Banc Of California’s Preferred Stock: A High-Yield, Low-Risk Opportunity in a Volatile Market

In a market where volatility has become the new normal, investors are scrambling to balance growth aspirations with income needs. Enter Banc of California’s preferred stock (BANC.PRF), a compelling value play that offers a 7.73% yield while resting on a fortress-like balance sheet and a track record of dividend discipline. For value investors, this is the kind of opportunity that checks all the boxes: high income, low risk, and a company that’s not just surviving but thriving in today’s economic climate.

The Allure of High Yield: A Fixed Coupon in a Floating World

BANC.PRF’s 7.75% fixed coupon is a rare gem in an era of rising interest rates. With the most recent dividend payment of $0.4845 per share on September 1, 2025, and the next payout scheduled for October 1, 2025, this preferred stock has delivered consistent returns for over a year without a single cut [3]. That kind of reliability is music to the ears of income-focused investors, especially when juxtaposed against the uncertainty of common stocks or the credit risk of lower-rated bonds.

What’s more, the stock’s annualized dividend of $1.94 translates to a yield that outpaces most investment-grade corporate bonds and even many high-yield options [2]. In a world where the 10-year Treasury yield hovers near 4%, this is a premium that’s hard to ignore.

Balance Sheet Strength: The Bedrock of Safety

Here’s where BANC.PRF truly shines. Banc of California’s financials are a masterclass in prudence. The bank boasts $34.3 billion in total assets and $3.4 billion in total equity, with a CET1 capital ratio of 9.92%—well above the “well capitalized” regulatory threshold [1]. This isn’t just a well-run bank; it’s a bank that’s built to withstand storms.

The loan-to-deposit ratio of 87% is another green flag, indicating ample liquidity and a conservative approach to lending. Meanwhile, non-performing loans sit at a mere 0.7% of total loans, and the bank’s $2.3 billion in cash and short-term investments provide a buffer that would make Warren Buffett nod approvingly [1].

Credit Quality: Ratings That Reflect Stability

Credit ratings are the unsung heroes of low-risk investing, and Banc of California’s profile is as solid as its balance sheet. Fitch and KBRA both assign stable outlooks, with Fitch rating the bank’s long-term deposits at BBB+ and KBRA affirming its senior unsecured debt at BBB [1]. What’s more, KBRA recently upgraded the preferred stock rating to BB+ from BB, signaling growing confidence in the bank’s ability to meet its obligations [2].

These ratings aren’t just letters—they’re a testament to the bank’s proactive risk management. For instance, Banc of California’s decision to transfer $506.7 million in loans to held for sale has slashed nonperforming, classified, and special mention loans by 19, 46, and 115 basis points, respectively, since Q1 2025 [1]. That’s not just cleanup work; it’s a strategic move to fortify credit quality in a tightening lending environment.

Dividend Discipline: A Track Record of Reliability

Dividend cuts are the kiss of death for income stocks, but Banc of California has shown no signs of wavering. The common stock’s adjusted EPS of $0.31 in Q2 2025 beat expectations by 19.23%, and while revenue fell slightly short, the bank’s ability to exceed earnings forecasts underscores its operational resilience [2].

For preferred shareholders, the message is clear: the bank’s profitability supports its dividend commitments. With a fixed coupon and a history of uninterrupted payments, BANC.PRF is less a gamble and more a guaranteed income stream wrapped in a stock ticker.

The Bottom Line: A Value Play for the Disciplined Investor

Let’s cut to the chase: in a market where tech stocks swing wildly and bond yields lag, BANC.PRF offers a rare combination of yield, safety, and simplicity. Its 7.73% yield isn’t just attractive—it’s sustainable, underpinned by a bank with a fortress balance sheet, improving credit metrics, and a management team that knows how to navigate uncertainty.

For value investors, this is the kind of opportunity that doesn’t come along every day. The question isn’t whether BANC.PRF is worth considering—it’s whether you can afford to miss out on a high-yield, low-risk play that’s built to last.

Source:
[1] Banc of California, Inc. Reports Second Quarter Results and 9 ... [https://investors.bancofcal.com/news-releases/news-release-details/banc-california-inc-reports-second-quarter-results-and-9/]
[2] Banc Of California Inc | 7.75% Dep Shares Rate Reset Non ... [https://www.preferredstockchannel.com/symbol/banc.prf/]
[3] Banc of California Inc 7.75% PRF PERPETUAL USD [https://divvydiary.com/en/banc-of-california-inc-7-75-stock-US05990K8412]