KBW Reiterates Outperform Rating on Banc of California (BANC)

Keefe, Bruyette & Woods analyst Christopher Mcgratty reiterated an Outperform rating and $18.00 price target on Banc of California (NYSE: BANC).

The analyst commented: "Warburg Selling Down; Our Thoughts; In recent days, Warburg reduced its exposure in BANC to ~12% of shares (+warrants) as part of a 5.65mm share stock sale at $16.38/share, of which BANC repurchased 1.15mm shares. At 1x TBV/share, BANC remains a deep value idea, poised to benefit from lower rates and a multi-year ROTCE improvement story. That said, the disclosure of a large shareholder reducing exposure could be a modest overhang.

Since their initial investment in BANC in November 2023, Warburg's investment in BANC is up ~37%. We view the disclosed selling as part a diversification strategy by a large investor, but we also note that the initial financial targets for BANC (1.1% ROAA and 13% ROTCE) have been pushed out from initial expectations (no formal timeline today - KBWe 83bps and 9.6% for 2026E). Bottom line, while the disclosure of a large shareholder reducing exposure could represent a modest overhang on BANC, we would also note that the stock trades at just 1x TBV/share and is poised to benefit from lower rates and a multi-year ROTCE improvement story."

For an analyst ratings summary and ratings history on Banc of California click here. For more ratings news on Banc of California click here.

Shares of Banc of California closed at $16.82 yesterday.

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