Company: BANC-PF
Filing Date: 2025-03-03
Form Type: 10-K
Source: 0001628280-25-009438
Chunk: 229

Company: BANC OF CALIFORNIA, INC.
Filing Date: 2025-03-03
Form: 10-K
Item: Item 1
Chunk 229
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 increased assessment rate is intended to improve the likelihood that the DIF reserve ratio will reach the required minimum of 1.35% by the statutory deadline of September 30, 2028.

Further, on November 16, 2023, the FDIC issued a final rule to implement a special assessment to recover the loss to the DIF associated with protecting uninsured depositors following the closure of several large banks. Under the final rule, the assessment base for an insured institution will be equal to the institution's estimated uninsured deposits as of December 31, 2022, adjusted to exclude the first $5 billion in estimated uninsured deposits. The FDIC began collecting the special assessment at an annual rate of 13.4 basis points in the first quarterly assessment period of 2024 and will continue to collect special assessments for an anticipated total of ten quarterly assessment periods. As a result of this final rule, our estimated special assessment amount totaled $38.6 million.

Brokered Deposits

The Federal Deposit Insurance Act restricts the use of brokered deposits by certain depository institutions. A well-capitalized insured depository institution may solicit and accept, renew or roll over any brokered deposit without restriction. An adequately capitalized insured depository institution may not accept, renew or roll over any brokered deposit unless it has applied for and been granted a waiver of this prohibition by the FDIC. The FDIC may grant a waiver upon a finding that the acceptance of brokered deposits does not constitute an unsafe or unsound practice with respect to such institution. The rates that an adequately capitalized institution with a waiver may pay on brokered deposits may not exceed certain ceilings. An “undercapitalized insured depository institution” may not accept, renew or roll over any brokered deposit. As of December 31, 2024, the Bank was considered “well capitalized” for this purpose.

On August 23, 2024, the FDIC published a proposed rule that would revise the FDIC’s regulations governing the classification and treatment of brokered deposits. Among other changes, the proposal would broaden the definition of deposit broker and thereby expand the scope of deposits classified as brokered. We are evaluating the potential impact of the proposed rule and if the rule is finalized as proposed then it may require the Bank to classify a greater amount of its deposits obtained with the involvement of third parties as brokered deposits. An increase in the amount of brokered deposits could, among other things, increase the Bank’s deposit insurance assessment costs. The current status of the proposed