Southern California Bancorp (ticker: BCAL), a bank holding company for Bank of Southern California, has reported a net unrealized loss on available-for-sale debt securities of $7.1 million as of March 31, 2023. This figure reflects a decrease compared to the net unrealized loss of $9.1 million recorded at December 31, 2022. The bank currently holds 81 available-for-sale debt securities in a gross unrealized loss position.
The company described the reasons for the unrealized losses as primarily attributable to factors other than credit-related concerns, citing changes in interest rates driven by The Federal Reserve’s policy to fight inflation and general volatility in credit market conditions. As a result, the company applied a zero credit loss assumption to these securities and recorded no provision for credit losses on either held-to-maturity or available-for-sale debt securities during the three months ended March 31, 2023.
Table of Contents
Southern California Bancorp’s Available-for-Sale Debt Securities Portfolio
Southern California Bancorp had 108 available-for-sale debt securities with a combined fair value of $124.4 million, carrying net unrealized losses totaling $7.1 million or $5.0 million net of tax in the accumulated other comprehensive loss. The unrealized losses on available-for-sale debt securities were recognized in shareholders’ equity as accumulated other comprehensive loss.
For available-for-sale debt securities with unrealized losses, the company considered the financial condition of the issuer, and its intent and ability to retain the investment for a sufficient period to allow for any anticipated recovery in fair value. Additionally, the bank reviewed the credit ratings of municipal securities, with a total fair value of taxable municipal and tax-exempt bank-qualified municipal securities amounting to $4.3 million and $21.1 million, respectively.
Loan Portfolio Composition and Federal Reserve System Membership
At March 31, 2023, the company’s loan portfolio in real estate-secured credit represented 83% of total loans, as compared to 82% at December 31, 2022. The loan portfolio primarily comprises loans to borrowers within Southern California markets, including San Diego, Orange, Ventura, Los Angeles, and Riverside counties, as well as the Inland Empire.
As a member of the Federal Reserve System, Southern California Bancorp is required to hold stock in the Federal Reserve Bank of San Francisco and the Federal Home Loan Bank of San Francisco. As of March 31, 2023, the company had invested $7.3 million and $7.2 million in these Federal Reserve Bank and Federal Home Loan Bank stocks, respectively.
Other Equity Investment Activity
Southern California Bancorp also reported investments in other equity securities, including affordable housing investments and a technology venture capital fund focusing on fintech and community banking. As of March 31, 2023, the balance of these investments was valued at $5.2 million, compared to $4.6 million at December 31, 2022. During the three months ended March 31, 2023, there were $567 thousand net capital contributions made to these equity investments.
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!