Beach Cities Commercial Bank Announces Third Quarter 2024 Financial Results

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

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241108571528/en/