Southern California Bancorp Reports Increased Net Interest Income and Loan Growth Amid Rising Interest Rates

Southern California Bancorp (BCAL) has reported notable increases in net interest income and loan growth during the first quarter of 2023. The growth can be attributed to higher average balances and yields on interest-bearing assets, which were partially offset by higher average balances and costs of interest-bearing liabilities.

Increased Net Interest Income and Net Interest Margin

As of March 31, 2023, the net interest income increased by $7.1 million, reaching $24.9 million compared to $17.8 million in the prior year. The net interest margin for the same period rose from 3.40% in 2022 to 4.71% in 2023. This can be linked to a 199 basis point increase in the total interest-earning assets yield, partly due to higher market interest rates and a shift in asset mix, and a 74 basis point growth in the cost of funds.

Growth in Yield on Earning Assets and Loans

The yield on total earning assets during the three months ended March 31, 2023, stood at 5.53%, while the yield on average total loans increased by 108 basis points, from 4.70% in 2022 to 5.78% in 2023. These developments resulted in a $10.7 million increase in total interest income, consisting of a $9.3 million growth in total loan interest income, $888 thousand more in debt securities income, and $548 thousand additional interest and dividend income from other financial institutions and interest-earning assets.

Factors Contributing to Growth

This growth is backed by various factors, including an increase in non-PPP loan balances, a change in interest-earning asset mix, and higher yields on interest-earning assets due to rising target Fed fund rates. On the other hand, the total cost of funds shot up by 74 basis points from 0.14% in 2022 to 0.88% in 2023, driven mainly by a 135 basis point climb in the cost of interest-bearing deposits to 1.51%. However, a decrease in noninterest-bearing deposits partially offset this rise.

Loan Sales

Regarding loan sales, Southern California Bancorp sold seven SBA loans with a net carrying value of $9.9 million during the first quarter of 2023. This resulted in a gain of $797 thousand at an average premium of 8.04% and one non-SBA loan with a net carrying value of $39 thousand, earning a gain of $11 thousand.


Despite rising interest rates and ongoing concerns over inflation and potential economic downturns, Southern California Bancorp’s recent financial performance demonstrates the bank’s adaptability, competitiveness, and resilience amid fluctuating market conditions. The financial institution has effectively utilized its strategic position in developing optimal loan offerings and asset management, contributing to overall growth and success.

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!