Company: BANC-PF
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0001169770-25-000024
Chunk: 171

Company: BANC OF CALIFORNIA, INC.
Filing Date: 2025-05-09
Form: 10-Q
Item: Item 8
Chunk 171
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256)(1,024)Total borrowings, net (1)$1,670,782 $1,391,814 

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(1)    All borrowings were held at the Bank level with the exception of the 5.25% Senior Notes due April 2025 ("Senior Notes"), which were issued at the holding company level. 

Borrowings increased by $279.0 million to $1.7 billion at March 31, 2025 compared to $1.4 billion at December 31, 2024 due to higher short-term borrowings. We utilized short-term borrowings to manage liquidity needs, including, but not limited to, accommodating liability maturities and deposit withdrawals, funding asset growth, and supporting business operations.

Subordinated Debt

As of March 31, 2025, the carrying value of subordinated debt totaled $944.9 million compared to $941.9 million at December 31, 2024. The increase was mainly driven by the accretion of the acquisition discount on acquired subordinated debt and higher valuation of the Euribor-based subordinated debt. At March 31, 2025, $131.0 million was included in the Company's Tier I capital and $798.9 million was included in Tier II capital. 

94

Regulatory Matters

Capital

Bank regulatory agencies measure capital adequacy through standardized risk-based capital guidelines that compare different levels of capital (as defined by such guidelines) to risk-weighted assets and off-balance sheet obligations. At March 31, 2025, banks considered to be “well capitalized” must maintain a minimum Tier 1 leverage ratio of 5.00%, a minimum common equity Tier 1 capital ratio of 6.50%, a minimum Tier 1 capital ratio of 8.00%, and a minimum Total capital ratio of 10.00%.  

Regulatory capital requirements limit the amount of DTAs that may be included when determining the amount of regulatory capital. Deferred tax asset amounts in excess of the calculated limit are disallowed from regulatory capital. At March 31, 2025, such disallowed amounts were $309.5 million for the Company and none for the Bank. No assurance can be given that the regulatory capital deferred tax asset limitation will not increase in the future or that the Company and the Bank will not have increased DTAs that are disallowed.

In 2020, the federal bank regulatory authorities approved a rule that delays the estimated impact