About Banc of California, Inc.
Banc of California, Inc. (NYSE: BANC) is a bank holding company with over $34 billion in assets and the parent company of Banc of California. Banc of California is one of the nation’s premier relationship-based business banks, providing banking and treasury management services to small-, middle-market, and venture-backed businesses.
Banc of California is the largest independent bank headquartered in Los Angeles and the third largest bank headquartered in California and offers a broad range of loan and deposit products and services through 79 full-service branches located throughout California and in Denver, Colorado, and Durham, North Carolina, as well as through regional offices nationwide. The bank also provides full-service payment processing solutions to its clients and serves the Community Association Management industry nationwide with its technology-forward platform, SmartStreet.
Fourth Quarter and Full Year 2025 Financial Highlights
Total loans and leases of $25.2 billion increased by 15% for the quarter annualized and 6% year-over-year. Fourth quarter loan production and disbursements totaled $2.7 billion with a weighted average interest rate on production of 6.83%, and heavily concentrated toward the end of the quarter. Full year loan production and disbursements of $9.6 billion, up 31% year-over-year. Noninterest-bearing deposits of $7.8 billion increased by 11% annualized from 3Q25, representing 28% of total deposits.
Net interest margin of 3.20% for the quarter, and 3.15% for the year reflecting a 30 basis point expansion year-over-year, driven by improved funding mix and lower deposit costs. Late fourth quarter loan production will have a full quarter benefit to net interest income in 1Q26.
Total revenue of $292.9 million increased over 2% and pre-tax pre-provision income of $112.3 million increased 10% from 3Q25 reflecting improved operating leverage. Noninterest expenses of $180.6 million decreased by $5.0 million from 3Q25 contributing to an efficiency ratio decrease to 59.35% from 62.05% in 3Q25.
Credit quality metrics stable with quarter-over-quarter reductions in nonperforming, criticized, and special mention loans and leases, as a percentage of total loans and leases held for investment, of 8 basis points, 24 basis points, and 27 basis points, respectively. On a year-over-year basis, there were reductions in nonperforming, criticized, and special mention loans and leases, as a percentage of total loans and leases held for investment, of 16 basis points, 195 basis points, and 278 basis points, respectively.
Net Interest Income and Margin
Net interest income decreased by $2.1 million to $251.4 million for the fourth quarter from $253.4 million for the third quarter. Net interest income increased by $51.3 million to $977.4 million for the year ended December 31, 2025 from $926.1 million for the year ended December 31, 2024.
Provision For Credit Losses
The provision for credit losses was $12.5 million for the fourth quarter compared to $9.7 million for the third quarter. The fourth quarter provision included a provision for loan losses of $7.8 million and a $4.7 million provision for unfunded loan commitments. The provision for credit losses was $70.6 million for the year ended December 31, 2025, compared to $42.8 million for the year ended December 31, 2024. The provision for 2025 included a provision for loan losses of $64.8 million and a provision for unfunded loan commitments of $5.9 million.
Noninterest Income
Noninterest income increased by $7.3 million to $41.6 million for the fourth quarter from $34.3 million for the third quarter due mainly to a $6.1 million increase in leased equipment income and a $1.2 million increase in dividends and gains on equity investments. Noninterest income increased by $65.0 million to $142.1 million for the year ended December 31, 2025 from $77.1 million for the year ended December 31, 2024.
Securities
Securities available forsale (AFS) increased by $27.3 million during the fourth quarter to $2.5 billion at December 31, 2025. The increase was primarily driven by $160.9 million of purchases and a $15.7 million increase in the fair value of AFS securities, offset partially by $118.6 million of principal paydowns, $29.3 million of maturities, and $1.4 million of net amortization. As of December 31, 2025, AFS securities had aggregate unrealized net after-tax losses in accumulated other comprehensive income (loss) (AOCI) of $136.6 million, down from $147.9 million at September 30, 2025.
AFS securities recorded lower unrealized net losses quarter over quarter, driven by a slight decline in interest rates, which positively impacted fair values. The balance of securities held-to-maturity (HTM) increased by $5.0 million in the fourth quarter to $2.3 billion at December 31, 2025. As of December 31, 2025, HTM securities had aggregate unrealized net after-tax losses in AOCI of $133.4 million remaining from the balance established at the time of transfer from AFS.
