SOUTHERN CALIFORNIA BANCORP Southern California Bancorp reported net income of
First Quarter 2023 Highlights
- Net income of
$8 .2 million, compared with$8 .5 million in the prior quarter - Diluted earnings per share of
$0.44 , compared with$0.46 the prior quarter - Net interest margin of 4.71%, compared with 4.62% in the prior quarter; average loan yield of 5.78% compared with 5.47% in the prior quarter
- Return on average assets of 1.46%, the same as the prior quarter
- Return on average common equity of 12.72%, compared with 13.21% in the prior quarter
- Efficiency ratio of 56.8%, compared with 51.5% in the prior quarter
- Tangible book value per common share ("TBV") (non-GAAP) of
$12.49 atMarch 31, 2023 , up$0.17 from$12.32 atDecember 31, 2022 - Day 1 CECL transition adjustment to the allowance for credit losses ("ACL") of
$5 .5 million, and a related after-tax decrease to retained earnings of$3 .9 million - Day 2 CECL provisions for credit losses of
$202 thousand - Total assets of
$2.29 billion , relatively flat fromDecember 31, 2022 - Total loans, including loans held for sale, of
$1.89 billion , compared with$1.91 billion atDecember 31, 2022 - Nonperforming assets to total assets ratio of 0.000% at
March 31, 2023 , compared with 0.002% atDecember 31, 2022 - Total deposits of
$1.99 billion , up$54 .0 million or 2.8%, compared with$1.93 billion atDecember 31, 2022 - Noninterest-bearing demand deposits were
$882.0 million , representing 44.4% of total deposits, compared with$923.9 million , or 47.8% of total deposits atDecember 31, 2022 - Cost of deposits was 0.80%, compared with 0.51% in the prior quarter
- Banks's capital exceeds minimums to be “well-capitalized,” the highest regulatory capital category
“We are pleased to report the Company’s continued strong financial performance in the first quarter of 2023, with net income of
“While the banking industry experienced some disruption in the first quarter, and there is economic uncertainty regarding a potential recession and the future direction of the Fed funds rate, we believe our strong balance sheet and very diversified loan and deposit portfolios, which have very little sector or individual customer concentration, position us safely and soundly in the current environment. Our commercial banking model is founded on strong, ongoing relationships with clients in a broad variety of industries. I note that the current uncertainty in the banking industry has provided us with an opportunity to attract new clients.
“We are optimistic about the future and in early
Adoption of the Current Expected Credit Loss ("CECL") Model
On
First Quarter Operating Results
Net Income
Net income for the first quarter of 2023 was
Net Interest Income and Net Interest Margin
Net interest income for the first quarter of 2023 was
Net interest margin for the first quarter of 2023 was 4.71%, compared with 4.62% in the prior quarter. The increase was primarily related to a 39 basis point increase in the total interest-earning assets yield, the result of higher market interest rates and a change in the Bank's interest-earning asset mix, partially offset by a 32 basis point increase in the cost of funds. The yield on total earning assets in the first quarter of 2023 was 5.53%, compared with 5.14% in the prior quarter. The yield on average total loans in the first quarter of 2023 was 5.78%, an increase of 31 basis points from 5.47% in the prior quarter.
Cost of funds for the first quarter of 2023 was 88 basis points, an increase of 32 basis points from 56 basis points in the prior quarter. The increase was primarily driven by a 53 basis point increase in the cost of interest-bearing deposits, coupled with a decrease in average noninterest-bearing deposits. Average noninterest-bearing demand deposits decreased
Average total borrowings increased
Provision for Credit Losses
The Company recorded a provision for credit losses of $202 thousand under the CECL model, compared to a $750 thousand provision in the prior quarter under the incurred loss model. The provision for credit losses included a $76 thousand negative provision for unfunded commitments primarily due to the impact of lower unfunded loan commitments. Total unfunded loan commitments decreased
Noninterest Income
Total noninterest income in the first quarter of 2023 was
Noninterest Expense
Total noninterest expense for the first quarter of 2023 was
The
Efficiency ratio for the first quarter of 2023 was 56.8%, compared to 51.5% in the prior quarter.
Income Tax
In the first quarter of 2023, the Company’s income tax expense was
Balance Sheet
Assets
Total assets at
Loans
Total loans held for investment were
Deposits
Total deposits at
During the first quarter of 2023, the Company repaid
At
Asset Quality
Total non-performing assets decreased to $1 thousand, or 0.000% of total assets at
The Company had no loans over 90 days past due that were accruing interest at
Loan delinquencies (30-89 days past due) totaled $123 thousand at
The allowance for credit losses, which is comprised of allowance for loan losses (ALL) and reserve for unfunded loan commitments, totaled
Allowance for loan losses was
Capital
Tangible book value (non-GAAP) per common share at
The Bank’s leverage capital ratio and total risk-based capital ratio were 11.15% and 12.61%, respectively, at
ABOUT BANK OF
Southern California Bancorp (OTC Pink: BCAL) is a registered bank holding company headquartered in
Southern California Bancorp’s common stock is traded on the OTC Markets Group Inc. Pink Open Market under the symbol “BCAL.” For more information, please visit banksocal.com or call (844) BNK-SOCAL.
NON-GAAP FINANCIAL MEASURES
This press release contains certain non-GAAP financial measures in addition to results presented in accordance with GAAP. The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company's results of operations and financial condition and to enhance investors' overall understanding of such results of operations and financial condition, permit investors to effectively analyze financial trends of our business activities, and enhance comparability with peers across the financial services sector. These non-GAAP financial measures are not a substitute for GAAP measures and should be read in conjunction with the Company's GAAP financial information. A reconciliation of GAAP financial measures to non-GAAP financial measures is included in the accompanying financial tables.
FORWARD-LOOKING STATEMENTS
In addition to historical information, certain matters set forth herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to management’s beliefs, projections and assumptions concerning future results and events. Forward-looking statements include descriptions of management’s plans or objectives for future operations, products or services, and forecasts of Southern California Bancorp’s revenues, earnings, litigation expenses, or other measures of economic performance. Also, forward-looking statements may relate to future outlook and anticipated events. These forward-looking statements involve risks and uncertainties, based on the beliefs and assumptions of management and on the information available to management at the time that such forward-looking statements were made and can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words or phrases such as “aim,” “can,” "may," "could," "predict," "should," "will," "would," "believe," "anticipate," "estimate," "expect," “hope,” "intend," "plan," “potential," “project,” "will likely result," "continue," "seek," “shall,” “possible,” "projection," “optimistic,” and "outlook," and variations of these words and similar expressions or the negative version of those words or phrases.
Forward-looking statements involve substantial risks and uncertainties, many of which are difficult to predict and are generally beyond our control. Many factors could cause actual results to differ materially from those contemplated by these forward-looking statements. Except to the extent required by applicable law or regulation,
Financial Highlights (Unaudited)
| At or for the Three Months Ended | ||||||||||||
2023 | 2022 | 2022 | ||||||||||
| EARNINGS | ($ in thousands except share and per share data) | |||||||||||
| Net interest income | $ | 24,892 | $ | 25,269 | $ | 17,795 | ||||||
| Provision for credit losses | $ | 202 | $ | 750 | $ | 1850 | ||||||
| Noninterest income | $ | 1,570 | $ | 188 | $ | 1,603 | ||||||
| Noninterest expense | $ | 15,019 | $ | 13,112 | $ | 15,552 | ||||||
| Income tax expense | $ | 3,017 | $ | 3,121 | $ | 550 | ||||||
| Net income | $ | 8,224 | $ | 8,474 | $ | 1,446 | ||||||
| Pre-tax pre-provision income (1) | $ | 11,443 | $ | 12,345 | $ | 3,846 | ||||||
| Adjusted pre-tax pre-provision income (1) | $ | 11,443 | $ | 12,337 | $ | 4,370 | ||||||
| Diluted earnings per share | $ | 0.44 | $ | 0.46 | $ | 0.08 | ||||||
| Ending shares outstanding | 18,271,194 | 17,940,283 | 17,753,849 | |||||||||
| PERFORMANCE RATIOS | ||||||||||||
| Return on average assets | 1.46 | % | 1.46 | % | 0.26 | % | ||||||
| Adjusted return on average assets (1) | 1.46 | % | 1.45 | % | 0.33 | % | ||||||
| Return on average common equity | 12.72 | % | 13.21 | % | 2.37 | % | ||||||
| Adjusted return on average common equity (1) | 12.72 | % | 13.20 | % | 3.00 | % | ||||||
| Yield on total loans | 5.78 | % | 5.47 | % | 4.70 | % | ||||||
| Yield on interest earning assets | 5.53 | % | 5.14 | % | 3.54 | % | ||||||
| Cost of deposits | 0.80 | % | 0.51 | % | 0.08 | % | ||||||
| Cost of funds | 0.88 | % | 0.56 | % | 0.14 | % | ||||||
| Net interest margin | 4.71 | % | 4.62 | % | 3.40 | % | ||||||
| Efficiency ratio (1) | 56.8 | % | 51.5 | % | 80.2 | % | ||||||
| Adjusted efficiency ratio (1) | 56.8 | % | 51.5 | % | 77.5 | % | ||||||
| As of | ||||||||
2023 | 2022 | |||||||
| CAPITAL | ($ in thousands except share and per share data) | |||||||
| Tangible equity to tangible assets (1) | 10.13 | % | 9.84 | % | ||||
| Book value (BV) per common share | $ | 14.64 | $ | 14.51 | ||||
| $ | 12.49 | $ | 12.32 | |||||
| ASSET QUALITY | ||||||||
| Allowance for loan losses (ALL) | $ | 22,391 | $ | 17,099 | ||||
| Reserve for unfunded loan commitments | $ | 1,673 | $ | 1,310 | ||||
| Allowance for credit losses (ACL) | $ | 24,064 | $ | 18,409 | ||||
| ALL to total loans | 1.18 | % | 0.90 | % | ||||
| ACL to total loans | 1.27 | % | 0.97 | % | ||||
| Nonperforming loans | $ | 1 | $ | 41 | ||||
| Other real estate owned | $ | — | $ | — | ||||
| Nonperforming assets to total assets | — | % | — | % | ||||
| END OF PERIOD BALANCES | ||||||||
| Total loans, including loans held for sale | $ | 1,894,509 | $ | 1,906,800 | ||||
| Total assets | $ | 2,292,053 | $ | 2,283,927 | ||||
| Deposits | $ | 1,985,856 | $ | 1,931,905 | ||||
| Loans to deposits | 95.4 | % | 98.7 | % | ||||
| Shareholders' equity | $ | 267,539 | $ | 260,355 | ||||
(1) Non-GAAP measure. See – GAAP to Non-GAAP reconciliation
| For the Three Months Ended | ||||||||||||
| ALLOWANCE for CREDIT LOSSES | 2023 | 2022 | 2022 | |||||||||
| ($ in thousands) | ||||||||||||
| Allowance for loan losses (ALL) | ||||||||||||
| Balance at beginning of period | $ | 17,099 | $ | 16,436 | $ | 11,657 | ||||||
| Adoption of ASU 2016-13 (1) | 5,027 | — | — | |||||||||
| Provision for loan losses | 278 | 650 | 1,850 | |||||||||
| Charge-offs | (27 | ) | — | — | ||||||||
| Recoveries | 14 | 13 | 27 | |||||||||
| Net (charge-offs) recoveries | (13 | ) | 13 | 27 | ||||||||
| Balance, end of period | $ | 22,391 | $ | 17,099 | $ | 13,534 | ||||||
| Reserve for unfunded loan commitments | ||||||||||||
| Balance, beginning of period | $ | 1,310 | $ | 1,210 | $ | 804 | ||||||
| Adoption of ASU 2016-13 (1) | 439 | — | — | |||||||||
| Provision (reversal) for loan losses | (76 | ) | 100 | — | ||||||||
| Balance, end of period | 1,673 | 1,310 | 804 | |||||||||
| Allowance for credit losses (ACL) | $ | 24,064 | $ | 18,409 | $ | 14,338 | ||||||
| ALL to total loans | 1.18 | % | 0.90 | % | 0.83 | % | ||||||
| ACL to total loans | 1.27 | % | 0.97 | % | 0.88 | % | ||||||
(1) Represents the impact of adopting ASU 2016-13, Financial Instruments - Credit Losses on
Balance Sheets (Unaudited)
2023 | 2022 | |||||||
| ASSETS | ($ in thousands) | |||||||
| Cash and due from banks | $ | 34,159 | $ | 60,295 | ||||
| Federal funds sold & interest-bearing balances | 67,980 | 26,465 | ||||||
| Total cash and cash equivalents | 102,139 | 86,760 | ||||||
| Securities available-for-sale, at fair value | 124,438 | 112,580 | ||||||
| Securities held-to-maturity, at cost (fair value of | 53,864 | 53,946 | ||||||
| Loans held for sale | 577 | 9,027 | ||||||
| Loans held for investment: | ||||||||
| Construction & land development | 256,096 | 239,067 | ||||||
| 1-4 family residential | 154,071 | 144,322 | ||||||
| Multifamily | 227,676 | 218,606 | ||||||
| Other commercial real estate | 936,513 | 958,676 | ||||||
| Commercial & industrial | 314,248 | 331,644 | ||||||
| Other consumer | 5,328 | 5,458 | ||||||
| Total loans held for investment | 1,893,932 | 1,897,773 | ||||||
| Allowance for credit losses - loans | (22,391 | ) | (17,099 | ) | ||||
| Total loans held for investment, net | 1,871,541 | 1,880,674 | ||||||
| Restricted stock at cost | 14,557 | 14,543 | ||||||
| Premises and equipment | 14,105 | 14,334 | ||||||
| Right of use asset | 8,384 | 8,607 | ||||||
| 37,803 | 37,803 | |||||||
| Core deposit intangible | 1,493 | 1,584 | ||||||
| Bank owned life insurance | 38,196 | 37,972 | ||||||
| Deferred taxes, net | 10,492 | 10,699 | ||||||
| Accrued interest and other assets | 14,464 | 15,398 | ||||||
| Total Assets | $ | 2,292,053 | $ | 2,283,927 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Deposits: | ||||||||
| Noninterest-bearing demand | $ | 882,000 | $ | 923,899 | ||||
| Interest bearing NOW accounts | 248,809 | 209,625 | ||||||
| Money market and savings accounts | 677,636 | 668,602 | ||||||
| Time deposits | 177,411 | 129,779 | ||||||
| Total deposits | 1,985,856 | 1,931,905 | ||||||
| Borrowings | 17,794 | 67,770 | ||||||
| Operating lease liability | 10,925 | 11,055 | ||||||
| Accrued interest and other liabilities | 9,939 | 12,842 | ||||||
| Total liabilities | 2,024,514 | 2,023,572 | ||||||
| Shareholders' Equity: | ||||||||
| Common Stock - 50,000,000 Shares Authorized, No Par Value; issued and Outstanding 18,271,194 at | 219,659 | 218,280 | ||||||
| Retained earnings | 52,889 | 48,516 | ||||||
| Accumulated Other Comprehensive (Loss) Income - Net of Taxes | (5,009 | ) | (6,441 | ) | ||||
| Total shareholders' equity | 267,539 | 260,355 | ||||||
| Total Liabilities and Shareholders' Equity | $ | 2,292,053 | $ | 2,283,927 | ||||
Income Statements - Quarterly and Year-to-Date (Unaudited)
| Three Months Ended | ||||||||||||
2023 | 2022 | 2022 | ||||||||||
| ($ in thousands except share and per share data) | ||||||||||||
| INTEREST AND DIVIDEND INCOME | ||||||||||||
| Interest and fees on loans | $ | 27,019 | $ | 25,781 | $ | 17,731 | ||||||
| Interest on debt securities | 731 | 647 | 254 | |||||||||
| Interest on tax-exempted debt securities | 487 | 488 | 76 | |||||||||
| Interest and dividends from other institutions | 972 | 1,227 | 424 | |||||||||
| Total interest and dividend income | 29,209 | 28,143 | 18,485 | |||||||||
| INTEREST EXPENSE | ||||||||||||
| Interest on NOW, savings, and money market accounts | 2,903 | 2,096 | 282 | |||||||||
| Interest on time deposits | 975 | 463 | 98 | |||||||||
| Interest on borrowings | 439 | 315 | 310 | |||||||||
| Total interest expense | 4,317 | 2,874 | 690 | |||||||||
| Net interest income | 24,892 | 25,269 | 17,795 | |||||||||
| Provision for credit losses (1) | 202 | 750 | 1,850 | |||||||||
| Net interest income after provision for loan losses | 24,690 | 24,519 | 15,945 | |||||||||
| NONINTEREST INCOME | ||||||||||||
| Service charges and fees on deposit accounts | 439 | 456 | 487 | |||||||||
| Gain on sale of loans | 808 | 293 | 49 | |||||||||
| Bank owned life insurance income | 223 | 221 | 832 | |||||||||
| Servicing and related income on loans | 75 | 53 | 69 | |||||||||
| Loss on sale of debt securities | — | (994 | ) | — | ||||||||
| Other charges and fees | 25 | 159 | 166 | |||||||||
| Total noninterest income | 1,570 | 188 | 1,603 | |||||||||
| NONINTEREST EXPENSE | ||||||||||||
| Salaries and employee benefits | 10,241 | 8,634 | 10,196 | |||||||||
| Occupancy and equipment expenses | 1,447 | 1,458 | 1,410 | |||||||||
| Data processing | 1,056 | 1,089 | 1,420 | |||||||||
| Legal, audit and professional | 785 | 487 | 617 | |||||||||
| Regulatory assessments | 452 | 345 | 339 | |||||||||
| Director and shareholder expenses | 213 | 219 | 195 | |||||||||
| Merger and related (income) expenses | — | (8 | ) | 524 | ||||||||
| Core deposit intangible amortization | 91 | 141 | 99 | |||||||||
| Other expense | 734 | 747 | 752 | |||||||||
| Total noninterest expense | 15,019 | 13,112 | 15,552 | |||||||||
| Income before income tax expense | 11,241 | 11,595 | 1,996 | |||||||||
| Income tax expense | 3,017 | 3,121 | 550 | |||||||||
| Net income | $ | 8,224 | $ | 8,474 | $ | 1,446 | ||||||
| Net income per share - basic | $ | 0.46 | $ | 0.47 | $ | 0.08 | ||||||
| Net income per share - diluted | $ | 0.44 | $ | 0.46 | $ | 0.08 | ||||||
| Pre-tax, pre-provision income (2) | $ | 11,443 | $ | 12,345 | $ | 3,846 | ||||||
| Adjusted pre-tax, pre-provision income (2) | $ | 11,443 | $ | 12,337 | $ | 4,370 | ||||||
(1) Included (reversal) provision for unfunded commitment of
(2) Non-GAAP measure. See – GAAP to Non-GAAP reconciliation.
Average Balance Sheets and Yield Analysis
(Unaudited)
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||
| Average Balance | Income/Expense | Yield/Cost | Average Balance | Income/Expense | Yield/Cost | Average Balance | Income/ Expense | Yield/Cost | |||||||||||||||||||||||||||||||
| Assets | ($ in thousands) | ||||||||||||||||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||||||||||||||||
| Total non-PPP loans | $ | 1,890,758 | $ | 27,005 | 5.79 | % | $ | 1,866,708 | $ | 25,755 | 5.47 | % | $ | 1,496,375 | $ | 16,409 | 4.45 | % | |||||||||||||||||||||
| Total PPP loans | 3,476 | 14 | 1.63 | % | 3,997 | 26 | 2.58 | % | 34,867 | 1,322 | 15.38 | % | |||||||||||||||||||||||||||
| Total loans | 1,894,234 | 27,019 | 5.78 | % | 1,870,705 | 25,781 | 5.47 | % | 1,531,242 | 17,731 | 4.70 | % | |||||||||||||||||||||||||||
| Taxable debt securities | 97,023 | 731 | 3.06 | % | 102,205 | 647 | 2.51 | % | 72,309 | 254 | 1.42 | % | |||||||||||||||||||||||||||
| Tax-exempt debt securities (1) | 74,188 | 487 | 3.37 | % | 73,166 | 488 | 3.35 | % | 15,163 | 76 | 2.57 | % | |||||||||||||||||||||||||||
| Deposits in other financial institutions | 37,611 | 457 | 4.93 | % | 40,781 | 347 | 3.38 | % | 463,977 | 193 | 0.17 | % | |||||||||||||||||||||||||||
| Fed funds sold/resale agreements | 25,306 | 287 | 4.60 | % | 68,437 | 637 | 3.69 | % | 23,822 | 11 | 0.19 | % | |||||||||||||||||||||||||||
| Restricted stock investments and other bank stock | 14,902 | 228 | 6.20 | % | 14,883 | 243 | 6.48 | % | 14,009 | 220 | 6.37 | % | |||||||||||||||||||||||||||
| Total interest-earning assets | 2,143,264 | 29,209 | 5.53 | % | 2,170,177 | 28,143 | 5.14 | % | 2,120,522 | 18,485 | 3.54 | % | |||||||||||||||||||||||||||
| Total non-interest-earning assets | 134,707 | 139,205 | 139,279 | ||||||||||||||||||||||||||||||||||||
| Total assets | $ | 2,277,971 | $ | 2,309,382 | $ | 2,259,801 | |||||||||||||||||||||||||||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||
| Interest-bearing NOW accounts | $ | 206,785 | $ | 316 | 0.62 | % | $ | 215,272 | $ | 121 | 0.22 | % | $ | 190,530 | $ | 81 | 0.17 | % | |||||||||||||||||||||
| Money market and savings accounts | 685,368 | 2,587 | 1.53 | % | 700,544 | 1,975 | 1.12 | % | 694,155 | 201 | 0.12 | % | |||||||||||||||||||||||||||
| Time deposits | 152,613 | 975 | 2.59 | % | 123,524 | 463 | 1.49 | % | 97,030 | 98 | 0.41 | % | |||||||||||||||||||||||||||
| Total interest-bearing deposits | 1,044,766 | 3,878 | 1.51 | % | 1,039,340 | 2,559 | 0.98 | % | 981,715 | 380 | 0.16 | % | |||||||||||||||||||||||||||
| Borrowings: | |||||||||||||||||||||||||||||||||||||||
| FHLB advances | 14,356 | 168 | 4.75 | % | 3,696 | 44 | 4.72 | % | — | — | — | % | |||||||||||||||||||||||||||
| Subordinated debt | 17,783 | 271 | 6.18 | % | 17,759 | 271 | 6.05 | % | 17,688 | 272 | 6.24 | % | |||||||||||||||||||||||||||
| TruPS | — | — | — | % | — | — | — | % | 2,737 | 38 | 5.63 | % | |||||||||||||||||||||||||||
| Total borrowings | 32,139 | 439 | 5.54 | % | 21,455 | 315 | 5.82 | % | 20,425 | 310 | 6.16 | % | |||||||||||||||||||||||||||
| Total interest-bearing liabilities | 1,076,905 | 4,317 | 1.63 | % | 1,060,795 | 2,874 | 1.07 | % | 1,002,140 | 690 | 0.28 | % | |||||||||||||||||||||||||||
| Non-interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits (2) | 915,160 | 970,908 | 990,185 | ||||||||||||||||||||||||||||||||||||
| Other liabilities | 23,788 | 23,199 | 19,746 | ||||||||||||||||||||||||||||||||||||
| Shareholders' equity | 262,118 | 254,480 | 247,730 | ||||||||||||||||||||||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 2,277,971 | $ | 2,309,382 | $ | 2,259,801 | |||||||||||||||||||||||||||||||||
| Net interest spread | 3.90 | % | 4.07 | % | 3.26 | % | |||||||||||||||||||||||||||||||||
| Net interest income and margin | $ | 24,892 | 4.71 | % | $ | 25,269 | 4.62 | % | $ | 17,795 | 3.40 | % | |||||||||||||||||||||||||||
| Cost of deposits | 0.80 | % | 0.51 | % | 0.08 | % | |||||||||||||||||||||||||||||||||
| Cost of funds | 0.88 | % | 0.56 | % | 0.14 | % | |||||||||||||||||||||||||||||||||
(1) Tax-exempt debt securities yields are presented on a tax equivalent basis using a 21% tax rate.
(2) Average noninterest-bearing deposits represent 46.69%, 48.30% and 50.21% of average total deposits for the three months ended
GAAP to Non-GAAP Reconciliation
(Unaudited)
The following tables present a reconciliation of non-GAAP financial measures to GAAP measures for: (1) adjusted net income, (2) efficiency ratio, (3) adjusted efficiency ratio, (4) pre-tax pre-provision income, (5) adjusted pre-tax pre-provision income, (6) average tangible common equity, (7) adjusted return on average assets, (8) adjusted return on average equity, (9) return on average tangible common equity, (10) adjusted return on average tangible common equity, (11) tangible common equity, (12) tangible assets, (13) tangible common equity to tangible asset ratio, and (14) tangible book value per share. We believe the presentation of certain non-GAAP financial measures provides useful information to assess our consolidated financial condition and consolidated results of operations and to assist investors in evaluating our financial results relative to our peers. These non-GAAP financial measures complement our GAAP reporting and are presented below to provide investors and others with information that we use to manage the business each period. Because not all companies use identical calculations, the presentation of these non-GAAP financial measures may not be comparable to other similarly titled measures used by other companies. These non-GAAP measures should be taken together with the corresponding GAAP measures and should not be considered a substitute of the GAAP measures.
| Three Months Ended | ||||||||||||
2023 | 2022 | 2022 | ||||||||||
| ($ in thousands) | ||||||||||||
| Adjusted net income | ||||||||||||
| Net income | $ | 8,224 | $ | 8,474 | $ | 1,446 | ||||||
| (Deduct)/add: After-tax merger and related (income) expenses (1) | — | (6 | ) | 387 | ||||||||
| Adjusted net income (non-GAAP) | $ | 8,224 | $ | 8,468 | $ | 1,833 | ||||||
| Efficiency Ratio | ||||||||||||
| Noninterest expense | $ | 15,019 | $ | 13,112 | $ | 15,552 | ||||||
| Less: Merger and related (income) expenses | — | (8 | ) | 524 | ||||||||
| Adjusted noninterest expense | $ | 15,019 | $ | 13,120 | $ | 15,028 | ||||||
| Net interest income | 24,892 | 25,269 | 17,795 | |||||||||
| Noninterest income | 1,570 | 188 | 1,603 | |||||||||
| Total net interest income and noninterest income | $ | 26,462 | $ | 25,457 | $ | 19,398 | ||||||
| Efficiency ratio (non-GAAP) | 56.8 | % | 51.5 | % | 80.2 | % | ||||||
| Adjusted efficiency ratio (non-GAAP) | 56.8 | % | 51.5 | % | 77.5 | % | ||||||
| Pre-tax pre-provision income | ||||||||||||
| Net interest income | $ | 24,892 | $ | 25,269 | $ | 17,795 | ||||||
| Noninterest income | 1,570 | 188 | 1,603 | |||||||||
| Total net interest income and noninterest income | 26,462 | 25,457 | 19,398 | |||||||||
| Less: Noninterest expense | 15,019 | 13,112 | 15,552 | |||||||||
| Pre-tax pre-provision income (non-GAAP) | $ | 11,443 | $ | 12,345 | $ | 3,846 | ||||||
| (Deduct)/add: Merger and related (income) expenses | — | (8 | ) | 524 | ||||||||
| Adjusted pre-tax pre-provision income (non-GAAP) | $ | 11,443 | $ | 12,337 | $ | 4,370 | ||||||
| Return on Average Assets, Equity, and Tangible Equity | ||||||||||||
| Net income | $ | 8,224 | $ | 8,474 | $ | 1,446 | ||||||
| Adjusted net income (non-GAAP) | $ | 8,224 | $ | 8,468 | $ | 1,833 | ||||||
| Average assets | $ | 2,277,971 | $ | 2,309,382 | $ | 2,259,801 | ||||||
| Average shareholders' equity | 262,118 | 254,480 | 247,730 | |||||||||
| Less: Average intangible assets | 39,340 | 39,475 | 38,760 | |||||||||
| Average tangible common equity (non-GAAP) | $ | 222,778 | $ | 215,005 | $ | 208,970 | ||||||
(1) After-tax merger and related (income) expenses are presented using a 29.56% tax rate on taxable merger and related (income) expenses.
| Three Months Ended | ||||||||||||
2023 | 2022 | 2022 | ||||||||||
| ($ in thousands) | ||||||||||||
| Return on average assets | 1.46 | % | 1.46 | % | 0.26 | % | ||||||
| Adjusted return on average assets (non-GAAP) | 1.46 | % | 1.45 | % | 0.33 | % | ||||||
| Return on average equity | 12.72 | % | 13.21 | % | 2.37 | % | ||||||
| Adjusted return on average equity (non-GAAP) | 12.72 | % | 13.20 | % | 3.00 | % | ||||||
| Return on average tangible common equity (non-GAAP) | 14.97 | % | 15.64 | % | 2.81 | % | ||||||
| Adjusted return on average tangible common equity (non-GAAP) | 14.97 | % | 15.63 | % | 3.56 | % | ||||||
2023 | 2022 | |||||||
| ($ in thousands except share and per share data) | ||||||||
| Tangible Common Equity Ratio/Tangible Book Value Per Share | ||||||||
| Shareholders' equity | $ | 267,539 | $ | 260,355 | ||||
| Less: Intangible assets | 39,296 | 39,387 | ||||||
| Tangible common equity (non-GAAP) | $ | 228,243 | $ | 220,968 | ||||
| Total assets | $ | 2,292,053 | $ | 2,283,927 | ||||
| Less: Intangible assets | 39,296 | 39,387 | ||||||
| Tangible assets (non-GAAP) | $ | 2,252,757 | $ | 2,244,540 | ||||
| Equity to asset ratio | 11.67 | % | 11.40 | % | ||||
| Tangible common equity to tangible asset ratio (non-GAAP) | 10.13 | % | 9.84 | % | ||||
| Book value per share | $ | 14.64 | $ | 14.51 | ||||
| Tangible book value per share (non-GAAP) | $ | 12.49 | $ | 12.32 | ||||
| Shares outstanding | 18,271,194 | 17,940,283 | ||||||
INVESTOR RELATIONS CONTACT
kmccabe@banksocal.com
818.637.7065
2023 GlobeNewswire, Inc., source
