Southern California Bancorp (ticker: BCAL), the parent company of Bank of Southern California, N.A., has shown an increase in liquidity and maintained its well-capitalized status, according to the company’s recent SEC report. With a strong financial performance and a stable liquidity position, the company is equipped to meet its day-to-day cash flow requirements and manage interest rate risks effectively.
Table of Contents
Primary Sources of Liquidity
As of March 31, 2023, the primary sources of liquidity for the bank include customer deposits, principal and interest payments on loans and debt securities, FHLB advances, and other borrowings. Southern California Bancorp reported consolidated cash and cash equivalents of $102.1 million, marking an increase of $15.4 million from $86.8 million at December 31, 2022. This growth in liquidity is attributed to the net cash provided by operating cash flows of $18.3 million, $6.5 million of net cash used in investing cash flows, and $3.6 million of net cash flows provided by financing cash flows.
FHLB Borrowing Arrangement and Other Credit Lines
Furthermore, the Bank has a secured line of credit of $481.7 million from the Federal Home Loan Bank (FHLB), with $453.2 million available at March 31, 2023. This borrowing arrangement is secured under a blanket lien on qualifying real estate loans and relies on the company providing adequate collateral and continued compliance with advances and security agreements. The Bank has also pledged qualifying loans with an unpaid principal balance of $846.3 million for this line.
In addition to the FHLB borrowing arrangement, Southern California Bancorp has credit availability of $109.8 million at the Federal Reserve discount window, with collateral pledged through the Borrower-in-Custody (BIC) program as qualifying loans of $134.6 million. The Bank also has three overnight unsecured credit lines from correspondent banks totaling $75 million, subject to annual review.
Well-Capitalized Status and Interest Rate Risk Management
While maintaining a strong liquidity position, Southern California Bancorp is also considered “well-capitalized” under regulatory capital requirements. At March 31, 2023, the company’s regulatory capital ratios exceeded the minimum requirements, including a total capital ratio of 12.61%, Tier 1 capital ratio of 11.68%, common equity Tier 1 capital ratio of 11.68%, and a Tier 1 capital to average assets ratio of 11.15%.
In managing its interest rate risk, Southern California Bancorp uses various risk management tools, such as interest rate sensitivity analysis, Net Interest Income at Risk (NII at Risk), and Economic Value of Equity (EVE) measurements. By monitoring and managing these risks, the company effectively manages its net interest income and prevents potential loss due to changes in market interest rates.
Conclusion
Overall, Southern California Bancorp’s solid financial performance and stable liquidity position reflect the company’s ability to meet daily cash flow requirements and maintain a strong capital position. With effective interest rate risk management strategies in place, the company remains well-positioned for continued growth and success in the future.
Income Statement
Financials in millions USD. Fiscal year is January – December. source
| Year | 2022 | 2021 | |
|---|---|---|---|
| 0 | Revenue | 86.01 | 67.73 |
| 1 | Revenue Growth (YoY) | 27.00% | – |
| 2 | Gross Profit | 86.01 | 67.73 |
| 3 | Selling, General & Admin | 51.43 | 46.83 |
| 4 | Other Operating Expenses | 12.6 | 6.71 |
| 5 | Operating Expenses | 64.03 | 53.54 |
| 6 | Operating Income | 21.98 | 14.19 |
| 7 | Pretax Income | 21.98 | 14.19 |
| 8 | Income Tax | 5.87 | 3.48 |
| 9 | Net Income | 16.11 | 10.71 |
| 10 | Net Income Growth | 50.46% | – |
| 11 | Shares Outstanding (Basic) | 18 | – |
| 12 | EPS (Basic) | 0.90 | 0.74 |
| 13 | EPS (Diluted) | 0.88 | 0.72 |
| 14 | EPS Growth | 22.22% | – |
| 15 | Free Cash Flow Per Share | 0.90 | – |
| 16 | Gross Margin | 100.00% | 100.00% |
| 17 | Operating Margin | 25.56% | 20.95% |
| 18 | Profit Margin | 18.73% | 15.81% |
| 19 | Free Cash Flow Margin | 18.81% | 26.43% |
| 20 | Effective Tax Rate | 26.70% | 24.51% |
| 21 | EBITDA | 23.98 | 15.91 |
| 22 | EBITDA Margin | 27.88% | 23.49% |
| 23 | Depreciation & Amortization | 2 | 1.72 |
| 24 | EBIT | 21.98 | 14.19 |
| 25 | EBIT Margin | 25.56% | 20.95% |
Note that we may hold securities mentioned in this article. All data is based on recent SEC filings. Even though we have implemented various manual and automatic fact-checking and data acquisition processes, some incorrect information may have slipped through (false positive). Let us know if you find any inconsistencies!