Banc Of California, Inc. · NYSE:BANC
Banc Of California — Q2 2025 Earnings Presentation
41 slides from Banc Of California's earnings presentation, Jul 24, 2025
Slide 1: Investor Presentation Second Quarter 2025 Results
Draft v4.5 1/21/24 Investor Presentation Second Quarter 2025 Results
Slide 2: Forward-Looking Statements and Other Matters
Forward-Looking Statements and Other Matters This presentation 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 rega
Slide 3: Financial Highlights
Financial Highlights 2Q25 adjusted EPS(1) of $0.31 up 19% QoQ and 9% annualized total loan growth Strategic sales of CRE loans drive improved credit quality metrics and further positions balance sheet to grow high quality sustainable earnings Change EPS NIM 2Q25 1Q25 2Q24 QoQ D YoY D Reported EPS of
Slide 4: Profitability and Growth Metrics since 1Q24
Profitability and Growth Metrics since 1Q24 Our strong execution has led to robust growth across core earnings drivers . . . Core Loans(1) Cost of Deposits Cost of Funds NIM Adjusted NIE / Assets(2) $23.9B 2.13% 2.42% 3.10% 1.89% +7.5% -53 bps -60 bps +44 bps -62 bps Note: Growth rates represent var
Slide 5: 2Q25 Adjustments to EPS
2Q25 Adjustments to EPS 2Q25 results were adjusted for non-recurring items which impacted EPS by ($0.19) HIGHLIGHTS ❖ 2Q25 EPS of $0.12. Adjusted EPS(1) of $0.31 Net P&L impact EPS Impact excluding impacts of loan sale actions and non-cash tax charge Reported $18.4 $0.12 ❖ Loan sales – opportunistic
Slide 6: Income Statement
Income Statement Average interest-earning Strong PTPP(1) growth of 6% QoQ and 56% YoY driven by higher NII, NIM expansion and assets yield continued expense discipline -27 +3 bps bps 5.39% 5.42% ($ in millions) 2Q25 1Q25 2Q24 Key Income Statement Metrics 2Q25 1Q25 2Q24 Total interest income $420.5 $
Slide 7: Balance Sheet
Balance Sheet Achieved strong loan growth while increasing TBVPS(1) and maintaining healthy liquidity position ($ in millions) 2Q25 1Q25 2Q24 Key Balance Sheet Metrics 2Q25 1Q25 2Q24 Cash and cash equivalents $2,354 $2,344 $2,699 Average interest-earning assets $31,097 $30,611 $32,945 Investment sec
Slide 8: Net Interest Income and Net Interest Margin
Net Interest Income and Net Interest Margin Net interest income up 3% QoQ, driven by interest income from strong loan growth Net Interest Income (NII) ($mm) and Net Interest Margin (NIM) (%) NIM increased 30bps 3.08% 3.10% YoY 3.04% 2.93% 2.80% NII increased $7.9mm, or 3.4% QoQ $240.2 $232.2 $235.3
Slide 9: Noninterest Income
Noninterest Income 2Q25 noninterest income in line with normal run-rate HIGHLIGHTS ❖Noninterest income of $32.6mm was down 3% QoQ due primarily to variance in the fair ($ in millions) 2Q25 1Q25 2Q24 values of items requiring MTM accounting Leased Equipment Income $10.2 $10.8 $11.5 ❖ CRA equity inves
Slide 10: Noninterest Expense
Noninterest Expense 2Q25 expenses below target range driven by disciplined expense management ($ in millions) 2Q25 1Q25 2Q24 Adjusted Noninterest Expense / Average Assets Ratio(1) Compensation $88.4 $86.4 $85.9 2.43% Occupancy 15.5 15.0 17.5 2.27% 2.24% 2.21% IT and data processing 13.1 15.1 15.5 2.
Slide 11: Deposits
Deposits Core deposit(1) balances and cost of deposits remained stable ($ in millions) 2Q25 1Q25 2Q24 Average Fed Funds Rate Average Total Cost of Deposits Noninterest-bearing Checking $7,441 $7,594 $7,825 Checking 7,974 7,747 7,310 5.33% 5.26% 4.65% 4.33% 4.33% MMDA 5,375 5,368 4,837 Savings 1,933
Slide 12: NIB Deposit Growth Remains a Key Priority
NIB Deposit Growth Remains a Key Priority Steady growth continuing in new NIB business deposit relationships and balances(1) 3,569 2,929 2,390 1,889 $643.2 1,288 $537.8 $439.2 $382.6 650 $257.8 $107.3 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 Cumulative New NIB Business Deposits Accounts Cumulative New NIB Busi
Slide 13: Diversified Loan Portfolio
Diversified Loan Portfolio Core loan portfolio(1) grew ~12% annualized, driven by higher yielding C&I loan categories Core loan portfolio has strong credit quality with appropriate reserve levels for low loan loss categories 2Q25 1Q25 Variance Loan Segment from Loan Core Total % of Total Wtd. Avg. N
Slide 14: Loan Activity
Loan Activity Strong loan production of $1.2B and increase in production coupon rates 8.29% Rate on Production 7.80% Total Loan Yield Rate on production reflects 7.20% growth in lender finance, fund 7.00% 7.29% finance and SFR 6.18% 6.18% 6.01% 5.90% 5.93% Loan yield increase QoQ due to ($ in millio
Slide 15: Asset Quality Ratios and Trends
Asset Quality Ratios and Trends Strategic sales of ~$507mm of CRE loans primarily drove improvements to credit quality metrics Nonperforming Loans / Total Loans (NPLs) ($mm) Classified Loans / Total Loans ($mm) 0.88% 3.17% 0.80% 2.71% 0.72% 0.69% 2.27% 2.37% 1.79% 0.50% $213.5 $764.7 $189.6 $168.3 $
Slide 16: Allowance for Credit Losses – Loans
Allowance for Credit Losses – Loans ACL coverage ratio at appropriate level under CECL given portfolio mix and loss rates; additional credit protection enhances total economic coverage 2Q25 ACL walk Economic 1.61% HIGHLIGHTS ($ in millions) coverage ratio(1) ❖ ACL decreased $6.0mm driven by: ❖ NCOs
Slide 17: Key Allowance for Credit Losses Ratios
Key Allowance for Credit Losses Ratios Adjusted ACL ratio(1) is significantly higher when adjusting for lower loss loan categories Adjusted ACL Ratio(1) Composition of Lower Loss Loan Categories 1.44% 1.29% Lower Loss Loan Categories 1.20% 1.07% ($ in millions) 2Q25 1Q25 2Q24 Residential $3,083 $2,6
Slide 18: Investment Securities Portfolio
Investment Securities Portfolio Maintaining diversified portfolio with stable balances and yields Duration Security Type (1) (yrs) Unrealized Unrealized ($ in millions) 2Q25 1Q25 Variance 2Q25 Loss 2Q25 Loss 1Q25 AFS - Gov't & Agency $1,453 $1,497 ($44) 5.8 ($179) ($182) HIGHLIGHTS AFS - CLO's 228 2
Slide 19: Capital
Capital Continue to grow TBVPS and maintain healthy capital levels after impact of common stock repurchases Regulatory Well- Excess of Well- 2Q25 1Q25 2Q24 Capitalized Capitalized Consolidated Company Total Risk-Based Ratio 16.32% 16.93% 16.57% 10.00% 6.32% Repurchased 5.2% of outstanding shares in
Slide 20: Interest Rate Sensitivity
Interest Rate Sensitivity IRR position for 2025 remains largely neutral for NII sensitivity, however total earnings are liability sensitive when adjusting for ECR costs 2Q25 IRR position – NII impact ($B) $19.5 Asset / liability gap of $14.5 ($5B) is largely neutral to NII when adjusting for deposit
Slide 21: Loan Maturity and Repricing Summary
Loan Maturity and Repricing Summary 19% of fixed rate and hybrid loans will reprice / reset within one year at higher rates Approximately $3.2B of low yielding multifamily loans will reprice or mature in next 2.5 years Total Fixed Rate and Hybrid Loans – Maturities / Repricing Loans maturing or Tota
Slide 22: 2025 outlook
2025 outlook 2025 outlook remains largely unchanged with clarifications to reflect impact of funding accelerated loan growth Outlook as of 1Q25 earnings Current outlook Key factors Future state financial targets remain unchanged ❖ Driven by growth in ❖ ROAA ~1.1%+ ❖ Target mid single digit growth ❖
Slide 23: Supplemental Information
Supplemental Information
Slide 24: Share Repurchases
Share Repurchases ❖$150mm remaining in share repurchase program which can be used towards common stock or preferred stock Share Repurchase Activity 1Q25 2Q25 Total Repurchase Amount $38,545,698 $111,454,299 $150,000,000 Price Per Share(1) $14.36 $12.65 $13.05 Number of Shares Repurchased 2,684,823 8
Slide 25: CRE Portfolio
CRE Portfolio High quality CRE portfolio has low weighted-average LTV and strong debt-service coverage ratio (DSCR) Total CRE is well diversified across multiple industries HIGHLIGHTS 2Q25 % of ❖ 74% of total CRE portfolio located in California Property Type 2Q25 % of Total Avg Loan WA ($ in million
Slide 26: Customer Related Expense
Customer Related Expense Lower ECR expense mostly driven by mix-shift into lower cost HOA deposits Adjusted Noninterest Expense Detail(1) ($mm) Customer Related Expense ($mm) $34.5 $216.3 $32.4 $31.7 $4.6 ECR indexed to Fed $4.7 $4.2 $27.8 $196.7 $26.6 Funds rate with high $32.4 $4.1 $182.4 $183.7 $
Slide 27: Projects and Investments
Projects and Investments Expect total project and investment spend of $20mm in 2025, with $7-$8mm of planned expense in 2025 Project investment composition Revenue enhancing projects Back office and support projects $0.8mm $6.0mm 13% $3.8mm $4.7mm 30% 26% $2.6mm 32% 44% $2.6mm 70% 43% $14.4mm 41% $6
Slide 28: Liquidity
Liquidity Maintaining high levels of primary and secondary liquidity as prudent risk management ❖Uninsured and uncollateralized deposits of $7.6B, which represents ~27% of total deposits ❖Total primary and secondary liquidity was 2.0x uninsured and uncollateralized deposits ($ in millions) Current 2
Slide 29: Experienced Management Team with Track Record of Success at Leading Institutions
Experienced Management Team with Track Record of Success at Leading Institutions Jared Wolff Joe Kauder Chris Baron Chris Blake President and Chief Executive Chief Financial Officer President, Community Banking Vice Chairman of the Bank Officer 30+ years banking experience, 30+ years banking experie
Slide 30: Appendix
Appendix
Slide 31: Non-GAAP Financial Information
Non-GAAP Financial Information Tangible assets, tangible common equity, tangible common equity ratio, tangible book value per common share, Efficiency ratio is calculated by dividing noninterest expense (less intangible asset amortization and acquisition, adjusted net earnings, adjusted return on av
Slide 32: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in thousands, except per share data) 2Q25 1Q25 4Q24 3Q24 2Q24 Tangible Common Equity Ratio Total stockholders' equity $3,426,843 $3,521,656 $3,499,949 $3,496,198 $3,407,848 Less: preferred stock 498,516 498,516 498,516 498,516 498,516 Total common equity 2,928,327 3,023,14
Slide 33: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in thousands) 2Q25 1Q25 4Q24 3Q24 2Q24 Return on Average Tangible Common Equity ("ROATCE") Net earnings $28,385 $53,568 $56,919 $8,784 $30,333 Earnings before income taxes $73,061 $70,103 $11,514 $44,637 Add: Intangible asset amortization 7,160 7,770 8,485 8,484 Adjusted e
Slide 34: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in thousands, except per share amounts) 2Q25 1Q25 4Q24 3Q24 2Q24 Adjusted Net Earnings Net earnings $28,385 $53,568 $56,919 $8,784 $30,333 Earnings before income taxes $73,061 $70,103 $11,514 $44,637 Add: Loss on sale of securities NA NA 59,946 NA Less: Acquisition, integr
Slide 35: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in thousands) 2Q25 1Q25 4Q24 3Q24 2Q24 PTPP Income Net interest income $240,216 $232,364 $235,285 $232,175 $229,488 Add: Noninterest (loss) income 32,633 33,650 28,989 (15,452) 29,792 Total revenue 272,849 266,014 264,274 216,723 259,280 Less: Noninterest expense (185,869)
Slide 36: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in thousands) 2Q25 1Q25 4Q24 3Q24 2Q24 Adjusted Efficiency Ratio Noninterest expense $185,869 $183,653 $181,370 $196,209 $203,643 Less: Intangible asset amortization (7,159) (7,160) (7,770) (8,485) (8,484) Less: Acquisition, integration, and reorganization costs NA NA 1,02
Slide 37: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in thousands) 2Q25 1Q25 4Q24 3Q24 2Q24 Adjusted Noninterest Expense to Average Total Assets Noninterest expense $185,869 $183,653 $181,370 $196,209 $203,643 Less: Acquisition, integration, and reorganization costs NA NA 1,023 510 12,650 Adjusted noninterest expense $185,86
Slide 38: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in thousands) 2Q25 1Q25 2Q24 Core Deposits Total Deposits $27,528 $27,193 $28,804 Less: Brokered CDs (2,312) (1,995) (4,034) Total Core Deposits $25,216 $25,198 $24,770 Second Quarter 2025 Earnings | 38
Slide 39: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in thousands) 2Q25 1Q25 Core Loans Total Loans HFI $24,246 $24,127 Discontinued Area Loans Less: Premium Finance Loans (473) (518) Less: Student Loans (286) (298) Less: Civic Loans (75) (103) Total Discontinued Area Loans ($834) ($918) Total Core Loans $23,412 $23,208 ($ i
Slide 40: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in thousands) 2Q25 1Q25 4Q24 3Q24 2Q24 Economic coverage ratio Allowance for credit losses ("ACL") $258,565 $264,557 $268,431 $281,916 $275,333 Add: Unearned credit mark from purchase accounting (1) 19,199 20,870 22,473 24,678 26,982 (2) Add: Credit-linked notes 112,887 11
Slide 41: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in thousands) 2Q25 Adjusted ACL for Lower Loss Loan Categories Ratio Allowance for credit losses ("ACL") $258,565 Less: ACL on lower loss loan categories: ACL on warehouse lending loan portfolio (3,321) ACL on equity fund loan portfolio (465) ACL on lender finance loan por