Following Banc of California's recent fourth-quarter 2025 financial performance, Raymond James has raised its price target for the lender from $20 to $24 per share while maintaining a Strong Buy rating. The investment firm cited the bank's stronger-than-anticipated quarterly outcomes and steady advancement in its strategic initiatives as primary reasons for the upward revision.
Key highlights include noteworthy loan growth, particularly within commercial and industrial sectors such as mortgage warehouse lending, fund finance, and lender finance. Banc of California demonstrated impressive deposit gains, with a significant rise in non-interest-bearing accounts, which bolsters its funding base.
Raymond James regards the bank's initial outlook for 2026 as attainable and potentially conservative, especially given that it does not incorporate potential benefits from further Federal Reserve rate reductions. Such rate cuts could positively impact both net interest income and expense management.
Looking ahead, the firm forecasts approximately 11% growth in net interest income, an 8.5% increase in tangible book value, alongside an 8% improvement in operating leverage. These drivers are expected to enhance profitability markedly, with Banc of California anticipated to finish 2026 with a return on average assets near 0.85% and a return on average tangible common equity around 11%.
Raymond James also identifies prospective positive contributions from the planned rollout of the bank's payments initiative and potential capital optimization measures slated for next year. However, these factors have not yet been factored into the current financial projections.
While acknowledging that recent upticks in the share price have been partly fueled by speculation around potential takeovers, Raymond James stresses that its constructive stance is grounded in the bank's improving fundamental financial performance rather than acquisition expectations.
In conjunction with Raymond James's update, Banc of California reported fourth-quarter earnings per share of $0.42, surpassing the $0.37 consensus estimate. Revenue totaled $292.9 million, exceeding projections of $289.43 million. Loan growth was robust, with total loans and leases climbing by 15% on an annualized basis to $25.2 billion during the quarter.
Additionally, DA Davidson reiterated a Buy rating for Banc of California and set a price target at $24. The firm highlighted better-than-expected earnings per share and pre-provision net revenue, along with a 6 basis point expansion in the core net interest margin, reflecting solid underlying performance.
These developments underscore growing analyst confidence in Banc of California's trajectory based on recent performance metrics and strategic positioning.