Banc of California, Inc.

factors outside of our control, and actual results may differ materially. For discussion of some of the risks that could affect our results, please see our Safe Harbor Statement on forward-looking statements included in both the earnings release and the earnings presentation, as well as the risk factors section of our most recent 10-K. Joining me on today's call are Jared Wolf, Chairman and Chief Executive Officer, and Joe Cowder, Chief Financial Officer. After our prepared remarks, we will be taking questions from the analyst community. I would like to now turn the conference call over to Jared.

Thanks, Anne, and good morning, everyone. I have a prepared script here, but let me go off script for a minute. This was a really great quarter and end to the year. I really couldn't be more pleased with the execution of our team, and as you all know, we spent 2024 integrating the merger that was completed at the end of 23, and so 2025 was supposed to be business as usual for Well, in my view, there really was nothing usual about what we did in 2025. It really represented very strong performance by our teams on both sides of the balance sheet. Solid credit management, great expense controls, and we did a great job bringing new high-quality relationships to the bank. Our production these last several quarters has been particularly good. And as I frequently say, you know, we try to move the ball down the field each quarter, and sometimes it's a lot of plays that work. Other times it's just a long pass that gets us there, but at least this quarter it felt like we played a ton of offense, our time of possession was very long, and we strung together a lot of good plays. In my view, we did this very well throughout all of 25, expanding our core earnings power and profitability, strengthening our balance sheet, and creating a ton of value for our shareholders. So let me highlight a few of our many accomplishments for the full year of 25. Our loan production disbursements were $9.6 billion, up 31% from 24. We added nearly 2,500 new NIB deposit accounts and nearly $530 million of new NIB deposit balances, getting us close to that 30% NIB percent on a percent of total deposits. Our margin expanded 30 basis points, driven by a 47 basis point decline in deposit costs. Expenses came down 7% year-over-year, and our adjusted efficiency ratio dropped nearly 900 basis points. Our adjusted pre-tax pre-provision grew 39%, and adjusted EPS of 135 was 69% year-over-year, up 69% year-over-years. And we had tangible book value per share growth of 11%, including a pretty substantial growth in tangible book value per share in the fourth quarter. And opportunistically, importantly, we returned significant capital to our shareholders by repurchasing 13.6 million shares, or 8% of our common stock outstanding, at a weighted average price of 13.59, far below where it's trading today, as we all know. If we turn to the specifics of the fourth quarter, our Q4 earnings per share grew 11% sequentially to 42 cents, reflecting strong positive operating leverage and great momentum across our core earning drivers. During the quarter, we grew pre-tax, pre-provision income by 10% and generated annualized loan and non-sparing deposit growth of 15% and 11% respectively. We also achieved double-digit return on average tangible common equity of 10.75%, an increase of 319 basis points since the start of the year. This quarter, like the complete 2025 year, As I said, there was nothing usual about it. I think our teams did a phenomenal job. Q4 core deposit trends were very positive, as we saw a continuation of the strong growth in non-expiry deposit balances that we had in Q3. And for the second half of 25, as a whole, we achieved 10.5% annualized growth in NIB deposits, which was broad-based across our businesses and attributable to both new accounts as well as average balance growth. This growth reflects the continued success of our relationship driven deposit strategy and our ability to attract and deepen very high quality client relationships. Loan production and disbursements were very strong in Q4 at $2.7 billion, up 32% quarter over quarter, resulting in total loan growth of 15% annualized. As we said in our materials, loan growth was heavily weighted toward the end of Q4 and actually had a very limited impact on fourth quarter financial results. The late quarter loan growth positions us very well for earnings expansion in 2026 and beyond. Unfunded new commitments also grew significantly, up 90% quarter over quarter to $1.7 billion, providing an additional tailwind for further balance sheet growth. Loan growth during the quarter was driven by C&I generally, as well as in venture, equipment finance, warehouse, fund finance, and our lender finance businesses. and we saw strong production from all of our business units, including construction, LIHTC, and mini-perm financing. We also continue to complement our origination activity with selective single-family loan purchases. Our pipelines remain strong, and we expect loan production activity to remain healthy in 26 across all of our business units. As we sit here today, so far in the quarter, deposit activity has continued to remain strong, and our pipelines look very, very good. We'll see where we end the quarter, but as of right now, things look very, very good. The average rate on new production in the quarter remained healthy at 6.83%, well above the rate of loans that have been maturing, and we expect to continue benefiting from the remixing of our balance sheet as our higher rate loan production more than offsets maturities of lower yielding loans. We continue to see positive trends in credit quality as well, with most credit metrics improving during the quarter. Non-performing and special mention loan balances each decreased 9% quarter over quarter. Classified loan balances increased partially driven by a nearly 50 million CRE loan due to a delay in the closing of the loan. That closing actually happened yesterday. Excluding this loan, our adjusted classified loan ratio would have declined 17 basis points quarter over quarter to 3%. And as I mentioned, that loan paid off yesterday. Our delinquency rate increased during the quarter due to two loans totaling 36 million, which became current in the first week of January. So excluding these loans, the adjusted delinquency ratio would have declined about one basis point to 66 basis points. Our coverage ratios were stable with our allowance for credit losses at 1.12% of total loans and our economic coverage ratio at 1.62%. We believe our reserve coverage remains appropriate, reflecting both loan growth and portfolio mix as net charge-offs remained very minimal in the quarter. Our strong Q4 and full-year results underscore the strength of our franchise and our consistent execution across the organization by a truly phenomenal team that we have here. The momentum we achieved is broad-based, spanning both loan and deposit growth, margin expansion, positive operating leverage, credit performance, and obviously generated a fair amount of capital. Our team is firing on all cylinders, and we believe we are very well positioned to continue delivering consistent, high-quality earnings growth and long-term value for our shareholders in 26 and beyond. Let me turn it over to Joe, who's going to talk about some of the details and give some comments on what we expect for 2026. And then I'll come back with some comments, and we'll go to questions. Joe?

Thank you, Jared. For the fourth quarter, we reported net income available to shareholders of $67.4 million. or 42 cents per diluted share, which was up 11% from 38 cents per diluted share in the third quarter. Net interest income of $251.4 million was down modestly from the prior quarter as the benefit of lower deposit costs was muted by the timing of our loan growth occurring late in the quarter. Lower loan income in Q4 was also driven by the impact of rate cuts on floating rate loans and lower accretion income which was elevated in Q3 due to loan prepayments. While the fourth quarter loan growth had minimal impact on Q4 financial results, we expect this growth to be a tailwind for net interest income in Q1. A full-quarter impact of the strong loan growth we had in Q4 represents about $13 million in loan interest income before any associated funding costs. As we look ahead, we expect 2026 full-year net interest income to increase 10% to 12% from 2025. Our net interest margin in Q4 was 3.20%, while our spot NIM at December 31st was 3.22%, which is up four basis points from the September 30th spot NIM of 3.18%, driven mainly by lower cost of deposit. We expect NIM to expand throughout the year, as margin expansion should come from both sides of the balance sheet. We expect to continue to drive deposit costs lower, and our loan production continues to originate at rates higher than loans expected to pay off. We do not assume any additional Fed rate cuts in our outlook. Average yield on loans declined to 5.83% versus the Q3 loan yield of 6.05% and versus the September 30 spot yield of 5.90%, which normalizes for the elevated accretion income and rate cut that we had in the third quarter. The Q4 loan yield reflects the impact of the two Fed rate cuts on the rates for new production and on our floating rate loan portfolio, which has grown to 39% of total loans. Spot loan yield at the end of Q4 was 5.75%. As a reminder, our strong loan growth had minimal impact to net interest income and yields in Q4 given the late timing of when those loans came on. And as a result, we expect to see a more pronounced benefit to our results as we move into the first quarter of 26 and beyond. Total loan balances of $25.2 billion were up 15% on an annualized basis for the quarter and 6% for the year. Total average loan balances were essentially flat quarter over quarter given the timing of the loan growth. In 26, we expect full-year loan growth in mid-single digits. dependent upon broader economic conditions. For now, we expect that growth to be broad-based across all our C&I and real estate lending areas that meet our credit criteria. Deposit trends were generally favorable with a continuation of strong NIB balance growth in the quarter. We temporarily increased short-term broker deposits during the quarter to support our strong late quarter loan growth. Cost of deposits declined 19 basis points quarter over quarter to 1.89%, driven by growth in non-interest-bearing deposits combined with the benefit of Fed rate cuts. We remained disciplined around our deposit pricing and achieved a 60% beta on interest-bearing deposits following the recent rate cuts. Bot cost of deposits at the end of Q4 was 1.81%. Looking ahead into 26, we are forecasting another good year of deposit growth in the mid-single digits. The interest rate sensitivity of our balance sheet for net interest income remains largely neutral, although the proportion of floating rate loans has increased. The net interest income impact is largely neutral when adjusting for deposit repricing betas. From a total earnings perspective, We remain liability-sensitive due to the impact of rate-sensitive ECR costs on HOA deposits, which are reflected in non-interest expense. Should rate cuts occur, every 25 basis points currently represents about $6 million of ECR pre-tax savings. We expect fixed-rate asset repricing to continue to benefit net interest margin as we remix the balance sheet with higher quality and higher-yielding loans. We have $2.5 billion of total loans maturing or resetting over the next year with a weighted average coupon rate of 4.7%, which is way below our Q4 average rate on new production of 6.83%. Our multifamily portfolio, which represents about a quarter of our loan portfolio, has approximately $3.2 billion repricing or maturing over the next two and a half years at a weighted average rate that offers significant repricing upsides. Non-interest income of $41.6 million was up 21% sequentially, driven by gain on the sale of a lease residual, as well as higher market-sensitive income. Commissions and fees income increased 16% year-over-year, primarily due to our stronger loan production. While non-interest income can be lumpy at times, we still expect normal run rate for non-interest income of about $11 to $12 million per month. Non-interest expense increased of $180.6 million declined 3% from the prior quarter, largely due to lower compensation expense from hitting tax and benefit accrual limits and other adjustments, a reversal from a prior quarter FDIC special assessment expense of around $2 million, and lower customer-related expenses related to impact of the Q3 Fed rate cut. As a result, our adjusted efficiency ratio improved to 55.6%, down 266 basis points from the prior quarter. We remain focused on managing expenses prudently while continuing to invest selectively in talent and technology to support long-term growth. In 2026, we are targeting full-year expenses to increase 3% to 3.5% from 2025. Note that for Q1, we expect lower customer-related expenses as the impact of Q4 rate cuts flow through. Also, the first quarter typically includes some seasonality around resets of compensation expense accruals, so expenses in Q1 should be seasonally higher in a few categories. Provision expense of $12.5 million was largely driven by the strong loan portfolio growth and updates to risk ratings. We maintained our allowance for credit losses at 1.12% of total loans, and net charge-offs were minimal. As Jared mentioned earlier, overall credit performance trends were mostly positive. We are very pleased with the strong progress we made in 2025, scaling our franchise and delivering positive operating leverage while protecting our balance sheet and generating significant returns to our shareholders. In 2026, we are projecting pre-tax, pre-provision income to grow 20% to 25%, reflecting our ability to drive earnings growth while maintaining disciplined expense management. As we continue into 2026, we believe we are well positioned to continue building on our momentum in delivering high-quality, consistent results. And with that, I'll turn the call back over to Jared.