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Banc of California Inc. (BANC)
NYSE:BANC
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Banc of California
(NYSE:BANC)
61Neutral
Positive Factors
Growth Opportunities
Banc of California has an opportunity to grow its franchise significantly with its presence in Los Angeles County, which has $500B of deposits, presenting a substantial market potential.
Market Position
The PPBI deal showcases Banc of California's value in the Southern California market and increases its scarcity value.
Valuation
Shares are trading at 84% of tangible book value, indicating potential value for investors.
Negative Factors
Credit Concerns
Credit concerns were noted due to negative risk migration and an increase in classified loans by 35%.
Earnings
Earnings per share of $0.22 missed expectations, reflecting weaker performance in revenue and expenses.
Profitability
The 4Q25 return on average tangible common equity estimate is below the company's target, reflecting below peer profitability.
Banc of California (BANC) vs. S&P 500 (SPY)
Market Cap
$2.08B
Dividend Yield2.99%
Average Volume (3M)3.38M
Price to Earnings (P/E)23.8
Beta (1Y)1.42
Revenue Growth121.04%
EPS GrowthN/A
CountryUS
Employees1,903
SectorFinancial
Sector Strength85
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.28
Shares Outstanding158,815,400
10 Day Avg. Volume4,477,366
30 Day Avg. Volume3,383,348
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.33
Price to Cash Flow (P/CF)7.00
P/FCF Ratio2.70
Enterprise Value/Market Cap2.59
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit2.97
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$17.25Price Target Upside25.55% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
Banc of California Business Overview & Revenue Model
Company DescriptionBanc of California, Inc. operates as the bank holding company for Banc of California, National Association that provides banking products and services in the United States. The company offers deposit products, including checking, savings, money market, retirement, and interest-bearing and noninterest-bearing demand accounts, as well as certificate of deposits. It also provides various commercial and consumer loan products, such as commercial and industrial loans; commercial real estate and multifamily loans; construction loans; single family residential mortgage loans; warehouse and indirect/direct leveraged lending; home equity lines of credit; small business administration loans; and other consumer loans. In addition, the company offers automated bill payment, cash and treasury management, foreign exchange, card payment, remote and mobile deposit capture, automated clearing house origination, wire transfer, direct deposit, and internet banking services; and master demand accounts, interest rate swaps, and safe deposit boxes. Further, it invests in collateralized loan obligations, agency securities, municipal bonds, agency residential mortgage-backed securities, and corporate debt securities. As of December 31, 2020, the company operated 29 full-service branches in Southern California. The company was formerly known as First PacTrust Bancorp, Inc. and changed its name to Banc of California, Inc. in July 2013. Banc of California, Inc. was founded in 1941 and is headquartered in Santa Ana, California.
How the Company Makes MoneyBanc of California makes money primarily through the interest income generated from its lending activities. This includes interest from loans such as commercial real estate loans, residential mortgages, and small business loans. The bank also earns non-interest income from fees and service charges related to deposit accounts, loan servicing, and other banking services. Additionally, Banc of California may generate revenue from investment securities and other financial instruments. The company's earnings can be influenced by factors such as interest rate fluctuations, economic conditions, and competition in the banking sector. Strategic partnerships and a focus on expanding its customer base in the Southern California region also play a role in its revenue generation.
Banc of California Financial Statement Overview
Summary
Banc of California shows positive revenue growth and improved profitability in 2024, but past volatility in income and negative cash flow trends affect stability. A strong balance sheet with no debt in 2024 enhances financial health, but cash flow management needs improvement.Income Statement
The company shows a substantial improvement in total revenue and net income from 2023 to 2024, indicating positive revenue growth. However, previous years showed significant volatility, especially with negative EBIT and net income in 2023, which affects overall stability. The gross profit margin is consistently high due to the nature of banking revenues, but profitability has been inconsistent.60
Neutral
Balance Sheet
The balance sheet demonstrates strong equity with a substantial stockholder's equity and no total debt in 2024, indicating stability and low financial risk. The equity ratio is healthy, and the return on equity has improved significantly in 2024, showcasing good leverage management. However, cash and short-term investments have fluctuated, suggesting potential liquidity considerations.75
Positive
Cash Flow
Cash flow from operations has been inconsistent, with a significant drop in operating cash flow in 2024 compared to 2023. Although free cash flow is positive, the growth rate is negative due to a decrease from the previous year, indicating potential challenges in cash management. The operating cash flow to net income ratio remains favorable, but the volatility in financing cash flow suggests external funding reliance.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.81B | 278.38M | 331.71M | 272.71M | 243.11M | Gross Profit |
| 1.81B | 278.38M | 331.71M | 272.71M | 243.11M | EBIT |
| 1.47B | -251.60M | 242.64M | 82.62M | 14.36M | EBITDA |
| 0.00 | 0.00 | 664.97M | 177.96M | 0.00 | Net Income Common Stockholders |
| 126.89M | -1.90B | 120.94M | 62.35M | 12.57M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 4.89B | 5.38B | 1.10B | 1.54B | 1.45B | Total Assets |
| 33.54B | 38.53B | 9.20B | 9.39B | 7.88B | Total Debt |
| 2.33B | 3.85B | 1.00B | 816.12M | 816.76M | Net Debt |
| -168.47M | -1.53B | 773.36M | 588.00M | 595.94M | Total Liabilities |
| 30.04B | 35.14B | 8.24B | 8.33B | 816.76M | Stockholders Equity |
| 3.50B | 3.39B | 959.62M | 1.07B | 897.21M |
| Cash Flow | Free Cash Flow | |||
| 16.98M | 120.55M | 109.28M | 102.93M | 69.77M | Operating Cash Flow |
| 16.98M | 135.77M | 136.12M | 105.74M | 74.86M | Investing Cash Flow |
| 1.89B | 12.61B | 149.53M | -5.67M | -266.92M | Financing Cash Flow |
| -110.49M | -9.61B | 1.05B | -92.77M | 39.40M |
Banc of California Technical Analysis
Positive
13.74
Price Trends
13.66
Positive
14.74
Negative
14.65
Negative
Market Momentum
-0.04
Negative
54.34
Neutral
45.93
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BANC, the sentiment is Positive. The current price of 13.74 is above the 20-day moving average (MA) of 12.98, above the 50-day MA of 13.66, and below the 200-day MA of 14.65, indicating a neutral trend. The MACD of -0.04 indicates Negative momentum. The RSI at 54.34 is Neutral, neither overbought nor oversold. The STOCH value of 45.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BANC.
Banc of California Risk Analysis
Banc of California disclosed 49 risk factors in its most recent earnings report. Banc of California reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Banc of California Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $2.22B | 9.62 | 8.63% | 3.55% | -0.60% | 39.49% | |
75 Outperform | $2.16B | 10.43 | 9.16% | 3.90% | 1.42% | 2.77% | |
73 Outperform | $2.23B | 15.42 | 6.77% | 5.75% | 80.23% | -30.60% | |
73 Outperform | $2.29B | 9.98 | 9.58% | 4.07% | 8.05% | -3.31% | |
71 Outperform | $2.00B | 9.30 | 7.70% | 3.68% | 24.53% | 0.16% | |
64 Neutral | $12.65B | 9.74 | 8.04% | 17044.64% | 12.65% | -5.11% | |
61 Neutral | $2.08B | 23.79 | 4.33% | 2.99% | 121.04% | ― |
* Financial Sector Average
Performance Comparison
BANC
Banc of California
13.74
-0.64
-4.45%
BKU
BankUnited
33.80
5.87
21.02%
FFBC
First Financial Bancorp
24.00
1.47
6.52%
FRME
First Merchants
37.03
3.31
9.82%
PFS
Provident Financial Services
17.09
2.12
14.16%
WAFD
Washington Federal
29.08
1.21
4.34%
Banc of California Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q1-2025)
| % Change Since: 0.00%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed view. While there were notable achievements such as strong loan growth, margin expansion, and a robust share buyback program, there were also challenges with credit downgrades, economic uncertainty, and a decline in certain loan segments. The bank remains cautious due to the macroeconomic environment but is optimistic about its market position.Q1-2025 Updates
Positive Updates
Strong Loan Growth
Loan production, including unfunded commitments, was $2.6 billion, up from $1.8 billion in the fourth quarter, resulting in a loan portfolio growth of 6% on an annualized basis.
Share Buyback Program
Announced a $150 million share buyback program, completed the initial repurchase of 6.8% of shares, and expanded the program to cover both common and preferred stock with an additional $150 million.
Net Interest Margin Expansion
Net interest margin increased by four basis points to 3.08% due to a 13 basis point decline in cost of funds.
Stable Non-Interest Expenses
Total noninterest expense of $183.7 million remained consistent, despite seasonally higher compensation-related expenses.
Negative Updates
Credit Downgrades
Uptick in classified and non-performing assets, driven by a single CRE loan and multifamily rate-sensitive loans.
Decline in Construction Loans
Loan growth was partially offset by a decline in construction loans due to payoffs and completed projects.
Economic Uncertainty
Concerns about the macroeconomic environment and potential impact of tariffs led to a revised outlook for loan growth to mid-single-digit growth.
Lower Net Interest Income
Net interest income of $232 million was slightly down from the prior quarter due to lower day count, fewer loan prepayments, and lower market interest rates.
Company Guidance
During Banc of California's first quarter earnings call, the company reported several key metrics and provided guidance for the remainder of 2025. The quarter saw net income of $43.6 million, or $0.26 per share, and net interest income of $232 million, resulting in a net interest margin increase to 3.08%. Loan production, including unfunded commitments, was $2.6 billion, with a loan portfolio growth of 6% on an annualized basis. The bank announced a $150 million share buyback program, which was upsized to $300 million. Despite a strong first quarter performance, the outlook for loan growth was adjusted to mid-single-digit growth due to economic uncertainties, although high single-digit growth remains a target. The company's credit reserve level stands at 1.1% of total loans, with an economic coverage ratio of 1.66%. Noninterest income was $33.7 million, and noninterest expense increased to $183.7 million. The bank aims to increase its noninterest-bearing deposits to 30% of total deposits by the end of the year, with a long-term target of 35%. Additionally, the company remains focused on maintaining a strong balance sheet and capital liquidity positions amid market volatility.Banc of California Corporate Events
Stock BuybackFinancial Disclosures
Banc of California Boosts Stock Buyback Program
Positive
Apr 23, 2025
Banc of California reported its first quarter 2025 financial results, highlighting a diluted earnings per share of $0.26 and a 6% annualized loan growth. The company also announced an increase in its stock buyback program to $300 million, reflecting its strong liquidity and capital position. The bank’s net interest margin improved, and it maintained high liquidity levels, with a significant increase in book value per share. Despite economic uncertainties, Banc of California continues to leverage its market strength to support loan and deposit growth while managing expenses effectively.
Spark’s Take on BANC Stock
According to Spark, TipRanks’ AI Analyst, BANC is a Neutral.
Banc of California’s stock score is driven by strong financial health with no debt and positive earnings call sentiment highlighting profitability growth and cost synergies. However, technical analysis indicates bearish trends, and valuation metrics suggest the stock might be overvalued, which tempers the overall score.
To see Spark’s full report on BANC stock, click here.
Executive/Board Changes
Banc of California Appoints New Chief Accounting Officer
Neutral
Mar 4, 2025
On March 4, 2025, Banc of California announced the appointment of Karen Hon as Chief Accounting Officer. Hon, with over 20 years of experience in finance and accounting, previously held the same position at SVB and has extensive expertise in accounting, system integrations, and process improvements. Her appointment is expected to drive operational excellence and enhance processes, systems, and technology across the bank. She replaces Jeff Krumpoch, who is retiring after 23 years of service.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.