Company: BANC-PF
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001628280-25-050892
Chunk: 117

Company: BANC OF CALIFORNIA, INC.
Filing Date: 2025-11-10
Form: 10-Q
Item: Item 8
Chunk 117
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 9.  DERIVATIVES       

We use derivative instruments and other risk management techniques to reduce our exposure to adverse fluctuations in interest rates and foreign currency exchange rates in accordance with our risk management policies and for certain loan clients to allow them to hedge the risk of rising interest rates and on their variable rate loans.Our derivatives are carried at fair value and recorded in "Other assets" or "Accrued interest payable and other liabilities," as appropriate, in the condensed consolidated balance sheets. On the date we enter into a derivative contract, the derivative is designated as a fair value hedge, cash flow hedge, or a hedge designation is not made as it is a customer-related transaction. When a derivative is designated as a fair value hedge or cash flow hedge, the Company performs an assessment at inception, and at least quarterly thereafter, to determine the effectiveness of the derivative in offsetting changes in the fair value or cash flows of the hedged items.The following table presents the U.S. dollar notional amounts and fair values of our derivative instruments included in the condensed consolidated balance sheets as of the dates indicated:September 30, 2025December 31, 2024NotionalFair ValueNotionalFair ValueAmountAssetLiabilityAmountAssetLiability(In thousands)Derivatives Designated as Cash Flow Hedges:Interest rate swaps$300,000 $— $4,281 $300,000 $1,442 $— Interest rate collars1,000,000 — 113 — — — Derivatives Not Designated as Hedging Instruments:Interest rate contracts152,480 4,268 4,224 192,405 6,516 6,428 Foreign exchange contracts97,312 128 119 36,155 515 1,134 Equity warrant assets14,494 3,418 — 16,066 3,763 — Total contracts$1,564,286 $7,814 $8,737 $544,626 $12,236 $7,562 Cash Flow HedgesCash flow hedges included pay-fixed, receive-floating interest rate swap contracts with notional amounts aggregating $300.0 million, five-year terms, and varying maturity dates throughout 2028. These swap contracts were entered into with institutional counterparties to hedge against variability in cash flow attributable to interest rate risk on a portion of the Company's borrowings. Cash flow hedges also included