Southern California Bancorp reported net income of
“I am pleased to report that our strong year-to-date performance in 2023 includes net interest income of
“Second quarter net income of
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 atJune 30, 2023 , up$0.33 from$12.49 atMarch 31, 2023 - Total assets of
$2.31 billion , a slight increase fromMarch 31, 2023 - Total loans, including loans held for sale, of
$1.91 billion , compared with$1.89 billion atMarch 31, 2023 - Nonperforming assets to total assets ratio of 0.002% at
June 30, 2023 , compared with 0.000% atMarch 31, 2023 - Total deposits of
$1.98 billion , down$4 .9 million or 0.2%, compared with$1.99 billion atMarch 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 atMarch 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
Net Interest Income and Net Interest Margin
Net interest income for the second quarter of 2023 was
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
Average total borrowings increased
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
Noninterest Income
Total noninterest income in the second quarter of 2023 was
Noninterest Expense
Total noninterest expense for the second quarter of 2023 was
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
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
Balance Sheet
Assets
Total assets at
Loans
Total loans held for investment were
Deposits
Total deposits at
At
At
Asset Quality
Total non-performing assets increased to $40 thousand, or 0.002% of total assets at
The Company had no loans over 90 days past due that were accruing interest at
There were no loan delinquencies (30-89 days past due) at
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
The Bank’s leverage capital ratio and total risk-based capital ratio were 11.47% and 12.98%, respectively, at
ABOUT
Southern California Bancorp (NASDAQ: BCAL) is a registered bank holding company headquartered in
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
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
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.
Financial Highlights (Unaudited)
At or for the Three Months Ended | At or for the Six Months Ended | |||||||||||||||||||
2023 | 2023 | 2022 | 2023 | 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 | ||||||||||||
2023 | 2023 | 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 | ||||||
$ | 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 | 2023 | 2023 | 2022 | 2023 | 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
Balance Sheets (Unaudited)
2023 | 2023 | 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 | 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 | |||||||||
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 | 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 |
Income Statements - Quarterly and Year-to-Date (Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||||||
2023 | 2023 | 2022 | 2023 | 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
(2) Non-GAAP measure. See – GAAP to Non-GAAP reconciliation.
Average Balance Sheets and Yield Analysis (Unaudited)
Three Months Ended | ||||||||||||||||||||||||||||||||||||
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
Average Balance Sheets and Yield Analysis
(Unaudited)
Six Months Ended | ||||||||||||||||||||||||
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
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 | |||||||||||||||||||
2023 | 2023 | 2022 | 2023 | 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 | % |
2023 | 2023 | 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
kmccabe@banksocal.com
818.637.7065
1 Reconciliations of the non–U.S. generally accepted accounting principles (“GAAP”) measures are set forth at the end of this press release.
Source:
2023 GlobeNewswire, Inc., source