Banc of California (BANC) investor relations material

Executive summary

• Strategic balance sheet repositioning included $2.3B in securities repositioning, $825–$827M targeted loan sales, and $385M subordinated debt retirement to enhance recurring earnings, capital efficiency, and long-term flexibility.

• Achieved strong annualized loan growth of 9% and deposit growth of 12% in Q2, with $2.8B in new loan production and a focus on higher-yielding assets.

• Significant one-time charges from repositioning actions resulted in a net loss of $251.3M ($1.61 per share) for Q2 2026.

• Management expects these actions to improve net interest margin, recurring earnings, and capital generation going forward.

Financial highlights

• Reported a net loss of $251.3M ($1.61 per share) due to repositioning and loan sale charges.

• Net interest income was $250.5M, with NIM at 3.13% (down 11 bps sequentially), expected to rise to 3.30%+ post-loan sale.

• Non-interest income loss of $234.1M, driven by $256.7M securities loss and $12.5M loan adjustment; excluding these, non-interest income was $35.2M.

• Non-interest expense rose to $189.9M, mainly due to elevated FDIC assessments and a non-recurring software charge.

• Book value per share was $18.38 and tangible book value per share was $16.44 at quarter-end.

Outlook and guidance

• NIM expected to reach 3.30–3.40% by year-end 2026; ROAA targeted at 0.95–1.00% and ROATCE at 11.5–12.5%.

• Q4 pre-tax, pre-provision income targeted at $125–$130M.

• CET1 ratio projected to reach 9.5–9.6% in Q3, 9.8–9.9% by year-end, and above 10% in early 2027.

• Provisioning expected to normalize to $9–12M per quarter; tax rate to decline by 1–2% in coming quarters.

• Loan growth guidance remains mid-single digits for the year, with potential to outpace.