Banc of California, Inc. (NYSE:BANC) today reported net income of $14.4 million and net income available to common stockholders for the first quarter of 2021 of $7.8 million, or diluted earnings per common share of $0.15.

Highlights for the first quarter included:

Return on average assets of 0.74%
Average cost of total deposits of 0.28%, an 8 basis point decrease from the prior quarter, and period-end total cost of deposits of 0.24%
Noninterest-bearing deposit balances represented 28% of total deposits at March 31, 2021, up from 23% a year earlier
Allowance for credit losses at 1.43% of total loans and 148% of non-performing loans
Total deferrals/forbearances declined to $108.7 million at March 31, 2021 from $251.9 million at December 31, 2020
Common Equity Tier 1 capital at 11.50%
Entered into an agreement and plan of merger with Pacific Mercantile Bancorp, a commercial bank headquartered in Costa Mesa, California with total assets of $1.6 billion at December 31, 2020
Redemption of all Series D Preferred Stock for total consideration of $93.3 million

Jared Wolff, President & CEO of Banc of California, commented, "Our first quarter results reflected solid core operating performance and execution on the strategies that are enhancing the value of our franchise. We continued to grow average loans and earning assets, improve our deposit mix, reduce our cost of deposits, and maintain disciplined expense control. Certain non-core items in the quarter masked some of these results but, adjusted for these items, our quarterly results were very good."

Mr. Wolff continued, "Strong loan production helped to offset runoff in certain legacy areas of our portfolio. Our loan pipeline is steadily building which should support continued loan and earning asset growth through the year, assuming economic trends continue. During the first quarter, we also announced that we entered into a definitive agreement to acquire Pacific Mercantile Bancorp. The transaction is currently on track to close during the third quarter of 2021 and both organizations are excited about the opportunities to leverage the collective strengths of the combined company, and to realize the earnings accretion and other benefits that will further accelerate profitability."

Lynn Hopkins, Chief Financial Officer of Banc of California, said, "Given the high level of reserves we built during 2020 and improving economic forecasts, we had a small reserve release in the first quarter, and our allowance for credit losses to total loans ratio was unchanged from the prior quarter. We continued to see a significant decline in loan deferrals during the first quarter, although non-performing loans increased due to the downgrade of well-secured single family residential loans. We are pleased we were able to redeem our Series D Preferred Stock during the first quarter, which we expect to be accretive to our earnings per share going forward. With the improvement we are seeing in our financial performance and strong capital ratios, we remain well positioned to redeem our Series E Preferred Stock late in 2021 or in early 2022, which we expect will provide additional earnings accretion."

Ms. Hopkins continued, "Our net income available to common stockholders and earnings per share in the first quarter included $3.6 million in pre-tax losses on alternative energy investment partnership investments, $1.4 million in pre-tax merger-related and indemnified professional fees, $3.4 million in Series D preferred stock redemption expense, and $2.1 million in tax benefits related to the exercise of all previously issued outstanding stock appreciation rights. Excluding these items, net of a more normalized effective tax rate of 25%, our adjusted net income available to common stockholders for the quarter would have been $12.9 million or $0.25 per diluted share."

Income Statement Highlights

	Three Months Ended
	March 31, 2021			December 31, 2020		September 30, 2020		June 30, 2020			March 31, 2020
	($ in thousands)
Total interest and dividend income	$	68,618		$	73,530	$	69,666	$	72,697		$	74,714
Total interest expense	10,702			11,967		13,811		17,382			22,853
Net interest income	57,916			61,563		55,855		55,315			51,861
Total noninterest income	4,381			6,975		3,954		5,528			2,061
Total revenue	62,297			68,538		59,809		60,843			53,922
Total noninterest expense	46,735			38,950		40,394		72,770			46,919
Pre-tax / pre-provision income (loss)	15,562			29,588		19,415		(11,927		)	7,003
(Reversal of) provision for credit losses	(1,107		)	991		1,141		11,826			15,761
Income tax expense (benefit)	2,294			6,894		2,361		(5,304		)	(2,165		)
Net income (loss)	$	14,375		$	21,703	$	15,913	$	(18,449	)	$	(6,593	)

Net income (loss) available to common stockholders⁽¹⁾	$	7,825		$	17,706	$	12,084	$	(21,936	)	$	(9,694	)

(1)

Balance represents the net income (loss) available to common stockholders after subtracting preferred stock dividends, income allocated to participating securities, participating securities dividends, and impact of preferred stock redemption from net income (loss). Refer to the Statements of Operations for additional detail on these amounts.

Net interest income

Q1-2021 vs Q4-2020

Net interest income decreased $3.6 million to $57.9 million for the first quarter due to lower prepayment fees, higher net nonaccrual interest reversal, lower amortized fee income from PPP loan forgiveness, and 2 less days in the current quarter, offset by higher average interest-earning assets and lower interest expense. Compared to the prior quarter, average interest-earning assets increased by $110.0 million to $7.36 billion, including higher average loans of $39.1 million and higher other interest-earning assets of $74.1 million.

The net interest margin decreased 19 basis points to 3.19% for the first quarter of 2021 from 3.38% for the fourth quarter of 2020 as the average earning-assets yield decreased 26 basis points and the average cost of total funding decreased 7 basis points. The yield on average interest-earning assets decreased to 3.78% for the first quarter from 4.04% for the fourth quarter due mostly to lower loan yields. The average yield on loans decreased 28 basis points to 4.30% during the first quarter due to impact of lower prepayment penalty fees, higher net reversal of nonaccrual loan interest, and lower amortized fees from PPP loan forgiveness; these items increased the first quarter loan yield by 13 basis points and the fourth quarter loan yield by 34 basis points. The average yield on securities remained flat at 2.13% between quarters. The average yield on our collateralized loan obligations (CLOs) decreased 3 basis points to 1.91% for the first quarter from 1.94% for the fourth quarter as these securities reprice quarterly.

The average cost of total funding decreased 7 basis points to 0.63% for the first quarter from 0.70% for the fourth quarter. This decrease was driven by the lower average cost of interest-bearing liabilities and improved funding mix, including higher average noninterest-bearing deposits during the first quarter. During the first quarter, average deposits increased $164.2 million, consisting of higher average noninterest-bearing deposits of $205.1 million and lower average interest-bearing deposits of $40.9 million. Average Federal Home Loan Bank (FHLB) advances decreased $87.7 million primarily due to maturities of $105.0 million in advances during the prior quarter. The average cost of interest-bearing liabilities decreased 6 basis points to 0.83% for the first quarter of 2021 from 0.89% for the fourth quarter of 2020 due to actively managing down the cost of interest-bearing deposits into the current rate environment. The average cost of interest-bearing deposits declined 9 basis points to 0.38% for the first quarter from 0.47% for the prior quarter. Additionally, average noninterest-bearing deposits represented 27% of total average deposits for the first quarter compared to 24% of total average deposits for the fourth quarter. The average cost of total deposits decreased 8 basis points to 0.28% for the first quarter. The spot rate of total deposits at the end of the first quarter of 2021 was 0.24%.

Provision for credit losses

Q1-2021 vs Q4-2020

The provision for credit losses was a reversal of $1.1 million for the first quarter, compared to a provision for credit losses of $1.0 million for the fourth quarter. The first quarter reversal of credit losses was due primarily to improvements in key macro-economic forecast variables, such as unemployment and gross domestic product, consideration of credit quality metrics, and lower period end loan balances of $134.0 million.

Noninterest income

Q1-2021 vs Q4-2020

Noninterest income decreased $2.6 million, to $4.4 million for the first quarter due mostly to lower other income from legacy legal settlements for the benefit of the Company which totaled $2.8 million during the fourth quarter of 2020. Customer service fees decreased by $195 thousand due to lower loan fees of $367 thousand, offset by higher deposit activity fees of $172 thousand. The increase in deposit activity fees is attributed to higher balances and our initiative to bring our service fee schedules more in line with market.

Noninterest expense

Q1-2021 vs Q4-2020

Noninterest expense increased $7.8 million to $46.7 million for the first quarter compared to the prior quarter. The increase was primarily due to higher professional fees of $4.0 million, higher merger-related costs of $700 thousand, and higher net losses in alternative energy partnership investments of $4.3 million. Professional fees included indemnified legal expenses, net of recoveries, of $721 thousand in the first quarter compared to net recoveries of $4.2 million during the fourth quarter. These increases were offset by lower occupancy and equipment of $364 thousand due mostly to lower rent and other facility-related expenses and a $566 thousand decrease in all other expense. The fourth quarter all other expenses included the write-off of capitalized software costs of $336 thousand; there were no similar charges in the first quarter. Total operating costs, defined as noninterest expense adjusted for certain non-core items (refer to section Non-GAAP Measures), decreased $2.3 million to $41.7 million for the first quarter compared to $44.0 million for the prior quarter primarily due to lower professional fees, occupancy and equipment, and other expenses.

Income taxes

Q1-2021 vs Q4-2020

Income tax expense totaled $2.3 million for the first quarter resulting in an effective tax rate of 13.8% compared to $6.9 million for the fourth quarter and an effective tax rate of 24.1%. The lower effective tax rate between quarters was due to a tax benefit resulting from the exercise of all previously issued outstanding stock appreciation rights, including a net benefit of $2.1 million in the first quarter. The effective tax rate is expected to be in the 25% to 27% range for the remaining quarters in 2021.

Balance Sheet

At March 31, 2021, total assets were $7.93 billion, which represented a linked-quarter increase of $56.1 million. The following table shows selected balance sheet line items as of the dates indicated.

											Amount Change
	March 31, 2021		December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020		Q1-21 vs. Q4-20			Q1-21 vs. Q1-20

	($ in thousands)
Securities available-for-sale	$	1,270,830	$	1,231,431	$	1,245,867	$	1,176,029	$	969,427	$	39,399		$	301,403
Loans held-for-investment	$	5,764,401	$	5,898,405	$	5,678,002	$	5,627,696	$	5,667,464	$	(134,004	)	$	96,937
Loans held-for-sale	$	1,408	$	1,413	$	1,849	$	19,768	$	20,234	$	(5	)	$	(18,826	)
Total assets	$	7,933,459	$	7,877,334	$	7,738,106	$	7,770,138	$	7,662,607	$	56,125		$	270,852

Noninterest-bearing deposits	$	1,700,343	$	1,559,248	$	1,450,744	$	1,391,504	$	1,256,081	$	141,095		$	444,262
Total deposits	$	6,142,042	$	6,085,800	$	6,032,266	$	6,037,465	$	5,562,838	$	56,242		$	579,204
Borrowings⁽¹⁾	$	891,546	$	796,110	$	733,105	$	790,707	$	1,151,479	$	95,436		$	(259,933	)
Total liabilities	$	7,128,766	$	6,980,127	$	6,863,852	$	6,923,179	$	6,827,605	$	148,639		$	301,161
Total equity	$	804,693	$	897,207	$	874,254	$	846,959	$	835,002	$	(92,514	)	$	(30,309	)

(1)

Represents Advances from Federal Home Loan Bank and Notes payable, net

Investments

Securities available-for-sale increased $39.4 million during the first quarter to $1.27 billion at March 31, 2021 primarily due to purchases of $52.8 million, offset by principal payments of $9.4 million and lower unrealized net gains of $3.6 million. The decrease in the unrealized net gains was due mostly to decreases in the value of mortgage-backed securities as a result of increases in longer term interest rates, offset by improved pricing of CLOs and corporate debt securities due to lower credit spreads. There were no sales of securities during the first quarter. As of March 31, 2021, our securities portfolio included $683.9 million of CLOs, $334.3 million of agency securities, $85.5 million of municipal securities, $150.3 million of corporate debt securities, and $16.7 million of SBA pool securities. The CLO portfolio, which is comprised only of AA and AAA rated securities, represented 53.8% of the total securities portfolio and the carrying value included an unrealized net loss of $3.6 million at March 31, 2021 compared to an unrealized net loss of $9.7 million at December 31, 2020.

Loans

The following table sets forth the composition, by loan category, of our loan portfolio as of the dates indicated:

	March 31, 2021			December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020
	($ in thousands)
Composition of held-for-investment loans
Commercial real estate	$	839,965		$	807,195		$	826,683		$	822,694		$	810,024
Multifamily	1,258,278			1,289,820			1,476,803			1,434,071			1,466,083
Construction	169,122			176,016			197,629			212,979			227,947
Commercial and industrial	1,878,325			2,088,308			1,586,824			1,436,990			1,578,223
SBA	338,903			273,444			320,573			310,784			70,583
Total commercial loans	4,484,593			4,634,783			4,408,512			4,217,518			4,152,860
Single-family residential mortgage	1,253,251			1,230,236			1,234,479			1,370,785			1,467,375
Other consumer	26,557			33,386			35,011			39,393			47,229
Total consumer loans	1,279,808			1,263,622			1,269,490			1,410,178			1,514,604
Total gross loans	$	5,764,401		$	5,898,405		$	5,678,002		$	5,627,696		$	5,667,464
Composition percentage of held-for-investment loans
Commercial real estate	14.6		%	13.7		%	14.6		%	14.6		%	14.3		%
Multifamily	21.8		%	21.9		%	26.0		%	25.5		%	25.9		%
Construction	2.9		%	3.0		%	3.5		%	3.8		%	4.0		%
Commercial and industrial	32.6		%	35.3		%	28.0		%	25.5		%	27.9		%
SBA	5.9		%	4.6		%	5.6		%	5.5		%	1.2		%
Total commercial loans	77.8		%	78.5		%	77.7		%	74.9		%	73.3		%
Single-family residential mortgage	21.7		%	20.9		%	21.7		%	24.4		%	25.9		%
Other consumer	0.5		%	0.6		%	0.6		%	0.7		%	0.8		%
Total consumer loans	22.2		%	21.5		%	22.3		%	25.1		%	26.7		%
Total gross loans	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%

Held-for-investment loans decreased $134.0 million to $5.76 billion from the prior quarter, resulting from lower commercial and industrial (C&I) loans of $210.0 million due, in part, to decreased utilization of credit facilities and decreases in multifamily loans of $31.5 million, and construction loans of $6.9 million due to prepayment activity. The decreases were partially offset by increases in commercial real estate loans of $32.8 million and SBA loans of $65.5 million due mostly to $131.9 million in new PPP loans originated, offset by the SBA processing forgiveness requests of $62.5 million during the quarter. At March 31, 2021, SBA loans included $276.0 million of PPP loans, net of fees.

We continue to focus the real estate loan portfolio toward relationship-based multifamily, bridge, light infill construction, and commercial real estate loans. Currently, loans secured by residential real estate (single-family, multifamily, single-family construction, and credit facilities) represent approximately 66% of our total loans outstanding.

The C&I portfolio has limited exposure to certain business sectors undergoing severe stress. The C&I industry concentrations in dollars and as a percentage of total outstanding C&I loan balances are summarized below:

	March 31, 2021
	Amount		% of Portfolio
	($ in thousands)
C&I Portfolio by Industry
Finance and insurance (includes Warehouse lending)	$	1,220,408	65	%
Real Estate & Rental Leasing	230,781		12	%
Gas Stations	68,672		4	%
Healthcare	68,964		4	%
Wholesale Trade	40,803		2	%
Television / Motion Pictures	34,067		2	%
Manufacturing	25,198		1	%
Food Services	31,366		2	%
Other Retail Trade	21,167		1	%
Professional Services	16,993		1	%
Transportation	4,773		—	%
Accommodations	2,427		—	%
All other	112,706		6	%
Total	$	1,878,325	100	%

Deposits

The following table sets forth the composition of our deposits at the dates indicated.

	March 31, 2021			December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020
	($ in thousands)
Composition of deposits
Noninterest-bearing checking	$	1,700,343		$	1,559,248		$	1,450,744		$	1,391,504		$	1,256,081
Interest-bearing checking	2,088,528			2,107,942			2,045,115			1,846,698			1,572,389
Money market	775,072			714,297			689,769			765,854			575,820
Savings	909,631			932,363			946,293			939,018			877,947
Non-brokered certificates of deposit	668,468			755,727			820,531			924,630			1,071,936
Brokered certificates of deposit	—			16,223			79,814			169,761			208,665
Total deposits	$	6,142,042		$	6,085,800		$	6,032,266		$	6,037,465		$	5,562,838
Composition percentage of deposits
Noninterest-bearing checking	27.7		%	25.6		%	24.1		%	23.0		%	22.6		%
Interest-bearing checking	34.0		%	34.6		%	33.9		%	30.6		%	28.3		%
Money market	12.6		%	11.7		%	11.4		%	12.7		%	10.3		%
Savings	14.8		%	15.3		%	15.7		%	15.6		%	15.8		%
Non-brokered certificates of deposit	10.9		%	12.4		%	13.6		%	15.3		%	19.3		%
Brokered certificates of deposit	—		%	0.4		%	1.3		%	2.8		%	3.7		%
Total deposits	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%

Total deposits increased $56.2 million during the first quarter of 2021 to $6.14 billion due to higher noninterest-bearing checking balances of $141.1 million and money market balances of $60.8 million, offset by lower interest-bearing checking of $19.4 million, savings balances of $22.7 million, and non-brokered certificates of deposit of $87.3 million. We continue to focus on growing relationship-based deposits, strategically augmented by wholesale funding, as we actively managed down deposit costs in response to the current interest rate environment. Noninterest-bearing deposits totaled $1.70 billion and represented 27.7% of total deposits at March 31, 2021 compared to $1.56 billion, or 25.6% of total deposits, at December 31, 2020.

Debt

Advances from the FHLB increased $95.3 million, or 18%, to $635.1 million, as of March 31, 2021, due to higher overnight advances, offset by maturities of $45.0 million in term advances. At the end of the first quarter, FHLB advances included $225.0 million in overnight borrowings, $5.0 million in term advances maturing within three months, and $411.0 million maturing beyond three months with a weighted average life of 4.7 years and weighted average interest rate of 2.53%.

Equity

At March 31, 2021, total stockholders' equity decreased by $92.5 million to $804.7 million and tangible common equity decreased by $2.3 million to $670.2 million on a linked-quarter basis. The decrease in total stockholders' equity for the first quarter, was a result of the redemption of all remaining Series D Preferred Stock for $93.3 million, lower net accumulated other comprehensive income of $2.6 million, dividends to common and preferred stockholders of $6.2 million and the impact of vested and exercised share-based awards of $6.4 million, offset by net income of $14.4 million and share-based award compensation of $1.5 million. Tangible book value per share decreased to $13.24 as of March 31, 2021 from $13.39 at December 31, 2020.

Capital ratios remain strong with total risk-based capital at 15.87% and a tier 1 leverage ratio of 9.62%. The following table sets forth our regulatory capital ratios at March 31, 2021 and the previous four quarters. The interim capital relief related to the adoption of the current expected credit losses (CECL) accounting standard increased the Bank's leverage ratio by approximately 10 basis points at March 31, 2021.

	March 31, 2021		December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020
Capital Ratios⁽¹⁾
Banc of California, Inc.
Total risk-based capital ratio	15.87	%	17.01	%	16.19	%	16.35	%	16.16	%
Tier 1 risk-based capital ratio	13.17	%	14.35	%	14.94	%	15.10	%	14.91	%
Common equity tier 1 capital ratio	11.50	%	11.19	%	11.59	%	11.68	%	11.58	%
Tier 1 leverage ratio	9.62	%	10.90	%	10.79	%	10.56	%	11.20	%
Banc of California, NA
Total risk-based capital ratio	17.82	%	17.27	%	18.14	%	18.17	%	18.21	%
Tier 1 risk-based capital ratio	16.57	%	16.02	%	16.89	%	16.92	%	16.96	%
Common equity tier 1 capital ratio	16.57	%	16.02	%	16.89	%	16.92	%	16.96	%
Tier 1 leverage ratio	12.13	%	12.19	%	12.21	%	11.84	%	12.67	%

(1)

March 31, 2021 capital ratios are preliminary.

Credit Quality

	March 31, 2021			December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020
Asset quality information and ratios	($ in thousands)
Delinquent loans held-for-investment
30 to 89 days delinquent	$	31,005		$	13,981		$	51,229		$	49,810		$	56,338
90+ days delinquent	30,292			17,636			31,809			45,384			28,632
Total delinquent loans	$	61,297		$	31,617		$	83,038		$	95,194		$	84,970
Total delinquent loans to total loans	1.06		%	0.54		%	1.46		%	1.69		%	1.50		%
Non-performing assets, excluding loans held-for-sale
Non-accrual loans	$	55,920		$	35,900		$	66,337		$	72,703		$	56,471
90+ days delinquent and still accruing loans	—			728			547			—			—
Non-performing loans	55,920			36,628			66,884			72,703			56,471
Other real estate owned	—			—			—			—			—
Non-performing assets	$	55,920		$	36,628		$	66,884		$	72,703		$	56,471
ALL to non-performing loans	141.90		%	221.22		%	135.95		%	124.30		%	138.55		%
Non-performing loans to total loans held-for-investment	0.97		%	0.62		%	1.18		%	1.29		%	1.00		%
Non-performing assets to total assets	0.70		%	0.46		%	0.86		%	0.94		%	0.74		%
Troubled debt restructurings (TDRs)
Performing TDRs	$	4,547		$	4,733		$	5,408		$	5,597		$	6,100
Non-performing TDRs	4,130			4,264			20,002			20,275			20,852
Total TDRs	$	8,677		$	8,997		$	25,410		$	25,872		$	26,952

Total delinquent loans increased $29.7 million in the first quarter to $61.3 million at March 31, 2021, due to $39.0 million of additions, offset by $9.2 million returning to current status and $0.2 million of principal payments or payoffs. Delinquent loans included single-family residential (SFR) loans of $47.8 million, or 78% of the total delinquent balance at quarter end, and represented $24.9 million of the quarter over quarter increase. Excluding delinquent SFR loans, the remaining delinquent loans totaled $13.5 million, or 0.30% of total loans at March 31, 2021.

Non-performing loans increased $19.3 million to $55.9 million as of March 31, 2021, of which $18.1 million, or 32%, relates to loans in a current payment status. The first quarter increase was due to $22.5 million of loans placed on non-accrual status, offset by $3.2 million in cured loans and payoffs. Of the $22.5 million of loans placed on non-accrual status, $20.0 million, or 88.7%, of such loans, related to SFR loans.

At March 31, 2021, non-performing loans included (i) a legacy relationship totaling $7.3 million, or 13% of total non-performing loans, that is well-secured by a combination of commercial real estate and SFR properties with an average loan-to-value ratio of 51%, (ii) SFR loans totaling $32.4 million, or 58% of total non-performing loans, and (iii) other commercial loans of $16.1 million, or 29% of total non-performing loans.

In light of the pandemic, we provided support to clients by granting loan deferments or forbearances. The loans on deferment or forbearance status as of the dates indicated are shown below:

	March 31, 2021					December 31, 2020
	Count	Amount⁽¹⁾		% of Loans in Category		Count	Amount		% of Loans in Category
	($ in thousands)
Single-family residential mortgage	47	$	48,831	4	%	123	$	138,771	11	%
All other loans	15	59,858		1	%	33	113,163		2	%
Total	62	$	108,689	2	%	156	$	251,934	4	%

(1)

Includes loans in the process of deferment or forbearance which are not reported as delinquent.

Loans on deferment or forbearance status decreased $143.2 million, or 57%, during the first quarter of 2021. Of the balances as of March 31, 2021, all other loans include 8 commercial loans totaling $34.0 million under review and pending approval for deferral, of which 3 loans totaling $17.3 million were initial deferral requests. We continue to actively monitor and manage all lending relationships in a manner that supports our clients and protects the Bank.

Allowance for Credit Losses

	Three Months Ended
	March 31, 2021					December 31, 2020				September 30, 2020				June 30, 2020				March 31, 2020
	($ in thousands)
Allowance for loan losses (ALL)
Balance at beginning of period	$	81,030				$	90,927			$	90,370			$	78,243			$	57,649
Adoption of ASU 2016-13⁽¹⁾	—					—				—				—				7,609
Loans charged off	(565		)			(11,520		)		(1,821		)		—				(2,076		)
Recoveries	172					609				248				608				350
Net (charge-offs) recoveries	(393		)			(10,911		)		(1,573		)		608				(1,726		)
Provision for (reversal of) loan losses	(1,284		)			1,014				2,130				11,519				14,711
Balance at end of period	$	79,353				$	81,030			$	90,927			$	90,370			$	78,243
Reserve for unfunded loan commitments
Balance at beginning of period	$	3,183				$	3,206			$	4,195			$	3,888			$	4,064
Adoption of ASU 2016-13⁽¹⁾	—					—				—				—				(1,226		)
Provision for (reversal of) credit losses	177					(23		)		(989		)		307				1,050
Balance at end of period	3,360					3,183				3,206				4,195				3,888
Allowance for credit losses (ACL)	$	82,713				$	84,213			$	94,133			$	94,565			$	82,131

ALL to total loans	1.38			%		1.37			%	1.60			%	1.61			%	1.38			%
ACL to total loans	1.43			%		1.43			%	1.66			%	1.68			%	1.45			%
ACL to total loans, excluding PPP loans	1.51			%		1.48			%	1.74			%	1.76			%	1.45			%
ACL to NPLs	147.91			%		229.91			%	140.74			%	130.07			%	145.44			%
Annualized net loan charge-offs (recoveries) to average total loans held-for-investment	0.03			%		0.77			%	0.12			%	(0.04		)	%	0.12			%

Reserve for loss on repurchased loans
Balance at beginning of period	$	5,515				$	5,487			$	5,567			$	5,601			$	6,201
Initial provision for loan repurchases	—					—				11				—				—
Provision for (reversal of) provision for loan repurchases	(132		)		<