Company: BANC-PF
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0001169770-25-000029
Chunk: 161

Company: BANC OF CALIFORNIA, INC.
Filing Date: 2025-08-08
Form: 10-Q
Item: Item 8
Chunk 161
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 loan losses and a $0.5 million provision for unfunded loan commitments, offset partially by a $0.9 million reversal of the provision for credit losses related to investment securities. The first quarter provision for loans and unfunded loan commitments was primarily driven by net charge-off activity experienced during the quarter, offset partially by lower specific reserves and changes in portfolio mix driven by growth in loan segments with low expected credit losses.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

The provision for credit losses was $48.4 million for the six months ended June 30, 2025 compared to $21.0 million for the six months ended June 30, 2024. The provision for the six months ended June 30, 2025 primarily included a provision for loan losses of $48.3 million and a provision for unfunded loan commitments of $0.2 million.

The provision for the six months ended June 30, 2025 included $26.3 million related to loans transferred to held for sale. The remaining provision for loans and unfunded loan commitments was primarily driven by net charge-off activity experienced in the first half of the year, with additional impacts from risk rating migration activity. These were offset partially by lower specific reserves and a favorable shift in the portfolio mix due to growth in loan segments with lower expected credit losses.

The provision for loans and unfunded loan commitments for the six months ended June 30, 2024 included a $23.0 million provision for loan losses and a $2.0 million reversal of the provision for unfunded loan commitments. The provision for the six months ended June 30, 2024 was generally due to higher net charge-offs and higher qualitative reserves, offset partially by the reserves released for the Civic loans transferred to held for sale in the second quarter of 2024.

Certain circumstances may lead to increased provisions for credit losses on loans and leases in the future. Examples of such circumstances include deterioration in economic conditions and forecasts, an increased amount of classified and/or criticized loans and leases, and net loan and lease and unfunded commitment growth. Deterioration in economic conditions and forecasts may include the rate of economic growth, the unemployment rate, the rate of inflation, changes in the general level of interest rates, changes in real estate values, and adverse conditions in borrowers’ businesses. See further discussion in “- Balance Sheet Analysis - Allowance for Credit Losses on Loans and Leases Held for Investment”