Activist PL Capital Sends 3 Letters To Banc Of California

| About: Banc of (BANC)

Summary

The activist does not appreciate that the company is expending $100 million on naming rights for a soccer stadium.

The bank is undervalued as compared to peers despite its above average operating performance.

PL Capital will have an opportunity to meet with members of the board after the Committee’s work is completed.

Activist and the target

PL Capital ("PL") is an activist fund formed by Richard Lashley and John Palmer in 1996. The fund focuses on the banking industry. I could not find the assets under management of the fund, but I found this comment in an interview made to one of the founders:

"His firm is soliciting new investors and would like to amass up to $350 million in assets."

Article

Banc Of California (NYSE:BANC) ("BANC") was formed in 1941. It has 40 banking branches in Southern California. Its market capitalization is $862.87 million and its enterprise value is $1.49 billion. The financial performance is impressive: its ROE is 12.53%. However, it is undervalued by the market because of bad corporate governance. It is trading at 9x 2017 EPS while competitors are trading at 13x.

The activist has sent several letters to the Board of Directors. I believe that investors in Seeking Alpha should read them.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in BANC over the next 72 hours.

Business relationship disclosure: Business relationship disclosure: I do not have business relationship with PL Capital LP and I am not being paid by any other party. I think this letter is very relevant for the Banc of California shareholders since it perfectly shows the current situation of the company. Seeking Alpha investors should not invest in this stock until until the current Board of Directors acts according to its fiduciary duties.

About this article:

Expand
Author payment: $35 + $0.01/page view. Authors of PRO articles receive a minimum guaranteed payment of $150-500.
Tagged: , , , Regional - Pacific Banks
Want to share your opinion on this article? Add a comment.
Disagree with this article? .
To report a factual error in this article, click here