Banc of California : Fourth Quarter 2021 Earnings Conference Call Presentation

INVESTOR PRESENTATION

2021 Fourth Quarter Earnings

bancofcal.com

FORWARD LOOKING STATEMENTS

When used in this report and in documents filed with or furnished to the Securities and Exchange Commission (the "SEC"), in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases "believe," "will," "should," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "plans," or similar expressions are intended to identify "forward-looking statements" within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements. These statements may relate to future financial performance, strategic plans or objectives, revenue, expense or earnings projections, or other financial items of Banc of California, Inc. and its affiliates ("BANC," the "Company", "we", "us" or "our"), as well as the continuing effects of the COVID-19 pandemic on the Company's business, operations, financial performance and prospects. By their nature, these statements are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the statements.

Factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to, the following: (i) the effect of the COVID-19 pandemic and steps taken by governmental and other authorities to contain, mitigate, and combat the pandemic on our business, operations, financial performance and prospects; (ii) the costs and effects of litigation generally, including legal fees and other expenses, settlements and judgments; (iii) the risk that we will not be successful in the implementation of our capital utilization strategy, new lines of business, new products and services, or other strategic project initiatives; (iv) risks that the Company's merger and acquisition transactions may disrupt current plans and operations and lead to difficulties in customer and employee retention, risks that the costs, fees, expenses and charges related to these transactions could be significantly higher than anticipated and risks that the expected revenues, cost savings, synergies, and other benefits of these transactions might not be realized to the extent anticipated, within the anticipated timetables, or at all; (v) 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 but not limited to, the effectiveness of our underwriting practices and the risk of fraud, any of which may lead to increased loan delinquencies, losses, and nonperforming assets in our loan portfolio, and may result in our allowance for credit losses not being adequate and require us to materially increase our credit loss reserves; (vi) the quality and composition of our securities portfolio; (vii) changes in general economic conditions, either nationally or in our market areas, or changes in financial markets; (viii) continuation of, or changes in, the short-term interest rate environment, changes in the levels of general interest rates, volatility in the interest rate environment, the relative differences between short- and long-term interest rates, deposit interest rates, our net interest margin, and funding sources; (ix) fluctuations in the demand for loans, and fluctuations in commercial and residential real estate values in our market area; (x) our ability to develop and maintain a strong core deposit base or other low cost funding sources necessary to fund our activities; (xi) results of examinations of us by regulatory authorities and the possibility that any such regulatory authority may, among other things, limit our business activities, require us to change our business mix, restrict our ability to invest in certain assets, increase our allowance for credit losses, write-down asset values, increase our capital levels, affect our ability to borrow funds or maintain or increase deposits, or impose fines, penalties or sanctions, any of which could adversely affect our liquidity and earnings; (xii) legislative or regulatory changes that adversely affect our business, including, without limitation, changes in tax laws and policies, changes in privacy laws, and changes in regulatory capital or other rules, and the availability of resources to address or respond to such changes; (xiii) our ability to control operating costs and expenses; (xiv) staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our work force and potential associated charges; (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, which may result in significant changes in valuation; (xvii) failures or security breaches with respect to the network and computer systems on which we depend, including but not limited to, due to cybersecurity threats; (xviii) our ability to attract and retain key members of our senior management team; (xix) increased competitive pressures among financial services companies;

1. changes in consumer spending, borrowing and saving habits; (xxi) the effects of severe weather, including as a result of climate change, natural disasters, pandemics, acts of war or terrorism, and other external events on our business; (xxii) the ability of key third-party providers to perform their obligations to us; (xxiii) changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board or their application to our business, including additional guidance and interpretation on accounting issues and details of the implementation of new accounting standards; (xxiv) continuing impact of the Financial Accounting Standards Board's credit loss accounting standard, referred to as Current Expected Credit Loss, which requires financial institutions to determine periodic estimates of lifetime expected credit losses on loans, and provide for the expected credit losses as allowances for loan losses; (xxv) share price volatility and reputational risks, related to, among other things, speculative trading and certain traders shorting our common shares and attempting to generate negative publicity about us; (xxvi) our ability to obtain regulatory approvals or non-objection to take various capital actions, including the payment of dividends by us or our bank subsidiary, or repurchases of our common or preferred stock; and (xxvii) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services and the other risks described in this report and from time to time in other documents that we file with or furnish to the SEC.

Further, statements about the potential effects of the Pacific Mercantile Bancorp acquisition on our business, financial results and condition may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including (i) the risk that the benefits from the transaction may not be fully realized or may take longer to realize than expected, including as a result of changes in general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which Banc of California, Inc. and Pacific Mercantile Bancorp operate; (ii) the ability to promptly and effectively integrate the businesses of Banc of California, Inc. and Pacific Mercantile Bancorp; (iii) diversion of management time on integration-related issues; (iv) lower than expected revenues, credit quality deterioration or a reduction in real estate values or a reduction in net earnings; and (v) other risks that are described in Banc of California, Inc.'s public filings with the SEC.

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FOURTH QUARTER 2021 RESULTS

($ in Thousands Except EPS)									4Q21		3Q21		4Q20
Net interest income								$	73,039	$	62,976	$	61,563
Provision for (reversal of) credit losses				$	11,262	$	(1,147)	$	991
Net income									$	5,751	$	23,170	$	21,703
Net income available to common stockholders		$	4,024	$	21,443	$	17,706
Earnings per diluted common share					$	0.07	$	0.42	$	0.35
Adjusted net income available to common stockholders	(1)	$	13,672	$	19,120	$	13,876
Adjusted earnings per diluted common share	(1)		$	0.23	$	0.38	$	0.28
Pre-taxpre-provision (PTPP) income	(1)				$	19,772	$	30,684	$	29,588
Adjusted PTPP income	(1)					$	32,637	$	27,587	$	24,481
Return on average assets (ROAA)						0.24%		1.13%		1.11%
PTPP ROAA	(1)									0.84%		1.50%		1.52%
Adjusted PTPP ROAA	(1)						1.39%		1.34%		1.25%
Average assets								$	9,331,955	$	8,141,613	$	7,764,997
Net interest margin									3.28%		3.28%		3.38%
Allowance for credit losses coverage ratio					1.35%		1.26%		1.43%
Common equity tier 1	(2)							11.38%		10.86%		11.19%
Tangible common equity per common share	(1)		$	13.88	$	13.99	$	13.39
Noninterest-bearing deposits as % of total deposits			37.5%		32.2%		25.6%

1. Denotes a non-GAAP financial measure; see "Non-GAAP Reconciliation" slides at end of presentation

(2) 4Q21 capital ratios are preliminary	3

ENHANCING FRANCHISE VALUE

		4th Quarter 2021 Summary
Increase in	•	Adjusted PTPP Income(1) up 18% from prior quarter
Core Earnings Power	•	Adjusted PTPP ROAA(1) improved 4 bps to 1.39% from prior quarter

Acquisition of

Pacific Mercantile Bancorp

("PMB")

• Closed October 18, 2021; system conversion completed November 15, 2021
• All measures necessary to achieve 40%+ cost savings put in place by end of 2021
• $1.5 billion in total assets acquired, including $963 million in loans
• Excess liquidity utilized to optimize NIM through repayment of borrowings and improvement of deposit mix while funding loan growth

• Largest quarter of total loan fundings of 2021

Continued Strong	• New loan fundings increased 16% from 3Q21
Loan Production
• Well balanced production across markets, asset classes and industries
	• Improved deposit mix: NIB represented 37% of deposits at the end of 4Q21 versus
	32% at the end of 3Q21
Further Improvement in	• Time deposits declined to 6.8% of total deposits at end of 4Q21 versus 8.6% at end of
Deposit Franchise	3Q21
	• Reduced average cost of deposits to 0.11% for 4Q21 from 0.15% for 3Q21; spot rate of
	0.07% at the end of 4Q21
	• Non-performing loans of $52.6 million at December 31, 2021 reflects addition of loans
Positive Trends	from PMB acquisition
in Asset Quality	• BANC originated non-performing loans declined 32% from end of prior quarter(1)

• BANC originated criticized and classified loans declined 23% from end of prior quarter

(1) Denotes a non-GAAP financial measure; see "Non-GAAP Reconciliation" slides at end of presentation	4

GROWING CORE EARNINGS POWER

($ in millions)

4Q 2021

$32.6

$(1.2)

$(0.0)

$19.8

$14.1

Adjusted

PTPP

ROAA

1.39%

Pre-tax, pre-

Noninterest expense

Gain on alternative

Noninterest income

Adjusted pre-tax, pre-

provision income

adjustments

energy partnerships

adjustments

provision income (1)

3Q 2021

$30.7							$27.6
$(1.2)
		$(1.8)
				$(0.2)

Adjusted

PTPP

ROAA 1.34%

Pre-tax, pre-	Noninterest expense	Gain on alternative	Noninterest income	Adjusted pre-tax, pre-
provision income	adjustments	engergy partnerships	adjustments	provision income (1)

1. Denotes a non-GAAP financial measure; see "Non-GAAP Reconciliation" slides at end of presentation

• Adjusted pre-taxpre-provision income increased $5 million, or 18%
• Adjusted PTPP increase due mostly to higher net interest income driven by higher average loan balances from both organic and acquired growth, offset by higher operating costs related to including PMB's operations since the acquisition date
• Annualized adjusted PTPP ROAA increase of 4%
• Noninterest expense adjustments include merger-related costs and indemnified professional fees, net of recoveries
• • Merger-relatedcosts totaled $13.5 million for 4Q21 versus $1.0 million for 3Q21; and
  • Indemnified net professional fees totaled $0.6 million in 4Q21 versus $2.2 million in net recoveries in 3Q21, an increase of $2.8 million

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