Company: BANC-PF
Filing Date: 2025-03-03
Form Type: 10-K
Source: 0001628280-25-009438
Chunk: 277

Company: BANC OF CALIFORNIA, INC.
Filing Date: 2025-03-03
Form: 10-K
Item: Item 1A
Chunk 277
---
 expected. If that occurs, we may have to redeploy the loan or investment proceeds into lower yielding assets, which might also decrease our income. Accordingly, changes in levels of market interest rates could materially and adversely affect our financial condition, net interest margin, results of operations, and profitability. Changes in interest rates also have a significant impact on the carrying value of certain of our assets, such as investment securities, on our balance sheet. In a rapidly changing interest rate environment, we may not be able to manage our interest rate risk effectively, which would adversely impact our financial condition and results of operations.

A reduction in our credit ratings could adversely affect our access to capital and could increase our cost of funds.

The credit rating agencies regularly evaluate the Company and the Bank, and credit ratings are based on a number of factors, including our financial strength and ability to generate earnings, as well as factors not entirely within our control, including conditions affecting the financial services industry, the economy, and changes in rating methodologies. There can be no assurance that we will maintain our current credit ratings. A downgrade of the credit ratings of the Company or the Bank could adversely affect our access to liquidity and capital and could significantly increase our cost of funds, trigger additional collateral or funding requirements, and decrease the number of investors and counterparties willing to lend to us or purchase our securities, reducing our ability to generate earnings.

We have a number of large credit relationships and individual commitments.

At December 31, 2024, there were two individual real estate construction and land commitments greater than or equal to $100 million with the largest commitment being $135 million. At December 31, 2024, these two individual commitments totaled $240 million and had an aggregate outstanding balance of $182 million. The projects financed by these commitments are two multi-family projects.

At December 31, 2024, we had six individual loan commitments greater than or equal to $150 million that ranged in size from $150 million to $500 million and totaled $1.3 billion and had an aggregate outstanding balance of $617 million. Two of these commitments totaling $650 million were equity fund loans, two of these commitments totaling $300 million were warehouse lending loans, one of these commitments totaling $200 million was a lender finance loan, and one of these commitments totaling $175 million was a loan secured by a multi-family property.

Funding and Liquidity Risks

We may not be able to develop and maintain a strong core deposit base or other low cost funding sources. 

We depend on checking