REGULATORY CAPITAL MATTERS

3 Months Ended

Mar. 31, 2017

Banking and Thrift [Abstract]

REGULATORY CAPITAL MATTERS

REGULATORY CAPITAL MATTERS

The following table presents the regulatory capital amounts and ratios for the Company and the Bank as of dates indicated:

					Minimum Capital Requirement				Minimum Required to Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	($ in thousands)
March 31, 2017
Banc of California, Inc.
Total risk-based capital	$	993,726	13.72	%	$	579,613	8.00	%	N/A		N/A
Tier 1 risk-based capital	947,772		13.08	%	434,709		6.00	%	N/A		N/A
Common equity tier 1 capital	678,701		9.37	%	326,032		4.50	%	N/A		N/A
Tier 1 leverage	947,772		8.51	%	445,645		4.00	%	N/A		N/A
Banc of California, NA
Total risk-based capital	$	1,091,813	15.11	%	$	577,987	8.00	%	$	722,484	10.00	%
Tier 1 risk-based capital	1,045,859		14.48	%	433,491		6.00	%	577,987		8.00	%
Common equity tier 1 capital	1,045,859		14.48	%	325,118		4.50	%	469,615		6.50	%
Tier 1 leverage	1,045,859		9.43	%	443,728		4.00	%	554,660		5.00	%
December 31, 2016
Banc of California, Inc.
Total risk-based capital	$	975,918	13.70	%	$	569,856	8.00	%	N/A		N/A
Tier 1 risk-based capital	941,429		13.22	%	427,392		6.00	%	N/A		N/A
Common equity tier 1 capital	672,358		9.44	%	320,544		4.50	%	N/A		N/A
Tier 1 leverage	941,429		8.17	%	460,840		4.00	%	N/A		N/A
Banc of California, NA
Total risk-based capital	$	1,042,617	14.73	%	$	566,405	8.00	%	$	708,007	10.00	%
Tier 1 risk-based capital	999,788		14.12	%	424,804		6.00	%	566,405		8.00	%
Common equity tier 1 capital	999,788		14.12	%	318,603		4.50	%	460,204		6.50	%
Tier 1 leverage	999,788		8.71	%	459,368		4.00	%	574,210		5.00	%

In July 2013, the Federal banking regulators approved a final rule to implement the revised capital adequacy standards of the Basel Committee on Banking Supervision, commonly called Basel III, and to address relevant provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act). The final rule strengthens the definition of regulatory capital, increases risk-based capital requirements, makes selected changes to the calculation of risk-weighted assets, and adjusts the prompt corrective action thresholds. The Company and the Bank became subject to the new rule on January 1, 2015 and certain provisions of the new rule will be phased in through 2019.

The final rule:

• Permits banking organizations that had less than $15 billion in total consolidated assets as of December 31, 2009, to include in Tier 1 capital trust preferred securities and cumulative perpetual preferred stock that were issued and included in Tier 1 capital prior to May 19, 2010, subject to a limit of 25 percent of Tier 1 capital elements, excluding any non-qualifying capital instruments and after all regulatory capital deductions and adjustments have been applied to Tier 1 capital.

• Establishes new qualifying criteria for regulatory capital, including new limitations on the inclusion of deferred tax assets and mortgage servicing rights.

• Requires a minimum ratio of common equity Tier 1 capital to risk-weighted assets of 4.5 percent.

• Increases the minimum Tier 1 capital to risk-weighted assets ratio requirement from 4 percent to 6 percent.

• Retains the minimum total capital to risk-weighted assets ratio requirement of 8 percent.

• Retains a minimum leverage ratio requirement of 4 percent.

• Changes the prompt corrective action standards so that in order to be considered well-capitalized, a depository institution must have a ratio of common equity Tier 1 capital to risk-weighted assets of 6.5 percent (new), a ratio of Tier 1 capital to risk-weighted assets of 8 percent (increased from 6 percent), a ratio of total capital to risk-weighted assets of 10 percent (unchanged), and a leverage ratio of 5 percent (unchanged).

• Retains the existing regulatory capital framework for one-to-four family residential mortgage exposures.

• Permits banking organizations that are not subject to the advanced approaches rule, such as the Company and the Bank, to retain, through a one-time election, the existing treatment for most accumulated other comprehensive income, such that unrealized gains and losses on securities available-for-sale will not affect regulatory capital amounts and ratios.

• Implements a new capital conservation buffer requirement for a banking organization to maintain a common equity capital ratio more than 2.5 percent above the minimum common equity Tier 1 capital, Tier 1 capital and total risk based capital ratios in order to avoid limitations on capital distributions, including dividend payments, and certain discretionary bonus payments. The capital conservation buffer requirement will be phased in beginning on January 1, 2016 at 0.625 percent, with additional 0.625 percent increments annually, and will be fully phased in at 2.50 percent by January 1, 2019. A banking organization with a buffer of less than the required amount would be subject to increasingly stringent limitations on such distributions and payments as the buffer approaches zero. The new rule also generally prohibits a banking organization from making such distributions or payments during any quarter if its eligible retained income is negative and its capital conservation buffer ratio was 2.5 percent or less at the end of the previous quarter. The eligible retained income of a banking organization is defined as its net income for the four calendar quarters preceding the current calendar quarter, based on the organization’s quarterly regulatory reports, net of any distributions and associated tax effects not already reflected in net income.

• Increases capital requirements for past-due loans, high volatility commercial real estate exposures, and certain short term commitments and securitization exposures.

• Expands the recognition of collateral and guarantors in determining risk-weighted assets.

• Removes references to credit ratings consistent with the Dodd Frank Act and establishes due diligence requirements for securitization exposures.