Company: BANC-PF
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001628280-25-050892
Chunk: 20

Company: BANC OF CALIFORNIA, INC.
Filing Date: 2025-11-10
Form: 10-Q
Item: Item 2
Chunk 20
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 Credit Quality Metrics:Net (recoveries) charge-offs on loans and leases held for investment (1)$(2,457)$44,222 $55,839 $59,342 Annualized net (recoveries) charge-offs to average loans and leases(0.04)%0.72 %0.31 %0.32 %At quarter-end:Allowance for credit losses$270,722 $258,565 Allowance for credit losses to loans and leases held for investment1.12 %1.07 %Allowance for credit losses to nonaccrual loans and leases held for investment155.1 %154.4 %Nonaccrual loans and leases held for investment $174,541 $167,516 Nonaccrual loans and leases held for investment to loans and leases held for investment0.72 %0.69 %Classified loans and leases held for investment $763,582 $656,556 Special mention loans and leases held for investment$505,979 $661,568 

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(1)    See "- Balance Sheet Analysis - Allowance for Credit Losses on Loans and Leases Held for Investment" for detail of charge-offs and recoveries by loan portfolio segment, class, and subclass for the periods presented.

Provision for credit losses are charged to earnings for the ALLL, the reserve for unfunded loan commitments, and the ACL on HTM and AFS securities. The provision for credit losses on our loans and leases held for investment is based on our allowance methodology and is an expense that, in our judgment, is required to maintain an adequate ACL. For further details on our loan-related ACL methodology, see “- Balance Sheet Analysis - Allowance for Credit Losses on Loans and Leases Held for Investment” contained herein.

88

Third Quarter of 2025 Compared to Second Quarter of 2025 

The provision for credit losses was $9.7 million for the third quarter compared to $39.1 million for the second quarter. The third quarter provision included a provision for loan losses of $8.7 million and a $1.0 million provision for unfunded loan commitments. 

The third quarter provision for loan losses and unfunded commitments reflected changes in loan risk ratings, new originations, changes in the macroeconomic outlook, and higher unfunded commitments, partially offset by net recoveries and lower qualitative reserve driven primarily by lower balances in commercial real estate loans