Company: BANC-PF
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001628280-25-050892
Chunk: 31

Company: BANC OF CALIFORNIA, INC.
Filing Date: 2025-11-10
Form: 10-Q
Item: Item 2
Chunk 31
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 for investment$15,734,688 100 %$16,599,952 100 %

At September 30, 2025 and December 31, 2024, 72% and 71% of our real estate loans were collateralized by property located in California because our full-service branches and our community banking activities are primarily located in California.

Loans Held for Sale     

Total loans held for sale increased by $185.1 million to $211.5 million at September 30, 2025 compared to $26.3 million at December 31, 2024. The increase primarily reflects the transfer of loans to HFS as part of the Company’s strategic loan sale process initiated in the second quarter of 2025, partially offset by subsequent loan liquidations, as discussed above. 

97

Allowance for Credit Losses on Loans and Leases Held for Investment

The ACL on loans and leases held for investment is the combination of the ALLL and the reserve for unfunded loan commitments. The ALLL is reported as a reduction of the amortized cost basis of loans and leases, while the reserve for unfunded loan commitments is included within "Accrued interest payable and other liabilities" on the condensed consolidated balance sheets. The amortized cost basis of loans and leases does not include accrued interest receivable, which is included in "Other assets" on the condensed consolidated balance sheets. The "Provision for credit losses" on the condensed consolidated statement of earnings is a combination of the provision for loan and lease losses, the provision for unfunded loan commitments, the provision for AFS debt securities, and the provision for HTM debt securities.

Under the CECL methodology, expected credit losses reflect losses over the remaining contractual life of an asset, considering the effect of prepayments and available information about the collectability of cash flows, including information about relevant historical experience, current conditions, and reasonable and supportable forecasts of future events and circumstances. Thus, the CECL methodology incorporates a broad range of information in developing credit loss estimates. 

For further information regarding the calculation of the ACL on loans and leases held for investment using the CECL methodology, see Note 1. Nature of Operations and Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data" of our Form 10-K. 

In calculating our ACL, we continued to consider higher inflation rates, the Federal Reserve's monetary policy, the risk of a recession, technical or otherwise