Banc of California’s Profit Emerges

Since Jared Wolff in 2019 became CEO of Santa Ana-based Banc of California Inc., the second biggest in Orange County, he’s focused on lending to the real estate and health sectors. He’s dumped expensive pet projects of previous executives such as the naming rights to a new soccer stadium in downtown Los Angeles.

The results became evident in the fourth quarter when the company reported net income climbed 70% to $17.7 million from the same period a year ago. Its adjusted profit of 35 cents a share easily topped the Zacks consensus estimate of 19 cents. Its net interest margin was 3.38%, a stunning 29 basis point increase from the third quarter.

“We ended 2020 with a strong quarter that demonstrates the potential of our franchise,” Wolff said. “The result of these accomplishments is that we made significantly more money on a core basis in 2020 than we did in 2019, while operating  with a smaller balance sheet for most of the year.”

Although Southern California business has been heavily hit by new COVID-19 restrictions, the bank hasn’t seen it impact credit quality or a new wave of deferral requests, Wolff said.

The bank’s shares have risen about three-fold since April 1 and at press time hovered around $956 million cap. KBW increased its target price to $20 from $16.

“Banc continues to deliver on its strategic plans to improve profitability with a lower-risk profile,” KBW analyst Jacquelynne Bohlen wrote in a report to investors. “We are increasingly positive on Banc.”


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