SOUTHERN CALIFORNIA BANCORP REPORTS NET INCOME OF $8.2 MILLION FOR THE FIRST QUARTER
Southern California Bancorp (OTC Pink: BCAL) reported a net income of $8.2 million for Q1 2023, or $0.44 per diluted share, up from $1.4 million in Q1 2022 but slightly down from $8.5 million in Q4 2022. The net interest margin improved to 4.71%, while total assets stood at $2.29 billion. Total deposits increased by $54 million to $1.99 billion, with noninterest-bearing deposits making up 44.4% of total deposits. Despite a slight rise in noninterest expense to $15 million, the efficiency ratio rose to 56.8%. The company adopted the CECL model, which adjusted the allowance for credit losses to $24.1 million. CEO David Rainer remains optimistic about future growth amidst industry disruptions.
- Net income increased by $6.8 million year-over-year.
- Net interest margin improved to 4.71%, up from 4.62% in the prior quarter.
- Total deposits grew by $54 million, or 2.8%, compared to the last quarter.
- Nonperforming assets ratio improved to 0.000%.
- Net income decreased from $8.5 million in Q4 2022.
- Efficiency ratio worsened to 56.8% from 51.5% in the prior quarter.
- Noninterest expense rose by $1.9 million to $15 million.
San Diego, Calif., April 25, 2023 (GLOBE NEWSWIRE) -- Southern California Bancorp (“us,” “we,” “our,” or the “Company”) (OTC Pink: BCAL), the holding company for Bank of Southern California, N.A. (the “Bank”) announces its consolidated financial results for the first quarter of 2023.
Southern California Bancorp reported net income of
First Quarter 2023 Highlights
- Net income of
$8.2 million , compared with$8.5 million in the prior quarter - Diluted earnings per share of
$0.44 , compared with$0.46 t he prior quarter - Net interest margin of
4.71% , compared with4.62% in the prior quarter; average loan yield of5.78% compared with5.47% in the prior quarter - Return on average assets of
1.46% , the same as the prior quarter - Return on average common equity of
12.72% , compared with13.21% in the prior quarter - Efficiency ratio of
56.8% , compared with51.5% in the prior quarter - Tangible book value per common share ("TBV") (non-GAAP) of
$12.49 at March 31, 2023, up$0.17 from$12.32 at December 31, 2022 - Day 1 CECL transition adjustment to the allowance for credit losses ("ACL") of
$5.5 million , and a related after-tax decrease to retained earnings of$3.9 million - Day 2 CECL provisions for credit losses of
$202 thousand - Total assets of
$2.29 billion , relatively flat from December 31, 2022 - Total loans, including loans held for sale, of
$1.89 billion , compared with$1.91 billion at December 31, 2022 - Nonperforming assets to total assets ratio of
0.000% at March 31, 2023, compared with0.002% at December 31, 2022 - Total deposits of
$1.99 billion , up$54.0 million or2.8% , compared with$1.93 billion at December 31, 2022 - Noninterest-bearing demand deposits were
$882.0 million , representing44.4% of total deposits, compared with$923.9 million , or47.8% of total deposits at December 31, 2022 - Cost of deposits was
0.80% , compared with0.51% in the prior quarter - Banks's capital exceeds minimums to be “well-capitalized,” the highest regulatory capital category
“We are pleased to report the Company’s continued strong financial performance in the first quarter of 2023, with net income of
“While the banking industry experienced some disruption in the first quarter, and there is economic uncertainty regarding a potential recession and the future direction of the Fed funds rate, we believe our strong balance sheet and very diversified loan and deposit portfolios, which have very little sector or individual customer concentration, position us safely and soundly in the current environment. Our commercial banking model is founded on strong, ongoing relationships with clients in a broad variety of industries. I note that the current uncertainty in the banking industry has provided us with an opportunity to attract new clients.
“We are optimistic about the future and in early April 2023 we announced the filing of a Registration Statement on Form 10 with the U.S. Securities and Exchange Commission, subsequent to our March 2023 application to be listed on the Nasdaq Capital Market.”
Adoption of the Current Expected Credit Loss ("CECL") Model
On January 1, 2023, we adopted the new accounting standard, commonly known as CECL, which uses a current expected credit loss model for determining ACL. Upon adoption, we recognized a Day 1 increase in the ACL of
First Quarter Operating Results
Net Income
Net income for the first quarter of 2023 was
Net Interest Income and Net Interest Margin
Net interest income for the first quarter of 2023 was
Net interest margin for the first quarter of 2023 was
Cost of funds for the first quarter of 2023 was 88 basis points, an increase of 32 basis points from 56 basis points in the prior quarter. The increase was primarily driven by a 53 basis point increase in the cost of interest-bearing deposits, coupled with a decrease in average noninterest-bearing deposits. Average noninterest-bearing demand deposits decreased
Average total borrowings increased
Provision for Credit Losses
The Company recorded a provision for credit losses of
Noninterest Income
Total noninterest income in the first quarter of 2023 was
Noninterest Expense
Total noninterest expense for the first quarter of 2023 was
The
Efficiency ratio for the first quarter of 2023 was
Income Tax
In the first quarter of 2023, the Company’s income tax expense was
Balance Sheet
Assets
Total assets at March 31, 2023 were
Loans
Total loans held for investment were
Deposits
Total deposits at March 31, 2023 were
Federal Home Loan Bank ("FHLB") and Federal Reserve Bank ("Federal Reserve") Borrowings
During the first quarter of 2023, the Company repaid
At March 31, 2023, the Company had available borrowing capacity from the FHLB secured lines of credit of approximately
Asset Quality
Total non-performing assets decreased to
The Company had no loans over 90 days past due that were accruing interest at March 31, 2023.
Loan delinquencies (30-89 days past due) totaled
The allowance for credit losses, which is comprised of allowance for loan losses (ALL) and reserve for unfunded loan commitments, totaled
Allowance for loan losses was
Capital
Tangible book value (non-GAAP) per common share at March 31, 2023, was
The Bank’s leverage capital ratio and total risk-based capital ratio were
ABOUT BANK OF SOUTHERN CALIFORNIA AND SOUTHERN CALIFORNIA BANCORP
Southern California Bancorp (OTC Pink: 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 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, Bank of Southern California, N.A. 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.
Southern California Bancorp’s common stock is traded on the OTC Markets Group Inc. Pink Open Market under the symbol “BCAL.” For more information, please visit banksocal.com or call (844) BNK-SOCAL.
NON-GAAP FINANCIAL MEASURES
This press release contains certain non-GAAP financial measures in addition to results presented in accordance with GAAP. The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company's results of operations and financial condition and to enhance investors' overall understanding of such results of operations and financial condition, permit investors to effectively analyze financial trends of our business activities, and enhance comparability with peers across the financial services sector. These non-GAAP financial measures are not a substitute for GAAP measures and should be read in conjunction with the Company's GAAP financial information. A reconciliation of GAAP financial measures to non-GAAP financial measures is included in the accompanying financial tables.
FORWARD-LOOKING STATEMENTS
In addition to historical information, certain matters set forth herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to management’s beliefs, projections and assumptions concerning future results and events. Forward-looking statements include descriptions of management’s plans or objectives for future operations, products or services, and forecasts of Southern California Bancorp’s revenues, earnings, litigation expenses, or other measures of economic performance. Also, forward-looking statements may relate to future outlook and anticipated events. These forward-looking statements involve risks and uncertainties, based on the beliefs and assumptions of management and on the information available to management at the time that such forward-looking statements were made and can be identified by the fact that they do not relate strictly to historical or current facts. They 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 or the negative version of those words or phrases.
Forward-looking statements involve substantial risks and uncertainties, many of which are difficult to predict and are generally beyond our control. Many factors could cause actual results to differ materially from those contemplated by these forward-looking statements. Except to the extent required by applicable law or regulation, Southern California Bancorp 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 except as required by law.
Southern California Bancorp and Subsidiary
Financial Highlights (Unaudited)
At or for the Three Months Ended | ||||||||||||
March 31, 2023 | December 31, 2022 | March 31, 2022 | ||||||||||
EARNINGS | ($ in thousands except share and per share data) | |||||||||||
Net interest income | $ | 24,892 | $ | 25,269 | $ | 17,795 | ||||||
Provision for credit losses | $ | 202 | $ | 750 | $ | 1850 | ||||||
Noninterest income | $ | 1,570 | $ | 188 | $ | 1,603 | ||||||
Noninterest expense | $ | 15,019 | $ | 13,112 | $ | 15,552 | ||||||
Income tax expense | $ | 3,017 | $ | 3,121 | $ | 550 | ||||||
Net income | $ | 8,224 | $ | 8,474 | $ | 1,446 | ||||||
Pre-tax pre-provision income (1) | $ | 11,443 | $ | 12,345 | $ | 3,846 | ||||||
Adjusted pre-tax pre-provision income (1) | $ | 11,443 | $ | 12,337 | $ | 4,370 | ||||||
Diluted earnings per share | $ | 0.44 | $ | 0.46 | $ | 0.08 | ||||||
Ending shares outstanding | 18,271,194 | 17,940,283 | 17,753,849 | |||||||||
PERFORMANCE RATIOS | ||||||||||||
Return on average assets | 1.46 | % | 1.46 | % | 0.26 | % | ||||||
Adjusted return on average assets (1) | 1.46 | % | 1.45 | % | 0.33 | % | ||||||
Return on average common equity | 12.72 | % | 13.21 | % | 2.37 | % | ||||||
Adjusted return on average common equity (1) | 12.72 | % | 13.20 | % | 3.00 | % | ||||||
Yield on total loans | 5.78 | % | 5.47 | % | 4.70 | % | ||||||
Yield on interest earning assets | 5.53 | % | 5.14 | % | 3.54 | % | ||||||
Cost of deposits | 0.80 | % | 0.51 | % | 0.08 | % | ||||||
Cost of funds | 0.88 | % | 0.56 | % | 0.14 | % | ||||||
Net interest margin | 4.71 | % | 4.62 | % | 3.40 | % | ||||||
Efficiency ratio (1) | 56.8 | % | 51.5 | % | 80.2 | % | ||||||
Adjusted efficiency ratio (1) | 56.8 | % | 51.5 | % | 77.5 | % |
As of | ||||||||
March 31, 2023 | December 31, 2022 | |||||||
CAPITAL | ($ in thousands except share and per share data) | |||||||
Tangible equity to tangible assets (1) | 10.13 | % | 9.84 | % | ||||
Book value (BV) per common share | $ | 14.64 | $ | 14.51 | ||||
Tangible BV per common share (1) | $ | 12.49 | $ | 12.32 | ||||
ASSET QUALITY | ||||||||
Allowance for loan losses (ALL) | $ | 22,391 | $ | 17,099 | ||||
Reserve for unfunded loan commitments | $ | 1,673 | $ | 1,310 | ||||
Allowance for credit losses (ACL) | $ | 24,064 | $ | 18,409 | ||||
ALL to total loans | 1.18 | % | 0.90 | % | ||||
ACL to total loans | 1.27 | % | 0.97 | % | ||||
Nonperforming loans | $ | 1 | $ | 41 | ||||
Other real estate owned | $ | — | $ | — | ||||
Nonperforming assets to total assets | — | % | — | % | ||||
END OF PERIOD BALANCES | ||||||||
Total loans, including loans held for sale | $ | 1,894,509 | $ | 1,906,800 | ||||
Total assets | $ | 2,292,053 | $ | 2,283,927 | ||||
Deposits | $ | 1,985,856 | $ | 1,931,905 | ||||
Loans to deposits | 95.4 | % | 98.7 | % | ||||
Shareholders' equity | $ | 267,539 | $ | 260,355 |
(1) Non-GAAP measure. See – GAAP to Non-GAAP reconciliation
For the Three Months Ended | ||||||||||||
ALLOWANCE for CREDIT LOSSES | March 31, 2023 | December 31, 2022 | March 31, 2022 | |||||||||
($ in thousands) | ||||||||||||
Allowance for loan losses (ALL) | ||||||||||||
Balance at beginning of period | $ | 17,099 | $ | 16,436 | $ | 11,657 | ||||||
Adoption of ASU 2016-13 (1) | 5,027 | — | — | |||||||||
Provision for loan losses | 278 | 650 | 1,850 | |||||||||
Charge-offs | (27 | ) | — | — | ||||||||
Recoveries | 14 | 13 | 27 | |||||||||
Net (charge-offs) recoveries | (13 | ) | 13 | 27 | ||||||||
Balance, end of period | $ | 22,391 | $ | 17,099 | $ | 13,534 | ||||||
Reserve for unfunded loan commitments | ||||||||||||
Balance, beginning of period | $ | 1,310 | $ | 1,210 | $ | 804 | ||||||
Adoption of ASU 2016-13 (1) | 439 | — | — | |||||||||
Provision (reversal) for loan losses | (76 | ) | 100 | — | ||||||||
Balance, end of period | 1,673 | 1,310 | 804 | |||||||||
Allowance for credit losses (ACL) | $ | 24,064 | $ | 18,409 | $ | 14,338 | ||||||
ALL to total loans | 1.18 | % | 0.90 | % | 0.83 | % | ||||||
ACL to total loans | 1.27 | % | 0.97 | % | 0.88 | % |
(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 Subsidiary
Balance Sheets (Unaudited)
March 31, 2023 | December 31, 2022 | |||||||
ASSETS | ($ in thousands) | |||||||
Cash and due from banks | $ | 34,159 | $ | 60,295 | ||||
Federal funds sold & interest-bearing balances | 67,980 | 26,465 | ||||||
Total cash and cash equivalents | 102,139 | 86,760 | ||||||
Securities available-for-sale, at fair value | 124,438 | 112,580 | ||||||
Securities held-to-maturity, at cost (fair value of | 53,864 | 53,946 | ||||||
Loans held for sale | 577 | 9,027 | ||||||
Loans held for investment: | ||||||||
Construction & land development | 256,096 | 239,067 | ||||||
1-4 family residential | 154,071 | 144,322 | ||||||
Multifamily | 227,676 | 218,606 | ||||||
Other commercial real estate | 936,513 | 958,676 | ||||||
Commercial & industrial | 314,248 | 331,644 | ||||||
Other consumer | 5,328 | 5,458 | ||||||
Total loans held for investment | 1,893,932 | 1,897,773 | ||||||
Allowance for credit losses - loans | (22,391 | ) | (17,099 | ) | ||||
Total loans held for investment, net | 1,871,541 | 1,880,674 | ||||||
Restricted stock at cost | 14,557 | 14,543 | ||||||
Premises and equipment | 14,105 | 14,334 | ||||||
Right of use asset | 8,384 | 8,607 | ||||||
Goodwill | 37,803 | 37,803 | ||||||
Core deposit intangible | 1,493 | 1,584 | ||||||
Bank owned life insurance | 38,196 | 37,972 | ||||||
Deferred taxes, net | 10,492 | 10,699 | ||||||
Accrued interest and other assets | 14,464 | 15,398 | ||||||
Total Assets | $ | 2,292,053 | $ | 2,283,927 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Deposits: | ||||||||
Noninterest-bearing demand | $ | 882,000 | $ | 923,899 | ||||
Interest bearing NOW accounts | 248,809 | 209,625 | ||||||
Money market and savings accounts | 677,636 | 668,602 | ||||||
Time deposits | 177,411 | 129,779 | ||||||
Total deposits | 1,985,856 | 1,931,905 | ||||||
Borrowings | 17,794 | 67,770 | ||||||
Operating lease liability | 10,925 | 11,055 | ||||||
Accrued interest and other liabilities | 9,939 | 12,842 | ||||||
Total liabilities | 2,024,514 | 2,023,572 | ||||||
Shareholders' Equity: | ||||||||
Common Stock - 50,000,000 Shares Authorized, No Par Value; issued and Outstanding 18,271,194 at March 31, 2023 and 17,940,283 at December 31, 2022) | 219,659 | 218,280 | ||||||
Retained earnings | 52,889 | 48,516 | ||||||
Accumulated Other Comprehensive (Loss) Income - Net of Taxes | (5,009 | ) | (6,441 | ) | ||||
Total shareholders' equity | 267,539 | 260,355 | ||||||
Total Liabilities and Shareholders' Equity | $ | 2,292,053 | $ | 2,283,927 |
Southern California Bancorp and Subsidiary
Income Statements - Quarterly and Year-to-Date (Unaudited)
Three Months Ended | ||||||||||||
March 31, 2023 | December 31, 2022 | March 31, 2022 | ||||||||||
($ in thousands except share and per share data) | ||||||||||||
INTEREST AND DIVIDEND INCOME | ||||||||||||
Interest and fees on loans | $ | 27,019 | $ | 25,781 | $ | 17,731 | ||||||
Interest on debt securities | 731 | 647 | 254 | |||||||||
Interest on tax-exempted debt securities | 487 | 488 | 76 | |||||||||
Interest and dividends from other institutions | 972 | 1,227 | 424 | |||||||||
Total interest and dividend income | 29,209 | 28,143 | 18,485 | |||||||||
INTEREST EXPENSE | ||||||||||||
Interest on NOW, savings, and money market accounts | 2,903 | 2,096 | 282 | |||||||||
Interest on time deposits | 975 | 463 | 98 | |||||||||
Interest on borrowings | 439 | 315 | 310 | |||||||||
Total interest expense | 4,317 | 2,874 | 690 | |||||||||
Net interest income | 24,892 | 25,269 | 17,795 | |||||||||
Provision for credit losses (1) | 202 | 750 | 1,850 | |||||||||
Net interest income after provision for loan losses | 24,690 | 24,519 | 15,945 | |||||||||
NONINTEREST INCOME | ||||||||||||
Service charges and fees on deposit accounts | 439 | 456 | 487 | |||||||||
Gain on sale of loans | 808 | 293 | 49 | |||||||||
Bank owned life insurance income | 223 | 221 | 832 | |||||||||
Servicing and related income on loans | 75 | 53 | 69 | |||||||||
Loss on sale of debt securities | — | (994 | ) | — | ||||||||
Other charges and fees | 25 | 159 | 166 | |||||||||
Total noninterest income | 1,570 | 188 | 1,603 | |||||||||
NONINTEREST EXPENSE | ||||||||||||
Salaries and employee benefits | 10,241 | 8,634 | 10,196 | |||||||||
Occupancy and equipment expenses | 1,447 | 1,458 | 1,410 | |||||||||
Data processing | 1,056 | 1,089 | 1,420 | |||||||||
Legal, audit and professional | 785 | 487 | 617 | |||||||||
Regulatory assessments | 452 | 345 | 339 | |||||||||
Director and shareholder expenses | 213 | 219 | 195 | |||||||||
Merger and related (income) expenses | — | (8 | ) | 524 | ||||||||
Core deposit intangible amortization | 91 | 141 | 99 | |||||||||
Other expense | 734 | 747 | 752 | |||||||||
Total noninterest expense | 15,019 | 13,112 | 15,552 | |||||||||
Income before income tax expense | 11,241 | 11,595 | 1,996 | |||||||||
Income tax expense | 3,017 | 3,121 | 550 | |||||||||
Net income | $ | 8,224 | $ | 8,474 | $ | 1,446 | ||||||
Net income per share - basic | $ | 0.46 | $ | 0.47 | $ | 0.08 | ||||||
Net income per share - diluted | $ | 0.44 | $ | 0.46 | $ | 0.08 | ||||||
Pre-tax, pre-provision income (2) | $ | 11,443 | $ | 12,345 | $ | 3,846 | ||||||
Adjusted pre-tax, pre-provision income (2) | $ | 11,443 | $ | 12,337 | $ | 4,370 |
(1) Included (reversal) provision for unfunded commitment 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 | |||||||||||||||||||||||||||||||||||||||
March 31, 2023 | December 31, 2022 | March 31, 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 | $ | 1,890,758 | $ | 27,005 | 5.79 | % | $ | 1,866,708 | $ | 25,755 | 5.47 | % | $ | 1,496,375 | $ | 16,409 | 4.45 | % | |||||||||||||||||||||
Total PPP loans | 3,476 | 14 | 1.63 | % | 3,997 | 26 | 2.58 | % | 34,867 | 1,322 | 15.38 | % | |||||||||||||||||||||||||||
Total loans | 1,894,234 | 27,019 | 5.78 | % | 1,870,705 | 25,781 | 5.47 | % | 1,531,242 | 17,731 | 4.70 | % | |||||||||||||||||||||||||||
Taxable debt securities | 97,023 | 731 | 3.06 | % | 102,205 | 647 | 2.51 | % | 72,309 | 254 | 1.42 | % | |||||||||||||||||||||||||||
Tax-exempt debt securities (1) | 74,188 | 487 | 3.37 | % | 73,166 | 488 | 3.35 | % | 15,163 | 76 | 2.57 | % | |||||||||||||||||||||||||||
Deposits in other financial institutions | 37,611 | 457 | 4.93 | % | 40,781 | 347 | 3.38 | % | 463,977 | 193 | 0.17 | % | |||||||||||||||||||||||||||
Fed funds sold/resale agreements | 25,306 | 287 | 4.60 | % | 68,437 | 637 | 3.69 | % | 23,822 | 11 | 0.19 | % | |||||||||||||||||||||||||||
Restricted stock investments and other bank stock | 14,902 | 228 | 6.20 | % | 14,883 | 243 | 6.48 | % | 14,009 | 220 | 6.37 | % | |||||||||||||||||||||||||||
Total interest-earning assets | 2,143,264 | 29,209 | 5.53 | % | 2,170,177 | 28,143 | 5.14 | % | 2,120,522 | 18,485 | 3.54 | % | |||||||||||||||||||||||||||
Total non-interest-earning assets | 134,707 | 139,205 | 139,279 | ||||||||||||||||||||||||||||||||||||
Total assets | $ | 2,277,971 | $ | 2,309,382 | $ | 2,259,801 | |||||||||||||||||||||||||||||||||
Liabilities and Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||
Interest-bearing NOW accounts | $ | 206,785 | $ | 316 | 0.62 | % | $ | 215,272 | $ | 121 | 0.22 | % | $ | 190,530 | $ | 81 | 0.17 | % | |||||||||||||||||||||
Money market and savings accounts | 685,368 | 2,587 | 1.53 | % | 700,544 | 1,975 | 1.12 | % | 694,155 | 201 | 0.12 | % | |||||||||||||||||||||||||||
Time deposits | 152,613 | 975 | 2.59 | % | 123,524 | 463 | 1.49 | % | 97,030 | 98 | 0.41 | % | |||||||||||||||||||||||||||
Total interest-bearing deposits | 1,044,766 | 3,878 | 1.51 | % | 1,039,340 | 2,559 | 0.98 | % | 981,715 | 380 | 0.16 | % | |||||||||||||||||||||||||||
Borrowings: | |||||||||||||||||||||||||||||||||||||||
FHLB advances | 14,356 | 168 | 4.75 | % | 3,696 | 44 | 4.72 | % | — | — | — | % | |||||||||||||||||||||||||||
Subordinated debt | 17,783 | 271 | 6.18 | % | 17,759 | 271 | 6.05 | % | 17,688 | 272 | 6.24 | % | |||||||||||||||||||||||||||
TruPS | — | — | — | % | — | — | — | % | 2,737 | 38 | 5.63 | % | |||||||||||||||||||||||||||
Total borrowings | 32,139 | 439 | 5.54 | % | 21,455 | 315 | 5.82 | % | 20,425 | 310 | 6.16 | % | |||||||||||||||||||||||||||
Total interest-bearing liabilities | 1,076,905 | 4,317 | 1.63 | % | 1,060,795 | 2,874 | 1.07 | % | 1,002,140 | 690 | 0.28 | % | |||||||||||||||||||||||||||
Non-interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||
Noninterest-bearing deposits (2) | 915,160 | 970,908 | 990,185 | ||||||||||||||||||||||||||||||||||||
Other liabilities | 23,788 | 23,199 | 19,746 | ||||||||||||||||||||||||||||||||||||
Shareholders' equity | 262,118 | 254,480 | 247,730 | ||||||||||||||||||||||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 2,277,971 | $ | 2,309,382 | $ | 2,259,801 | |||||||||||||||||||||||||||||||||
Net interest spread | 3.90 | % | 4.07 | % | 3.26 | % | |||||||||||||||||||||||||||||||||
Net interest income and margin | $ | 24,892 | 4.71 | % | $ | 25,269 | 4.62 | % | $ | 17,795 | 3.40 | % | |||||||||||||||||||||||||||
Cost of deposits | 0.80 | % | 0.51 | % | 0.08 | % | |||||||||||||||||||||||||||||||||
Cost of funds | 0.88 | % | 0.56 | % | 0.14 | % |
(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 | ||||||||||||
March 31, 2023 | December 31, 2022 | March 31, 2022 | ||||||||||
($ in thousands) | ||||||||||||
Adjusted net income | ||||||||||||
Net income | $ | 8,224 | $ | 8,474 | $ | 1,446 | ||||||
(Deduct)/add: After-tax merger and related (income) expenses (1) | — | (6 | ) | 387 | ||||||||
Adjusted net income (non-GAAP) | $ | 8,224 | $ | 8,468 | $ | 1,833 | ||||||
Efficiency Ratio | ||||||||||||
Noninterest expense | $ | 15,019 | $ | 13,112 | $ | 15,552 | ||||||
Less: Merger and related (income) expenses | — | (8 | ) | 524 | ||||||||
Adjusted noninterest expense | $ | 15,019 | $ | 13,120 | $ | 15,028 | ||||||
Net interest income | 24,892 | 25,269 | 17,795 | |||||||||
Noninterest income | 1,570 | 188 | 1,603 | |||||||||
Total net interest income and noninterest income | $ | 26,462 | $ | 25,457 | $ | 19,398 | ||||||
Efficiency ratio (non-GAAP) | 56.8 | % | 51.5 | % | 80.2 | % | ||||||
Adjusted efficiency ratio (non-GAAP) | 56.8 | % | 51.5 | % | 77.5 | % | ||||||
Pre-tax pre-provision income | ||||||||||||
Net interest income | $ | 24,892 | $ | 25,269 | $ | 17,795 | ||||||
Noninterest income | 1,570 | 188 | 1,603 | |||||||||
Total net interest income and noninterest income | 26,462 | 25,457 | 19,398 | |||||||||
Less: Noninterest expense | 15,019 | 13,112 | 15,552 | |||||||||
Pre-tax pre-provision income (non-GAAP) | $ | 11,443 | $ | 12,345 | $ | 3,846 | ||||||
(Deduct)/add: Merger and related (income) expenses | — | (8 | ) | 524 | ||||||||
Adjusted pre-tax pre-provision income (non-GAAP) | $ | 11,443 | $ | 12,337 | $ | 4,370 | ||||||
Return on Average Assets, Equity, and Tangible Equity | ||||||||||||
Net income | $ | 8,224 | $ | 8,474 | $ | 1,446 | ||||||
Adjusted net income (non-GAAP) | $ | 8,224 | $ | 8,468 | $ | 1,833 | ||||||
Average assets | $ | 2,277,971 | $ | 2,309,382 | $ | 2,259,801 | ||||||
Average shareholders' equity | 262,118 | 254,480 | 247,730 | |||||||||
Less: Average intangible assets | 39,340 | 39,475 | 38,760 | |||||||||
Average tangible common equity (non-GAAP) | $ | 222,778 | $ | 215,005 | $ | 208,970 |
(1) After-tax merger and related (income) expenses are presented using a
Three Months Ended | ||||||||||||
March 31, 2023 | December 31, 2022 | March 31, 2022 | ||||||||||
($ in thousands) | ||||||||||||
Return on average assets | 1.46 | % | 1.46 | % | 0.26 | % | ||||||
Adjusted return on average assets (non-GAAP) | 1.46 | % | 1.45 | % | 0.33 | % | ||||||
Return on average equity | 12.72 | % | 13.21 | % | 2.37 | % | ||||||
Adjusted return on average equity (non-GAAP) | 12.72 | % | 13.20 | % | 3.00 | % | ||||||
Return on average tangible common equity (non-GAAP) | 14.97 | % | 15.64 | % | 2.81 | % | ||||||
Adjusted return on average tangible common equity (non-GAAP) | 14.97 | % | 15.63 | % | 3.56 | % |
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 | $ | 267,539 | $ | 260,355 | ||||
Less: Intangible assets | 39,296 | 39,387 | ||||||
Tangible common equity (non-GAAP) | $ | 228,243 | $ | 220,968 | ||||
Total assets | $ | 2,292,053 | $ | 2,283,927 | ||||
Less: Intangible assets | 39,296 | 39,387 | ||||||
Tangible assets (non-GAAP) | $ | 2,252,757 | $ | 2,244,540 | ||||
Equity to asset ratio | 11.67 | % | 11.40 | % | ||||
Tangible common equity to tangible asset ratio (non-GAAP) | 10.13 | % | 9.84 | % | ||||
Book value per share | $ | 14.64 | $ | 14.51 | ||||
Tangible book value per share (non-GAAP) | $ | 12.49 | $ | 12.32 | ||||
Shares outstanding | 18,271,194 | 17,940,283 |
INVESTOR RELATIONS CONTACT
Kevin Mc Cabe
Bank of Southern California
kmccabe@banksocal.com
818.637.7065
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