Good day ladies and gentlemen and welcome to the Banc of California Quarterly Earnings Conference Call. My name is Ketene and I will be your coordinator for today. At this time, all participants are in a listen-only mode. Later, we will facilitate a question-and-answer session. (Operator Instructions) I would now like to turn the presentation over to your host for today’s call Mr. John Grosvenor, General Counsel. Please proceed.

Thank you, operator. Good morning everyone. And I am John Grosvenor and let me be the first to welcome you to this morning’s conference call to discuss Banc of California’s results of operations for the quarterly and annual period ending December 31, 2013. With me on the call this morning will be our Chief Executive Officer, Steven Sugarman and our Chief Financial Officer, Ronald Nicolas. This morning’s presentation is being recorded and a copy of the recording will be available later today on the Company’s Investor Relations Web site. Now before I turn it over to Steven I want to take a moment to remind everyone that our presentation today contains forward-looking statements which reflects our best view of the world and our businesses as we see them today. Those views can change as the world changes, so please interpret those statements in that light. Further information regarding reliance on our forward-looking statements is included in today’s 8-K filing and applies as well to our comments during today’s call. The 8-K covering our earnings announcement is also available on our Investor Relations website. Finally, we’ve reserved time at the end of the presentation to address questions. We’re concerning the announcement. So with those formalities concluded, it is my pleasure to introduce our Chief Executive Officer, Steven Sugarman ensuring the call [indiscernible].

Thank you, John. Welcome to everyone. This is Banc of California earnings call for the period ending December 31, 2013. We issued a short presentation alongside our earnings release, which you can find on our Investor Relations Web site at bancofcal.com. You may find a worthwhile supplement for my comments this morning as I’ll reference the slides during the course of my remarks. 2013 was a year of significant transformation for Banc of California and I’m very proud of our team and all they’ve accomplished this year. This is my first full year as CEO of the holding company and 2014 will be my first full year running the Bank. During this period we have taken focused steps towards achieving our mission of becoming California’s bank. So far we’ve accomplished a lot. I am more optimistic about the value we’re creating at the Bank and excited about the future of Banc of California today. This is primarily due to the talented leaders I’ve surrounding me and working in positions throughout the Bank. The change we’ve embarked on is not easy and we’ve seen some bumps in the road but the progress we’ve made over the past year is exceptional and the shared accomplishment of the broad group of professionals throughout the organization who’ve worked tirelessly and made sacrifice and performed very well. During the fourth quarter we rewarded all of our employees by establishing an employee equity ownership plan that has result in each employee becoming an investor in the Company. So this morning we have a little bit over a 1,000 new owner employees interested in our financial results because each one of them is personally impacted by the price of our stock and the amount of the Company’s profits. I can tell you that now every meeting that…

Thanks, Steve, and good morning everyone. As customary, I will be directing my comments to the financial statements included with the release provided earlier this morning focusing primarily on the comparison to the third quarter of 2013 starting with the income statement. Note, these figures through December 31st include the impact of the deposit branch sale and bank consolidation completed in October, as well as the full quarter impact of the acquisition of The Palisades Group in September and the partial quarter impact of the acquisition of CS Financial in November. I will provide some insight as to the impact of these activities to our deposits and balance sheet where applicable. For the fourth quarter 2013, the Company reported net income of $3.3 million and net income available to common shareholders of $2.4 million or $0.12 per share on just over 20 million average shares outstanding. This compares to a net loss of $9.5 million to common shareholders for the third quarter of 2013 and a net loss of $3.5 million to the common shareholders for the fourth quarter of 2012 as highlighted in our release. The fourth quarter results included a net gain of $12.1 million from the sale of our eight legacy branch locations and deposits in October partially offset by one-time expenses the Company incurred related to the acquisitions, bank mergers and divestitures as well as the margin squeeze in the mortgage business. I will highlight these particular areas as we review the financial results. Total revenues before loan loss provision were $67.8 million for the quarter compared to $45.2 million for the third quarter. Excluding the fourth quarter gain of 12.1 million resulting from the deposit branch sale, total revenues were $10.6 million. Taking a closer look at the components of that net interest income of…

Thanks Ron. This completes our prepared remarks today. With that operator, we would like to open up the call for questions.

and:

Thank you. (Operator Instructions) Your first question comes from the line of Brett Rabatin representing Sterne Agee. Please proceed.

Hi guys, good morning. Wanted to first I guess start off with the usual question on the expenses and just I guess first, is there anything besides, I think you mentioned 5 million, where there any other non-recurring things that affected the fourth quarter in terms of the initiatives you had in place? And with the growth or the expenses in 1Q ’14 for CS Financial and the other new acquisitions, can you give us maybe a little better feel for what the run rate might be with the expenses on a go forward basis? Sterne Agee: Hi guys, good morning. Wanted to first I guess start off with the usual question on the expenses and just I guess first, is there anything besides, I think you mentioned 5 million, where there any other non-recurring things that affected the fourth quarter in terms of the initiatives you had in place? And with the growth or the expenses in 1Q ’14 for CS Financial and the other new acquisitions, can you give us maybe a little better feel for what the run rate might be with the expenses on a go forward basis?

Thanks for the question Brett. Yes, the $5 million number mentioned was the incremental expense approximation for the two acquisitions The Palisades Group and CS Financial. I am not sure that I would characterize those expenses as non-recurring or one-time, however they do also happen to approximate the increase in expenses over the course of kind of just a quarter-over-quarter look. There were a number of non-recurring and one-time of revenue items and expense items relating to the two acquisitions, the branch disposition, our platform initiatives and some of the cost cutting. What we could do is if you have kind of specific kind of breakdowns you would like to see, we will figure out how to include that. We are looking at doing an investor conference. We would looking at including it or including it in our investor presentation going forward, so we welcome you to kind of help us understand how you would like to see it. But just at a high level The Palisades Group and CS consolidation of their financials kind of represented that $5 million number.

And just Brett, to put just a little bit of a finer point on that last comment by Steve that 5 million attributable to the two acquisitions, just keep in mind that the CS acquisition only represents roughly about two-thirds of their what I would characterize as their normally quarterly run rate. So, I would expect that number to be probably around 20% higher on a full quarter basis.

Okay. May be we can follow-up some more about expenses upfront, can I move maybe to capital and I know given that you guys a lot of grief over the past year or two on just ratios but you have got your total risk based capital ratio 12.5 now and just with all the people you are adding to produce loans. Do the capital ratios from here build a little more or is this sort of the level that you are comfortable with in terms of the various ratios? Sterne Agee: Okay. May be we can follow-up some more about expenses upfront, can I move maybe to capital and I know given that you guys a lot of grief over the past year or two on just ratios but you have got your total risk based capital ratio 12.5 now and just with all the people you are adding to produce loans. Do the capital ratios from here build a little more or is this sort of the level that you are comfortable with in terms of the various ratios?

Look, the capital ratios are going to be dependent a lot on our rate of growth because one of the primary drivers is the pace of growth. One of the things that we discussed in our earnings today was the transfer of certain parts of our loan portfolio into are held for, into a new policy which results in new originations being placed under our held for sale category that’s part of our view on, one example of what is the -- we believe the profitability can be enhanced but also these ratios can be managed without compromising profitability. So, there are steps like that that are being taken. We don’t see -- we feel comfortable with where we are on a capital perspective that being said we also provide guidance that our optimal size and our strategic plan is the size that’s materially bigger than we are today and therefore if there are opportunities to grow where we have very compelling use of proceeds, we’ll take on those opportunities and that could require capital in the future but there is no kind of current issues on our capital front and that’s kind of underscored by kind of our new regulatory status as a financial holding company.

Okay. And then just one last and I’ll hop off, the other thing I was just curious about was just the thinking about what you’re doing in the mortgage banking operation can you maybe, I guess first I didn’t catch the number if you gave it what you actually sold in the quarter, I know you said the gain on sale margin was down a little bit but if I understand correctly it sounds like you’re basically saying you’re going to increase somewhat substantially the amount you are going to sell in the next few quarters but you’re not going to have the expenses from a portion of that operation given what you’ve done with a few folks there. Can you I guess, first just give me the number for the actual loans sold in 4Q? Sterne Agee: Okay. And then just one last and I’ll hop off, the other thing I was just curious about was just the thinking about what you’re doing in the mortgage banking operation can you maybe, I guess first I didn’t catch the number if you gave it what you actually sold in the quarter, I know you said the gain on sale margin was down a little bit but if I understand correctly it sounds like you’re basically saying you’re going to increase somewhat substantially the amount you are going to sell in the next few quarters but you’re not going to have the expenses from a portion of that operation given what you’ve done with a few folks there. Can you I guess, first just give me the number for the actual loans sold in 4Q?

Yes. Let me just -- I’ll turn it over to Ron in a second. But one of the things I want to emphasis is that when we manage our business, we’re doing it kind of a, on a consolidated basis. So, some parts of your question are kind of driven a little bit unique here, but I want to make sure that you’re not confused. We have certain parts of our mortgage operations which are done on kind of a flow basis where we sell the production to Fannie Mae, Freddie Mac or others and then we have other parts of our mortgage banking activities that are underwritten to the credit criteria that basically we’ve developed and have had prior to the fourth quarter historically been held for investment and set on our portfolio. So, the new accounting policy relating to held for sale is something that only impacts that second category of loans are not kind of originated typically on a flow basis. And so that category of loans has a separate underwriting team, a separate kind of a lot of differences and how that loan gets originated from a cost standpoint than loans that are in the conforming flow business that we breakout on Slides 8 and 9. So, my comments around headcount reductions are and since sited were over 250 fewer terminations since December 1st, those were related mostly to the origination and sale of the conforming flow mortgages. And so the volumes that you’re seeing from the jumbo non-flow is kind of an apples to vendors so I just want to help you understand that the volumes -- the growth or shrinkage of volumes are different for those piece of operations at different points in time. Now, when we look at it we believe we have a nice comprehensive business where these provide diversification and the actual underlying operations collectively supports both of these businesses. And so we don’t break it down exactly how we’re talking about it when as we manage the business. But I just want to make sure that you’re not confusing a reduction in originations in the conforming business with anything to do with this accounting policy change that we made in the fourth quarter. With that, Ron if you have.

Sure. So, Brett, we sold roughly a little over 700 million in total residential mortgages and approximately $150 million of that was the jumbo non-conforming piece and roughly a little north of 550 million, 560 million was the mortgage banking or the conforming piece. Actually, I’d take it back, that number was closer to 600 million on the mortgage banking piece. So, all told we sold roughly about 750 million in total during the quarter.

Okay. Great, thanks for all the color. Sterne Agee: Okay. Great, thanks for all the color.

Thanks Brett.

Thank you.

Your next question comes from the line of Andrew Liesch representing Sandler O'Neill & Partners. Please proceed.

Good morning guys. Sandler O'Neill & Partners: Good morning guys.

Hi Andrew.

I just want to go back to the expense question here for a second. So and just looking at it differently kind of on an average asset basis, expenses have been running north of 6% this year, is that like a good level for us to forecast and continue or what level do you think would be a good percentage? Sandler O'Neill & Partners: I just want to go back to the expense question here for a second. So and just looking at it differently kind of on an average asset basis, expenses have been running north of 6% this year, is that like a good level for us to forecast and continue or what level do you think would be a good percentage?

I’m not sure that we’d view an expense to averaged asset as relevant to our business given the high degree of variable expense on parts of our business relating to assets under advisement that don’t hit the asset level from The Palisades Group and also related to held for sale loans, which if you look at Page 8 you will see that are kind of conforming for our mortgage banking business, uses about 6% of our balance sheet as of the end of 2013, which means on an average assets basis it’s pretty low. That being said, the expense structure is based mostly on volume of originations and so I’m not sure you could just take a expensed averaged ratio and apply it over market cycles and have it be standard at all.

Okay. And then Ron can you give some more clarification on why it’s not unsurprising for non-accrual loans to rise in a seasoned mortgage portfolio, if you bottomed out these portfolios at a discount and they performed worsened than expected then I would assume non-performers would rise, so I am just kind of curious like why it’s not unexpected? Sandler O’Neill & Partners: Okay. And then Ron can you give some more clarification on why it’s not unsurprising for non-accrual loans to rise in a seasoned mortgage portfolio, if you bottomed out these portfolios at a discount and they performed worsened than expected then I would assume non-performers would rise, so I am just kind of curious like why it’s not unexpected?

Well, I guess I would just clarify that comment to suggest that they are a little bit more volatile type of performing assets they typically do go delinquent by a month or two, they bounce back and forth.

But look I’d add that the actual performance of these loans during the fourth quarter never exceeded our expectations at the time we brought it. So if you look at on a pool basis within a pool sometimes you receive a loan that maybe on non-accrual status, but the portfolios as a whole have performed very well and therefore the elevated characteristics like this are things that were priced in as we bought in with our expectations at the time.

So would be not unsurprising to see another increase? Sandler O’Neill & Partners: So would be not unsurprising to see another increase?

Well, he’s not saying that these increased apples-to-apples same loan-to-loan. What he’s saying is that we have -- we closed our purchase of over $500 million of these at the end of the third quarter and so the steady state of percentage of that pool that you’d expect to see have some non-accrual elements as higher than some other parts of our portfolio. So it’s the change of mix in composition of our portfolio on the growth of the portfolio that makes the notional number of non-accruals higher, it’s not that loans that weren’t on accrual went on accrual and spiked up just without any growth.

Yes, that’s correct and also during the quarter, the Company directed a servicing transfer for that pool that fairly large and substantial pool and that also typically what you see is a little bit of a spike in some of the credit profile numbers as a result of that usually that spike those are temporary type of phenomenon and we see a return back to normalcy. But again think of these loans, as Steve indicated, it’s the overall economic performance on a pool basis that we look at less differently than newly minted loans again originated at par.

And just to follow-up. We discussed on, I believe, our second quarter conference call that we went through the same process on a seasoned loan pool on the servicing transfer and saw a spike in that portfolio and later subsided as we thought was expected, but the numbers here are just largely growing because the size of the portfolio grew and not because loans that already existed on the portfolio changed to negative in terms of its characteristics.

That’s right.

Okay, thanks for taking my questions. Sandler O’Neill & Partners: Okay, thanks for taking my questions.

Thanks Andrew.

Your next question comes from the line of Kevin Reynolds representing Wunderlich Securities. Please proceed.

Alright, thank you. Good morning Steve how are you doing? Wunderlich Securities: Alright, thank you. Good morning Steve how are you doing?

Good, hey Kevin.

A couple of questions here and I’m going to sort of try to attack the expense item a little bit differently. I think you all said that and I’ve got a few questions to follow-up on that, but I think you all said that with Palisades and CS being about 5 million of the increase sequentially in the quarter and I believe mortgage commissions were about half of the $6 million increase in salaries expense, so just kind of, if you took those numbers just to simplify the matter and then went back to last quarter where I think you’d identified $6 million roughly in non-recurring items of a variety of sorts. It looks like there were still another 3 million to 4 million or something in that ballpark of sequential increase in expenses, so I was just trying to figure out if you could talk about what might have caused that? And then I guess just kind of conceptual question along those lines of, if we can identify $6 million in one-time versus last quarter is there some reason why we can’t identify similar explicit expenses associated with conversions and what not because there was a lot of that activity going on in this quarter to back out the expenses to get to mortgage free true run rate and maybe the offset to that one-time gain on the branch sale in the quarter. And I guess that’s my first question. Wunderlich Securities: A couple of questions here and I’m going to sort of try to attack the expense item a little bit differently. I think you all said that and I’ve got a few questions to follow-up on that, but I think you all said that with Palisades and CS being about 5 million of the increase sequentially in the quarter and I believe mortgage commissions were about half of the $6 million increase in salaries expense, so just kind of, if you took those numbers just to simplify the matter and then went back to last quarter where I think you’d identified $6 million roughly in non-recurring items of a variety of sorts. It looks like there were still another 3 million to 4 million or something in that ballpark of sequential increase in expenses, so I was just trying to figure out if you could talk about what might have caused that? And then I guess just kind of conceptual question along those lines of, if we can identify $6 million in one-time versus last quarter is there some reason why we can’t identify similar explicit expenses associated with conversions and what not because there was a lot of that activity going on in this quarter to back out the expenses to get to mortgage free true run rate and maybe the offset to that one-time gain on the branch sale in the quarter. And I guess that’s my first question.

And I appreciate the question. If you remember we have previously given guidance on the last quarterly call and on an interim update call that we expected the total one-time costs on the second half of or the total one-time cost around our platform initiative to be I believe we sited it at $10 million to $12 million and that about half of that was in the third quarter, and the preponderant to that would be on the second half of the year. And so you’re numbers are very consistent with the guidance we have given. The only hesitation is that even on the platform cost there were one-time costs. You also have benefits in the numbers after the third quarter relating to the branch sale and you have other costs relating to these M&A transactions. And so I guess the question is, where do you summarize these to be? But your estimation of kind of non-recurring of one-time expenses and approach to thinking about that I think it’s fairly consistent with the guidance we have previously given around the expectations for one-time cost in the fourth quarter. Some of these things also have one-time benefits. So we are just a little bit hesitant to start digging into one-time costs without also digging into one-time benefits, and then it gets to be a pretty blurred story. Do you have anything to add, Ron?

No, I think you covered pretty well there, Steve. There was some spillage into the fourth quarter on the one-time cost. We had roughly a couple of million dollars on that from -- so that number was down a little bit from the -- on a linked quarter basis, from I think we have identified $5 million or $6 million in the third quarter. But again the higher commission expense related to the higher mortgage originations and the true up of the bonus in the fourth quarter, where there was a couple of 3 million on a combined basis and then the bank was up another million dollars. So just to add a little finer point, there are a lot of moving parts as Steve indicated. There is one-time benefits associated with that. Some of the economics that we will see come about as a result of the higher originations, won’t be realized on the jumbo side at least until the first quarter. But that basically is what gives rise to the $5 million in summary.

Okay. And then I guess to sort of maybe beyond that a little bit. I guess what I am struggling with is, in your presentation accompanying the press release here, I think you have identified specifically operating efficiencies designed to generate roughly $12 million or so annually in savings and there is I’m sure other things behind the scenes that will be ongoing in nature, and maybe not as direct or explicit. But it seems to me that that number is not nearly enough to get to an expense run rate that ultimately would this -- with the revenue that you’re putting up this quarter, annualized and projecting even some growth in there too to move the EPS needle meaningfully higher. And so I guess I want to ask a question that is if you step back and look at your organization today, very different than when it began, from 30,000 feet, and then look out into the future, what are you seeing down the line longer term? What is Banc of California? What does it look like, asset size? What kind of business mix is it going to be? What is the profitability, the ROA, after tax that you have to generate to say we’re doing a pretty good job here that should be rewarded with a higher pricing in the market? And then secondly as you go down that path, does it trouble you, that we are spending so much time talking about mortgage, mortgage origination, the decline in volumes, the expenses and what has to be done to something that doesn’t really add to most investors view of franchise value? Wunderlich Securities: Okay. And then I guess to sort of maybe beyond that a little bit. I guess what I am struggling with is, in your presentation…

Well, I appreciate your question. I think that our goal is, what we’re doing here is similar to the goal that we have set out for the last kind of three years, pretty I believe clearly and consistently which our first target is our banking operations should be at $5 billion in Southern California with minimum scale in each MSA that we are in. That our balance sheet, we target to be balanced across five different origination categories to be a full service bank which is residential, C&I, commercial, real estate, multi-family and specialties. And that we also seek to have complimentary financial services businesses that are profitable and add to the profitability of the bank and vice versa such as The Palisades Group. So when we think about that we believe that there is some pretty standard metrics to what a profitable commercial bank is $5 billion in size will generate. The target on size is kind of pretty well laid out, for kind of what our near-term focus is. And the profitability metrics for that piece, that operating piece are, from your perspective are probably pretty well understood. That being said when you look at strong franchises of full service banks here in California, we believe that lending against real estate and residential real estate is an important component of that. And if you look at tiers that we look at that we believe are kind of some of the more valuable banking franchises we believe that a portion of their balance sheet is to support a private mortgage banking operation which serves the high net worth needs of their clients. And so all the banks in Southern California that are the standard bearers in terms of valuation and value to the shareholders so that we looked at…

Okay, thanks a lot for taking my questions. Wunderlich Securities: Okay, thanks a lot for taking my questions.

Sure.

Your next question comes from the line of Don Worthington representing Raymond James. Please proceed.

Well, good morning Steve and Ron. Raymond James & Associates: Well, good morning Steve and Ron.

Good morning Don.

A couple I guess follow-ups, in terms of the headcount where are you today rather than or as opposed to the end of the year and I guess I am trying to figure out how much of the mortgage banking reductions were December versus after the first of the year? Raymond James & Associates: A couple I guess follow-ups, in terms of the headcount where are you today rather than or as opposed to the end of the year and I guess I am trying to figure out how much of the mortgage banking reductions were December versus after the first of the year?

A majority of them were after the first of the year.

Okay. And then I noticed FHLB advances were up about 225 million quarter-over-quarter. Was that just for the liquidity adjustment purposes or did you do some match funding on a longer term basis for interest rate risk? Raymond James & Associates: Okay. And then I noticed FHLB advances were up about 225 million quarter-over-quarter. Was that just for the liquidity adjustment purposes or did you do some match funding on a longer term basis for interest rate risk?

Don, that was for liquidity. So as we and to my earlier comments with the growth that we saw on our loans held for sale portfolio we saw a pretty sizeable uptick on our SFR jumbo piece. We took down some additional liquidity to fund that for that interim period until that the sales catch up with the origination so when you see an origination spike as we saw here in the fourth quarter versus the third quarter obviously you’d prefund that with your additional liquidity until your sales catch up. So it’s really no more than that. There is more to it obviously as it relates to the branch sale as well but effectively it was the increase in our loan growth and volume related to the held for sale portfolios.

Okay, great. And then on the specialty loans, what types of loans are those typically? Raymond James & Associates: Okay, great. And then on the specialty loans, what types of loans are those typically?

I mean to give you an example we have an equipment lease business that we launched a couple of years ago that has been continually growing and ramping up its growth, that’s an attractive business for us. We also have a number of other loans either that were acquired in some of the acquisitions or just dumps that cleanly into these categories. Ron do you want to expand on that?

With respect to the specialty -- I think the bulk of it is the equipment leasing small ticket equipment and everything from copiers to factory machinery in that. I think there is some other consumer type, smaller consumer type loan ticket items that are also included in that Don.

Okay, okay. And then is there any overlap between Banc’s assets and The Palisades Group, the reason I am asking is I think you were actually a customer of Palisades before they became part of the Company. And so was there any overlap in that 1.6 billion being Banc loans? Raymond James & Associates: Okay, okay. And then is there any overlap between Banc’s assets and The Palisades Group, the reason I am asking is I think you were actually a customer of Palisades before they became part of the Company. And so was there any overlap in that 1.6 billion being Banc loans?

Yes, we -- The Palisades Group manages the season loans on our behalf or it buys it on them, and so the preponderance of our season loans are within that number. Importantly over the back half of last year and now into this year the growth that we discussed is coming from third-party fee sources. So that may also be a little bit of confusion that could be generated from looking at the call reports versus line items where there are eliminations that occur relating to those if.

And I guess my last question any, what was the balance of TDRs that are not included in non-performers? Raymond James & Associates: And I guess my last question any, what was the balance of TDRs that are not included in non-performers?

You know what Don I have to get back to you on that. I have got the number.

Very well. Raymond James & Associates: Very well.

But yes it is a very low number. We’ll have to follow-up with that with you on that.

Okay, alright thank you. Raymond James & Associates: Okay, alright thank you.

Your next question comes from the line of Jackie Chimera representing KBW. Please proceed.

Hi. Good morning everyone. Keefe, Bruyette & Wood: Hi. Good morning everyone.

Hi Jackie.

I wanted to make sure that I am understanding the jumbo transfer that happened in the quarter the 500 million, so I understand the component about the 150 that’s associated with the 1.4 million reduction in the reserve. So that 150 came from held for investments, the other 350 component was that ever included in the September 30th and the period loan balance in held for investment or was that just internal generation in the quarter that was transferred before quarter end? Keefe, Bruyette & Wood: I wanted to make sure that I am understanding the jumbo transfer that happened in the quarter the 500 million, so I understand the component about the 150 that’s associated with the 1.4 million reduction in the reserve. So that 150 came from held for investments, the other 350 component was that ever included in the September 30th and the period loan balance in held for investment or was that just internal generation in the quarter that was transferred before quarter end?

Yes, that was a function of our new originations during the fourth quarter and in the presentation that we gave you on Page 9, you could look at the total amount of new originations in the fourth quarter of around 380 million. So a preponderance of that is now going to, held for sale.

Okay. So if I am looking to calculated growth maybe on the originated portfolio, I would only subtract 150 million and not 500 million for the change in what happened in the quarter? Keefe, Bruyette & Wood: Okay. So if I am looking to calculated growth maybe on the originated portfolio, I would only subtract 150 million and not 500 million for the change in what happened in the quarter?

That’s right and I think we’ve done that for you on the Slide 9 that we provided which shows fourth quarter originations on the jumbo at 380.

Okay. Okay there is the chart. Okay thank you. Looking at just kind of centering it on the other fees, if I take out the 12.1 million for the gain from the branch divestiture and then the 2.6 million on the PCI loan from Private Bank, I am getting a run rate of about 4.5 million in fees, does that sound pretty standard go forward given the addition of house agency at Financial? Keefe, Bruyette & Wood: Okay. Okay there is the chart. Okay thank you. Looking at just kind of centering it on the other fees, if I take out the 12.1 million for the gain from the branch divestiture and then the 2.6 million on the PCI loan from Private Bank, I am getting a run rate of about 4.5 million in fees, does that sound pretty standard go forward given the addition of house agency at Financial?

Jackie I am sorry I was distracted would you mind asking that question one more time please.

Sure, so if I take the other fee income that started out at the 19.2 million and I take out the 12.1 million from the branch divestiture and then I take out the 2.6 million from the PCI loan sale that you had from The Private Bank acquisition. That gives me around 4.5 million as a run rate in other fees. Is there anything else included in there that would be on a non-go forward basis or is that a pretty good run rate understanding that we’re still missing an additional month in CS Financial in that number? Keefe, Bruyette & Wood: Sure, so if I take the other fee income that started out at the 19.2 million and I take out the 12.1 million from the branch divestiture and then I take out the 2.6 million from the PCI loan sale that you had from The Private Bank acquisition. That gives me around 4.5 million as a run rate in other fees. Is there anything else included in there that would be on a non-go forward basis or is that a pretty good run rate understanding that we’re still missing an additional month in CS Financial in that number?

Yes, that’s exactly right, the math you just described there that would be a pretty good run rate number for the quarter.

Now does all of the income that was discussed in the slide deck, does that all hit in the other income or is some of that also flowing into the NIM someway? Keefe, Bruyette & Wood: Now does all of the income that was discussed in the slide deck, does that all hit in the other income or is some of that also flowing into the NIM someway?

Jackie I just want to go back to that prior quarter, there was one other non-recurring item that I don’t know if in your analysis there you just recapped to me included and that was a $2.6 million one-time recovery related to a credit that was previously fair valued at acquisition that we ended up recovering.

And that was what you had mentioned from The Private Bank of California transaction? Keefe, Bruyette & Wood: And that was what you had mentioned from The Private Bank of California transaction?

That is correct, yes.

Okay. Yes, that was included as well. Keefe, Bruyette & Wood: Okay. Yes, that was included as well.

Okay, terrific. Your second question?

You know what I lost my train of thought so it must not have been important and going back not touching too much on expenses but just making sure that I understand, I know we have already discussed this quite a bit. But the 12.1 million gains from the branch divestiture that took place in early October you had mentioned with expenses in quantifying that additional 5 million to 6 million remaining from the original 10 million to 12 million guidance that you’d given. Would any of that have been associated with the branch divestiture, because I know you had said that there were benefits attached to those one-time charges but would any of that benefit be related to the 12.1 million or is that completely separate? Keefe, Bruyette & Wood: You know what I lost my train of thought so it must not have been important and going back not touching too much on expenses but just making sure that I understand, I know we have already discussed this quite a bit. But the 12.1 million gains from the branch divestiture that took place in early October you had mentioned with expenses in quantifying that additional 5 million to 6 million remaining from the original 10 million to 12 million guidance that you’d given. Would any of that have been associated with the branch divestiture, because I know you had said that there were benefits attached to those one-time charges but would any of that benefit be related to the 12.1 million or is that completely separate?

Well, yes the branch divestiture caused a couple of things. One is the net interest margin kind of expansion you started to see in the fourth quarter. Number two is I think we reduced headcount by approximately 50 people as that occurred. And then number three is the transactions that we were processing for those branches represented the vast majority of the overall transactions and therefore it helps us on the indirect cost to become a lot more efficient within the organization and to implement kind of some of the cost saves kind of following the branch disposition. That said, some of those things happened in the third quarter following the branch sale where the people who were transferred with the branch got transferred on the day of the sale, so it was only a few days under the quarter. But some of the other things happened over the course of the following months and even today we are working on our one-bank initiative where we are bringing together kind of the policies, procedures and processes from all the organizations we have acquired over the last year or two under one kind of common and comprehensive set of policies and procedures. And so the efficiencies from that and some of the expenses from updating the systems to accommodate for that kind of are ongoing.

Okay. And where there any loan pool purchases or sales in the quarter, I know there were sales but were there any purchases in the quarter? Keefe, Bruyette & Wood: Okay. And where there any loan pool purchases or sales in the quarter, I know there were sales but were there any purchases in the quarter?

No.

No, no purchases here in the fourth quarter.

And then lastly just to touch on taxes, so now that the DTA is fully reserved against and on a go forward basis, would it be correct to assume that, I know that the valuation allowance will trend downward as you earn income, so would it be correct to assume that you will have an effective tax rate of zero until the potential reversal of that valuation allowance? Keefe, Bruyette & Wood: And then lastly just to touch on taxes, so now that the DTA is fully reserved against and on a go forward basis, would it be correct to assume that, I know that the valuation allowance will trend downward as you earn income, so would it be correct to assume that you will have an effective tax rate of zero until the potential reversal of that valuation allowance?

I don’t think zero is the right number, Ron can dig into the specifics but it will offset a portion of our taxes in the future but it’s not a 100% offset.

So, just to amplify that a little bit more, on the income statement it will of course bleed in through the effective tax rate and there is a lot of moving pieces not the least of which is the timing and recognition of the reversal of that deferred tax asset once the valuation is removed. The other thing is that considers on the balance sheet the -- it is likely as future earnings are recognized the reversal of the valuation allowance will happen all at once. So, even while the reversal on the balance sheet would happen all at once and we will have the corresponding pickup in tangible book value the income statement will be recognized on a more discrete and timely basis through the effective tax rate. But as Steve indicates, it won’t be, it definitely will not be zero.

Are there -- sorry I am just trying to wrap my mind around this and obviously every company is very different and I know you have many different line items. The way that I have seen it from several companies is in the past is that it flows straight through and then you do the reversal through the year-end and you continue to have a lower or 0% tax rate, so that’s not the case here then? You will continue to have… Keefe, Bruyette & Wood: Are there -- sorry I am just trying to wrap my mind around this and obviously every company is very different and I know you have many different line items. The way that I have seen it from several companies is in the past is that it flows straight through and then you do the reversal through the year-end and you continue to have a lower or 0% tax rate, so that’s not the case here then? You will continue to have…

We will once the Company decides to reverse out the valuation allowance, we will begin to recognize a lower tax rate. To exactly quantify that what that rate will be is the difficult thing, you are asking us to try to predict into the future, what the timing of the earnings and the timing of the reversal and that’s impossible to do at this point.

Okay. And then just lastly and I am not sure if you are able to answer this or not but do you know when you intend to file the 10-K? Keefe, Bruyette & Wood: Okay. And then just lastly and I am not sure if you are able to answer this or not but do you know when you intend to file the 10-K?

The filing date is due on Monday the 17th and we anticipate filing it on time.

Okay, great. Thank you very much. Keefe, Bruyette & Wood: Okay, great. Thank you very much.

Your next question comes as a follow-up from the line of Andrew Liesch representing Sandler O'Neill & Partners. Please proceed.

Hi guys. I have got just one follow-up on Kevin’s question, I mean what is your ROA, ROE and efficiency ratio target and when do you think you can get there? Sandler O'Neill & Partners: Hi guys. I have got just one follow-up on Kevin’s question, I mean what is your ROA, ROE and efficiency ratio target and when do you think you can get there?

I think that the target requires us it depends on when we get to our scale targets which our plan would set those in 12 to 24 months. So I think that’s still a reasonable projection of when we’ll reach kind of our goals which would equate to approximately five years after the recapitalization of First PacTrust at which time I think we guided that we thought it would be a five to seven year process to get where we targeted. As far as the metrics you’re talking about, we’ve talked a little bit about you can, from an investor standpoint you can measure things like efficiency ratio for some of our businesses but some of the businesses that metric is tougher to measure against because it wasn’t designed for things like an RA business or even a retail broker business. So, I don’t think we’ve provided guidance on it and the reason is that we’re looking to optimize our business as a whole in the profitability as a whole and something like a dent only metric like an efficiency ratio investors have asked me provided some colors as far as target efficiency ratios and those tend to against just kind of some model line peers. But -- model line just means bank-only operations. But to try and jam in efficiency ratio into kind of see a financial business or The Palisades Group’s business, this is something that that we don’t find particularly productive because just to give you a sense as an example, the revenues on the CS Financial business and the expenses that get incurred tend to be payments of fees or loans from borrowers that didn’t get paid out to the brokers. And that tends to be pretty close to 100% correlated expense where the margins on…

So, in that case, how do you or what metrics do you look at that analysts, investors can also look at to compare you to competitors? Sandler O'Neill & Partners: So, in that case, how do you or what metrics do you look at that analysts, investors can also look at to compare you to competitors?

Well, what we look at is our strategic plan, which takes the business as a whole and sights the question that Kevin asked, which is what are we building here. And as we build it, what's the consolidated profitability we'd expect for that future business and…

Is that ROA or ROE? Sandler O'Neill & Partners: Is that ROA or ROE?

No

Consolidated profitability? Sandler O'Neill & Partners: Consolidated profitability?

Yes sure. And I think we've given guidance before that when we do investments for -- based on ROE, you're looking at things that are in the high-teens as a return hurdle. Even in our acquisitions we've given guidance that we have return hurdles over 15% ROEs and that's consistent with how we look at our business.

Got you. Thank you very much. Sandler O'Neill & Partners: Got you. Thank you very much.

With no further questions at this time, I would now like to turn the call back to Mr. Steve Sugarman for any closing remarks.

Steve, this is Ron. If I may, I just want to go back to a question I was asked earlier. I believe by Don Worthington on the TDRs. We have roughly, approximately 13 million, 26 loans that are in a TDR status. Of those 26, 25 are paying under the currently modified terms and are less than 90 days delinquent and roughly about $12 million is paying according to those terms. So that’s basically one loan Don, roughly about $1 million.

Very well, we hope that you guys found this call productive and we really appreciate you taking the time. Thanks again to all the employees and professionals at Banc of California. And I think we are going to continuing to make good progress towards our business plan. We look forward to reporting to you in a couple of months on the first quarter. Thank you.

Thank you. Ladies and gentlemen, thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.