Company: BANC-PF
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0001169770-25-000029
Chunk: 160

Company: BANC OF CALIFORNIA, INC.
Filing Date: 2025-08-08
Form: 10-Q
Item: Item 8
Chunk 160
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0.24 %0.49 %0.45 %At quarter-end:Allowance for credit losses$258,565 $264,557 Allowance for credit losses to loans and leases held for investment1.07 %1.10 %Allowance for credit losses to nonaccrual loans and leases held for investment154.4 %123.9 %Nonaccrual loans and leases held for investment $167,516 $213,480 Nonaccrual loans and leases held for investment to loans and leases held for investment0.69 %0.88 %Classified loans and leases held for investment $656,556 $764,723 Special mention loans and leases held for investment$661,568 $937,014 

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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.

85

Second Quarter of 2025 Compared to First Quarter of 2025 

The provision for credit losses was $39.1 million for the second quarter compared to $9.3 million for the first quarter. The second quarter provision included a provision of loan losses of $38.6 million, offset partially by a $0.4 million reversal of the provision for unfunded loan commitments, and a provision for credit losses on investment securities of $0.9 million. 

The second quarter provision for loan losses included $26.3 million related to loans transferred to held for sale for the strategic loan sales process. The remaining $12.3 million provision for loan losses was primarily driven by net charge-off activity experienced during the quarter, an increase in the quantitative reserve driven by the updated economic forecast, and an increase in the qualitative reserve related to loans secured by office properties.

The first quarter provision included a $9.7 million provision for