BANC

Business Context and Reporting Period

Company: Banc of California, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: February 8, 2016
Event: The company filed Articles Supplementary to its charter to establish a new series of preferred stock and closed a public offering of depositary shares representing that stock.

Key Financial Metrics and Capital Structure

This filing details a capital raise rather than operational financial performance. Key metrics related to the transaction include:

• Instrument: 7.000% Non-Cumulative Perpetual Preferred Stock, Series E.
• Shares Sold: 5,000,000 Depositary Shares (each representing a 1/40th interest in a share of Series E Preferred Stock).
• Over-Allotment Option: Underwriters granted a 30-day option to purchase up to an additional 750,000 Depositary Shares.
• Liquidation Preference: $1,000 per share of Series E Preferred Stock (equivalent to $25 per Depositary Share).
• Dividend Rate: 7.000% per annum, payable quarterly in arrears (first payment June 15, 2016).
• Authorized Shares: 5,750,000 shares of Series E Preferred Stock authorized.

Note: The filing text does not provide values for revenue, net income, operating cash flow, total debt, or liquidity ratios.

Material Changes Versus Prior Period

The filing reports a material modification to the rights of security holders and an amendment to the Certificate of Incorporation:

• New Capital Class: Establishment of Series E Preferred Stock, which ranks senior to common stock and junior to all existing and future debt obligations.
• Parity: The new stock ranks equally with Series A, B, C, and D preferred stock regarding dividends and liquidation distributions.
• Dividend Restrictions: The ability to pay dividends on common stock or junior securities is restricted if dividends on Series E are not declared and paid.

Guidance, Outlook, and Terms

Redemption Terms:

• Standard Redemption: The stock is redeemable in whole or in part on or after March 15, 2021, at a price of $1,000 per share plus declared and unpaid dividends.
• Regulatory Redemption: The stock may be redeemed in whole within 90 days following a "Regulatory Capital Treatment Event" at the same price.
• Perpetuity: The stock has no maturity date and will remain outstanding indefinitely unless redeemed.

Holders have no general voting rights except regarding specific matters such as the authorization of senior stock, mergers, changes to terms, or dividend non-payments.

Redemption is subject to prior approval from the Board of Governors of the Federal Reserve System and applicable capital guidelines. Dividends are non-cumulative, meaning undeclared dividends do not accumulate.

Investor Verification Checklist

• Verify the final closing amount and whether the underwriters exercised the 750,000 share over-allotment option.
• Confirm the impact of the new preferred stock issuance on the company's regulatory capital ratios.
• Review the full text of the Articles Supplementary (Exhibit 3.1) for detailed restrictions on common stock dividends.
• Monitor the first dividend payment date of June 15, 2016, to confirm the declaration of the 7.000% rate.