Banc of California, Inc. reported a net loss of $251.3 million, or $(1.61) per diluted share, for the second quarter of 2026, a significant decline from net earnings of $62.0 million, or $0.39 per diluted share, in the previous quarter. The loss was primarily attributed to strategic balance sheet actions, including a $256.7 million pre-tax loss from the repositioning of securities and a $12.5 million loss related to loans transferred to held-for-sale (HFS) status. Total interest income for the quarter was $414.6 million, while interest expense rose to $164.1 million, resulting in net interest income of $250.5 million, a slight decrease from $251.6 million in the first quarter.
Compared to the same period last year, the company’s financial performance showed a stark contrast, with a net loss of $189.3 million for the first half of 2026, compared to net earnings of $62.1 million for the first half of 2025. The total interest income for the six months ended June 30, 2026, was $822.0 million, down from $827.2 million in the prior year. The provision for credit losses surged to $171.6 million, reflecting the impact of the targeted loan sale process and increased charge-offs, particularly in commercial real estate and multi-family construction loans.
Operationally, Banc of California executed several strategic initiatives during the quarter, including the transfer of $827.0 million in loans to HFS and the redemption of $385.0 million in subordinated debt. The company also repositioned $2.3 billion of lower-yielding held-to-maturity (HTM) securities to available-for-sale (AFS) securities, which resulted in a significant yield pickup on redeployed balances. Total deposits increased by $277.8 million to $28.1 billion, driven by higher balances in checking and money market accounts, while noninterest-bearing deposits represented 28% of total deposits.
As of June 30, 2026, total assets stood at $35.0 billion, reflecting a modest increase from $34.8 billion at the end of 2025. The allowance for credit losses was $276.2 million, representing 1.14% of loans and leases held for investment (HFI). The company reported a total of $203.7 million in nonaccrual loans, an increase from $159.2 million at the end of 2025, indicating a need for continued vigilance in credit quality management. Looking ahead, Banc of California aims to enhance its capital efficiency and improve its risk profile through ongoing strategic actions, while maintaining compliance with regulatory capital requirements.
About BANC OF CALIFORNIA, INC.
Banc of California, Inc. is a relationship-focused commercial bank serving small to middle-market and venture-backed businesses. It offers diverse loan and deposit products, treasury management, and payment processing services through its subsidiaries. Operating primarily in California, Colorado, and North Carolina, the bank emphasizes personalized service, flexible financing solutions, and technology-driven platforms to support business clients, homeowner associations, and community associations nationwide. Its business model centers on strong client relationships and tailored financial services.
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