Beach Cities Commercial Bank Announces Third Quarter 2024 Financial Results

IRVINE, Calif,–(BUSINESS WIRE)–Beach Cities Commercial Bank, www.beachcitiescb.com (OTCQB: BCCB) (the “Bank”), today announced financial results for the quarter ended, September 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 $97.04 million as of September 30, 2024, which increased by $49.4 million from December 31, 2023 (102% growth).
  • Total loans were $78.1 million as of September 30, 2024, which increased by $56.0 million from December 31, 2023 (254% growth).
  • Total deposits were $75.8 million as of September 30, 2024, which increased by $49.9 million from December 31, 2023 (193%).
  • Total liquidity remains high at $15.6 million, which equates to 16.1% of the Bank’s total assets. The Bank also maintains contingent borrowing sources at $27 million which equates to 27.8% of total assets.
  • The loan portfolio average yield was at 8.15% which is contributing to a healthy net interest margin at 4.28% as of September 30, 2024.
  • The Bank maintains a reserve for credit losses of $796,000 which equates to 1.08% of total loans. As of September 30, 2024, the Bank had Zero dollars in delinquent, and non-performing loans.

The Bank reported third quarter net loss of $940,000 and year-to-date net loss of $3.54 million. As the Bank continued to grow its loan portfolio, the interest income increased, which decreased the Bank’s quarterly net loss. The third quarter’s net loss of $940,000 decreased from the second quarter’s loss of $1.26 million by $326k or 25.7%.

During the third quarter, 2024, the total interest income was $1.61 million compared to $1.27 million recorded during the second quarter, 2024, an increase of 26%. The Bank’s interest expense from the interest-bearing deposits was $716k for the third quarter, 2024, compared to $557k for the second quarter, 2024, an increase of 29%. 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 third quarter, 2024, net interest income increased by $177k from the second quarter 2024, an increase of 25%.

Total non-interest expenses for the third quarter, 2024, were $1.721 million compared to $1.805 million incurred during the second quarter 2024, a decrease of $84k (4.6%). The decreases were in the compensation and professional/legal expenses categories. The compensation expense reduced in the third quarter due to few support employees in the lending and operations areas were replaced with employees with more appropriate work experience at a lesser cost. Several technology-related projects using an outside consultant were completed, and as these buildout projects were fully implemented, the Bank’s reliance on outside consultants was phased out in the third quarter, 2024 which resulted in lower professional expenses.

As noted above, the Bank’s liquidity remains above 16% 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 September 30, 2024, total contingent borrowing sources unused totaled $27 million or 28% of total assets outstanding.

“During 2024, the Bank has made tremendous strides in growing its earning asset base. We have a great team with a focus of moving the Bank towards profitability,” noted H. Kent Falk, CEO.

“Our major products and services buildout is complete, which has allowed us to focus in growing the Bank. During the last nine months this year, the Bank has doubled its total assets, and we are excited to cross the $100 million in total assets in October 2024,” 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 using 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 do not guarantee 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 Sept 30, 2024 As of June 30, 2024 Growth $ Growth %
ASSETS:
 
Cash and due from banks

$

131

 

$

136

 

$

(5

)

-3.7

%

Interest-bearing balance at the Federal Reserve Bank

 

15,519

 

 

14,210

 

 

1,309

 

9.2

%

Total Cash and Cash Equivalents

 

15,650

 

 

14,346

 

 

1,304

 

9.1

%

 
Debt Securities available for sale

 

974

 

 

993

 

 

(19

)

-1.9

%

 
Total Loans

 

78,105

 

 

63,136

 

 

14,969

 

23.7

%

Allowance for credit losses

 

(843

)

 

(726

)

 

(117

)

16.1

%

Net Loans

 

77,262

 

 

62,410

 

 

14,852

 

23.8

%

 
Premises and equipment, net

 

206

 

 

223

 

 

(17

)

-7.6

%

Right-of-use asset

 

1,477

 

 

1,566

 

 

(89

)

-5.7

%

Other assets

 

1,473

 

 

1,654

 

 

(181

)

-10.9

%

TOTAL ASSETS

$

97,042

 

$

81,192

 

 

15,850

 

19.5

%

 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
 
Deposits
Non-interest Bearing deposits

$

12,035

 

$

7,193

 

 

4,842

 

67.3

%

Interest -bearing deposits

 

63,788

 

 

54,145

 

 

9,643

 

17.8

%

Total Deposits

 

75,823

 

 

61,338

 

 

14,485

 

23.6

%

 
Borrowings

 

2,300

 

 

0

 

 

2,300

 

100.0

%

Other Liabilities

 

2,801

 

 

2,846

 

 

(45

)

-1.6

%

TOTAL LIABILITIES

 

80,924

 

 

64,184

 

 

16,740

 

26.1

%

 
Common Stock

 

25,117

 

 

25,019

 

 

98

 

0.4

%

Additional paid in capital

 

366

 

 

416

 

 

(50

)

-12.0

%

Accumulated deficit

 

(9,366

)

 

(8,426

)

 

(940

)

11.2

%

Accumulated other comprehensive loss

 

1

 

 

(1

)

 

2

 

-200.0

%

Total Shareholders’ Equity

 

16,118

 

 

17,008

 

 

(890

)

-5.2

%

 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

97,042

 

$

81,192

 

$

15,850

 

19.5

%

 
BEACH CITIES COMMERCIAL BANK
UNAUDITED STATEMENT OF OPERATIONS
(Dollars in thousands except share and per share amounts)
 
For the Three Months Ended For the Nine Months Ended For the twelve Months Ended
September 30, 2024 June 30, 2024 March 31, 2024 September 30, 2024 December 31, 2023
Interest Income:
Loans

$

1,414,644

 

$

1,039,820

 

$

603,552

 

$

3,058,016

 

$

336,181

 

Investment Securities

 

13,981

 

 

13,216

 

 

13,043

 

$

40,240

 

 

17,320

 

Other Short-term investments

 

179,138

 

 

220,164

 

 

246,997

 

$

646,299

 

 

821,283

 

Total Interest Income

 

1,607,763

 

 

1,273,200

 

 

863,592

 

$

3,744,555

 

 

1,174,784

 

 
Interest Expense:
Deposits

 

716,112

 

 

557,882

 

 

283,838

 

$

1,557,832

 

 

348,702

 

Total Interest Expense

 

716,112

 

 

557,882

 

 

283,838

 

$

1,557,832

 

 

348,702

 

 
Net Interest Income

 

891,651

 

 

715,318

 

 

579,754

 

$

2,186,723

 

 

826,082

 

 
Provisions for credit losses

 

117,000

 

 

180,000

 

 

245,000

 

$

542,000

 

 

317,000

 

Net interest income after provisions for loan losses

 

774,651

 

 

535,318

 

 

334,754

 

$

1,644,723

 

 

509,082

 

 
Non-interest income:
Service charges, fees and other

 

6,362

 

 

4,117

 

 

5,147

 

$

15,626

 

 

1,706

 

 
Non-Interest expense:
Salaries and employee benefits

 

1,106,821

 

 

1,135,056

 

 

1,105,393

 

$

3,347,270

 

 

2,318,336

 

Occupancy and Equipment expenses

 

174,256

 

 

175,312

 

 

171,013

 

$

520,581

 

 

408,909

 

Organization Expenses

 

 

 

 

 

 

$

 

 

1,045,800

 

Data Processing

 

185,053

 

 

175,117

 

 

128,315

 

$

488,485

 

 

332,424

 

Professional and Legal

 

101,407

 

 

171,546

 

 

111,763

 

$

384,716

 

 

469,110

 

Other Expenses

 

153,761

 

 

147,836

 

 

151,366

 

$

452,963

 

 

294,946

 

Total Non-interest expense

 

1,721,298

 

 

1,804,867

 

 

1,667,850

 

$

5,194,015

 

 

4,869,525

 

 
Income (Loss) before taxes

 

(940,285

)

 

(1,265,432

)

 

(1,327,949

)

$

(3,533,666

)

 

(4,358,737

)

Income tax expense

 

 

 

800

 

 

800

 

$

1,600

 

 

800

 

Net Income (Loss)

$

(940,285

)

$

(1,266,232

)

$

(1,328,749

)

$

(3,535,266

)

$

(4,359,537

)

 
Earnings per share (“EPS”): Basic

$

(0.37

)

$

(0.50

)

$

(0.52

)

$

(1.38

)

$

(1.71

)

Common Shares Outstanding

 

2,556,112

 

 

2,556,112

 

 

2,556,112

 

 

2,556,112

 

 

2,556,112

 

 

Contacts

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

error: Content is protected !!
Exit mobile version