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On Monday, Stephens analyst Andrew Terrell revised the price target for Banc of California (NYSE:BANC) shares, reducing it to $17 from the previous $18, while maintaining an Equal Weight rating on the stock. Currently trading at $15.99, the stock sits below both Stephens' target and the analyst consensus range of $17-20. The adjustment comes after accounting for a one-time tax benefit of approximately $5 million. According to InvestingPro data, the company's overall financial health score is rated as "FAIR," with particularly strong price momentum metrics. Banc of California's fourth-quarter operating earnings per share (EPS) were reported at $0.24, slightly above Stephens' estimate of $0.22 and the consensus of $0.23. The pre-provision net revenue (PPNR) exceeded consensus by 3.5%. The bank has demonstrated strong revenue growth, with InvestingPro data showing a remarkable 289% year-over-year increase in revenue to $960.39 million. Get access to 6 more exclusive InvestingPro Tips and comprehensive analysis through the Pro Research Report.
Despite a solid fourth quarter, the firm's 2026 operating EPS estimate has been lowered by 7% to $1.45. This revision is due to an anticipated increase in expenses, with the 2025 expense guidance set between $190 million and $195 million. This forecast aligns with Stephens' previous projections and suggests an uptick in costs for the first quarter. The stock currently trades at a P/E ratio of 30.36, though InvestingPro analysis indicates it's trading at a low P/E relative to near-term earnings growth, with a PEG ratio of just 0.3.
The bank's net interest income (NII) growth is expected to continue, supported by positive margin progression and solid growth trends, although the margin increase is predicted to be more gradual than before. Banc of California has indicated openness to various capital options, but Stephens believes that achieving an 11% Common Equity Tier 1 (CET1) ratio may pose a constraint in the short term. The bank maintains a moderate debt-to-equity ratio of 0.78, with a Piotroski Score of 6 indicating reasonably strong financial strength.
In his commentary, Terrell stated, "Adjusting PT to $17 (from $18)." The new price target reflects the latest adjustments to the bank's operating EPS forecast and expense guidance, as well as the anticipated trajectory of NII growth and capital strategy in the upcoming period.
In other recent news, Banc of California has reported an impressive performance in its fourth quarter earnings, surpassing analyst estimates. The bank holding company posted net earnings of $56.9 million, or $0.28 per diluted share, a significant improvement from a net loss of $482.9 million in the same quarter the previous year. Revenue for the quarter was reported at $264.3 million, with a notable increase in net interest income to $235.3 million.
The bank's CEO, Jared Wolff, attributed these strong results to continued momentum and consistent execution by their team. Banc of California saw its net interest margin expand by 11 basis points to 3.04%, while total loans increased by 4.3% to $23.8 billion. The bank also maintained strong capital ratios, with its CET1 ratio improving to 10.55%.
These recent developments underscore Banc of California's positive trajectory, as it continues to add to its client base and expand relationships with existing clients, as noted by Wolff.
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