SOUTHERN CALIFORNIA BANCORP REPORTS FINANCIAL RESULTS FOR THE SECOND QUARTER OF 2024
Rhea-AI Summary
Southern California Bancorp (NASDAQ: BCAL) reported net income of $190,000 ($0.01 per diluted share) for Q2 2024, down from $4.9 million ($0.26 per diluted share) in Q1 2024. The decrease was primarily due to a $4.8 million charge from the sale of other real estate owned properties. Key highlights include:
- Net interest margin increased to 3.94% from 3.80% in Q1
- Average loan yield rose to 6.21% from 6.02% in Q1
- Cost of funds increased modestly by 4 basis points to 2.21%
- Total deposits grew 0.3% to $1.94 billion
- Nonperforming assets ratio improved to 0.20% from 0.84% in Q1
The company expects to close its merger with California BanCorp on July 31, 2024, following shareholder approval.
Positive
- Net interest margin increased to 3.94% from 3.80% in Q1 2024
- Average loan yield rose to 6.21% from 6.02% in Q1 2024
- Total deposits grew 0.3% to $1.94 billion
- Nonperforming assets ratio improved to 0.20% from 0.84% in Q1 2024
- Merger with California BanCorp expected to close on July 31, 2024
Negative
- Net income decreased to $190,000 from $4.9 million in Q1 2024
- $4.8 million charge from the sale of other real estate owned properties
- Cost of funds increased by 4 basis points to 2.21%
- Efficiency ratio increased to 85.7% from 68.4% in Q1 2024
- Provision for credit losses increased to $2.9 million from a reversal of $331,000 in Q1 2024
News Market Reaction
On the day this news was published, BCAL declined 1.44%, reflecting a mild negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
San Diego, Calif., July 29, 2024 (GLOBE NEWSWIRE) -- 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 2024.
The Company reported net income of
“Our second quarter of 2024 financial results were impacted by the sale of other real estate owned (“OREO”) properties that sold for
“As we announced earlier this month, on July 17, 2024, at their respective shareholder meetings, shareholders of Southern California Bancorp and California BanCorp approved the merger of the two companies, and we expect the transaction to close on July 31, 2024. We are excited about the future and building what we believe will be the premier commercial banking franchise headquartered in the state of California.”
Second Quarter 2024 Highlights
- Net income of
$190 thousand , compared with$4.9 million in the prior quarter - Diluted earnings per share of
$0.01 , compared with$0.26 in the prior quarter - Net interest margin of
3.94% , compared with3.80% in the prior quarter; average loan yield of6.21% compared with6.02% in the prior quarter - Return on average assets of
0.03% , compared with0.86% in the prior quarter - Return on average common equity of
0.26% , compared with6.85% in the prior quarter - Efficiency ratio (non-GAAP1) of
85.7% compared with68.4% in the prior quarter; excluding merger related expenses the efficiency ratio was83.5% , compared with65.9% in the prior quarter - Tangible book value per common share ("TBV") (non-GAAP1) of
$13.71 at June 30, 2024, up$0.02 from$13.69 at March 31, 2024 - Total assets of
$2.29 billion at June 30, 2024, compared with$2.29 billion at March 31, 2024 - Total loans, including loans held for sale of
$1.88 billion at June 30, 2024, compared with$1.89 billion at March 31, 2024 - Nonperforming assets to total assets ratio of
0.20% at June 30, 2024, compared with0.84% at March 31, 2024, positively impacted by the sale of$13.1 million in other real estate owned in the second quarter of 2024
1 Reconciliations of non–U.S. generally accepted accounting principles (“GAAP”) measures are set forth at the end of this press release.
- Total deposits of
$1.94 billion at June 30, 2024, increased$5.3 million or0.3% , compared with$1.93 billion at March 31, 2024 - Noninterest-bearing demand deposits were
$666.6 million at June 30, 2024, representing34.4% of total deposits, compared with$652.0 million , or33.8% of total deposits at March 31, 2024 - Cost of deposits was
2.12% , compared with2.05% in the prior quarter - Cost of funds was
2.21% , compared with2.17% in the prior quarter - Bank's capital exceeds minimums to be “well-capitalized,” the highest regulatory capital category
Second Quarter Operating Results
Net Income
Net income for the second quarter of 2024 was
Net Interest Income and Net Interest Margin
Net interest income for the second quarter of 2024 was
Net interest margin for the second quarter of 2024 was
Cost of funds for the second quarter of 2024 was
Average total borrowings decreased
Provision for Credit Losses
The Company recorded a provision for credit losses of
Noninterest Income
The Company recorded noninterest income of
Noninterest Expense
Total noninterest expense for the second quarter of 2024 was
Salaries and employee benefits decreased
Efficiency ratio (non-GAAP1) for the second quarter of 2024 was
Income Tax
In the second quarter of 2024, the Company’s income tax expense was
Balance Sheet
Assets
Total assets at June 30, 2024 were
Loans
Total loans held for investment were
Deposits
Total deposits at June 30, 2024 were
Federal Home Loan Bank (“FHLB”) and Liquidity
The Company was able to repay a portion of its higher cost FHLB borrowings with the liquidity primarily derived from the increase in total deposits during the second quarter of 2024. At June 30, 2024, the Company had overnight FHLB borrowings of
At June 30, 2024, the Company had available borrowing capacity from the FHLB secured line of credit of approximately
Asset Quality
Total non-performing assets decreased to
The decrease in non-performing assets in the second quarter of 2024 was primarily attributable to the sale of
Total non-performing loans decreased to
Special mention loans decreased by
The Company had no loans over 90 days past due that were accruing interest at June 30, 2024 and March 31, 2024.
There were no loan delinquencies (30-89 days past due, excluding nonaccrual loans) at June 30, 2024 and March 31, 2024.
The allowance for credit losses, which is comprised of the allowance for loan losses (“ALL”) and reserve for unfunded loan commitments, totaled
The ALL was
Capital
Tangible book value (non-GAAP1) per common share at June 30, 2024, was
The Bank’s leverage capital ratio and total risk-based capital ratio were
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, Riverside, 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 expectations, plans or objectives for future operations, products or services, loan recoveries and the proposed merger (the “Merger”) of the Company and California BanCorp (“CBC”), as well as 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 Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”); changes in real estate markets and 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; the impacts of recent bank failures; the occurrence of any event, change or other circumstances that could give rise to the right of the Company or CBC to terminate their agreement with respect to the Merger; the outcome of any legal proceedings that may be instituted against the Company or CBC; delays in completing the Merger; the failure to satisfy any of the conditions to the Merger on a timely basis or at all; the ability to complete the Merger and integration of the Company and CBC successfully; costs being greater than anticipated; cost savings being less than anticipated; the risk that the Merger disrupts the business of the Company, CBC or both; difficulties in retaining senior management, employees or customers; and other factors that may affect the future results of the Company and CBC.
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 Annual Report on Form 10-K for the year ended December 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 Subsidiary
Financial Highlights (Unaudited)
| At or for the Three Months Ended | At or for the Six Months Ended | |||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||||||||||||||
| ($ in thousands except share and per share data) | ||||||||||||||||||||
| EARNINGS | ||||||||||||||||||||
| Net interest income | $ | 21,007 | $ | 20,494 | $ | 23,426 | $ | 41,501 | $ | 48,318 | ||||||||||
| Provision for (reversal of) credit losses | $ | 2,893 | $ | (331 | ) | $ | (15 | ) | $ | 2,562 | $ | 187 | ||||||||
| Noninterest income | $ | 1,169 | $ | 1,413 | $ | 1,096 | $ | 2,582 | $ | 2,666 | ||||||||||
| Noninterest expense | $ | 19,005 | $ | 14,981 | $ | 14,607 | $ | 33,986 | $ | 29,626 | ||||||||||
| Income tax expense | $ | 88 | $ | 2,322 | $ | 3,212 | $ | 2,410 | $ | 6,229 | ||||||||||
| Net income | $ | 190 | $ | 4,935 | $ | 6,718 | $ | 5,125 | $ | 14,942 | ||||||||||
| Pre-tax pre-provision income (1) | $ | 3,171 | $ | 6,926 | $ | 9,915 | $ | 10,097 | $ | 21,358 | ||||||||||
| Adjusted pre-tax pre-provision income (1) | $ | 3,662 | $ | 7,475 | $ | 9,915 | $ | 11,137 | $ | 21,358 | ||||||||||
| Diluted earnings per share | $ | 0.01 | $ | 0.26 | $ | 0.36 | $ | 0.27 | $ | 0.80 | ||||||||||
| Shares outstanding at period end | 18,547,352 | 18,527,178 | 18,296,365 | 18,547,352 | 18,296,365 | |||||||||||||||
| PERFORMANCE RATIOS | ||||||||||||||||||||
| Return on average assets | 0.03 | % | 0.86 | % | 1.18 | % | 0.45 | % | 1.32 | % | ||||||||||
| Adjusted return on average assets (1) | 0.11 | % | 0.95 | % | 1.18 | % | 0.53 | % | 1.32 | % | ||||||||||
| Return on average common equity | 0.26 | % | 6.85 | % | 9.93 | % | 3.53 | % | 11.29 | % | ||||||||||
| Adjusted return on average common equity (1) | 0.82 | % | 7.61 | % | 9.93 | % | 4.19 | % | 11.29 | % | ||||||||||
| Yield on total loans | 6.21 | % | 6.02 | % | 5.91 | % | 6.11 | % | 5.85 | % | ||||||||||
| Yield on interest earning assets | 5.97 | % | 5.79 | % | 5.64 | % | 5.88 | % | 5.58 | % | ||||||||||
| Cost of deposits | 2.12 | % | 2.05 | % | 1.29 | % | 2.08 | % | 1.05 | % | ||||||||||
| Cost of funds | 2.21 | % | 2.17 | % | 1.38 | % | 2.19 | % | 1.13 | % | ||||||||||
| Net interest margin | 3.94 | % | 3.80 | % | 4.36 | % | 3.87 | % | 4.54 | % | ||||||||||
| Efficiency ratio (1) | 85.70 | % | 68.38 | % | 59.57 | % | 77.10 | % | 58.11 | % | ||||||||||
| Adjusted efficiency ratio (1) | 83.49 | % | 65.88 | % | 59.57 | % | 74.74 | % | 58.11 | % | ||||||||||
| As of | ||||||||||||
| June 30, 2024 | March 31, 2024 | December 31, 2023 | ||||||||||
| ($ in thousands except share and per share data) | ||||||||||||
| CAPITAL | ||||||||||||
| Tangible equity to tangible assets (1) | 11.28 | % | 11.27 | % | 10.73 | % | ||||||
| Book value (BV) per common share | $ | 15.81 | $ | 15.79 | $ | 15.69 | ||||||
| Tangible BV per common share (1) | $ | 13.71 | $ | 13.69 | $ | 13.56 | ||||||
| ASSET QUALITY | ||||||||||||
| Allowance for loan losses (ALL) | $ | 23,788 | $ | 22,254 | $ | 22,569 | ||||||
| Reserve for unfunded loan commitments | $ | 819 | $ | 916 | $ | 933 | ||||||
| Allowance for credit losses (ACL) | $ | 24,607 | $ | 23,170 | $ | 23,502 | ||||||
| Allowance for loan losses to nonperforming loans | 5.07 | x | 3.62 | x | 1.74 | x | ||||||
| ALL to total loans held for investment | 1.27 | % | 1.18 | % | 1.15 | % | ||||||
| ACL to total loans held for investment | 1.31 | % | 1.23 | % | 1.20 | % | ||||||
| 30-89 days past due, excluding nonaccrual loans | $ | — | $ | — | $ | 19 | ||||||
| Over 90 days past due, excluding nonaccrual loans | $ | — | $ | — | $ | — | ||||||
| Special mention loans | $ | 27,861 | $ | 39,591 | $ | 2,996 | ||||||
| Special mention loans to total loans held for investment | 1.48 | % | 2.10 | % | 0.15 | % | ||||||
| Substandard loans | $ | 23,080 | $ | 11,299 | $ | 19,502 | ||||||
| Substandard loans to total loans held for investment | 1.23 | % | 0.60 | % | 1.00 | % | ||||||
| Nonperforming loans | $ | 4,696 | $ | 6,153 | $ | 13,004 | ||||||
| Nonperforming loans total loans held for investment | 0.25 | % | 0.33 | % | 0.66 | % | ||||||
| Other real estate owned, net | $ | — | $ | 13,114 | $ | — | ||||||
| Nonperforming assets | $ | 4,696 | $ | 19,267 | $ | 13,004 | ||||||
| Nonperforming assets to total assets | 0.20 | % | 0.84 | % | 0.55 | % | ||||||
| END OF PERIOD BALANCES | ||||||||||||
| Total loans, including loans held for sale | $ | 1,884,599 | $ | 1,886,085 | $ | 1,964,791 | ||||||
| Total assets | $ | 2,293,693 | $ | 2,289,715 | $ | 2,360,252 | ||||||
| Deposits | $ | 1,935,862 | $ | 1,930,544 | $ | 1,943,556 | ||||||
| Loans to deposits | 97.4 | % | 97.7 | % | 101.1 | % | ||||||
| Shareholders’ equity | $ | 293,219 | $ | 292,499 | $ | 288,152 | ||||||
(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, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||||||||||||
| ($ in thousands) | ||||||||||||||||||||
| Allowance for loan losses | ||||||||||||||||||||
| Balance at beginning of period | $ | 22,254 | $ | 22,569 | $ | 22,391 | $ | 22,569 | $ | 17,099 | ||||||||||
| Adoption of ASU 2016-13 (1) | — | — | — | — | 5,027 | |||||||||||||||
| Provision for (reversal of) credit losses | 2,990 | (314 | ) | 120 | 2,676 | 398 | ||||||||||||||
| Charge-offs | (1,456 | ) | (1 | ) | (9 | ) | (1,457 | ) | (36 | ) | ||||||||||
| Recoveries | — | — | — | — | 14 | |||||||||||||||
| Net charge-offs | (1,456 | ) | (1 | ) | (9 | ) | (1,457 | ) | (22 | ) | ||||||||||
| Balance, end of period | $ | 23,788 | $ | 22,254 | $ | 22,502 | $ | 23,788 | $ | 22,502 | ||||||||||
| Reserve for unfunded loan commitments (2) | ||||||||||||||||||||
| Balance, beginning of period | $ | 916 | $ | 933 | $ | 1,673 | $ | 933 | $ | 1,310 | ||||||||||
| Adoption of ASU 2016-13 (1) | — | — | — | — | 439 | |||||||||||||||
| Reversal of credit losses | (97 | ) | (17 | ) | (135 | ) | (114 | ) | (211 | ) | ||||||||||
| Balance, end of period | 819 | 916 | 1,538 | 819 | 1,538 | |||||||||||||||
| Allowance for credit losses | $ | 24,607 | $ | 23,170 | $ | 24,040 | $ | 24,607 | $ | 24,040 | ||||||||||
| ALL to total loans held for investment | 1.27 | % | 1.18 | % | 1.18 | % | 1.27 | % | 1.18 | % | ||||||||||
| ACL to total loans held for investment | 1.31 | % | 1.23 | % | 1.26 | % | 1.31 | % | 1.26 | % | ||||||||||
| Net (charge-offs) recoveries to average total loans | (0.31 | )% | 0.00 | % | 0.00 | % | (0.15 | )% | 0.00 | % | ||||||||||
| (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. |
| (2) | Included in “Accrued interest and other liabilities” on the consolidated balance sheet. |
Southern California Bancorp and Subsidiary
Balance Sheets (Unaudited)
| June 30, 2024 | March 31, 2024 | December 31, 2023 | ||||||||||
| ($ in thousands) | ||||||||||||
| ASSETS | ||||||||||||
| Cash and due from banks | $ | 29,153 | $ | 53,695 | $ | 33,008 | ||||||
| Federal funds sold & interest-bearing balances | 75,580 | 32,847 | 53,785 | |||||||||
| Total cash and cash equivalents | 104,733 | 86,542 | 86,793 | |||||||||
| Debt securities available-for-sale, at fair value (amortized cost of | 123,653 | 126,957 | 130,035 | |||||||||
| Debt securities held-to-maturity, at cost (fair value of | 53,449 | 53,533 | 53,616 | |||||||||
| Loans held for sale | 6,982 | 2,803 | 7,349 | |||||||||
| Loans held for investment: | ||||||||||||
| Construction & land development | 205,072 | 242,098 | 243,521 | |||||||||
| 1-4 family residential | 157,323 | 149,361 | 143,903 | |||||||||
| Multifamily | 187,960 | 183,846 | 221,247 | |||||||||
| Other commercial real estate | 1,043,662 | 1,025,381 | 1,024,243 | |||||||||
| Commercial & industrial | 283,203 | 279,788 | 320,142 | |||||||||
| Other consumer | 397 | 2,808 | 4,386 | |||||||||
| Total loans held for investment | 1,877,617 | 1,883,282 | 1,957,442 | |||||||||
| Allowance for credit losses - loans | (23,788 | ) | (22,254 | ) | (22,569 | ) | ||||||
| Total loans held for investment, net | 1,853,829 | 1,861,028 | 1,934,873 | |||||||||
| Restricted stock at cost | 16,898 | 16,066 | 16,055 | |||||||||
| Premises and equipment | 12,741 | 12,990 | 13,270 | |||||||||
| Right of use asset | 8,298 | 8,711 | 9,291 | |||||||||
| Other real estate owned, net | — | 13,114 | — | |||||||||
| Goodwill | 37,803 | 37,803 | 37,803 | |||||||||
| Core deposit intangible | 1,065 | 1,130 | 1,195 | |||||||||
| Bank owned life insurance | 39,445 | 39,179 | 38,918 | |||||||||
| Deferred taxes, net | 11,080 | 10,204 | 11,137 | |||||||||
| Accrued interest and other assets | 23,717 | 19,655 | 19,917 | |||||||||
| Total assets | $ | 2,293,693 | $ | 2,289,715 | $ | 2,360,252 | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| Deposits: | ||||||||||||
| Noninterest-bearing demand | $ | 666,606 | $ | 651,991 | $ | 675,098 | ||||||
| Interest-bearing NOW accounts | 355,994 | 358,598 | 381,943 | |||||||||
| Money market and savings accounts | 660,808 | 661,835 | 636,685 | |||||||||
| Time deposits | 252,454 | 258,120 | 249,830 | |||||||||
| Total deposits | 1,935,862 | 1,930,544 | 1,943,556 | |||||||||
| Borrowings | 42,913 | 44,889 | 102,865 | |||||||||
| Operating lease liability | 10,931 | 11,440 | 12,117 | |||||||||
| Accrued interest and other liabilities | 10,768 | 10,343 | 13,562 | |||||||||
| Total liabilities | 2,000,474 | 1,997,216 | 2,072,100 | |||||||||
| Shareholders’ Equity: | ||||||||||||
| Common stock - 50,000,000 shares authorized, no par value; issued and outstanding 18,547,352, 18,527,178 and 18,369,115 at June 30, 2024, March 31, 2024 and December 31, 2023) | 224,006 | 223,128 | 222,036 | |||||||||
| Retained earnings | 75,700 | 75,510 | 70,575 | |||||||||
| Accumulated other comprehensive loss - net of taxes | (6,487 | ) | (6,139 | ) | (4,459 | ) | ||||||
| Total shareholders’ equity | 293,219 | 292,499 | 288,152 | |||||||||
| Total liabilities and shareholders’ equity | $ | 2,293,693 | $ | 2,289,715 | $ | 2,360,252 | ||||||
Southern California Bancorp and Subsidiary
Income Statements - Quarterly and Year-to-Date (Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||||||||||||||
| ($ in thousands except share and per share data) | ||||||||||||||||||||
| INTEREST AND DIVIDEND INCOME | ||||||||||||||||||||
| Interest and fees on loans | $ | 29,057 | $ | 28,584 | $ | 27,987 | $ | 57,641 | $ | 55,006 | ||||||||||
| Interest on debt securities | 1,229 | 1,213 | 833 | 2,442 | 1,564 | |||||||||||||||
| Interest on tax-exempted debt securities | 306 | 306 | 456 | 612 | 943 | |||||||||||||||
| Interest and dividends from other institutions | 1,257 | 1,161 | 984 | 2,418 | 1,956 | |||||||||||||||
| Total interest and dividend income | 31,849 | 31,264 | 30,260 | 63,113 | 59,469 | |||||||||||||||
| INTEREST EXPENSE | ||||||||||||||||||||
| Interest on NOW, savings, and money market accounts | 7,039 | 6,770 | 4,730 | 13,809 | 7,633 | |||||||||||||||
| Interest on time deposits | 3,145 | 3,021 | 1,531 | 6,166 | 2,506 | |||||||||||||||
| Interest on borrowings | 658 | 979 | 573 | 1,637 | 1,012 | |||||||||||||||
| Total interest expense | 10,842 | 10,770 | 6,834 | 21,612 | 11,151 | |||||||||||||||
| Net interest income | 21,007 | 20,494 | 23,426 | 41,501 | 48,318 | |||||||||||||||
| Provision for (reversal of ) credit losses (1) | 2,893 | (331 | ) | (15 | ) | 2,562 | 187 | |||||||||||||
| Net interest income after provision for (reversal of) credit losses | 18,114 | 20,825 | 23,441 | 38,939 | 48,131 | |||||||||||||||
| NONINTEREST INCOME | ||||||||||||||||||||
| Service charges and fees on deposit accounts | 568 | 525 | 530 | 1,093 | 969 | |||||||||||||||
| Gain on sale of loans | — | 415 | 77 | 415 | 885 | |||||||||||||||
| Bank owned life insurance income | 266 | 261 | 232 | 527 | 455 | |||||||||||||||
| Servicing and related (expense) income on loans | (5 | ) | 73 | 87 | 68 | 162 | ||||||||||||||
| Loss on sale of debt securities | — | — | 34 | — | 34 | |||||||||||||||
| Loss on sale of building and related fixed assets | (19 | ) | — | — | (19 | ) | — | |||||||||||||
| Other charges and fees | 359 | 139 | 136 | 498 | 161 | |||||||||||||||
| Total noninterest income | 1,169 | 1,413 | 1,096 | 2,582 | 2,666 | |||||||||||||||
| NONINTEREST EXPENSE | ||||||||||||||||||||
| Salaries and employee benefits | 8,776 | 9,610 | 9,674 | 18,386 | 19,915 | |||||||||||||||
| Occupancy and equipment expenses | 1,445 | 1,452 | 1,527 | 2,897 | 2,974 | |||||||||||||||
| Data processing | 1,186 | 1,150 | 1,176 | 2,336 | 2,232 | |||||||||||||||
| Legal, audit and professional | 557 | 516 | 667 | 1,073 | 1,452 | |||||||||||||||
| Regulatory assessments | 347 | 387 | 367 | 734 | 819 | |||||||||||||||
| Director and shareholder expenses | 229 | 203 | 214 | 432 | 427 | |||||||||||||||
| Merger and related expenses | 491 | 549 | — | 1,040 | — | |||||||||||||||
| Core deposit intangible amortization | 65 | 65 | 90 | 130 | 181 | |||||||||||||||
| Other real estate owned expense | 4,935 | 88 | — | 5,023 | — | |||||||||||||||
| Other expense | 974 | 961 | 892 | 1,935 | 1,626 | |||||||||||||||
| Total noninterest expense | 19,005 | 14,981 | 14,607 | 33,986 | 29,626 | |||||||||||||||
| Income before income taxes | 278 | 7,257 | 9,930 | 7,535 | 21,171 | |||||||||||||||
| Income tax expense | 88 | 2,322 | 3,212 | 2,410 | 6,229 | |||||||||||||||
| Net income | $ | 190 | $ | 4,935 | $ | 6,718 | $ | 5,125 | $ | 14,942 | ||||||||||
| Net income per share - basic | $ | 0.01 | $ | 0.27 | $ | 0.37 | $ | 0.28 | $ | 0.82 | ||||||||||
| Net income per share - diluted | $ | 0.01 | $ | 0.26 | $ | 0.36 | $ | 0.27 | $ | 0.80 | ||||||||||
| Weighted average common share-diluted | 18,799,513 | 18,801,716 | 18,596,228 | 18,800,614 | 18,612,944 | |||||||||||||||
| Pre-tax, pre-provision income (2) | $ | 3,171 | $ | 6,926 | $ | 9,915 | $ | 10,097 | $ | 21,358 | ||||||||||
| (1) | Included reversal of provision for unfunded loan commitments of |
| (2) | Non-GAAP measure. See – GAAP to Non-GAAP reconciliation. |
Southern California Bancorp and Subsidiary
Average Balance Sheets and Yield Analysis
(Unaudited)
| Three Months Ended | ||||||||||||||||||||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | ||||||||||||||||||||||||||||||||||
| Average Balance | Income/Expense | Yield/Cost | Average Balance | Income/Expense | Yield/Cost | Average Balance | Income/Expense | Yield/Cost | ||||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||||||||||||||
| Total loans | $ | 1,882,845 | $ | 29,057 | 6.21 | % | $ | 1,909,271 | $ | 28,584 | 6.02 | % | $ | 1,900,033 | $ | 27,987 | 5.91 | % | ||||||||||||||||||
| Taxable debt securities | 123,906 | 1,229 | 3.99 | % | 126,803 | 1,213 | 3.85 | % | 106,208 | 833 | 3.15 | % | ||||||||||||||||||||||||
| Tax-exempt debt securities (1) | 53,754 | 306 | 2.90 | % | 53,842 | 306 | 2.89 | % | 70,470 | 456 | 3.29 | % | ||||||||||||||||||||||||
| Deposits in other financial institutions | 47,417 | 638 | 5.41 | % | 54,056 | 716 | 5.33 | % | 42,770 | 537 | 5.04 | % | ||||||||||||||||||||||||
| Fed funds sold/resale agreements | 19,062 | 261 | 5.51 | % | 9,771 | 134 | 5.52 | % | 17,639 | 228 | 5.18 | % | ||||||||||||||||||||||||
| Restricted stock investments and other bank stock | 17,091 | 358 | 8.42 | % | 16,412 | 311 | 7.62 | % | 16,039 | 219 | 5.48 | % | ||||||||||||||||||||||||
| Total interest-earning assets | 2,144,075 | 31,849 | 5.97 | % | 2,170,155 | 31,264 | 5.79 | % | 2,153,159 | 30,260 | 5.64 | % | ||||||||||||||||||||||||
| Total noninterest-earning assets | 150,603 | 139,672 | 133,716 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 2,294,678 | $ | 2,309,827 | $ | 2,286,875 | ||||||||||||||||||||||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||
| Interest-bearing NOW accounts | $ | 361,244 | $ | 2,134 | 2.38 | % | $ | 359,784 | $ | 2,045 | 2.29 | % | $ | 308,863 | $ | 1,279 | 1.66 | % | ||||||||||||||||||
| Money market and savings accounts | 653,244 | 4,905 | 3.02 | % | 648,640 | 4,725 | 2.93 | % | 662,487 | 3,451 | 2.09 | % | ||||||||||||||||||||||||
| Time deposits | 259,722 | 3,145 | 4.87 | % | 255,474 | 3,021 | 4.76 | % | 175,161 | 1,531 | 3.51 | % | ||||||||||||||||||||||||
| Total interest-bearing deposits | 1,274,210 | 10,184 | 3.21 | % | 1,263,898 | 9,791 | 3.12 | % | 1,146,511 | 6,261 | 2.19 | % | ||||||||||||||||||||||||
| Borrowings: | ||||||||||||||||||||||||||||||||||||
| FHLB advances | 27,391 | 387 | 5.68 | % | 50,593 | 708 | 5.63 | % | 22,791 | 302 | 5.31 | % | ||||||||||||||||||||||||
| Subordinated debt | 17,901 | 271 | 6.09 | % | 17,878 | 271 | 6.10 | % | 17,806 | 271 | 6.10 | % | ||||||||||||||||||||||||
| Total borrowings | 45,292 | 658 | 5.84 | % | 68,471 | 979 | 5.75 | % | 40,597 | 573 | 5.66 | % | ||||||||||||||||||||||||
| Total interest-bearing liabilities | 1,319,502 | 10,842 | 3.30 | % | 1,332,369 | 10,770 | 3.25 | % | 1,187,108 | 6,834 | 2.31 | % | ||||||||||||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits (2) | 658,001 | 661,265 | 805,553 | |||||||||||||||||||||||||||||||||
| Other liabilities | 23,054 | 26,430 | 22,727 | |||||||||||||||||||||||||||||||||
| Shareholders’ equity | 294,121 | 289,763 | 271,487 | |||||||||||||||||||||||||||||||||
| Total Liabilities and Shareholders’ Equity | $ | 2,294,678 | $ | 2,309,827 | $ | 2,286,875 | ||||||||||||||||||||||||||||||
| Net interest spread | 2.67 | % | 2.54 | % | 3.33 | % | ||||||||||||||||||||||||||||||
| Net interest income and margin | $ | 21,007 | 3.94 | % | $ | 20,494 | 3.80 | % | $ | 23,426 | 4.36 | % | ||||||||||||||||||||||||
| Cost of deposits | $ | 1,932,211 | $ | 10,184 | 2.12 | % | $ | 1,925,163 | $ | 9,791 | 2.05 | % | $ | 1,952,064 | $ | 6,261 | 1.29 | % | ||||||||||||||||||
| Cost of funds | $ | 1,977,503 | $ | 10,842 | 2.21 | % | $ | 1,993,634 | $ | 10,770 | 2.17 | % | $ | 1,992,661 | $ | 6,834 | 1.38 | % | ||||||||||||||||||
| (1) | Tax-exempt debt securities yields are presented on a tax equivalent basis using a |
| (2) | Average noninterest-bearing deposits represent |
Southern California Bancorp and Subsidiary
Average Balance Sheets and Yield Analysis
(Unaudited)
| Six Months Ended | ||||||||||||||||||||||||
| June 30, 2024 | June 30, 2023 | |||||||||||||||||||||||
| Average Balance | Income/Expense | Yield/Cost | Average Balance | Income/Expense | Yield/Cost | |||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||
| Total loans | $ | 1,896,058 | $ | 57,641 | 6.11 | % | $ | 1,897,150 | $ | 55,006 | 5.85 | % | ||||||||||||
| Taxable debt securities | 125,355 | 2,442 | 3.92 | % | 101,641 | 1,564 | 3.10 | % | ||||||||||||||||
| Tax-exempt debt securities (1) | 53,798 | 612 | 2.90 | % | 72,318 | 943 | 3.33 | % | ||||||||||||||||
| Deposits in other financial institutions | 50,737 | 1,354 | 5.37 | % | 40,205 | 994 | 4.99 | % | ||||||||||||||||
| Fed funds sold/resale agreements | 14,417 | 395 | 5.51 | % | 21,451 | 515 | 4.84 | % | ||||||||||||||||
| Restricted stock investments and other bank stock | 16,752 | 669 | 8.03 | % | 15,474 | 447 | 5.83 | % | ||||||||||||||||
| Total interest-earning assets | 2,157,117 | 63,113 | 5.88 | % | 2,148,239 | 59,469 | 5.58 | % | ||||||||||||||||
| Total noninterest-earning assets | 145,135 | 134,209 | ||||||||||||||||||||||
| Total assets | $ | 2,302,252 | $ | 2,282,448 | ||||||||||||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||
| Interest-bearing NOW accounts | $ | 360,514 | $ | 4,179 | 2.33 | % | $ | 258,106 | $ | 1,595 | 1.25 | % | ||||||||||||
| Money market and savings accounts | 650,942 | 9,630 | 2.98 | % | 673,864 | 6,038 | 1.81 | % | ||||||||||||||||
| Time deposits | 257,598 | 6,166 | 4.81 | % | 163,950 | 2,506 | 3.08 | % | ||||||||||||||||
| Total interest-bearing deposits | 1,269,054 | 19,975 | 3.17 | % | 1,095,920 | 10,139 | 1.87 | % | ||||||||||||||||
| Borrowings: | ||||||||||||||||||||||||
| FHLB advances | 38,992 | 1,095 | 5.65 | % | 18,597 | 469 | 5.09 | % | ||||||||||||||||
| Subordinated debt | 17,890 | 542 | 6.09 | % | 17,795 | 543 | 6.15 | % | ||||||||||||||||
| Total borrowings | 56,882 | 1,637 | 5.79 | % | 36,392 | 1,012 | 5.61 | % | ||||||||||||||||
| Total interest-bearing liabilities | 1,325,936 | 21,612 | 3.28 | % | 1,132,312 | 11,151 | 1.99 | % | ||||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||||||
| Noninterest-bearing deposits (2) | 659,633 | 860,054 | ||||||||||||||||||||||
| Other liabilities | 24,741 | 23,255 | ||||||||||||||||||||||
| Shareholders’ equity | 291,942 | 266,827 | ||||||||||||||||||||||
| Total Liabilities and Shareholders’ Equity | $ | 2,302,252 | $ | 2,282,448 | ||||||||||||||||||||
| Net interest spread | 2.60 | % | 3.59 | % | ||||||||||||||||||||
| Net interest income and margin | $ | 41,501 | 3.87 | % | $ | 48,318 | 4.54 | % | ||||||||||||||||
| Cost of deposits | $ | 1,928,687 | $ | 19,975 | 2.08 | % | $ | 1,955,974 | $ | 10,139 | 1.05 | % | ||||||||||||
| Cost of funds | $ | 1,985,569 | $ | 21,612 | 2.19 | % | $ | 1,992,366 | $ | 11,151 | 1.13 | % | ||||||||||||
| (1) | Tax-exempt debt securities yields are presented on a tax equivalent basis using a |
| (2) | Average noninterest-bearing deposits represent |
Southern California Bancorp and Subsidiary
GAAP 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, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||
| Adjusted net income | ||||||||||||||||||||
| Net income | $ | 190 | $ | 4,935 | $ | 6,718 | $ | 5,125 | $ | 14,942 | ||||||||||
| Add: After-tax merger and related expenses (1) | 412 | 547 | — | 959 | — | |||||||||||||||
| Adjusted net income (non-GAAP) | $ | 602 | $ | 5,482 | $ | 6,718 | $ | 6,084 | $ | 14,942 | ||||||||||
| Efficiency Ratio | ||||||||||||||||||||
| Noninterest expense | $ | 19,005 | $ | 14,981 | $ | 14,607 | $ | 33,986 | $ | 29,626 | ||||||||||
| Deduct: Merger and related expenses | 491 | 549 | — | 1,040 | — | |||||||||||||||
| Adjusted noninterest expense | 18,514 | 14,432 | 14,607 | 32,946 | 29,626 | |||||||||||||||
| Net interest income | 21,007 | 20,494 | 23,426 | 41,501 | 48,318 | |||||||||||||||
| Noninterest income | 1,169 | 1,413 | 1,096 | 2,582 | 2,666 | |||||||||||||||
| Total net interest income and noninterest income | $ | 22,176 | $ | 21,907 | $ | 24,522 | $ | 44,083 | $ | 50,984 | ||||||||||
| Efficiency ratio (non-GAAP) | 85.7 | % | 68.4 | % | 59.6 | % | 77.1 | % | 58.1 | % | ||||||||||
| Adjusted efficiency ratio (non-GAAP) | 83.5 | % | 65.9 | % | 59.6 | % | 74.7 | % | 58.1 | % | ||||||||||
| Pre-tax pre-provision income | ||||||||||||||||||||
| Net interest income | $ | 21,007 | $ | 20,494 | $ | 23,426 | $ | 41,501 | $ | 48,318 | ||||||||||
| Noninterest income | 1,169 | 1,413 | 1,096 | 2,582 | 2,666 | |||||||||||||||
| Total net interest income and noninterest income | 22,176 | 21,907 | 24,522 | 44,083 | 50,984 | |||||||||||||||
| Less: Noninterest expense | 19,005 | 14,981 | 14,607 | 33,986 | 29,626 | |||||||||||||||
| Pre-tax pre-provision income (non-GAAP) | 3,171 | 6,926 | 9,915 | 10,097 | 21,358 | |||||||||||||||
| Add: Merger and related expenses | 491 | 549 | — | 1,040 | — | |||||||||||||||
| Adjusted pre-tax pre-provision income (non-GAAP) | $ | 3,662 | $ | 7,475 | $ | 9,915 | $ | 11,137 | $ | 21,358 | ||||||||||
| (1) After-tax merger and related expenses are presented using a |
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||
| Return on Average Assets, Equity, and Tangible Equity | ||||||||||||||||||||
| Net income | $ | 190 | $ | 4,935 | $ | 6,718 | $ | 5,125 | $ | 14,942 | ||||||||||
| Adjusted net income (non-GAAP) | $ | 602 | $ | 5,482 | $ | 6,718 | $ | 6,084 | $ | 14,942 | ||||||||||
| Average assets | $ | 2,294,678 | $ | 2,309,827 | $ | 2,286,875 | $ | 2,302,252 | $ | 2,282,448 | ||||||||||
| Average shareholders' equity | 294,121 | 289,763 | 271,487 | 291,942 | 266,827 | |||||||||||||||
| Less: Average intangible assets | 38,900 | 38,964 | 39,250 | 38,932 | 39,294 | |||||||||||||||
| Average tangible common equity (non-GAAP) | $ | 255,221 | $ | 250,799 | $ | 232,237 | $ | 253,010 | $ | 227,533 | ||||||||||
| Return on average assets | 0.03 | % | 0.86 | % | 1.18 | % | 0.45 | % | 1.32 | % | ||||||||||
| Adjusted return on average assets (non-GAAP) | 0.11 | % | 0.95 | % | 1.18 | % | 0.53 | % | 1.32 | % | ||||||||||
| Return on average equity | 0.26 | % | 6.85 | % | 9.93 | % | 3.53 | % | 11.29 | % | ||||||||||
| Adjusted return on average equity (non-GAAP) | 0.82 | % | 7.61 | % | 9.93 | % | 4.19 | % | 11.29 | % | ||||||||||
| Return on average tangible common equity (non-GAAP) | 0.30 | % | 7.91 | % | 11.60 | % | 4.07 | % | 13.24 | % | ||||||||||
| Adjusted return on average tangible common equity (non-GAAP) | 0.95 | % | 8.79 | % | 11.60 | % | 4.84 | % | 13.24 | % | ||||||||||
| June 30, 2024 | December 31, 2023 | |||||||
| ($ in thousands except share and per share data) | ||||||||
| Tangible Common Equity Ratio/Tangible Book Value Per Share | ||||||||
| Shareholders’ equity | $ | 293,219 | $ | 288,152 | ||||
| Less: Intangible assets | 38,868 | 38,998 | ||||||
| Tangible common equity (non-GAAP) | $ | 254,351 | $ | 249,154 | ||||
| Total assets | $ | 2,293,693 | $ | 2,360,252 | ||||
| Less: Intangible assets | 38,868 | 38,998 | ||||||
| Tangible assets (non-GAAP) | $ | 2,254,825 | $ | 2,321,254 | ||||
| Equity to asset ratio | 12.78 | % | 12.21 | % | ||||
| Tangible common equity to tangible asset ratio (non-GAAP) | 11.28 | % | 10.73 | % | ||||
| Book value per share | $ | 15.81 | $ | 15.69 | ||||
| Tangible book value per share (non-GAAP) | $ | 13.71 | $ | 13.56 | ||||
| Shares outstanding | 18,547,352 | 18,369,115 | ||||||
INVESTOR RELATIONS CONTACT
Kevin Mc Cabe
Bank of Southern California
kmccabe@banksocal.com
818.637.7065
FAQ
What was Southern California Bancorp's (BCAL) net income for Q2 2024?
How did BCAL's net interest margin change in Q2 2024?
What was the main factor affecting BCAL's Q2 2024 financial results?
When is BCAL's merger with California BanCorp expected to close?
How did BCAL's nonperforming assets ratio change in Q2 2024?
