Southern California Bancorp (BCAL), the holding company for Bank of Southern California, has reported a net income of $8.2 million for the first quarter of 2023. Although this reflects a decrease in net income of $250,000 from the previous quarter, it also highlights a significant increase in net income of $6.8 million compared to Q1 2022.
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Financial Performance
The increased net income relative to Q1 2022 can be attributed to a rise in net interest income, a decrease in the provision for credit losses, and a reduction in noninterest expenses, offset by an increase in income taxes. Pre-tax, pre-provision income for the first quarter of 2023 was $11.4 million, reflecting a 7.3% decrease from the previous quarter’s $12.3 million but a 197.5% increase compared to Q1 2022’s $3.8 million.
Net interest income, which comprises the majority of the company’s revenue, reached $24.9 million in Q1 2023, a slight decrease from the previous quarter’s $25.3 million but a considerable increase from Q1 2022’s $17.8 million. The net interest margin was 4.71% for Q1 2023, an improvement from the prior quarter’s 4.62%.
Operational Efficiency
Efficiency ratio, a metric used to measure the productivity of operations, was 56.8% in the first quarter ending March 2023, demonstrating a decline in operational efficiency in comparison to the 51.5% in the previous quarter, but an improvement relative to the 80.2% in the same quarter of 2022.
Noninterest expense in Q1 2023 amounted to $15 million, reflecting an increase from the prior quarter’s $13.1 million but also a decline compared to the same period last year, when noninterest expense reached $15.6 million. Similarly, noninterest income for the first quarter of 2023 amounted to $1.6 million, demonstrating a substantial increase from the prior quarter’s $188,000, but remaining at a similar level to Q1 2022’s $1.6 million.
The company’s allowance for credit losses, which accounts for the expected lifetime credit losses on loans held for investment, is maintained at a level deemed appropriate by management.
Outlook
Commenting on the results, Southern California Bancorp’s approach to managing its net interest income and net interest margin, as well as its periodic evaluation of economic scenarios and consideration of multiple probability-weighted scenarios, have allowed the company to optimize its performance and maintain capital adequacy amid various market conditions. With a solid financial foundation and continued efforts towards operational efficiency, Southern California Bancorp aims to consistently deliver strong results and value for its shareholders.
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% |
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