Banc of California Inc. shares were down 5% in afternoon trading following the disclosure of a third-quarter increase in nonperforming assets.

On Oct. 23, the bank reported nonperforming loans of $45.2 million for the third quarter, up from $28.5 million in the second quarter. Executives attributed the rise to the deterioration of a single $14.5 million exposure in a shared national credit. During the bank's earnings call, CEO Jared Wolff said the bank was appropriately reserved for the credit and that it was tied to a private equity-led deal in the apparel and retail industry.

"It's a current pay loan, and so this was a circumstance where the regulators came in and, I guess, changed the rating on it for the lead bank and, therefore, we were all forced to make the same adjustment," Wolff said.

The bank reported a net loss of $22.7 million, or 45 cents per share, for the third quarter. Separate from the jump in nonperforming loans because of the apparel-related shared national credit, the bank's results suffered from a provision build tied to fraudulent activity by a borrower focused on financing liquor licenses.

On shared national credits, Wolff said the bank had $47.5 million in total exposure to five credits. While the total exposure did not represent a significant exposure for the $8.6 billion bank, Wolff said the company was looking to exit the relationships.

"It was nothing that we really had control over, which is why I hate shared national credits," he said. "I don't really like being in any of these."