Banc of California(BANC) - 2025 Q3 - Quarterly Report

Foreign Currency and Translation - As of September 30, 2025, the U.S. Dollar notional amounts of loans receivable and subordinated debt payable denominated in foreign currencies were $67.8 million and $30.2 million respectively[400] - The company recognized a foreign currency translation net gain of $18,000 for the nine months ended September 30, 2025, compared to a net loss of $752,000 for the same period in 2024[400] Interest Rate Risk Management - The projected change in the company's economic value of equity at September 30, 2025, shows a decrease of $628 million (13.2%) under a +200 basis points interest rate change scenario[418] - Under a -200 basis points interest rate change scenario, the economic value of equity would increase by $236 million (5.0%)[418] - The company's interest rate risk profile remained close to "neutral" as of September 30, 2025, indicating a balanced composition of repricing assets and liabilities[417] - The company uses a simulation model to measure estimated changes in net interest income (NII) from immediate and sustained changes in interest rates, reflecting a static balance sheet[414] - The interest rate risk management process includes monitoring loan and deposit flows, complemented by investment and funding activities[410] - The Finance Committee of the Boards of Directors reviews interest rate risk modeling results at least quarterly to ensure appropriate measurement and mitigation of interest rate risk[409] - The company has established asset/liability committees to monitor interest rate risk and ensure compliance with applicable regulations[406] Earnings and Deposits - The company expects that a declining interest rate environment would reduce Earnings Credit Rate (ECR) costs, thereby decreasing noninterest expenses[420] - As of September 30, 2025, client deposits eligible for ECRs totaled approximately $3.6 billion[421] - The Company's overall earnings profile is considered "liability sensitive" due to the rate sensitivity of ECRs[421] - In Q2 2025, the Company entered into interest rate collars with a notional value of $1.0 billion to mitigate interest expense risks[421]