Company: BANC-PF
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001628280-25-050892
Chunk: 24

Company: BANC OF CALIFORNIA, INC.
Filing Date: 2025-11-10
Form: 10-Q
Item: Item 2
Chunk 24
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 costs. Insurance and assessment decreased primarily due to incremental FDIC special assessments recorded in 2024, which reflected higher assessment rates. Customer related expense decreased due to lower earnings credit rate expenses, driven by the lower federal funds rate. Occupancy expenses decreased as a result of cost savings from branch consolidations following the PacWest Bancorp merger. Acquisition, integration and reorganization costs of $13.2 million in 2024 reflected adjustments to the merger-related accruals, as actual expenses were lower than previously estimated. 

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Income Taxes

Third Quarter of 2025 Compared to Second Quarter of 2025 

Income tax expense of $22.7 million was recorded for the third quarter resulting in an effective tax rate of 24.6% compared to income tax expense of $19.5 million and an effective tax rate of 40.7% for the second quarter. 

The higher effective tax rate in the second quarter of 2025 included a one-time non-cash income tax expense of $9.8 million due primarily to the revaluation of deferred tax assets related to the California state tax changes passed as part of the 2025 California budget enacted on June 30, 2025 and effective retroactively to January 1, 2025.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

Income tax expense of $61.7 million was recorded for the nine-month period ended September 30, 2025 resulting in an effective tax rate of 28.9% compared to income tax expense of $28.6 million and an effective tax rate of 29.0% for the comparable period in 2024. 

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the U.S. The OBBBA includes significant tax reform provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act and the restoration of immediate deductions of certain capital asset additions. While our initial evaluation indicates these tax law changes will not materially impact the Company’s future effective tax rate, we will continue to monitor any additional changes and relevant guidance, and to assess any potential impact to our financial statements.

Balance Sheet Analysis

The following table provides a summary of our balance sheet highlights as of the dates indicated:

September 30,December 31,IncreaseBalance Sheet Highlights20252024(Decrease)(In thousands)Cash and cash equivalents$2,