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Investing.com - Keefe, Bruyette & Woods reiterated its Outperform rating and $18.00 price target on Banc of California (NYSE:BANC) following Warburg’s recent reduction of its stake in the bank.
Warburg has decreased its exposure in BANC to approximately 12% of shares plus warrants through a 5.65 million share stock sale priced at $16.38 per share. Banc of California repurchased 1.15 million of these shares as part of the transaction, continuing management’s aggressive share buyback strategy according to InvestingPro data.
The investment firm’s stake reduction comes after seeing approximately 37% gains since its initial investment in November 2023. KBW views the selling as part of a diversification strategy by a large investor rather than a fundamental concern about the bank, which has delivered a solid 10.42% year-to-date return.
KBW noted that Banc of California’s initial financial targets of 1.1% ROAA and 13% ROTCE have been delayed from initial expectations, with KBW now estimating 83 basis points and 9.6% respectively for 2026.
Despite potential modest overhang from the stake reduction, KBW highlighted that BANC stock trades at just 1x tangible book value per share and remains positioned to benefit from lower interest rates and a multi-year return on tangible common equity improvement story.
In other recent news, Banc of California announced its second-quarter earnings for 2025, revealing a mixed financial performance. The company reported an adjusted earnings per share (EPS) of $0.31, exceeding analyst expectations of $0.26, marking a 19.23% increase. Despite this positive EPS result, Banc of California’s revenue fell short of projections, reaching $272.85 million compared to the anticipated $277.5 million, a 1.68% shortfall. These developments come amid ongoing evaluations by market analysts. While there were no specific analyst upgrades or downgrades reported, the financial results provide important insights for investors. The focus remains on how Banc of California will address the revenue shortfall in future quarters. These recent developments are crucial for stakeholders keeping a close watch on the company’s financial health.
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