Southern California Bancorp (“us,” “we,” “our,” or the “Company”)
(NASDAQ: BCAL), the holding company for Bank of Southern
California, N.A. (the “Bank”) announces its consolidated financial
results for the second quarter of 2023.
Southern California Bancorp reported net income
of $6.7 million for the second quarter of 2023, or $0.36 per
diluted share, compared to net loss of $736 thousand, or $0.04
per diluted share in the second quarter of 2022, and net income of
$8.2 million, or $0.44 per diluted share in the first quarter
of 2023.
“I am pleased to report that our strong
year-to-date performance in 2023 includes net interest income of
$48.3 million and net income of $14.9 million, showing
considerable improvement from $38.7 million and
$710 thousand, respectively, in the corresponding year-to-date
period in 2022,” said David Rainer, Chairman and CEO of Southern
California Bancorp and Bank of Southern California. “We believe
this improvement in performance is due to the strong execution of
our relationship-based business banking model.
“Second quarter net income of $6.7 million
helped drive our tangible book value per share to $12.82, an
increase of $0.33, or 2.6% from the prior quarter. Our balance
sheet continues to be strong, with deposit balances remaining
steady, as we have elected to vigorously defend our deposit base in
the face of increasing competition and deposit costs. Our loan
portfolio grew by $19.8 million in the second quarter, with a focus
on full banking relationships, that include a deposit
component."
Second Quarter 2023 Highlights
- Net income of
$6.7 million, compared with $8.2 million in the prior
quarter
- Diluted earnings per
share of $0.36, compared with $0.44 the prior quarter
- Net interest
margin of 4.36%, compared with 4.71% in the prior quarter;
average loan yield of 5.91% compared with 5.78% in the prior
quarter
- Return on average
assets of 1.18%, compared with 1.46% in the prior
quarter
- Return on average common
equity of 9.93%, compared with 12.72% in the prior
quarter
- Efficiency ratio
of 59.6%, compared with 56.8% in the prior quarter
- Tangible book value per
common share ("TBV")
(non-GAAP1) of $12.82 at
June 30, 2023, up $0.33 from $12.49 at March 31,
2023
- Total assets of
$2.31 billion, a slight increase from March 31, 2023
- Total
loans, including loans held for sale, of $1.91 billion,
compared with $1.89 billion at March 31, 2023
-
Nonperforming assets to total assets
ratio of 0.002% at June 30, 2023, compared
with 0.000% at March 31, 2023
- Total
deposits of $1.98 billion, down $4.9 million
or 0.2%, compared with $1.99 billion at March 31, 2023
- Noninterest-bearing demand
deposits were $776.9 million, representing 39.2% of total
deposits, compared with $882.0 million, or 44.4% of total deposits
at March 31, 2023
- Cost of deposits
was 1.29%, compared with 0.80% in the prior quarter
- Bank's
capital exceeds minimums to be
“well-capitalized,” the highest
regulatory capital category
"Given the recent turmoil in the banking
industry, we have opportunistically hired a few new business
relationship managers and continue to scout for additional talent,"
said Rainer. "We are building on an already exceptional team and
are focused on a strategy of deposit gathering through new
relationships--using exception pricing where appropriate--and
consequently we are seeing an increase in account openings.
"Reflecting our culture of prudent underwriting,
the credit quality of our loan portfolio remains outstanding; our
nonperforming assets to total assets ratio ended the second quarter
at 0.002%."
Second Quarter Operating Results
Net Income
Net income for the second quarter of 2023 was
$6.7 million, or $0.36 per diluted share, compared with net income
of $8.2 million, or $0.44 per diluted share in the first
quarter of 2023. Pre-tax, pre-provision income (non-GAAP) for the
second quarter was $9.9 million, a decrease of $1.5 million or
13.4% from the prior quarter.
Net Interest Income and Net Interest Margin
Net interest income for the second quarter of
2023 was $23.4 million, compared to $24.9 million in the
prior quarter. The decrease in net interest income was primarily
due to a $2.5 million increase in total interest expense,
partially offset by a $1.1 million increase in total interest
and dividend income in the second quarter of 2023 as compared to
the prior quarter. During the second quarter of 2023, loan interest
income increased $1.0 million, total debt securities income
increased $71 thousand, and interest and dividend income from
other financial institutions increased $12 thousand. The
increase in interest income was due to a number of factors: a
higher average total loan balance from organic loan growth; a
change in the interest-earning asset mix; and higher yields on
interest-earning assets resulting from increases in the target Fed
funds rate. Average interest-earning assets increased
$9.9 million, the result of a $5.8 million increase in
average total loans, a $5.5 million increase in average total
debt securities, a $5.2 million increase in average deposits
in other financial institutions, and a $1.1 million increase
in average restricted stock investments and other bank stock,
partially offset by a $7.7 million decrease in average Fed
funds sold/resale agreements. The increase in interest expense for
the second quarter of 2023 was primarily due to a $2.4 million
increase in interest expense on interest-bearing deposits, the
result of a $101.7 million increase in average
interest-bearing deposits, coupled with a 68 basis point increase
in interest-bearing deposit costs.
Net interest margin for the second quarter of
2023 was 4.36%, compared with 4.71% in the prior quarter. The
decrease was primarily related to a 50 basis point increase in the
cost of funds, partially offset by a 11 basis point increase in the
total interest-earning assets yield, the result of higher market
interest rates and a change in the Bank's interest-earning asset
mix. The yield on total earning assets in the second quarter of
2023 was 5.64%, compared with 5.53% in the prior quarter. The yield
on average total loans in the second quarter of 2023 was 5.91%, an
increase of 13 basis points from 5.78% in the prior quarter.
Cost of funds for the second quarter of 2023 was
138 basis points, an increase of 50 basis points from 88 basis
points in the prior quarter. The increase was primarily driven by a
68 basis point increase in the cost of interest-bearing deposits,
coupled with an increase in average interest-bearing deposits, and
a decrease in average noninterest-bearing deposits. Average
noninterest-bearing demand deposits decreased $109.6 million
to $805.6 million and represented 41.3% of total average
deposits for the second quarter of 2023, compared with
$915.2 million and 46.7%, respectively, for the prior quarter;
average interest-bearing deposits increased $101.7 million to
$1.15 billion during the second quarter of 2023. The total cost of
deposits in the second quarter of 2023 was 129 basis points, an
increase of 49 basis points from 80 basis points in the prior
quarter.
Average total borrowings increased
$8.5 million to $40.6 million for the second quarter of
2023, primarily due to an increase of $8.4 million in average
Federal Home Loan Bank (FHLB) borrowings during the quarter. The
average cost of total borrowings was 5.66% for the second quarter
of 2023, up from 5.54% in the prior quarter.
Provision for Credit Losses
The Company recorded a reversal of provision for
credit losses of $15 thousand in the second quarter of 2023,
compared to a $202 thousand provision for credit losses in the
prior quarter. The provision for credit losses in the second
quarter of 2023 included a $135 thousand negative provision
for unfunded commitments primarily due to lower unfunded loan
commitments. Total unfunded loan commitments decreased
$33.9 million to $523.6 million at June 30, 2023,
from $557.5 million at March 31, 2023. The provision for
credit losses for loan portfolio in the second quarter of 2023 was
$120 thousand, a decrease of $158 thousand from
$278 thousand in the prior quarter. The decrease was driven by
a number of factors: a decrease in classified loans, changes in the
portfolio mix, and a decrease in the qualitative reserve, partially
offset by change in our reasonable and supportable forecast,
primarily related to the economic outlook from the Federal
Reserve's actions to control inflation, and an increase in total
loan balances. The Company’s management continues to monitor
macroeconomic variables related to increasing interest rates,
inflation and the concerns of an economic downturn, and believes it
is appropriately provisioned for the current environment.
Noninterest Income
Total noninterest income in the second quarter
of 2023 was $1.1 million, a decrease of $474 thousand
compared to total noninterest income of $1.6 million in the
first quarter of 2023. In the second quarter of 2023, the Company
recorded a gain on sale of loans of $77 thousand on the sale
of $1.0 million of SBA 7A loans, a decrease of
$731 thousand from the gain on sale of loans of
$808 thousand in the first quarter of 2023, of which
$797 thousand was recorded on the sale of $9.9 million in
SBA 7A loans. Additionally, a $39 thousand gain on sale of
loans was recorded on a nonaccrual 1-4 family residential loan in
the prior quarter. Service charges and fees on deposit accounts was
$530 thousand, an increase of $91 thousand compared to
$439 thousand in the prior quarter. The increase was primarily
due to higher analysis charges for certain deposit accounts. The
Company recorded a gain on sale of debt securities of
$34 thousand in the second quarter of 2023, for which there
was no comparable transaction in the prior quarter. Other charges
and fees was $136 thousand, an increase of $111 thousand
compared to $25 thousand in the prior quarter. The increase
was primarily due to higher income from equity investments.
Noninterest Expense
Total noninterest expense for the second quarter
of 2023 was $14.6 million, a decrease of $412 thousand
from total noninterest expense of $15.0 million in the prior
quarter. In the second quarter of 2023, salaries and employee
benefits decreased by $567 thousand, and legal, audit and
professional fees decreased by $118 thousand, partially offset
by data processing and communications, which increased by
$120 thousand, and other expenses, which increased by
$158 thousand.
The $567 thousand decrease in salaries and
benefits was due primarily to lower stock compensation expense
related to the accelerated stock compensation expense resulting
from the vesting of performance-based restricted stock units of
$632 thousand recorded in the prior quarter, an increase in the
deferred loan origination costs resulting from higher loan growth
in the second quarter of 2023, and a decrease in payroll taxes and
benefits expense. The $118 thousand decrease in legal, audit
and professional fees was due primarily to completion of the
Company's listing on the Nasdaq Capital Market early in the second
quarter of 2023. The $120 thousand increase in data processing
and communications was due primarily to an increase in network and
core system data processing expense. The $158 thousand
increase in other expense was due primarily to the increase in
customer service related expense, and travel expense, partially
offset by the decrease in sundry losses resulting from the
recoveries of affidavits of forgery that were charged-off in
previous quarters.
Efficiency ratio (non-GAAP) for the second
quarter of 2023 was 59.6%, compared to 56.8% in the prior
quarter.
Income Tax
In the second quarter of 2023, the Company’s
income tax expense was $3.2 million, compared with
$3.0 million in the first quarter of 2023. The effective rate
was 32.3% for the second quarter of 2023 and 26.8% for the first
quarter of 2023. The effective rate was 29.4% for the six months
ended June 30, 2023. The increase in the effective tax rate
for the second quarter of 2023 was primarily attributable to the
impact of the vesting and exercise of equity awards combined with
changes in the Company's stock price over time.
Balance Sheet
Assets
Total assets at June 30, 2023 were
$2.31 billion, an increase of $17.1 million or 0.7% from
March 31, 2023. The increase in total assets from the prior
quarter was primarily related to a $2.5 million increase in
cash and cash equivalents and a $19.9 million increase in
total loans, including loans held for sale, partially offset by a
$4.6 million decrease in securities available-for-sale.
Loans
Total loans held for investment were
$1.91 billion at June 30, 2023, compared to
$1.89 billion at March 31, 2023, with second quarter of
2023 new originations of $63.3 million and payoffs and net paydowns
of $37.7 million. Total loans secured by real estate increased by
$22.4 million, with construction and land development loans
increasing by $19.2 million, and commercial real estate loans
increasing by $24.8 million, partially offset by a decrease in
1-4 family residential and multifamily decreasing $3.9 million
and $17.7 million, respectively. In addition, commercial and
industrial loans decreased by $1.4 million. The Company had
$1.1 million in SBA 7A loans held for sale at June 30,
2023, compared to $577 thousand at March 31, 2023; most
of these loans are expected to be sold in the secondary market in
the third quarter of 2023.
Deposits
Total deposits at June 30, 2023 were
$1.98 billion, a decrease of $4.9 million from
March 31, 2023. Noninterest-bearing demand deposits at
June 30, 2023 were $776.9 million, or 39.2% of total
deposits, compared with $882.0 million, or 44.4% of total
deposits at March 31, 2023. At June 30, 2023, total
interest-bearing deposits were $1.20 billion, compared to
$1.10 billion at March 31, 2023. At June 30, 2023,
total brokered time deposits were $98.4 million, compared to
$84.5 million at March 31, 2023. Given the nature of the
Company's commercial banking model, at June 30, 2023,
approximately 40% of total deposits exceeded the FDIC insurance
limits; however, the Company offers the Insured Cash Sweep (ICS)
product, providing customers with FDIC insurance coverage at ICS
network institutions. At June 30, 2023, ICS deposits increased
to $256.3 million, or 13% of total deposits, compared to
$140.3 million, or 7% of total deposits at March 31,
2023.
Federal Home Loan Bank ("FHLB") and
Federal Reserve Bank ("Federal Reserve")
Borrowings
At June 30, 2023, the Company had overnight
FHLB borrowings of $15.0 million, a $15.0 million
increase from March 31, 2023. There were no outstanding
Federal Reserve Discount Window borrowings at June 30, 2023.
The Company did not participate in the Federal Reserve Bank Term
Funding Program.
At June 30, 2023, the Company had available
borrowing capacity from the FHLB secured lines of credit of
approximately $405 million and available borrowing capacity
from the Federal Reserve Discount Window of approximately
$142 million. The Company also had available borrowing
capacity from two unsecured credit lines from correspondent banks
of approximately $60 million at June 30, 2023, with no
outstanding borrowings. Total available borrowing capacity was
$606.7 million at June 30, 2023. Additionally, the
Company had unpledged liquid securities at fair value approximately
$120 million and cash and cash equivalents of
$104.6 million at June 30, 2023.
Asset Quality
Total non-performing assets increased to
$40 thousand, or 0.002% of total assets at June 30, 2023,
compared with $1 thousand, or 0.000% of total assets at
March 31, 2023. The increase from March 31, 2023, was due
primarily to a commercial and industrial loan with a net carrying
value of $41 thousand that was placed on non-accrual status during
the second quarter of 2023. Special mention loans decreased by
$1.2 million during the second quarter of 2023 to
$10.6 million at June 30, 2023 due mostly to paydowns
totaling $1.1 million, coupled with three commercial and industrial
loans from one relationship totaling $590 thousand that were
downgraded from special mention loans to substandard loans,
partially offset by two commercial and industrial loans from one
relationship totaling $494 thousand that were downgraded from pass
loans to special mention. Substandard loans decreased by
$1.7 million during the second quarter of 2023 to
$4.7 million at June 30, 2023 due mostly to payoffs
totaling $2.1 million, partially offset by the three commercial and
industrial loans downgraded from special mention.
The Company had no loans over 90 days past due
that were accruing interest at June 30, 2023 and
March 31, 2023.
There were no loan delinquencies (30-89 days
past due) at June 30, 2023, compared to $123 thousand of
loan delinquencies (30-89 days past due) at March 31,
2023.
The allowance for credit losses, which is
comprised of allowance for loan losses (ALL) and reserve for
unfunded loan commitments, totaled $24.0 million, or 1.26% of
total loans at June 30, 2023, compared to $24.1 million,
or 1.27% at March 31, 2023. The $24 thousand decrease in
the allowance includes a $120 thousand provision for credit
losses for the loan portfolio and a $135 thousand negative
credit provision for unfunded loan commitments, coupled with a net
charge-off of $9 thousand for the quarter ended June 30,
2023.
Allowance for loan losses was
$22.5 million, or 1.18% of total loans at June 30, 2023,
compared to $22.4 million, or 1.18% at March 31,
2023.
Capital
Tangible book value (non-GAAP) per common share
at June 30, 2023, was $12.82, compared with $12.49 at
March 31, 2023. In the second quarter of 2023, tangible book
value was primarily impacted by net income, stock-based
compensation expense, and net of tax unrealized losses on debt
securities available-for-sale. Other comprehensive losses related
to unrealized losses, net of taxes, on securities
available-for-sale increased by $1.6 million to
$6.6 million at June 30, 2023 from $5.0 million at
March 31, 2023. Tangible common equity (non-GAAP) as a percent
of total tangible assets at June 30, 2023 increased to 10.33%
from 10.13% in the prior quarter, and unrealized losses as a
percent of tangible capital equity at June 30, 2023 increased
to 2.8% from 2.2% in the prior quarter.
The Bank’s leverage capital ratio and total
risk-based capital ratio were 11.47% and 12.98%, respectively, at
June 30, 2023. The Bank elected the three-year phase-in period
under the regulatory capital rules, which allow a phase-in of the
Day 1 CECL transition adjustment to the regulatory capital at 25%
per year over a three-year transition period.
ABOUT SOUTHERN CALIFORNIA BANCORP AND
BANK OF SOUTHERN CALIFORNIA, N.A.
Southern California Bancorp (NASDAQ: BCAL) is a
registered bank holding company headquartered in San Diego,
California. Bank of Southern California, N.A., a national banking
association chartered under the laws of the United States (the
“Bank”) and regulated by the Office of Comptroller of the Currency,
is a wholly owned subsidiary of Southern California Bancorp.
Established in 2001 and headquartered in San Diego, California, the
Bank offers a range of financial products and services to
individuals, professionals, and small- to medium-sized businesses
through its 13 branch offices serving Orange, Los Angeles,
Riversides, San Diego, and Ventura counties, as well as the Inland
Empire. The Bank's solutions-driven, relationship-based approach to
banking provides accessibility to decision makers and enhances
value through strong partnerships with its clients. Additional
information is available at www.banksocal.com.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
In addition to historical information, this
release includes forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995.
Forward-looking statements relate to expectations, beliefs,
projections, future plans and strategies, anticipated events or
trends and other matters that are not historical facts. Examples of
forward-looking statements include, among others, statements
regarding plans or objectives for future operations, products or
services, and forecasts relating to financial and operating results
or other measures of economic performance. Forward-looking
statements reflect management’s current view about future events
and involve risks and uncertainties that may cause actual results
to differ from those expressed in the forward-looking statement or
historical results. Forward-looking statements can be identified by
the fact that they do not relate strictly to historical or current
facts and often include the words or phrases such as “aim,” “can,”
“may,” “could,” “predict,” “should,” “will," “would,” “believe,”
“anticipate,” “estimate,” “expect,” “hope,” “intend,” “plan,”
“potential,” “project,” “will likely result,” “continue,” “seek,”
“shall,” “possible,” “projection,” “optimistic,” and “outlook,” and
variations of these words and similar expressions.
Some factors that could cause actual results to
differ materially from historical or expected results include,
among others: the risk factors discussed in the Company’s
Registration Statement on Form 10, as amended, filed with the
Securities and Exchange Commission; changes in general economic
conditions, either nationally or locally in the areas in which the
Company conducts business; the impact on financial markets from
geopolitical conflicts; inflation, interest rate, market and
monetary fluctuations; increases in competitive pressures among
financial institutions and businesses offering similar products and
services; higher than anticipated defaults in the Company’s loan
portfolio; changes in management’s estimate of the adequacy of the
allowance for credit losses; legislative or regulatory changes or
changes in accounting principles, policies or guidelines; and the
impacts of recent bank failures.
Additional information regarding these and other
risks and uncertainties to which our business and future financial
performance are subject is contained in the Company's Registration
Statement on Form 10, as amended, its Quarterly Report on Form 10-Q
for the fiscal quarter ended March 31, 2023, and other documents
the Company files with the SEC from time to time.
Any forward-looking statement made in this
release is based only on information currently available to
management and speaks only as of the date on which it is made. The
Company does not undertake, and specifically disclaims any
obligation, to update any forward-looking statements to reflect
occurrences or unanticipated events or circumstances after the date
of such statements or to conform such forward-looking statements to
actual results or to changes in its opinions or expectations,
except as required by law.
Southern California Bancorp and
SubsidiaryFinancial Highlights (Unaudited)
|
|
At or for the Three Months
Ended |
|
|
At or for the Six Months
Ended |
|
|
|
June 30, 2023 |
|
|
March 31, 2023 |
|
|
June 30, 2022 |
|
|
June 30, 2023 |
|
|
June 30, 2022 |
|
EARNINGS |
|
($ in thousands
except share and per share data) |
|
Net interest income |
|
$ |
23,426 |
|
|
$ |
24,892 |
|
|
$ |
20,936 |
|
|
$ |
48,318 |
|
|
$ |
38,731 |
|
(Reversal of) Provision for credit losses |
|
$ |
(15 |
) |
|
$ |
202 |
|
|
$ |
1,796 |
|
|
$ |
187 |
|
|
$ |
3,646 |
|
Noninterest income |
|
$ |
1,096 |
|
|
$ |
1,570 |
|
|
$ |
1,526 |
|
|
$ |
2,666 |
|
|
$ |
3,129 |
|
Noninterest expense |
|
$ |
14,607 |
|
|
$ |
15,019 |
|
|
$ |
21,708 |
|
|
$ |
29,626 |
|
|
$ |
37,260 |
|
Income tax expense (benefit) |
|
$ |
3,212 |
|
|
$ |
3,017 |
|
|
$ |
(306 |
) |
|
$ |
6,229 |
|
|
$ |
244 |
|
Net income (loss) |
|
$ |
6,718 |
|
|
$ |
8,224 |
|
|
$ |
(736 |
) |
|
$ |
14,942 |
|
|
$ |
710 |
|
Pre-tax pre-provision income (1) |
|
$ |
9,915 |
|
|
$ |
11,443 |
|
|
$ |
754 |
|
|
$ |
21,358 |
|
|
$ |
4,600 |
|
Adjusted pre-tax pre-provision income (1) |
|
$ |
9,915 |
|
|
$ |
11,443 |
|
|
$ |
7,798 |
|
|
$ |
21,358 |
|
|
$ |
12,168 |
|
Diluted earnings (loss) per share |
|
$ |
0.36 |
|
|
$ |
0.44 |
|
|
$ |
(0.04 |
) |
|
$ |
0.80 |
|
|
$ |
0.04 |
|
Shares outstanding at period end |
|
|
18,296,365 |
|
|
|
18,271,194 |
|
|
|
17,840,626 |
|
|
|
18,296,365 |
|
|
|
17,840,626 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE RATIOS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
|
1.18 |
% |
|
|
1.46 |
% |
|
|
(0.13 |
)% |
|
|
1.32 |
% |
|
|
0.06 |
% |
Adjusted return on average assets (1) |
|
|
1.18 |
% |
|
|
1.46 |
% |
|
|
0.73 |
% |
|
|
1.32 |
% |
|
|
0.53 |
% |
Return on average common equity |
|
|
9.93 |
% |
|
|
12.72 |
% |
|
|
(1.19 |
)% |
|
|
11.29 |
% |
|
|
0.58 |
% |
Adjusted return on average common equity (1) |
|
|
9.93 |
% |
|
|
12.72 |
% |
|
|
6.82 |
% |
|
|
11.29 |
% |
|
|
4.93 |
% |
Yield on total loans |
|
|
5.91 |
% |
|
|
5.78 |
% |
|
|
4.74 |
% |
|
|
5.85 |
% |
|
|
4.72 |
% |
Yield on interest earning assets |
|
|
5.64 |
% |
|
|
5.53 |
% |
|
|
3.99 |
% |
|
|
5.58 |
% |
|
|
3.77 |
% |
Cost of deposits |
|
|
1.29 |
% |
|
|
0.80 |
% |
|
|
0.07 |
% |
|
|
1.05 |
% |
|
|
0.07 |
% |
Cost of funds |
|
|
1.38 |
% |
|
|
0.88 |
% |
|
|
0.13 |
% |
|
|
1.13 |
% |
|
|
0.13 |
% |
Net interest margin |
|
|
4.36 |
% |
|
|
4.71 |
% |
|
|
3.87 |
% |
|
|
4.54 |
% |
|
|
3.64 |
% |
Efficiency ratio (1) |
|
|
59.57 |
% |
|
|
56.76 |
% |
|
|
96.64 |
% |
|
|
58.11 |
% |
|
|
89.01 |
% |
Adjusted efficiency ratio (1) |
|
|
59.57 |
% |
|
|
56.76 |
% |
|
|
65.28 |
% |
|
|
58.11 |
% |
|
|
70.93 |
% |
|
|
As of |
|
|
June 30, 2023 |
|
|
March 31, 2023 |
|
|
December 31, 2022 |
|
CAPITAL |
|
|
($ in thousands
except share and per share data) |
|
Tangible equity to tangible assets (1) |
|
|
10.33 |
% |
|
|
10.13 |
% |
|
|
9.84 |
% |
Book value (BV) per common share |
|
$ |
14.96 |
|
|
$ |
14.64 |
|
|
$ |
14.51 |
|
Tangible BV per common share (1) |
|
$ |
12.82 |
|
|
$ |
12.49 |
|
|
$ |
12.32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET
QUALITY |
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses (ALL) |
|
$ |
22,502 |
|
|
$ |
22,391 |
|
|
$ |
17,099 |
|
Reserve for unfunded loan commitments |
|
$ |
1,538 |
|
|
$ |
1,673 |
|
|
$ |
1,310 |
|
Allowance for credit losses (ACL) |
|
$ |
24,040 |
|
|
$ |
24,064 |
|
|
$ |
18,409 |
|
ALL to total loans |
|
|
1.18 |
% |
|
|
1.18 |
% |
|
|
0.90 |
% |
ACL to total loans |
|
|
1.26 |
% |
|
|
1.27 |
% |
|
|
0.97 |
% |
Nonperforming loans |
|
$ |
40 |
|
|
$ |
1 |
|
|
$ |
41 |
|
Other real estate owned |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Nonperforming assets to total assets |
|
|
— |
% |
|
|
— |
% |
|
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
END OF PERIOD BALANCES |
|
|
|
|
|
|
|
|
|
|
|
|
Total loans, including loans held for sale |
|
$ |
1,914,415 |
|
|
$ |
1,894,509 |
|
|
$ |
1,906,800 |
|
Total assets |
|
$ |
2,309,183 |
|
|
$ |
2,292,053 |
|
|
$ |
2,283,927 |
|
Deposits |
|
$ |
1,980,908 |
|
|
$ |
1,985,856 |
|
|
$ |
1,931,905 |
|
Loans to deposits |
|
|
96.6 |
% |
|
|
95.4 |
% |
|
|
98.7 |
% |
Shareholders' equity |
|
$ |
273,749 |
|
|
$ |
267,539 |
|
|
$ |
260,355 |
|
(1) Non-GAAP measure. See – GAAP to Non-GAAP reconciliation
|
|
At or for the Three Months
Ended |
|
|
At or for the Six Months
Ended |
|
ALLOWANCE for CREDIT LOSSES |
|
June 30, 2023 |
|
|
March 31, 2023 |
|
|
June 30, 2022 |
|
|
June 30, 2023 |
|
|
June 30, 2022 |
|
|
|
($ in
thousands) |
|
Allowance for loan losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning of period |
|
$ |
22,391 |
|
|
$ |
17,099 |
|
|
$ |
13,534 |
|
|
$ |
17,099 |
|
|
$ |
11,657 |
|
Adoption of ASU 2016-13 (1) |
|
|
— |
|
|
|
5,027 |
|
|
|
— |
|
|
|
5,027 |
|
|
|
— |
|
Provision for credit losses |
|
|
120 |
|
|
|
278 |
|
|
|
1,650 |
|
|
|
398 |
|
|
|
3,500 |
|
Charge-offs |
|
|
(9 |
) |
|
|
(27 |
) |
|
|
(21 |
) |
|
|
(36 |
) |
|
|
(21 |
) |
Recoveries |
|
|
— |
|
|
|
14 |
|
|
|
(27 |
) |
|
|
14 |
|
|
|
— |
|
Net (charge-offs) |
|
|
(9 |
) |
|
|
(13 |
) |
|
|
(48 |
) |
|
|
(22 |
) |
|
|
(21 |
) |
Balance, end of period |
|
$ |
22,502 |
|
|
$ |
22,391 |
|
|
$ |
15,136 |
|
|
$ |
22,502 |
|
|
$ |
15,136 |
|
Reserve for unfunded loan commitments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, beginning of period |
|
$ |
1,673 |
|
|
$ |
1,310 |
|
|
$ |
804 |
|
|
$ |
1,310 |
|
|
$ |
804 |
|
Adoption of ASU 2016-13 (1) |
|
|
— |
|
|
|
439 |
|
|
|
— |
|
|
|
439 |
|
|
|
— |
|
Provision (reversal) for credit losses |
|
|
(135 |
) |
|
|
(76 |
) |
|
|
146 |
|
|
|
(211 |
) |
|
|
146 |
|
Balance, end of period |
|
|
1,538 |
|
|
|
1,673 |
|
|
|
950 |
|
|
|
1,538 |
|
|
|
950 |
|
Allowance for credit losses |
|
$ |
24,040 |
|
|
$ |
24,064 |
|
|
$ |
16,086 |
|
|
$ |
24,040 |
|
|
$ |
16,086 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALL to total loans |
|
|
1.18 |
% |
|
|
1.18 |
% |
|
|
0.85 |
% |
|
|
1.18 |
% |
|
|
0.85 |
% |
ACL to total loans |
|
|
1.26 |
% |
|
|
1.27 |
% |
|
|
0.91 |
% |
|
|
1.26 |
% |
|
|
0.91 |
% |
(1) Represents the impact of adopting ASU
2016-13, Financial Instruments - Credit Losses on January 1, 2023.
As a result of adopting ASU 2016-13, our methodology to compute our
allowance for credit losses is based on a current expected credit
loss methodology, rather than the previously applied incurred loss
methodology.
Southern California Bancorp and
SubsidiaryBalance Sheets (Unaudited)
|
|
June 30, 2023 |
|
|
March 31, 2023 |
|
|
December 31, 2022 |
|
ASSETS |
|
($ in
thousands) |
|
Cash and due from banks |
|
$ |
34,632 |
|
|
$ |
34,159 |
|
|
$ |
60,295 |
|
Federal funds sold & interest-bearing balances |
|
|
69,995 |
|
|
|
67,980 |
|
|
|
26,465 |
|
Total cash and cash equivalents |
|
|
104,627 |
|
|
|
102,139 |
|
|
|
86,760 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities available-for-sale, at fair value |
|
|
119,875 |
|
|
|
124,438 |
|
|
|
112,580 |
|
Securities held-to-maturity, at cost (fair value of $48,563 at
June 30, 2023; $49,713 at March 31, 2023; and $47,906 at
December 31, 2022) |
|
|
53,782 |
|
|
|
53,864 |
|
|
|
53,946 |
|
Loans held for sale |
|
|
1,062 |
|
|
|
577 |
|
|
|
9,027 |
|
Loans held for investment: |
|
|
|
|
|
|
|
|
|
|
|
|
Construction & land development |
|
|
275,250 |
|
|
|
256,096 |
|
|
|
239,067 |
|
1-4 family residential |
|
|
150,150 |
|
|
|
154,071 |
|
|
|
144,322 |
|
Multifamily |
|
|
210,025 |
|
|
|
227,676 |
|
|
|
218,606 |
|
Other commercial real estate |
|
|
961,307 |
|
|
|
936,513 |
|
|
|
958,676 |
|
Commercial & industrial |
|
|
312,845 |
|
|
|
314,248 |
|
|
|
331,644 |
|
Other consumer |
|
|
3,776 |
|
|
|
5,328 |
|
|
|
5,458 |
|
Total loans held for investment |
|
|
1,913,353 |
|
|
|
1,893,932 |
|
|
|
1,897,773 |
|
Allowance for credit losses - loans |
|
|
(22,502 |
) |
|
|
(22,391 |
) |
|
|
(17,099 |
) |
Total loans held for investment, net |
|
|
1,890,851 |
|
|
|
1,871,541 |
|
|
|
1,880,674 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted stock at cost |
|
|
15,997 |
|
|
|
14,557 |
|
|
|
14,543 |
|
Premises and equipment |
|
|
13,919 |
|
|
|
14,105 |
|
|
|
14,334 |
|
Right of use asset |
|
|
7,853 |
|
|
|
8,384 |
|
|
|
8,607 |
|
Goodwill |
|
|
37,803 |
|
|
|
37,803 |
|
|
|
37,803 |
|
Core deposit intangible |
|
|
1,403 |
|
|
|
1,493 |
|
|
|
1,584 |
|
Bank owned life insurance |
|
|
38,428 |
|
|
|
38,196 |
|
|
|
37,972 |
|
Deferred taxes, net |
|
|
11,666 |
|
|
|
10,492 |
|
|
|
10,699 |
|
Accrued interest and other assets |
|
|
11,917 |
|
|
|
14,464 |
|
|
|
15,398 |
|
Total assets |
|
$ |
2,309,183 |
|
|
$ |
2,292,053 |
|
|
$ |
2,283,927 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand |
|
$ |
776,895 |
|
|
$ |
882,000 |
|
|
$ |
923,899 |
|
Interest-bearing NOW accounts |
|
|
354,088 |
|
|
|
248,809 |
|
|
|
209,625 |
|
Money market and savings accounts |
|
|
660,654 |
|
|
|
677,636 |
|
|
|
668,602 |
|
Time deposits |
|
|
189,271 |
|
|
|
177,411 |
|
|
|
129,779 |
|
Total deposits |
|
|
1,980,908 |
|
|
|
1,985,856 |
|
|
|
1,931,905 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings |
|
|
32,818 |
|
|
|
17,794 |
|
|
|
67,770 |
|
Operating lease liability |
|
|
10,394 |
|
|
|
10,925 |
|
|
|
11,055 |
|
Accrued interest and other liabilities |
|
|
11,314 |
|
|
|
9,939 |
|
|
|
12,842 |
|
Total liabilities |
|
|
2,035,434 |
|
|
|
2,024,514 |
|
|
|
2,023,572 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
Common stock - 50,000,000 shares authorized, no par value;
issued and outstanding 18,296,365 at June 30, 2023; 18,271,194 at
March 31, 2023 and 17,940,283 at December 31, 2022) |
|
|
220,702 |
|
|
|
219,659 |
|
|
|
218,280 |
|
Retained earnings |
|
|
59,607 |
|
|
|
52,889 |
|
|
|
48,516 |
|
Accumulated other comprehensive loss - net of taxes |
|
|
(6,560 |
) |
|
|
(5,009 |
) |
|
|
(6,441 |
) |
Total shareholders' equity |
|
|
273,749 |
|
|
|
267,539 |
|
|
|
260,355 |
|
Total liabilities and shareholders' equity |
|
$ |
2,309,183 |
|
|
$ |
2,292,053 |
|
|
$ |
2,283,927 |
|
Southern California Bancorp and
SubsidiaryIncome Statements - Quarterly and Year-to-Date
(Unaudited)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, 2023 |
|
|
March 31, 2023 |
|
|
June 30, 2022 |
|
|
June 30, 2023 |
|
|
June 30, 2022 |
|
|
|
($ in thousands
except share and per share data) |
|
INTEREST AND DIVIDEND INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on loans |
|
$ |
27,987 |
|
|
$ |
27,019 |
|
|
$ |
19,947 |
|
|
$ |
55,006 |
|
|
$ |
37,678 |
|
Interest on debt securities |
|
|
833 |
|
|
|
731 |
|
|
|
476 |
|
|
|
1,564 |
|
|
|
730 |
|
Interest on tax-exempted debt securities |
|
|
456 |
|
|
|
487 |
|
|
|
325 |
|
|
|
943 |
|
|
|
401 |
|
Interest and dividends from other institutions |
|
|
984 |
|
|
|
972 |
|
|
|
836 |
|
|
|
1,956 |
|
|
|
1,260 |
|
Total interest and dividend income |
|
|
30,260 |
|
|
|
29,209 |
|
|
|
21,584 |
|
|
|
59,469 |
|
|
|
40,069 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on NOW, savings, and money market accounts |
|
|
4,730 |
|
|
|
2,903 |
|
|
|
264 |
|
|
|
7,633 |
|
|
|
546 |
|
Interest on time deposits |
|
|
1,531 |
|
|
|
975 |
|
|
|
81 |
|
|
|
2,506 |
|
|
|
179 |
|
Interest on borrowings |
|
|
573 |
|
|
|
439 |
|
|
|
303 |
|
|
|
1,012 |
|
|
|
613 |
|
Total interest expense |
|
|
6,834 |
|
|
|
4,317 |
|
|
|
648 |
|
|
|
11,151 |
|
|
|
1,338 |
|
Net interest income |
|
|
23,426 |
|
|
|
24,892 |
|
|
|
20,936 |
|
|
|
48,318 |
|
|
|
38,731 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Reversal of) Provision for credit losses (1) |
|
|
(15 |
) |
|
|
202 |
|
|
|
1,796 |
|
|
|
187 |
|
|
|
3,646 |
|
Net interest income after provision for credit losses |
|
|
23,441 |
|
|
|
24,690 |
|
|
|
19,140 |
|
|
|
48,131 |
|
|
|
35,085 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges and fees on deposit accounts |
|
|
530 |
|
|
|
439 |
|
|
|
385 |
|
|
|
969 |
|
|
|
872 |
|
Gain on sale of loans |
|
|
77 |
|
|
|
808 |
|
|
|
767 |
|
|
|
885 |
|
|
|
816 |
|
Bank owned life insurance income |
|
|
232 |
|
|
|
223 |
|
|
|
215 |
|
|
|
455 |
|
|
|
1,047 |
|
Servicing and related income on loans |
|
|
87 |
|
|
|
75 |
|
|
|
25 |
|
|
|
162 |
|
|
|
94 |
|
Gain on sale of debt securities |
|
|
34 |
|
|
|
— |
|
|
|
— |
|
|
|
34 |
|
|
|
— |
|
Other charges and fees |
|
|
136 |
|
|
|
25 |
|
|
|
134 |
|
|
|
161 |
|
|
|
300 |
|
Total noninterest income |
|
|
1,096 |
|
|
|
1,570 |
|
|
|
1,526 |
|
|
|
2,666 |
|
|
|
3,129 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
9,674 |
|
|
|
10,241 |
|
|
|
9,361 |
|
|
|
19,915 |
|
|
|
19,557 |
|
Occupancy and equipment expenses |
|
|
1,527 |
|
|
|
1,447 |
|
|
|
1,732 |
|
|
|
2,974 |
|
|
|
3,142 |
|
Data processing |
|
|
1,176 |
|
|
|
1,056 |
|
|
|
1,092 |
|
|
|
2,232 |
|
|
|
2,512 |
|
Legal, audit and professional |
|
|
667 |
|
|
|
785 |
|
|
|
608 |
|
|
|
1,452 |
|
|
|
1,225 |
|
Regulatory assessments |
|
|
367 |
|
|
|
452 |
|
|
|
421 |
|
|
|
819 |
|
|
|
760 |
|
Director and shareholder expenses |
|
|
214 |
|
|
|
213 |
|
|
|
221 |
|
|
|
427 |
|
|
|
416 |
|
Merger and related expenses |
|
|
— |
|
|
|
— |
|
|
|
544 |
|
|
|
— |
|
|
|
1,068 |
|
Core deposit intangible amortization |
|
|
90 |
|
|
|
91 |
|
|
|
99 |
|
|
|
181 |
|
|
|
198 |
|
Loss contingency expense |
|
|
— |
|
|
|
— |
|
|
|
6,500 |
|
|
|
— |
|
|
|
6,500 |
|
Other expense |
|
|
892 |
|
|
|
734 |
|
|
|
1,130 |
|
|
|
1,626 |
|
|
|
1,882 |
|
Total noninterest expense |
|
|
14,607 |
|
|
|
15,019 |
|
|
|
21,708 |
|
|
|
29,626 |
|
|
|
37,260 |
|
Income (loss) before income taxes |
|
|
9,930 |
|
|
|
11,241 |
|
|
|
(1,042 |
) |
|
|
21,171 |
|
|
|
954 |
|
Income tax expense (benefit) |
|
|
3,212 |
|
|
|
3,017 |
|
|
|
(306 |
) |
|
|
6,229 |
|
|
|
244 |
|
Net income (loss) |
|
$ |
6,718 |
|
|
$ |
8,224 |
|
|
$ |
(736 |
) |
|
$ |
14,942 |
|
|
$ |
710 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share - basic |
|
$ |
0.37 |
|
|
$ |
0.46 |
|
|
$ |
(0.04 |
) |
|
$ |
0.82 |
|
|
$ |
0.04 |
|
Net income (loss) per share - diluted |
|
$ |
0.36 |
|
|
$ |
0.44 |
|
|
$ |
(0.04 |
) |
|
$ |
0.80 |
|
|
$ |
0.04 |
|
Pre-tax, pre-provision income (2) |
|
$ |
9,915 |
|
|
$ |
11,443 |
|
|
$ |
754 |
|
|
$ |
21,358 |
|
|
$ |
4,600 |
|
Adjusted pre-tax, pre-provision income (2) |
|
$ |
9,915 |
|
|
$ |
11,443 |
|
|
$ |
7,798 |
|
|
$ |
21,358 |
|
|
$ |
12,168 |
|
(1) Included (reversal of) provision for
unfunded commitments of $(135) thousand, $(76) thousand and $146
thousand for the three months ended June 30, 2023,
March 31, 2023 and June 30, 2022, respectively; and
$(211) thousand and $146 thousand for the six months ended
June 30, 2023 and June 30, 2022, respectively.
(2) Non-GAAP measure. See – GAAP to Non-GAAP
reconciliation.
Southern California Bancorp and
SubsidiaryAverage Balance Sheets and Yield
Analysis (Unaudited)
|
|
Three Months Ended |
|
|
|
June 30, 2023 |
|
|
March 31, 2023 |
|
|
June 30, 2022 |
|
|
|
Average Balance |
|
|
Income/Expense |
|
|
Yield/Cost |
|
|
Average Balance |
|
|
Income/Expense |
|
|
Yield/Cost |
|
|
Average Balance |
|
|
Income/Expense |
|
|
Yield/Cost |
|
Assets |
|
($ in
thousands) |
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-PPP loans |
|
$ |
1,896,805 |
|
|
$ |
27,973 |
|
|
|
5.92 |
% |
|
$ |
1,890,758 |
|
|
$ |
27,005 |
|
|
|
5.79 |
% |
|
$ |
1,679,902 |
|
|
$ |
19,668 |
|
|
|
4.70 |
% |
Total PPP loans |
|
|
3,228 |
|
|
|
14 |
|
|
|
1.74 |
% |
|
|
3,476 |
|
|
|
14 |
|
|
|
1.63 |
% |
|
|
9,072 |
|
|
|
279 |
|
|
|
12.34 |
% |
Total loans |
|
|
1,900,033 |
|
|
|
27,987 |
|
|
|
5.91 |
% |
|
|
1,894,234 |
|
|
|
27,019 |
|
|
|
5.78 |
% |
|
|
1,688,974 |
|
|
|
19,947 |
|
|
|
4.74 |
% |
Taxable debt securities |
|
|
106,208 |
|
|
|
833 |
|
|
|
3.15 |
% |
|
|
97,023 |
|
|
|
731 |
|
|
|
3.06 |
% |
|
|
100,548 |
|
|
|
476 |
|
|
|
1.90 |
% |
Tax-exempt debt securities (1) |
|
|
70,470 |
|
|
|
456 |
|
|
|
3.29 |
% |
|
|
74,188 |
|
|
|
487 |
|
|
|
3.37 |
% |
|
|
56,054 |
|
|
|
325 |
|
|
|
2.94 |
% |
Deposits in other financial institutions |
|
|
42,770 |
|
|
|
537 |
|
|
|
5.04 |
% |
|
|
37,611 |
|
|
|
457 |
|
|
|
4.93 |
% |
|
|
246,506 |
|
|
|
439 |
|
|
|
0.71 |
% |
Fed funds sold/resale agreements |
|
|
17,639 |
|
|
|
228 |
|
|
|
5.18 |
% |
|
|
25,306 |
|
|
|
287 |
|
|
|
4.60 |
% |
|
|
64,004 |
|
|
|
144 |
|
|
|
0.90 |
% |
Restricted stock investments and other bank stock |
|
|
16,039 |
|
|
|
219 |
|
|
|
5.48 |
% |
|
|
14,902 |
|
|
|
228 |
|
|
|
6.20 |
% |
|
|
14,914 |
|
|
|
253 |
|
|
|
6.80 |
% |
Total interest-earning assets |
|
|
2,153,159 |
|
|
|
30,260 |
|
|
|
5.64 |
% |
|
|
2,143,264 |
|
|
|
29,209 |
|
|
|
5.53 |
% |
|
|
2,171,000 |
|
|
|
21,584 |
|
|
|
3.99 |
% |
Total noninterest-earning assets |
|
|
133,716 |
|
|
|
|
|
|
|
|
|
|
|
134,707 |
|
|
|
|
|
|
|
|
|
|
|
137,829 |
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,286,875 |
|
|
|
|
|
|
|
|
|
|
$ |
2,277,971 |
|
|
|
|
|
|
|
|
|
|
$ |
2,308,829 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing NOW accounts |
|
$ |
308,863 |
|
|
$ |
1,279 |
|
|
|
1.66 |
% |
|
$ |
206,785 |
|
|
$ |
316 |
|
|
|
0.62 |
% |
|
$ |
211,663 |
|
|
$ |
56 |
|
|
|
0.11 |
% |
Money market and savings accounts |
|
|
662,487 |
|
|
|
3,451 |
|
|
|
2.09 |
% |
|
|
685,368 |
|
|
|
2,587 |
|
|
|
1.53 |
% |
|
|
669,183 |
|
|
|
208 |
|
|
|
0.12 |
% |
Time deposits |
|
|
175,161 |
|
|
|
1,531 |
|
|
|
3.51 |
% |
|
|
152,613 |
|
|
|
975 |
|
|
|
2.59 |
% |
|
|
87,176 |
|
|
|
81 |
|
|
|
0.37 |
% |
Total interest-bearing deposits |
|
|
1,146,511 |
|
|
|
6,261 |
|
|
|
2.19 |
% |
|
|
1,044,766 |
|
|
|
3,878 |
|
|
|
1.51 |
% |
|
|
968,022 |
|
|
|
345 |
|
|
|
0.14 |
% |
Borrowings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FHLB advances |
|
|
22,791 |
|
|
|
302 |
|
|
|
5.31 |
% |
|
|
14,356 |
|
|
|
168 |
|
|
|
4.75 |
% |
|
|
— |
|
|
|
— |
|
|
|
—% |
|
Subordinated debt |
|
|
17,806 |
|
|
|
271 |
|
|
|
6.10 |
% |
|
|
17,783 |
|
|
|
271 |
|
|
|
6.18 |
% |
|
|
17,711 |
|
|
|
271 |
|
|
|
6.14 |
% |
TruPS |
|
|
— |
|
|
|
— |
|
|
|
— |
% |
|
|
— |
|
|
|
— |
|
|
|
— |
% |
|
|
2,262 |
|
|
|
32 |
|
|
|
5.67 |
% |
Total borrowings |
|
|
40,597 |
|
|
|
573 |
|
|
|
5.66 |
% |
|
|
32,139 |
|
|
|
439 |
|
|
|
5.54 |
% |
|
|
19,973 |
|
|
|
303 |
|
|
|
6.08 |
% |
Total interest-bearing liabilities |
|
|
1,187,108 |
|
|
|
6,834 |
|
|
|
2.31 |
% |
|
|
1,076,905 |
|
|
|
4,317 |
|
|
|
1.63 |
% |
|
|
987,995 |
|
|
|
648 |
|
|
|
0.26 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits (2) |
|
|
805,553 |
|
|
|
|
|
|
|
|
|
|
|
915,160 |
|
|
|
|
|
|
|
|
|
|
|
1,053,615 |
|
|
|
|
|
|
|
|
|
Other liabilities |
|
|
22,727 |
|
|
|
|
|
|
|
|
|
|
|
23,788 |
|
|
|
|
|
|
|
|
|
|
|
18,779 |
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
271,487 |
|
|
|
|
|
|
|
|
|
|
|
262,118 |
|
|
|
|
|
|
|
|
|
|
|
248,440 |
|
|
|
|
|
|
|
|
|
Total Liabilities and Shareholders' Equity |
|
$ |
2,286,875 |
|
|
|
|
|
|
|
|
|
|
$ |
2,277,971 |
|
|
|
|
|
|
|
|
|
|
$ |
2,308,829 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest spread |
|
|
|
|
|
|
|
|
|
|
3.33 |
% |
|
|
|
|
|
|
|
|
|
|
3.90 |
% |
|
|
|
|
|
|
|
|
|
|
3.72 |
% |
Net interest income and margin |
|
|
|
|
|
$ |
23,426 |
|
|
|
4.36 |
% |
|
|
|
|
|
$ |
24,892 |
|
|
|
4.71 |
% |
|
|
|
|
|
$ |
20,936 |
|
|
|
3.87 |
% |
Cost of deposits |
|
|
|
|
|
|
|
|
|
|
1.29 |
% |
|
|
|
|
|
|
|
|
|
|
0.80 |
% |
|
|
|
|
|
|
|
|
|
|
0.07 |
% |
Cost of funds |
|
|
|
|
|
|
|
|
|
|
1.38 |
% |
|
|
|
|
|
|
|
|
|
|
0.88 |
% |
|
|
|
|
|
|
|
|
|
|
0.13 |
% |
(1) Tax-exempt debt securities yields are
presented on a tax equivalent basis using a 21% tax rate.
(2) Average noninterest-bearing deposits
represent 41.27%, 46.69% and 52.12% of average total deposits for
the three months ended June 30, 2023, March 31, 2023 and
June 30, 2022, respectively.
Southern California Bancorp and
SubsidiaryAverage Balance Sheets and Yield
Analysis(Unaudited)
|
|
Six Months Ended |
|
|
|
June 30, 2023 |
|
|
June 30, 2022 |
|
|
|
Average Balance |
|
|
Income/Expense |
|
|
Yield/Cost |
|
|
Average Balance |
|
|
Income/Expense |
|
|
Yield/Cost |
|
Assets |
|
($ in
thousands) |
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-PPP loans |
|
$ |
1,893,798 |
|
|
$ |
55,006 |
|
|
|
5.86 |
% |
|
$ |
1,588,645 |
|
|
$ |
36,077 |
|
|
|
4.58 |
% |
Total PPP loans |
|
|
3,352 |
|
|
|
— |
|
|
|
—% |
|
|
|
21,898 |
|
|
|
1,601 |
|
|
|
14.74 |
% |
Total loans |
|
|
1,897,150 |
|
|
|
55,006 |
|
|
|
5.85 |
% |
|
|
1,610,543 |
|
|
|
37,678 |
|
|
|
4.72 |
% |
Taxable debt securities |
|
|
101,641 |
|
|
|
1,564 |
|
|
|
3.10 |
% |
|
|
86,507 |
|
|
|
730 |
|
|
|
1.70 |
% |
Tax-exempt debt securities (1) |
|
|
72,318 |
|
|
|
943 |
|
|
|
3.33 |
% |
|
|
35,721 |
|
|
|
401 |
|
|
|
2.87 |
% |
Deposits in other financial institutions |
|
|
40,205 |
|
|
|
994 |
|
|
|
4.99 |
% |
|
|
354,641 |
|
|
|
633 |
|
|
|
0.36 |
% |
Fed funds sold/resale agreements |
|
|
21,451 |
|
|
|
515 |
|
|
|
4.84 |
% |
|
|
44,024 |
|
|
|
155 |
|
|
|
0.71 |
% |
Restricted stock investments and other bank stock |
|
|
15,474 |
|
|
|
447 |
|
|
|
5.83 |
% |
|
|
14,464 |
|
|
|
472 |
|
|
|
6.58 |
% |
Total interest-earning assets |
|
|
2,148,239 |
|
|
|
59,469 |
|
|
|
5.58 |
% |
|
|
2,145,900 |
|
|
|
40,069 |
|
|
|
3.77 |
% |
Total noninterest-earning assets |
|
|
134,209 |
|
|
|
|
|
|
|
|
|
|
|
138,550 |
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,282,448 |
|
|
|
|
|
|
|
|
|
|
$ |
2,284,450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing NOW accounts |
|
$ |
258,106 |
|
|
$ |
1,595 |
|
|
|
1.25 |
% |
|
$ |
201,155 |
|
|
$ |
137 |
|
|
|
0.14 |
% |
Money market and savings accounts |
|
|
673,864 |
|
|
|
6,038 |
|
|
|
1.81 |
% |
|
|
681,600 |
|
|
|
409 |
|
|
|
0.12 |
% |
Time deposits |
|
|
163,950 |
|
|
|
2,506 |
|
|
|
3.08 |
% |
|
|
92,076 |
|
|
|
179 |
|
|
|
0.39 |
% |
Total interest-bearing deposits |
|
|
1,095,920 |
|
|
|
10,139 |
|
|
|
1.87 |
% |
|
|
974,831 |
|
|
|
725 |
|
|
|
0.15 |
% |
Borrowings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FHLB advances |
|
|
18,597 |
|
|
|
469 |
|
|
|
5.09 |
% |
|
|
— |
|
|
|
— |
|
|
|
—% |
|
Subordinated debt |
|
|
17,795 |
|
|
|
543 |
|
|
|
6.15 |
% |
|
|
17,700 |
|
|
|
543 |
|
|
|
6.19 |
% |
TruPS |
|
|
— |
|
|
|
— |
|
|
|
—% |
|
|
|
2,498 |
|
|
|
70 |
|
|
|
5.65 |
% |
Total borrowings |
|
|
36,392 |
|
|
|
1,012 |
|
|
|
5.61 |
% |
|
|
20,198 |
|
|
|
613 |
|
|
|
6.12 |
% |
Total interest-bearing liabilities |
|
|
1,132,312 |
|
|
|
11,151 |
|
|
|
1.99 |
% |
|
|
995,029 |
|
|
|
1,338 |
|
|
|
0.27 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits (2) |
|
|
860,054 |
|
|
|
|
|
|
|
|
|
|
|
1,022,075 |
|
|
|
|
|
|
|
|
|
Other liabilities |
|
|
23,255 |
|
|
|
|
|
|
|
|
|
|
|
19,260 |
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
266,827 |
|
|
|
|
|
|
|
|
|
|
|
248,086 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Shareholders' Equity |
|
$ |
2,282,448 |
|
|
|
|
|
|
|
|
|
|
$ |
2,284,450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest spread |
|
|
|
|
|
|
|
|
|
|
3.59 |
% |
|
|
|
|
|
|
|
|
|
|
3.50 |
% |
Net interest income and margin |
|
|
|
|
|
$ |
48,318 |
|
|
|
4.54 |
% |
|
|
|
|
|
$ |
38,731 |
|
|
|
3.64 |
% |
Cost of deposits |
|
|
|
|
|
|
|
|
|
|
1.05 |
% |
|
|
|
|
|
|
|
|
|
|
0.07 |
% |
Cost of funds |
|
|
|
|
|
|
|
|
|
|
1.13 |
% |
|
|
|
|
|
|
|
|
|
|
0.13 |
% |
(1) Tax-exempt debt securities yields are
presented on a tax equivalent basis using a 21% tax rate.
(2) Average noninterest-bearing deposits
represent 43.97%, and 51.18% of average total deposits for the six
months ended June 30, 2023 and June 30, 2022,
respectively.
Southern California Bancorp and
SubsidiaryGAAP to Non-GAAP Reconciliation(Unaudited)
The following tables present a reconciliation of
non-GAAP financial measures to GAAP measures for: (1) adjusted net
income, (2) efficiency ratio, (3) adjusted efficiency ratio, (4)
pre-tax pre-provision income, (5) adjusted pre-tax pre-provision
income, (6) average tangible common equity, (7) adjusted return on
average assets, (8) adjusted return on average equity, (9) return
on average tangible common equity, (10) adjusted return on average
tangible common equity, (11) tangible common equity, (12) tangible
assets, (13) tangible common equity to tangible asset ratio, and
(14) tangible book value per share. We believe the presentation of
certain non-GAAP financial measures provides useful information to
assess our consolidated financial condition and consolidated
results of operations and to assist investors in evaluating our
financial results relative to our peers. These non-GAAP financial
measures complement our GAAP reporting and are presented below to
provide investors and others with information that we use to manage
the business each period. Because not all companies use identical
calculations, the presentation of these non-GAAP financial measures
may not be comparable to other similarly titled measures used by
other companies. These non-GAAP measures should be taken together
with the corresponding GAAP measures and should not be considered a
substitute of the GAAP measures.
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, 2023 |
|
|
March 31, 2023 |
|
|
June 30, 2022 |
|
|
June 30, 2023 |
|
|
June 30, 2022 |
|
|
|
($ in
thousands) |
|
Adjusted net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
6,718 |
|
|
$ |
8,224 |
|
|
$ |
(736 |
) |
|
$ |
14,942 |
|
|
$ |
710 |
|
Add:
After-tax merger and related expenses (1) |
|
|
— |
|
|
|
— |
|
|
|
383 |
|
|
|
— |
|
|
|
770 |
|
Add:
After-tax loss contingency expenses (1) |
|
|
— |
|
|
|
— |
|
|
|
4,579 |
|
|
|
— |
|
|
|
4,579 |
|
Adjusted net
income (non-GAAP) |
|
$ |
6,718 |
|
|
$ |
8,224 |
|
|
$ |
4,226 |
|
|
$ |
14,942 |
|
|
$ |
6,059 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency Ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense |
|
$ |
14,607 |
|
|
$ |
15,019 |
|
|
$ |
21,708 |
|
|
$ |
29,626 |
|
|
$ |
37,260 |
|
Less: Merger
and related expenses |
|
|
— |
|
|
|
— |
|
|
|
544 |
|
|
|
— |
|
|
|
1,068 |
|
Deduct: Loss
contingency expenses |
|
|
— |
|
|
|
— |
|
|
|
6,500 |
|
|
|
— |
|
|
|
6,500 |
|
Adjusted
noninterest expense |
|
$ |
14,607 |
|
|
$ |
15,019 |
|
|
$ |
14,664 |
|
|
$ |
29,626 |
|
|
$ |
29,692 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income |
|
|
23,426 |
|
|
|
24,892 |
|
|
|
20,936 |
|
|
|
48,318 |
|
|
|
38,731 |
|
Noninterest
income |
|
|
1,096 |
|
|
|
1,570 |
|
|
|
1,526 |
|
|
|
2,666 |
|
|
|
3,129 |
|
Total net
interest income and noninterest income |
|
$ |
24,522 |
|
|
$ |
26,462 |
|
|
$ |
22,462 |
|
|
$ |
50,984 |
|
|
$ |
41,860 |
|
Efficiency
ratio (non-GAAP) |
|
|
59.6 |
% |
|
|
56.8 |
% |
|
|
96.6 |
% |
|
|
58.1 |
% |
|
|
89.0 |
% |
Adjusted
efficiency ratio (non-GAAP) |
|
|
59.6 |
% |
|
|
56.8 |
% |
|
|
65.3 |
% |
|
|
58.1 |
% |
|
|
70.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax pre-provision income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income |
|
$ |
23,426 |
|
|
$ |
24,892 |
|
|
$ |
20,936 |
|
|
$ |
48,318 |
|
|
$ |
38,731 |
|
Noninterest
income |
|
|
1,096 |
|
|
|
1,570 |
|
|
|
1,526 |
|
|
|
2,666 |
|
|
|
3,129 |
|
Total net
interest income and noninterest income |
|
|
24,522 |
|
|
|
26,462 |
|
|
|
22,462 |
|
|
|
50,984 |
|
|
|
41,860 |
|
Less:
Noninterest expense |
|
|
14,607 |
|
|
|
15,019 |
|
|
|
21,708 |
|
|
|
29,626 |
|
|
|
37,260 |
|
Pre-tax
pre-provision income (non-GAAP) |
|
$ |
9,915 |
|
|
$ |
11,443 |
|
|
$ |
754 |
|
|
$ |
21,358 |
|
|
$ |
4,600 |
|
Add: Merger
and related expenses |
|
|
— |
|
|
|
— |
|
|
|
544 |
|
|
|
— |
|
|
|
1,068 |
|
Add: Loss
contingency expenses |
|
|
— |
|
|
|
— |
|
|
|
6,500 |
|
|
|
— |
|
|
|
6,500 |
|
Adjusted
pre-tax pre-provision income (non-GAAP) |
|
$ |
9,915 |
|
|
$ |
11,443 |
|
|
$ |
7,798 |
|
|
$ |
21,358 |
|
|
$ |
12,168 |
|
(1) After-tax merger and related expenses and
loss contingency expenses are presented using a 29.56% tax
rate.
Return on Average Assets, Equity, and Tangible Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
|
$ |
6,718 |
|
|
$ |
8,224 |
|
|
$ |
(736 |
) |
|
$ |
14,942 |
|
|
$ |
710 |
|
Adjusted net
income (non-GAAP) |
|
$ |
6,718 |
|
|
$ |
8,224 |
|
|
$ |
4,226 |
|
|
$ |
14,942 |
|
|
$ |
6,059 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average assets |
|
$ |
2,286,875 |
|
|
$ |
2,277,971 |
|
|
$ |
2,308,829 |
|
|
$ |
2,282,448 |
|
|
$ |
2,284,450 |
|
Average shareholders' equity |
|
|
271,487 |
|
|
|
262,118 |
|
|
|
248,440 |
|
|
|
266,827 |
|
|
|
248,086 |
|
Less:
Average intangible assets |
|
|
39,250 |
|
|
|
39,340 |
|
|
|
38,655 |
|
|
|
39,294 |
|
|
|
38,707 |
|
Average
tangible common equity (non-GAAP) |
|
$ |
232,237 |
|
|
$ |
222,778 |
|
|
$ |
209,785 |
|
|
$ |
227,533 |
|
|
$ |
209,379 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
average assets |
|
|
1.18 |
% |
|
|
1.46 |
% |
|
|
(0.13 |
%) |
|
|
1.32 |
% |
|
|
0.06 |
% |
Adjusted
return on average assets (non-GAAP) |
|
|
1.18 |
% |
|
|
1.46 |
% |
|
|
0.73 |
% |
|
|
1.32 |
% |
|
|
0.53 |
% |
Return on
average equity |
|
|
9.93 |
% |
|
|
12.72 |
% |
|
|
(1.19 |
%) |
|
|
11.29 |
% |
|
|
0.58 |
% |
Adjusted
return on average equity (non-GAAP) |
|
|
9.93 |
% |
|
|
12.72 |
% |
|
|
6.82 |
% |
|
|
11.29 |
% |
|
|
4.93 |
% |
Return on
average tangible common equity (non-GAAP) |
|
|
11.60 |
% |
|
|
14.97 |
% |
|
|
(1.41 |
%) |
|
|
13.24 |
% |
|
|
0.68 |
% |
Adjusted
return on average tangible common equity (non-GAAP) |
|
|
11.60 |
% |
|
|
14.97 |
% |
|
|
8.08 |
% |
|
|
13.24 |
% |
|
|
5.84 |
% |
|
|
June 30, 2023 |
|
|
March 31, 2023 |
|
|
December 31, 2022 |
|
|
|
($ in thousands
except share and per share data) |
|
Tangible Common
Equity Ratio/Tangible Book Value Per Share |
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
$ |
273,749 |
|
|
$ |
267,539 |
|
|
$ |
260,355 |
|
Less: Intangible assets |
|
|
39,206 |
|
|
|
39,296 |
|
|
|
39,387 |
|
Tangible common equity (non-GAAP) |
|
$ |
234,543 |
|
|
$ |
228,243 |
|
|
$ |
220,968 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,309,183 |
|
|
$ |
2,292,053 |
|
|
$ |
2,283,927 |
|
Less: Intangible assets |
|
|
39,206 |
|
|
|
39,296 |
|
|
|
39,387 |
|
Tangible assets (non-GAAP) |
|
$ |
2,269,977 |
|
|
$ |
2,252,757 |
|
|
$ |
2,244,540 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity to asset ratio |
|
|
11.85 |
% |
|
|
11.67 |
% |
|
|
11.40 |
% |
Tangible common equity to tangible asset ratio (non-GAAP) |
|
|
10.33 |
% |
|
|
10.13 |
% |
|
|
9.84 |
% |
Book value per share |
|
$ |
14.96 |
|
|
$ |
14.64 |
|
|
$ |
14.51 |
|
Tangible book value per share (non-GAAP) |
|
$ |
12.82 |
|
|
$ |
12.49 |
|
|
$ |
12.32 |
|
Shares outstanding |
|
|
18,296,365 |
|
|
|
18,271,194 |
|
|
|
17,940,283 |
|
INVESTOR RELATIONS CONTACT
Kevin Mc CabeBank of Southern
Californiakmccabe@banksocal.com818.637.7065
1 Reconciliations of the non–U.S. generally
accepted accounting principles (“GAAP”) measures are set forth at
the end of this press release.
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