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Banc of California down 4% after reporting fraudulently obtained loan

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Banc of California down 4% after reporting fraudulently obtained loan

Banc of California Inc. fell 4.04% to $20.20 at 11:45 a.m. ET on Friday, March 16.

The company's unit, Banc of California NA, expects to record a $13.7 million specific loan loss provision in its first-quarter results after it extended a $15 million line of credit to a fraudulent borrower. The Santa Ana, Calif.-based company estimates an after-tax impact of $9.7 million, or 19 cents per share.

Piper Jaffray analysts reiterated their overweight rating on Banc of California's stock. They wrote that the loss is not systemic and rather a one-off event. The analysts also wrote that while the loss is a disappointment, its impact on the company's capital will be manageable.

U.S. bank and thrift stocks were up before noon.

At 11:45 a.m. ET, the SNL U.S. Bank Index climbed 1.04% to 649.49 and the SNL U.S. Thrift Index added 0.47% to 981.99. The Dow Jones Industrial Average rose 0.47% to 24,991.46, the Nasdaq Composite Index gained 0.14% to 7,492.06 and the S&P 500 was up 0.44% to 2,759.50.

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Market prices and index values are current as of the time of publication and are subject to change.