Banc of California (NYSE:BANC) Issues Earnings Results, Misses Estimates By $2.01 EPS

Key Points

• Banc of California reported a $1.61 loss per diluted share, missing the $0.40 consensus estimate by $2.01 and reversing from $0.31 EPS a year earlier. Revenue plunged 94% year over year to $16.4 million.
• The results were heavily affected by a balance-sheet repositioning, which generated a $256.7 million pretax securities loss and contributed to a $251.3 million net loss. The bank repositioned $2.3 billion of securities and began selling $827 million of loans.
• Despite the near-term loss, management cited 9% annualized loan growth, 12% deposit growth and stronger long-term earnings potential. Analysts maintained a consensus “Buy” rating with an average price target of $22.69, while shares fell to $19.14 after the report.

Banc of California (NYSE:BANC - Get Free Report) posted its quarterly earnings data on Wednesday. The bank reported ($1.61) earnings per share for the quarter, missing the consensus estimate of $0.40 by ($2.01), FiscalAI reports. Banc of California had a return on equity of 9.25% and a net margin of 13.58%.During the same quarter in the previous year, the firm earned $0.31 EPS. The company's revenue was down 94.0% on a year-over-year basis.

Banc of California Stock Performance

BANC stock traded down $2.04 during midday trading on Wednesday, hitting $19.14. 4,432,508 shares of the company traded hands, compared to its average volume of 2,948,237. Banc of California has a twelve month low of $13.96 and a twelve month high of $21.93. The stock has a market capitalization of $2.95 billion, a price-to-earnings ratio of 14.65 and a beta of 0.73. The company has a quick ratio of 0.89, a current ratio of 0.89 and a debt-to-equity ratio of 0.31. The business has a 50 day simple moving average of $20.11 and a 200-day simple moving average of $19.31.

Banc of California Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Wednesday, July 1st. Shareholders of record on Monday, June 15th were given a dividend of $0.12 per share. The ex-dividend date of this dividend was Monday, June 15th. This represents a $0.48 dividend on an annualized basis and a yield of 2.5%. Banc of California's dividend payout ratio is presently 36.64%.

Institutional Trading of Banc of California

Large investors have recently modified their holdings of the company. Triumph Capital Management bought a new position in Banc of California in the 3rd quarter worth $25,000. Advisory Services Network LLC bought a new position in shares of Banc of California in the third quarter worth about $36,000. Meeder Asset Management Inc. bought a new position in shares of Banc of California in the fourth quarter worth about $44,000. Danske Bank A S acquired a new position in shares of Banc of California during the 3rd quarter worth about $70,000. Finally, Arax Advisory Partners boosted its stake in Banc of California by 165.3% during the 4th quarter. Arax Advisory Partners now owns 3,829 shares of the bank's stock valued at $74,000 after purchasing an additional 2,386 shares during the period. 86.88% of the stock is owned by institutional investors.

Banc of California News Summary

Here are the key news stories impacting Banc of California this week:

• Positive Sentiment: Management reported 9% annualized average loan growth and 12% annualized deposit growth. Deposits increased by $799 million, or 2.9%, during the quarter, while average loans grew by $556.1 million, or 2.3%. Banc of California Second Quarter Financial Results
• Positive Sentiment: The bank said its balance-sheet repositioning should enhance long-term earnings. It retired $385 million of subordinated debt and ended the quarter with an estimated Tier 1 capital ratio of 11.67% and CET1 ratio of 9.25%, providing support for its capital position. Banc of California Reports Q2 Loss and Strategic Repositioning
• Neutral Sentiment: The company repositioned $2.3 billion of securities and began a targeted sale process for $827 million of loans. Book value per share was $18.38 and tangible book value per share was $16.44 at June 30, but the transition created significant near-term volatility. Banc of California Posts Q2 Net Loss
• Negative Sentiment: BANC reported a $251.3 million net loss available to common shareholders, or $1.61 per diluted share, versus analyst expectations of approximately $0.40 in earnings and $0.31 of EPS a year earlier. The securities repositioning generated a $256.7 million pretax loss. Banc of California Q2 Earnings Miss Estimates
• Negative Sentiment: Quarterly revenue fell to $16.4 million from $286.9 million in the prior quarter and declined 94% year over year, adding to concerns about the bank’s near-term profitability. Banc of California Posts Q2 Net Loss

Analysts Set New Price Targets

BANC has been the subject of several recent analyst reports. JPMorgan Chase & Co. raised their target price on Banc of California from $22.00 to $24.00 and gave the stock an "overweight" rating in a research report on Wednesday, July 1st. DA Davidson reissued a "buy" rating and set a $24.00 price objective on shares of Banc of California in a research report on Tuesday, April 28th. Wells Fargo & Company boosted their target price on Banc of California from $22.00 to $23.00 and gave the company an "overweight" rating in a research note on Monday, July 6th. Barclays dropped their target price on Banc of California from $25.00 to $23.00 and set an "overweight" rating on the stock in a research report on Tuesday, April 7th. Finally, Piper Sandler raised their price target on Banc of California from $22.00 to $23.00 and gave the stock an "overweight" rating in a research note on Monday, April 27th. One analyst has rated the stock with a Strong Buy rating, seven have assigned a Buy rating and one has issued a Hold rating to the company's stock. According to MarketBeat, the stock currently has a consensus rating of "Buy" and a consensus target price of $22.69.

Banc of California Company Profile

Banc of California, N.A. is a full-service commercial bank headquartered in Santa Ana, California, offering a broad spectrum of banking products and services to corporate and individual customers. The bank focuses on serving middle-market businesses, professional service firms, real estate investors and developers, and entrepreneurs throughout California. Its core offerings include deposit accounts, treasury management services, commercial real estate lending, equipment finance, lines of credit and Small Business Administration lending, complemented by cash management and online banking solutions.

Operating a network of branches and lending offices concentrated in both Southern and Northern California, Banc of California seeks to support local businesses and communities with personalized service and regional expertise.

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