Southern California Bancorp (BCAL) has released its financial results for the first quarter ended March 31, 2023, reporting a net income of $8.2 million and total assets of $2.29 billion. The increase in total assets was primarily due to a $15.4 million increase in cash and cash equivalents, and an $11.8 million increase in debt securities. However, this was partially offset by a $9.1 million decrease in loans held for investment, net and an $8.5 million decrease in loans held for sale.
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Shareholders’ Equity and Adoption of CECL
Shareholders’ equity increased by $7.2 million to $267.5 million at the end of the first quarter due to the generated net income, $1.7 million related to share-based compensation activity, and $1.4 million net of tax unrealized gains on available-for-sale debt securities during the period. The increase in shareholders’ equity was partially offset by a $3.9 million net reduction related to the adoption of Current Expected Credit Losses (CECL).
Debt Securities Portfolio
Southern California Bancorp’s debt securities portfolio recorded an increase of $11.8 million in the first quarter, aggregating to $178.3 million at the end of the period. The company’s held-to-maturity debt securities and available-for-sale debt securities represented 2.35% and 5.43%, respectively, of total assets, compared to 2.36% and 4.93%, respectively, at the end of December 2022.
Loans Held for Investment and Real Estate Loans
The company reported a decrease of $3.8 million in total loans held for investment during the first quarter, amounting to $1.89 billion, which accounted for 82.6% of total assets. Loans secured by real estate increased by $13.7 million to $1.57 billion, driven mainly by a $17.0 million increase in construction and land development loans, a $9.7 million increase in 1-4 family residential loans, and a $9.1 million increase in multifamily residential loans. Commercial and industrial loans decreased by $17.4 million to $314.2 million, primarily due to net paydowns of $29.9 million.
Nonaccrual and Nonperforming Loans
At the end of the first quarter, the company’s nonaccrual and nonperforming loans amounted to $1 thousand, compared to $41 thousand at the end of December 2022. This decrease was attributed primarily to $39 thousand in note sales, with no loans downgraded to nonaccrual during the quarter.
Allowance for Loan Losses and Credit Quality
Southern California Bancorp’s allowance for loan losses to total loans stood at 1.18% at the end of the first quarter, up from 0.90% at the end of December 2022. The company had nonaccrual loans to total loans ratio of 0.000% and an allowance for loan losses to nonaccrual loans ratio of 22,391.00x, indicating a strong credit quality and ability to absorb potential losses.
Conclusion
In conclusion, Southern California Bancorp’s financial results for the first quarter of 2022 exhibit solid growth and a strong credit quality. With an increase in total assets, shareholders’ equity, and a healthy debt securities portfolio, the company is well-positioned for continued growth and success in the coming quarters.
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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