Beach Cities Commercial Bank, www.beachcitiescb.com (OTCQB:
BCCB) (the "Bank"), today announced financial results for the
quarter ended, June 30, 2024.
Beach Cities Commercial Bank (the Bank) was incorporated under
the laws of the State of California on April 11, 2022. The Bank
opened for business on June 12, 2023, after receiving all necessary
regulatory approvals, and it began providing a full range of
banking services from its branch locations in Irvine and Encinitas,
California. The Bank operates primarily in the Southern California
commercial markets, offering business and personal deposit
accounts. The lending products includes loans secured by commercial
real estate, commercial and industrial loans, guidance lines of
credit supporting bridge loans, lines of credit, SBA 7A and 504
loans, SBA express lines of credit, and State guaranteed loans. The
Bank has a state-of-the-art technology platform and offers cash
management products and services to allow its customers the ability
to focus on their business and not worry about banking.
Significant items for the period include:
- Total assets were $81.2 million as of June 30, 2024, which
increased by $33.2 million from December 31, 2023 (69.3%
growth).
- Total loans were $63.1 million as of June 30, 2024, which
increased by $41.1 million from December 31, 2023 (185.9%
growth).
- Total deposits were $61.3 million as of June 30, 2024, which
increased by $35.5 million from December 31, 2023 (124.7%).
- Total liquidity remains very high at $14.3 million, which
equates to 17.7% of the Bank's total assets. The Bank also
maintains contingent borrowing sources at $25.9 million which
equates to 32% of total assets.
- The loan portfolio average yield was at 8% which is
contributing to a healthy net interest margin at 4.14% as of June
30, 2024.
- The Bank maintains a reserve for credit losses of $726,000
which equates to 1.15% of total loans. As of June 30, 2024, the
Bank had Zero dollars in delinquent, and non-performing loans.
The Bank reported second quarter net loss of $1.27 million and
year-to-date net loss of $2.59 million. As the Bank continued to
grow its loan portfolio, the interest income increased, which
decreased the Bank’s quarterly net loss. The second quarter’s net
loss of $1.27 million decreased from the first quarter’s loss of
$1.33 million by $62k or 4.7%.
During the second quarter, 2024, the total interest income was
$1.27 million compared to $863,000 recorded during the first
quarter, 2024, an increase of 47%. The Bank’s interest expense
mainly from the interest-bearing deposits was $557,882 for the
second quarter, 2024, compared to $283,838 for the first quarter,
2024, an increase of 96%. The interest expense increased due to the
growth in the short-term institutional CDs deposits. The Bank has
launched a campaign to replace these high- cost institutional CD
deposits with non-interest bearing deposits to reduce the interest
cost. The second quarter, 2024, net interest income increased by
$135,564 from the first quarter 2024, an increase of 23%.
Total non-interest expenses for the second quarter, 2024, were
$1.8 million compared to $1.67 million incurred during the first
quarter 2024, an increase of $137k (8.2%). The increases were in
the data processing expense and professional/legal categories. This
was the result of completing several technology-related projects
using an outside consultant. As these buildout projects get fully
implemented, the Bank’s reliance on outside consultants is expected
to phase out in the third quarter, 2024.
As noted above, the Bank’s liquidity remains above 17% of total
assets. The Bank has also established contingent lines of
borrowings with its correspondent banks, including Federal home
loan Bank of San Francisco. As of June 30, 2024, total contingent
borrowing sources unused totaled $25.9 million or 32% of total
assets outstanding.
“The Bank completed its first full year in operations in June
2024, and during this period, has made tremendous progress in
growing the Bank,” noted H. Kent Falk, CEO.
“During the first start-up quarter, the Bank invested its
resources in implementing its technology platform, and as more
products and services became live, we have seen incredible growth
in lending and attracting good clients within the Southern
California region. We have a great board of directors and a team of
associates put together that continue to work diligently to offer
excellent products and services to our clients. We are very excited
about our future,” stated Jeffrey Redeker, President.
About Beach Cities Commercial Bank
Beach Cities Commercial Bank is a full-service bank, serving the
business, commercial and professional markets. The Bank meets the
financial needs of its business clients with loans for working
capital, equipment, owner-occupied and investment commercial real
estate, and a full array of cash management services and deposit
products for businesses and their owners. Beach cities Commercial
Bank meets its clients’ needs through its head office and branch in
Irvine and regional office and branch in Encinitas, California. For
more information, please visit www.beachcitiescb.com.
FORWARD-LOOKING STATEMENT: This news release contains a number
of forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
These statements may be identified by use of words such as
"anticipate." "Believe." "Continue," "could." "Estimate," "expect,"
"intend," "likely." "May," "outlook." "Plan," "potential,"
"predict." "Project." "Should," "will." "would" and similar terms
and phrases. including references to assumptions. Forward-looking
statements are based upon various assumptions and analyses made by
the Bank (which includes the Bank) considering management's
experience and its perception of historical trends. current
conditions and expected future developments, as well as other
factors it believes are appropriate under the circumstances. These
statements are not guaranteeing of future performance and are
subject to risks, uncertainties, and other factors (many of which
are beyond the Bank's control) that could cause actual results to
differ materially from future results expressed or implied by such
forward-looking statements. Accordingly, you should not place undue
reliance on such statements. factors that could affect the Bank's
results include, without limitation, the following: the timing and
occurrence or non-occurrence of events may be subject to
circumstances beyond the Bank's control; there may be increases in
competitive pressure among financial institutions or from
non-financial institutions; changes in the interest rate
environment may reduce interest margins; changes in deposit flows,
loan demand or real estate values may adversely affect the business
of the Bank; unanticipated or significant increases in loan losses;
changes in accounting principles, policies or guidelines may cause
the Bank's financial condition to be perceived differently; changes
in corporate and/or individual income tax laws may adversely affect
the Bank's financial condition or results of operations; general
economic conditions, either nationally or locally in some or all
areas in which the Bank conducts business, or conditions in the
securities markets or the banking industry may be less favorable
than the Bank currently anticipates; legislation or regulatory
changes may adversely affect the Bank's business; technological
changes may be more difficult or expensive than the Bank
anticipates; there may be failures or breaches of information
technology security systems; success or consummation of new
business initiatives may be more difficult or expensive than the
Bank anticipates; or litigation or other matters before regulatory
agencies, whether currently existing or commencing in the future,
may delay the occurrence or non-occurrence of events longer than
the Bank anticipates.
BEACH CITIES COMMERCIAL
BANK
UNAUDITED STATEMENTS OF FINANCIAL CONDITION (Dollars in
thousands) As of June 30,2024 As of December
31,2023 Growth $ Growth % ASSETS:
Cash and due from banks
$
136
$
996
$
(860
)
-86.3
%
Interest-bearing balance at the Federal Reserve Bank
14,210
20,985
(6,775
)
-32.3
%
Total Cash and Cash
Equivalents
14,346
21,981
(7,635
)
-34.7
%
Debt Securities available for
sale
993
980
13
1.3
%
Total Loans
63,136
22,081
41,055
185.9
%
Allowance for credit losses
(726
)
(301
)
(425
)
141.2
%
Net Loans
62,410
21,780
40,630
186.5
%
Premises and equipment, net
223
268
(45
)
-16.8
%
Right-of-use asset
1,566
1,741
(175
)
-10.1
%
Other assets
1,654
1,207
447
37.0
%
TOTAL ASSETS
$
81,192
$
47,957
33,235
69.3
%
LIABILITIES AND SHAREHOLDERS'
EQUITY:
Deposits
Non-interest Bearing deposits
$
7,193
$
6,673
520
7.8
%
Interest -bearing deposits
54,145
19,186
34,959
182.2
%
Total Deposits
61,338
25,859
35,479
137.2
%
Other Liabilities
2,846
2,711
135
5.0
%
TOTAL LIABILITIES
64,184
28,570
35,614
124.7
%
Common Stock
25,019
25,019
-
0.0
%
Additional paid in capital
416
200
216
108.0
%
Accumulated deficit
(8,426
)
(5,831
)
(2,595
)
44.5
%
Accumulated other comprehensive
loss
(1
)
(1
)
-
0.0
%
Total Shareholders'
Equity
17,008
19,387
(2,379
)
-12.3
%
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
81,192
$
47,957
$
33,235
69.3
%
BEACH CITIES COMMERCIAL BANK UNAUDITED STATEMENT
OF OPERATIONS (Dollars in thousands except share and per
share amounts)
For the Three Months
Ended
For the Six Months
Ended
For the twelve Months
Ended
June 30, 2024
March 31, 2024
December 31, 2023
June 30, 2024
December 31, 2023
Interest Income: Loans
$
1,039,820
$
603,552
$
318,288
$
1,643,372
$
336,181
Investment Securities
13,216
13,043
13,013
26,259
17,320
Other Short-term investments
220,164
246,997
316,334
467,161
821,283
Total Interest Income
1,273,200
863,592
647,635
2,136,792
1,174,784
Interest Expense: Deposits
557,882
283,838
204,495
841,720
348,702
Total Interest Expense
557,882
283,838
204,495
841,720
348,702
Net Interest Income
715,318
579,754
443,140
1,295,072
826,082
Provisions for credit losses
180,000
245,000
184,900
425,000
317,000
Net interest income after provisions for loan losses
535,318
334,754
258,240
870,072
509,082
Non-interest income: Service charges, fees and other
4,117
5,147
1,606
9,264
1,706
Non-Interest expense: Salaries and employee benefits
1,135,056
1,105,393
1,023,984
2,240,449
2,318,336
Occupancy and Equipment expenses
175,312
171,013
170,173
346,325
408,909
Organization Expenses
-
-
-
-
1,045,800
Data Processing
175,117
128,315
139,086
303,432
332,424
Professional and Legal
171,546
111,763
105,668
283,309
469,110
Other Expenses
147,836
151,366
129,696
299,202
294,946
Total Non-interest
expense
1,804,867
1,667,850
1,568,607
3,472,717
4,869,525
-
Income (Loss) before taxes
(1,265,432
)
(1,327,949
)
(1,308,761
)
(2,593,381
)
(4,358,737
)
Income tax expense
800
800
800
1,600
800
Net Income (Loss)
$
(1,266,232
)
$
(1,328,749
)
$
(1,309,561
)
$
(2,594,981
)
$
(4,359,537
)
Earnings per share ("EPS"): Basic
$
(0.50
)
$
(0.52
)
$
(0.51
)
$
(1.02
)
$
(1.71
)
Common Shares Outstanding
2,556,112
2,556,112
2,556,112
2,556,112
2,556,112
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240731718417/en/
H. Kent Falk, CEO kent@beachcitiescb.com 949.704.0120
Jeffrey Redeker, President jeff@beachcitiescb.com
949.704.2080
Najam Saiduddin, CFO/EVP najam@beachcitiescb.com
949.704.2275