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Regional bank Banc of California (NYSE:BANC) fell short of the market’s revenue expectations in Q1 CY2025 as sales only rose 1.2% year on year to $266 million. Its GAAP profit of $0.26 per share was 8.8% above analysts’ consensus estimates.
Is now the time to buy BANC? Find out in our full research report (it’s free).
Banc of California’s first quarter results saw modest revenue growth and a GAAP profit above analyst estimates, with the market largely unresponsive to the outcome. Management credited net interest margin expansion, strong loan production—especially in warehouse, lender finance, and fund finance segments—and disciplined expense control as key contributors to performance. CEO Jared Wolff emphasized the bank’s “broad-based commercial loan production” and focus on attracting new deposit relationships, while also noting an increase in classified loans due to a more conservative approach to risk ratings. The bank maintained robust liquidity and capital positions, highlighted by the completion and immediate upsizing of its share buyback program.
Looking forward, Banc of California’s management is prioritizing cautious loan growth and continued margin improvement in an environment marked by economic uncertainty and tariff-related risks. Wolff stated the bank is adjusting its outlook to “mid-single-digit” loan growth for the year, citing the potential for a market slowdown in the second half. The team aims to maintain disciplined underwriting standards while capitalizing on the withdrawal of competitors in the California banking market. CFO Joe Kauder indicated that positive operating leverage is expected as higher loan yields and net interest income offset increased expenses, and both executives highlighted ongoing efforts to strengthen deposit relationships and manage credit risks.
Management attributed the quarter’s performance to expanding margins from higher loan yields, prudent cost management, and a shift toward lower-risk loan categories, while also addressing a cautious credit outlook and competitive market dynamics.
Management’s outlook for the year centers on disciplined loan growth, prudent credit management, and capturing opportunities as regional competitors exit the market.
In the coming quarters, the StockStory team will be closely watching (1) the pace of new loan production and whether the shift to lower-risk lending categories continues; (2) progress toward the 30% noninterest-bearing deposit goal and the bank’s ability to attract and retain business clients; and (3) any changes in credit quality, including the evolution of classified and nonperforming loans. How management deploys the expanded buyback program and responds to competitive pressures will also be key indicators of execution.
Banc of California currently trades at $13.96, down from $14.47 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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