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Beach Cities Commercial Bank Announces Fourth Quarter 2024 Financial Results

News provided by business wire2025-02-06

Beach Cities Commercial Bank Announces Fourth 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 December 31, 2024.

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 include 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 $130.8 million as of December 31, 2024, which increased by $83.0 million from December 31, 2023 (173% growth).
Total loans were $105.6 million as of December 31, 2024, which increased by $84.0 million from December 31, 2023 (378% growth).
Total deposits were $112.9 million as of December 31, 2024, which increased by $87.0 million from December 31, 2023 (337%).
Total liquidity remains high at $22.1 million, which equates to 16.9% of the Bank's total assets. The Bank also maintains contingent borrowing sources at $33.2 million which equates to 25.3% of total assets.
The loan portfolio average yield was 8.05% which contributed to a healthy net interest margin at 4.21% as of December 31, 2024.
The Bank maintains a reserve for credit losses of $1.214 million which equates to 1.15% of total loans. As of December 31, 2024, the Bank had zero dollars in delinquent, and non-performing loans.

The shareholders’ equity was at $15.2 million as of December 31, 2024, which was reduced by $4.2 million from December 31, 2023. The reduction was mainly due to the recording of $927k in credit loss provisions and $3.3 million in operating losses. The Bank’s tier 1 capital to average assets ratio was at 14.2% which is considered well-capitalized under the regulatory framework.

The Bank reported fourth quarter 2024 net loss of $989k and year-to-date 2024 net loss of $4.52 million. During the fourth quarter, the Bank increased its loan portfolio by $27.5 million. Due to the loan growth, the credit reserve provisions were increased by $371k during the fourth quarter 2024 compared to $117k in the third quarter 2024. Pre-credit provision loss during the fourth quarter 2024 was $618k compared to $823k during the third quarter 2024.

During the fourth quarter 2024 the total interest income was $1.86 million compared to $1.61 million recorded during the third quarter 2024, an increase of 16%. The Bank’s interest expense from the interest-bearing deposits was $847k for the fourth quarter 2024 compared to $716k for the third quarter 2024, an increase of 20%. 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 fourth quarter 2024 net interest income increased by $110k from the third quarter 2024, an increase of 12%.

In the fourth quarter 2024, the Bank sold SBA loans which netted $127k in gain on sale.

Total non-interest expenses for the fourth quarter 2024 were $1.735 million compared to $1.721 million incurred during the third quarter 2024, a slight increase of $14k. The Bank continues to manage its operating expenses tightly.

As noted above, the Bank’s liquidity remains above 16.9% 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 December 31, 2024, total contingent borrowing sources unused totaled $33 million or 25% of total assets outstanding.

“The Bank’s balance sheet continues to grow in a safe and sound manner. As we wrap up 2024, we are excited about 2025 in achieving profitability. Our Board, and the entire Beach Cities Commercial Bank team is laser focused in achieving our strategic goals and objectives,” commented H. Kent Falk, CEO.

“Our commercial and real estate lending is off to a great start. During the first quarter 2025, the Bank will be applying for the Preferred Lending Status (PLP) with the Small Business Administration (SBA). This will provide the Bank with a huge competitive advantage in offering SBA loans,” 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. The Bank’s stock is currently trading on the OTCQB platform under the “BCCB” stock symbol. For more information, please visit www.beachcitiescb.com/investor-relations.

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

Asset	As of Dec 31, 2024		As of Sept 30, 2024		Qtr. Growth $		Qtr. Growth %	As of Dec 31, 2023		Annual Growth $		Annual Growth %

Total Cash and Cash Equivalent	22,112,065		15,649,897		6,462,168		41%	21,981,078		130,986		1%

Debt Securities Available for Sale	984,026		974,284		9,742		1%	979,802		4,224		0%

Gross Loans	105,648,161		78,105,307		27,542,854		35%	22,080,937		83,567,224		378%
Allowance for Credit Losses	(1,214,000	)	(843,000	)	(371,000	)	(44%)	(301,000	)	(913,000	)	(303%)
Net Loans	104,434,161		77,262,307		27,171,854		35%	21,779,937		82,654,224		379%

Total Fixed Assets	189,608		205,627		(16,019	)	(8%)	267,726		(78,118	)	(29%)
Right of Use Assets	1,386,721		1,477,169		(90,448	)	(6%)	1,741,353		(354,632	)	(20%)
Prepaids	1,061,411		1,054,014		7,396		1%	1,101,451		(40,040	)	(4%)
Total Other Assets	617,725		418,483		199,242		48%	105,425		512,300		486%
Total Assets	130,785,716		97,041,781		33,743,935		35%	47,956,772		82,828,944		173%

Non-Interest Bearing Deposits	13,870,624		12,035,356		1,835,269		15%	6,672,688		7,197,936		108%
NOW Deposits	938,289		847,662		90,626		11%	182,997		755,292		413%
Money Market Deposits	48,539,815		30,948,601		17,591,214		57%	18,328,941		30,210,874		165%
Total Demand Deposits	63,348,728		43,831,619		19,517,109		45%	25,184,625		38,164,103		152%

Savings Accounts	5,058,477		45,736		5,012,740		10,960%	27,415		5,031,062		18,352%
Total CDs	44,484,698		31,946,029		12,538,669		39%	646,368		43,838,330		6,782%
Total Deposits	112,891,903		75,823,384		37,068,519		49%	25,858,408		87,033,495		337%

Other Borrowed < 1 Yr	-		2,300,000		(2,300,000	)	(100%)	-		-		0%
Total Other Liabilities	2,661,936		2,801,028		(139,092	)	(5%)	2,711,566		(49,630	)	(2%)
Total Liabilities	115,553,839		80,924,412		34,629,426		43%	28,569,974		86,983,865		304%

Common Stock	25,116,895		25,116,895		-		0%	25,561,120		(444,225	)	(2%)
Additional Paid in Capital	470,347		365,754		104,594		29%	(342,303	)	812,650		237%
Accumulated Deficit	(10,355,311	)	(9,366,752	)	(988,559	)	(11%)	(5,831,486	)	(4,523,826	)	(78%)
Accumulated other comprehensive loss	(54	)	1,472		(1,526	)	(104%)	(533	)	479		90%
Total Shareholders' Equity	15,231,877		16,117,369		(885,491	)	(5%)	19,386,799		(4,154,921	)	(21%)
Total Liabilities & Equity	130,785,716		97,041,781		33,743,935		35%	47,956,772		82,828,944		173%

BEACH CITIES COMMERCIAL BANK
UNAUDITED STATEMENT OF OPERATIONS


	For the Three Months Ended												For the Twelve Months Ended			For the Twelve Months Ended

	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2024			December 31, 2023
Interest Income:
Interest and fees on loans	$	1,634,021		$	1,414,644		$	1,039,820		$	603,552		$	4,692,037		$	336,181
Interest on debt securities		13,814			13,981			13,216			13,043			54,054			17,320
Interest on federal funds sold and other interest-bearing deposits		213,719			179,138			220,164			246,997			860,018			821,283
Total Interest Income		1,861,554			1,607,763			1,273,200			863,592			5,606,109			1,174,784

Interest Expense:
Interest on Deposits		847,141			716,112			557,882			283,838			2,404,973			348,700
Interest on Borrowings		12,941			-			-			-			12,941			-
Total Interest Expense		860,082			716,112			557,882			283,838			2,417,914			348,700

Net Interest Income		1,001,472			891,651			715,318			579,754			3,188,195			826,084

Provisions for Credit Losses		385,000			117,000			180,000			245,000			927,000			317,000
Net interest income after provisions for loan losses		616,472			774,651			535,318			334,754			2,261,195			509,084

Non-interest income:
Service charges, fees and other		3,036			6,362			4,117			5,147			18,662			1,706
Gain on sale of loans		127,399			-			-			-			127,399			-

Non-Interest expense:
Salaries and employee benefits		1,134,175			1,106,821			1,135,056			1,105,393			4,481,445			2,318,336
Occupancy and Equipment expenses		170,923			174,256			175,312			171,013			691,504			408,909
Organization Expenses		-			-			-			-			-			1,045,800
Data Processing		139,545			185,053			175,117			128,315			628,030			332,424
Professional and Legal		59,734			101,407			171,546			111,763			444,450			469,110
Other Expenses		231,090			153,761			147,836			151,366			684,053			294,946
Total Non-interest expense		1,735,467			1,721,298			1,804,867			1,667,850			6,929,482			4,869,525

Income (Loss) before taxes		(988,560	)		(940,285	)		(1,265,432	)		(1,327,949	)		(4,522,226	)		(4,358,735	)
Income tax expense		-			-			800			800			1,600			800
Net Income (Loss)	$	(988,560	)	$	(940,285	)	$	(1,266,232	)	$	(1,328,749	)	$	(4,523,826	)	$	(4,359,535	)

Earnings per share ("EPS"): Basic	$	(0.39	)	$	(0.37	)	$	(0.50	)	$	(0.52	)	$	(1.77	)	$	(1.71	)
Common Shares Outstanding		2,565,864			2,556,112			2,556,112			2,556,112			2,565,864			2,556,112