for the fourth quarter was $4.2 million, compared to $2.8 million in the prior quarter, driven primarily by loan growth during the fourth quarter. The ratio of delinquent non-PCI loans to total non-PCI loans equaled 1.55% for the fourth quarter, and declined compared to 2.08% from the prior quarter, and was down from 2.43% a year ago. The ratio of nonperforming assets to total assets declined from 0.86% at the third quarter and stands at 0.65% as of December 31, 2014. Net charge offs for the fourth quarter were in a net recovery position of less than $0.1 million.

The Company remains well-capitalized with a Tier 1 Risk-Based Capital Ratio of 10.5%, a Tier 1 Leverage Ratio of 8.6%, and a Tangible Common Equity to Tangible Assets Ratio (TCE/TA) of 6.2% as of December 31, 2014.

The Company will host a conference call to discuss its fourth quarter and full year financial results at 8:00 a.m. Pacific Time (PT) Friday, March 6, 2015. Interested parties are welcome to attend the conference call by dialing 888-317-6003, and referencing event code 9966897. A live audio webcast will also be available and the webcast link will be posted on the Company’s website under the Investors section. The slide presentation for the call will also be available on the Company’s website prior to the call.

About Banc of California, Inc.

Banc of California, Inc. (NYSE: BANC) has total assets of $6.0 billion and is the largest bank holding company headquartered in Orange County, CA. The Company’s principal subsidiary, Banc of California, N.A., provides banking services and loans serving the diverse needs of California’s private businesses, entrepreneurs and homeowners. Banc of California operates over 100 offices, including 40 full-service branch locations, in California and the West.

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)


	December 31,			September 30,			December 31,
	2014			2014			2013
ASSETS
Cash and due from banks	$	14,364		$	5,646		$	4,937
Interest-bearing deposits		216,835			179,339			105,181

Total cash and cash equivalents		231,199			184,985			110,118
Time deposits in financial institutions		1,900			1,900			1,846
Securities available for sale		345,695			310,385			170,022
Loans held for sale		1,187,090			1,127,339			716,733
Loans and leases receivable		3,949,122			2,712,068			2,446,111
Allowance for loan and lease losses		(29,480	)		(25,283	)		(18,805	)
Federal Home Loan Bank and other bank stock		42,241			35,432			22,600
Servicing rights, net		19,566			11,745			13,883
Other real estate owned, net		423			605			-
Premises and equipment, net		78,685			67,323			66,260
Goodwill		31,591			31,591			30,143
Other intangible assets, net		25,252			10,829			12,152
Deferred income tax		16,445			8,663			-
Income tax receivable		-			-			2,995
Bank-owned life insurance investment		19,095			19,038			18,881
Other assets		52,747			41,376			35,084

Total assets	$	5,971,571		$	4,537,996		$	3,628,023


LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Noninterest-bearing deposits	$	662,295		$	457,743		$	429,158
Interest-bearing deposits		4,009,536			3,173,967			2,489,486

Total deposits		4,671,831			3,631,710			2,918,644
Advances from Federal Home Loan Bank		633,000			305,000			250,000
Notes payable, net		93,569			95,549			82,320
Reserve for loss reimbursements on sold loans		8,303			7,045			5,427
Income taxes payable		56			2,158			-
Accrued expenses and other liabilities		61,223			49,653			46,763

Total liabilities		5,467,982			4,091,115			3,303,154
Commitments and contingent liabilities

Preferred stock, Series A, non-cumulative perpetual preferred stock		31,934			31,934			31,934
Preferred stock, Series B, non-cumulative perpetual preferred stock		10,000			10,000			10,000
Preferred stock, Series C, 8.00% non-cumulative perpetual preferred stock		37,943			37,943			37,943
Common stock		358			297			210
Common stock, class B non-voting non-convertible		6			6			6
Additional paid-in capital		422,910			371,738			256,306
Retained earnings		29,863			24,862			16,981
Treasury stock		(29,798	)		(29,798	)		(27,911	)
Accumulated other comprehensive (loss)/income, net		373			(101	)		(600	)

Total shareholders’ equity		503,589			446,881			324,869

Total liabilities and shareholders’ equity	$	5,971,571		$	4,537,996		$	3,628,023

Banc of California, Inc

Consolidated Statements of Operations

(Dollars in thousands, except per share data)

(Unaudited)


	Three Months Ended							Year Ended
	December 31,			September 30,		December 31,		December 31,			December 31,
	2014			2014		2013		2014			2013
Interest and dividend income
Loans, including fees	$	52,599		$	44,555	$	39,922	$	180,761		$	116,673
Securities		1,781			1,460		473		5,158			2,632
Dividends and other interest-earning assets		700			634		361		2,220			1,206

Total interest and dividend income		55,080			46,649		40,756		188,139			120,511
Interest expense
Deposits		6,440			6,165		5,665		24,411			16,051
Federal Home Loan Bank advances		210			118		92		527			269
Notes payable and other interest-bearing liabilities		2,099			2,180		1,697		7,924			6,962

Total interest expense		8,749			8,463		7,454		32,862			23,282

Net interest income		46,331			38,186		33,302		155,277			97,229
Provision for loan and lease losses		4,159			2,780		1,768		10,976			7,963

Net interest income after provision for loan and lease losses		42,172			35,406		31,534		144,301			89,266
Noninterest income
Customer service fees		651			230		266		1,490			1,942
Net gain on sale of loans		3,927			10,260		4,180		19,828			8,700
Mortgage banking income		25,030			26,943		15,028		95,430			67,890
Advisory service fees		6,722			3,264		354		12,904			377
Loan brokerage income		2,314			2,033		1,343		8,674			1,356
All other income		2,245			1,368		13,346		7,311			16,478

Total noninterest income		40,889			44,098		34,517		145,637			96,743
Noninterest expense
Salaries and employee benefits		47,974			41,094		36,117		162,879			110,687
Occupancy and equipment		9,512			7,969		7,592		33,443			19,662
All other expenses		20,885			18,494		13,505		67,839			48,321

Total noninterest expense		78,371			67,557		57,214		264,161			178,670

Income before income taxes		4,690			11,947		8,837		25,777			7,339
Income tax (benefit) expense		(5,524	)		721		5,516		(4,541	)		7,260

Net income		10,214			11,226		3,321		30,318			79
Preferred stock dividends		910			910		951		3,640			2,185

Net income (loss) available to common shareholders	$	9,304		$	10,316	$	2,370	$	26,678		$	(2,106	)


Basic earnings (loss) per total common share	$	0.25		$	0.31	$	0.13	$	0.91		$	(0.14	)
Diluted earnings (loss) per total common share	$	0.25		$	0.30	$	0.12	$	0.91		$	(0.14	)

Banc of California, Inc

Selected Financial Data

(Dollars in thousands)

(Unaudited)


	Three Months Ended									Year Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
	2014			2014			2013			2014			2013
Average balances:
Total assets	$	5,223,463		$	4,391,523		$	3,555,265		$	4,348,626		$	2,773,276
Total gross loans and leases		4,534,428			3,829,204			3,056,232			3,805,239			2,217,421
Securities available for sale		310,454			257,067			170,350			225,182			153,229
Total interest earning assets		5,033,973			4,228,555			3,387,120			4,176,518			2,647,070
Total interest-bearing deposits		3,699,464			3,070,130			2,507,302			3,057,606			2,026,408
Total borrowings		406,531			378,671			244,708			364,095			160,045
Interest bearing liabilities		4,105,995			3,448,801			2,752,010			3,421,701			2,186,453
Total shareholders’ equity		487,578			449,392			324,290			413,454			264,818
Profitability and other ratios:
Return on average assets⁽¹⁾		0.78%			1.01%			0.37%			0.70%			0.00%
Return on average equity ⁽¹⁾		8.31%			9.91%			4.06%			7.33%			0.03%
Dividend payout ratio ⁽²⁾		48.00%			38.71%			92.31%			52.75%			0.00%
Net interest spread		3.49%			3.41%			3.70%			3.54%			3.49%
Net interest margin⁽¹⁾		3.65%			3.58%			3.90%			3.72%			3.67%
Noninterest income to total revenue ⁽³⁾		46.88%			53.59%			50.90%			48.40%			49.87%
Noninterest income to average total assets⁽¹⁾		3.11%			3.98%			3.85%			3.35%			3.49%
Noninterest expense to average total assets⁽¹⁾		5.95%			6.10%			6.38%			6.07%			6.44%
Efficiency ratio⁽⁴⁾		89.85%			82.10%			84.36%			87.79%			92.11%
Average held for investment loans and leases to average deposits		79.08%			75.39%			93.19%			77.36%			86.34%
Average securities available for sale to average total assets		5.94%			5.85%			4.79%			5.18%			5.53%
Average shareholders’ equity to average total assets		9.33%			10.23%			9.12%			9.51%			9.55%
Allowance for loan and lease losses (ALLL):
Balance at beginning of period	$	25,283		$	22,627		$	19,130		$	18,805		$	14,448
Loans and leases charged off		(25	)		(312	)		(868	)		(923	)		(3,013	)
Recoveries of loans and leases previously charged off		63			96			218			1,235			850
Transfer of loans from (to) held-for-sale		-			92			(1,443	)		(613	)		(1,443	)
Provision for loan and lease losses		4,159			2,780			1,768			10,976			7,963

Balance at end of period	$	29,480		$	25,283		$	18,805		$	29,480		$	18,805

Reserve for loss on repurchased loans
Balance at beginning of period	$	7,045		$	6,174		$	4,282		$	5,427		$	3,485
Acquired in business combinations		-			-			314			-			314
Provision for loan repurchases		1,149			1,556			1,020			4,243			2,383
Payment made for loss reimbursement on sold loans		109			(685	)		(189	)		(1,367	)		(755	)

Balance at end of period	$	8,303		$	7,045		$	5,427		$	8,303		$	5,427

(1)

Ratios are presented on an annualized basis

(2)

Dividends declared per common share divided by basic earnings per share. Not applicable for the year ended December 31, 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)


	December 31, 2014		September 30, 2014		December 31, 2013
Asset quality information and ratios:
30 to 89 days delinquent, excluding PCI loans	$	40,694	$	35,531	$	37,699
90+ days delinquent, excluding PCI loans		16,835		15,672		13,441

Total delinquent loans, excluding PCI loans		57,529		51,203		51,140

PCI loans, 30 to 89 days delinquent		17,641		18,743		30,514
PCI loans, 90+ days delinquent		5,761		4,017		12,205

Total delinquent PCI loans		23,402		22,760		42,719

Total delinquent loans	$	80,931	$	73,963	$	93,859

Total delinquent non-PCI loans to total non-PCI loans		1.55%		2.08%		2.43%
Total delinquent loans to gross loans		2.05%		2.73%		3.84%

Non-performing loans, excluding PCI loans	$	38,381	$	38,333	$	31,648
90+ days delinquent and still accruing loans, excluding PCI loans		-		-		-
Other real estate owned		423		605		-

Non-performing assets		38,804		38,938		31,648
ALLL to non-performing loans		76.81%		65.96%		59.42%
Non-performing loans to gross loans		0.97%		1.41%		1.29%
Non-performing assets to total assets		0.65%		0.86%		0.87%
Loan breakdown by ALLL evaluation type:
Originated loans
Individually evaluated for impairment	$	29,287	$	29,030	$	16,704
Collectively evaluated for impairment		1,892,240		1,668,004		1,168,195
Acquired loans through business acquisitions - non-impaired
Individually evaluated for impairment		4,191		8,004		2,243
Collectively evaluated for impairment		1,411,927		377,554		469,916
Seasoned SFR mortgage loan pools - non-impaired		364,580		376,575		449,767
Acquired with deteriorated credit quality		246,897		252,901		339,286

Total loans	$	3,949,122	$	2,712,068	$	2,446,111

ALLL breakdown:
Originated loans
Individually evaluated for impairment	$	1,288	$	517	$	96
Collectively evaluated for impairment		25,263		22,011		17,103
Acquired loans through business acquisitions - non-impaired
Individually evaluated for impairment		-		7		-
Collectively evaluated for impairment		2,906		2,748		1,410
Seasoned SFR mortgage loan pools - non-impaired		-		-		-
Acquired with deteriorated credit quality		23		-		196

Total ALLL	$	29,480	$	25,283	$	18,805

Discount on Purchased/Acquired Loans:
Acquired loans through business acquisitions - non-impaired	$	16,441	$	6,512	$	8,354
Seasoned SFR mortgage loan pools - non-impaired		29,955		30,811		38,240
Acquired with deteriorated credit quality		55,865		57,961		105,650

Total Discount	$	102,261	$	95,284	$	152,244

Ratios:
To originated loans:
Individually evaluated for impairment		4.40%		1.78%		0.57%
Collectively evaluated for impairment		1.34%		1.32%		1.46%
Total ALLL		1.38%		1.33%		1.45%
To originated and acquired non-impaired loans:
Individually evaluated for impairment		3.85%		1.41%		0.51%
Collectively evaluated for impairment		0.85%		1.21%		1.13%
Total ALLL		0.88%		1.21%		1.12%
Total ALLL and discount ⁽¹⁾		1.38%		1.53%		1.63%
To total loans:
Individually evaluated for impairment		3.85%		1.41%		0.51%
Collectively evaluated for impairment		0.77%		1.02%		0.89%
Total ALLL		0.75%		0.93%		0.77%
Total ALLL and discount ⁽¹⁾		3.34%		4.45%		6.99%

(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)


	December 31,		September 30,		December 31,
	2014		2014		2013
Composition of held for investment loans and leases
Commercial real estate	$	999,857	$	521,867	$	529,883
Multi-family		955,683		367,364		141,580
Construction		42,198		25,997		24,933
Commercial and industrial		490,900		366,416		287,771
SBA		36,155		25,729		27,428
Lease financing		85,749		72,027		31,949

Total commercial loans		2,610,542		1,379,400		1,043,544

Single family residential mortgage		1,171,662		1,191,021		1,286,541
Other consumer		166,918		141,647		116,026

Total consumer loans		1,338,580		1,332,668		1,402,567

Total gross loans and leases	$	3,949,122	$	2,712,068	$	2,446,111

Composition percentage of held for investment loans and leases
Commercial real estate		25.3%		19.2%		21.7%
Multi-family		24.2%		13.5%		5.8%
Construction		1.1%		1.0%		1.0%
Commercial and industrial		12.4%		13.5%		11.8%
SBA		0.9%		0.9%		1.1%
Lease financing		2.2%		2.7%		1.3%

Total commercial loans		66.1%		50.8%		42.7%

Single family residential mortgage		29.7%		44.0%		52.6%
Other consumer		4.2%		5.2%		4.7%

Total consumer loans		33.9%		49.2%		57.3%

Total gross loans and leases		100.0%		100.0%		100.0%

Composition of deposits
Noninterest-bearing checking	$	662,295	$	457,743	$	429,158
Interest-bearing checking		1,054,828		779,704		539,098
Money market		1,074,432		769,291		518,696
Savings		985,646		932,133		963,536
Certificates of deposit		894,630		692,839		468,156

Total deposits	$	4,671,831	$	3,631,710	$	2,918,644

Composition percentage of deposits
Noninterest-bearing checking		14.2%		12.6%		14.7%
Interest-bearing checking		22.6%		21.5%		18.5%
Money market		23.0%		21.2%		17.8%
Savings		21.1%		25.6%		33.0%
Certificates of deposit		19.1%		19.1%		16.0%

Total deposits		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
	December 31, 2014							September 30, 2014							December 31, 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	$	1,778,112		$	16,741		3.74%	$	1,757,890		$	16,979		3.83%	$	1,204,739		$	13,230		4.36%
Seasoned SFR mortgage loan pools		606,879			9,605		6.28%		675,083			11,753		6.91%		776,359			12,776		6.53%
Commercial real estate, multi-family, and construction		1,486,406			17,993		4.80%		827,934			9,592		4.60%		670,057			8,765		5.19%
Commercial and industrial, SBA, and lease financing		523,194			6,192		4.70%		451,992			5,060		4.44%		326,160			4,255		5.18%
Other consumer		139,837			2,068		5.87%		116,305			1,171		3.99%		78,917			896		4.50%

Gross loans and leases		4,534,428			52,599		4.60%		3,829,204			44,555		4.62%		3,056,232			39,922		5.18%
Securities		310,454			1,781		2.28%		257,067			1,460		2.25%		170,350			473		1.10%
Other interest-earning assets		189,091			700		1.47%		142,284			634		1.77%		160,538			361		0.89%

Total interest-earning assets		5,033,973			55,080		4.34%		4,228,555			46,649		4.38%		3,387,120			40,756		4.77%
Allowance for loan and lease losses		(26,105	)						(23,266	)						(19,960	)
BOLI and non-interest earning assets		215,595							186,234							188,105

Total assets	$	5,223,463						$	4,391,523						$	3,555,265


Interest-bearing liabilities:
Savings		960,253			1,963		0.81%		953,925			2,215		0.92%		969,266			2,751		1.13%
Interest-bearing checking		937,623			2,078		0.88%		745,635			2,037		1.08%		515,911			1,450		1.12%
Money market		964,414			841		0.35%		681,576			673		0.39%		550,652			639		0.46%
Certificates of deposit		837,174			1,558		0.74%		688,994			1,240		0.71%		471,473			825		0.69%
FHLB advances		307,859			210		0.27%		276,739			118		0.17%		157,772			92		0.23%
Long-term debt and other interest-bearing liabilities		98,672			2,099		8.44%		101,932			2,180		8.48%		86,936			1,697		7.74%

Total interest-bearing liabilities		4,105,995			8,749		0.85%		3,448,801			8,463		0.97%		2,752,010			7,454		1.07%
Noninterest-bearing deposits		577,623							448,825							429,620
Non-interest-bearing liabilities		52,267							44,505							49,345

Total liabilities		4,735,885							3,942,131							3,230,975
Total shareholders’ equity		487,578							449,392							324,290

Total liabilities and shareholders’ equity	$	5,223,463						$	4,391,523						$	3,555,265


Net interest income/spread				$	46,331		3.49%				$	38,186		3.41%				$	33,302		3.70%


Net interest margin							3.65%							3.58%							3.90%

Banc of California, Inc

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

(Dollars in thousands)

(Unaudited)


	Year Ended
	December 31, 2014							December 31, 2013
	Average Balance			Interest		Yield / Cost		Average Balance			Interest		Yield / Cost
Interest earning assets:
Loans held for sale and SFR mortgage	$	1,632,547		$	62,269		3.81%	$	935,284		$	39,216		4.19%
Seasoned SFR mortgage loan pools		683,121		$	46,153		6.76%		439,445			32,878		7.48%
Commercial real estate, multi-family, and construction		935,129		$	44,494		4.76%		560,661			28,241		5.04%
Commercial and industrial, SBA, and lease financing		438,250		$	22,558		5.15%		234,426			14,376		6.13%
Other consumer		116,192		$	5,287		4.55%		47,605			1,962		4.12%

Gross loans and leases		3,805,239			180,761		4.75%		2,217,421			116,673		5.26%
Securities		225,182			5,158		2.29%		153,229			2,632		1.72%
Other interest-earning assets		146,097			2,220		1.52%		276,420			1,206		0.44%

Total interest-earning assets		4,176,518			188,139		4.50%		2,647,070			120,511		4.55%
Allowance for loan and lease losses		(22,354	)						(17,332	)
BOLI and non-interest earning assets		194,462							143,538

Total assets	$	4,348,626						$	2,773,276


Interest-bearing liabilities:
Savings		967,803			9,121		0.94%		756,625			7,994		1.06%
Interest-bearing checking		735,156			7,629		1.04%		339,731			2,041		0.60%
Money market		692,464			2,788		0.40%		371,058			1,901		0.51%
Certificates of deposit		662,183			4,873		0.74%		558,994			4,115		0.74%
FHLB advances		267,816			527		0.20%		74,712			269		0.36%
Notes payable and other interest-bearing liabilities		96,279			7,924		8.23%		85,333			6,962		8.16%

Total interest-bearing liabilities		3,421,701			32,862		0.96%		2,186,453			23,282		1.06%
Noninterest-bearing deposits		468,077							287,325
Non-interest-bearing liabilities		45,394							34,680

Total liabilities		3,935,172							2,508,458
Total shareholders’ equity		413,454							264,818

Total liabilities and shareholders’ equity	$	4,348,626						$	2,773,276


Net interest income/spread				$	155,277		3.54%				$	97,229		3.49%


Net interest margin							3.72%							3.67%

Banc of California, Inc

Capital Ratios

(Unaudited)


	December 31, 2014		September 30, 2014		December 31, 2013
Capital Ratios:
Banc of California, Inc.
Total risk-based capital ratio:		11.28%		14.97%		12.45%
Tier 1 risk-based capital ratio:		10.54%		14.03%		11.41%
Tier 1 leverage ratio:		8.57%		9.28%		8.02%
Banc of California, NA
Total risk-based capital ratio:		12.04%		15.75%		14.65%
Tier 1 risk-based capital ratio:		11.29%		14.80%		13.60%
Tier 1 leverage ratio:		9.17%		9.80%		9.58%

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:


	December 31, 2014			September 30, 2014			December 31, 2013
Tangible common equity to tangible assets ratio
Total assets	$	5,971,571		$	4,537,996		$	3,628,023
Less goodwill		(31,591	)		(31,591	)		(30,143	)
Less other intangible assets		(25,252	)		(10,829	)		(12,152	)

Tangible assets	$	5,914,728		$	4,495,576		$	3,585,728


Total shareholders’ equity	$	503,589		$	446,881		$	324,869
Less preferred stock		(79,877	)		(79,877	)		(79,877	)
Less goodwill		(31,591	)		(31,591	)		(30,143	)
Less other intangible assets		(25,252	)		(10,829	)		(12,152	)

Tangible common equity	$	366,869		$	324,584		$	202,697


Total shareholders’ equity to total assets		8.43%			9.85%			8.95%
Tangible common equity to tangible assets		6.20%			7.22%			5.65%

Common stock outstanding		34,190,740			28,023,701			19,561,469
Class B non-voting non-convertible common stock outstanding		609,195			602,783			584,674

Total common stock outstanding		34,799,935			28,626,484			20,146,143

Minimum number of shares issuable under purchase contracts⁽¹⁾		3,215,538			4,198,425			-

Total common stock outstanding and shares issuable under purchase contracts		38,015,473			32,824,909			20,146,143

(1) Purchase contracts relating to the tangible equity units
Tangible common equity per common stock	$	10.54		$	11.34		$	10.06
Book value per common stock	$	12.18		$	12.82		$	12.16

Tangible equity per common stock and shares issuable under purchase contracts	$	9.65		$	9.89		$	10.06
Book value per common stock and shares issuable under purchase contracts	$	11.15		$	11.18		$	12.16

	Three Months Ended									Year Ended
	December 31, 2014			September 30, 2014			December 31, 2013			December 31, 2014			December 31, 2013
Return on tangible common equity
Average total shareholders’ equity	$	487,578		$	449,392		$	324,290		$	413,454		$	264,818
Less average preferred stock		(79,877	)		(79,877	)		(79,882	)		(79,877	)		(56,284	)
Less average goodwill		(33,129	)		(32,209	)		(27,384	)		(32,326	)		(15,872	)
Less average other intangible assets		(13,611	)		(10,634	)		(12,861	)		(11,739	)		(9,580	)

Average tangible common equity		360,961			326,672			204,163			289,512			183,082


Net income	$	10,214		$	11,226		$	3,321		$	30,318		$	79
Less preferred stock dividends		(910	)		(910	)		(951	)		(3,640	)		(2,185	)
Add tax-effected amortization of intangible assets ⁽¹⁾		849			579			614			2,651			1,723
Add tax-effected impairment on intangible assets ⁽¹⁾		31			-			55			31			690

Net income (loss) available to common shareholders	$	10,184		$	10,895		$	3,039		$	29,361		$	307

(1) Utilized a 35% effective tax rate

Return on average equity		8.31%			9.91%			4.06%			7.33%			0.03%
Return on average tangible common equity		11.19%			13.23%			5.91%			10.14%			0.17%

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BANC OF CALIFORNIA, INC. Reports