BORROWING ARRANGEMENTS |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BORROWING ARRANGEMENTS | BORROWING ARRANGEMENTS A summary of outstanding borrowings as of June 30, 2026 and December 31, 2025 follows:
Federal Home Loan Bank Secured Line of Credit At June 30, 2026, the Company had a secured line of credit of $784.8 million from the FHLB, of which $719.8 million was available. This secured borrowing arrangement is collateralized under a blanket lien on qualifying real estate loans and is subject to the Company providing adequate collateral and continued compliance with the Advances and Security Agreement and other eligibility requirements established by the FHLB. At June 30, 2026, the Company had pledged $2.25 billion of qualifying loans with the FHLB under a blanket lien, of which an unpaid principal balance of $1.42 billion was considered as eligible collateral under this secured borrowing arrangement. In addition, at June 30, 2026, the Company used $65.0 million of its secured FHLB borrowing capacity by having the FHLB issue letters of credit to meet collateral requirements for deposits from the State of California and other public agencies. There were no borrowings at June 30, 2026 and December 31, 2025. Federal Reserve Bank Secured Line of Credit At June 30, 2026, the Company had credit availability of $329.7 million at the Federal Reserve discount window to the extent of collateral pledged. At June 30, 2026, the Company had pledged held-to-maturity debt securities with an amortized cost of $52.8 million as collateral, and qualifying loans with an unpaid principal balance of $323.7 million as collateral through the Borrower-in-Custody (“BIC”) program. The Company also pledged available-for-sale debt securities with an amortized cost of $85.7 million as collateral for secured public deposits and for other purposes as required by law or contract provisions. The Company had no discount window borrowings at June 30, 2026 and December 31, 2025. Federal Funds Unsecured Lines of Credit At June 30, 2026, the Company had four overnight unsecured credit lines from correspondent banks totaling $90.5 million. The lines are subject to annual review. There were no outstanding borrowings under these lines at June 30, 2026 and December 31, 2025. Fixed-to-Floating Rate Subordinated Debt In connection with the merger with the predecessor California BanCorp, the Company assumed $35 million in subordinated debt, with a fixed interest rate of 3.50% and a stated maturity of September 1, 2031. Beginning September 1, 2026, the interest rate changes to a quarterly variable rate equal to the then current 90-day SOFR plus 2.86%, until maturity, unless redeemed early, at the Company’s option, after the end of the fixed-rate period. The subordinated debt was initially recognized with a fair value discount of $3.4 million. At June 30, 2026 and December 31, 2025, the net unamortized fair value discount was $389 thousand and $1.2 million, respectively. The net unamortized fair value discount is netted against the balance and recorded in borrowings in the consolidated balance sheets. The amortization of the fair value discount is recorded in interest expense in the consolidated statements of operations. At June 30, 2026, the Company was in compliance with all covenants and terms of these notes. See Note 13 – Subsequent Events for additional information regarding the proposed redemption of this subordinated debt.
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