financial market news about silicon valley bank

Highlights Include:

  • Assets, deposits, investment securities, and loans all increased over prior-year levels
  • Net interest income increased 10.8% year-over-year, the highest six-month net interest income in Bank’s history
  • Liquidity and capital strength remain exemplary, providing the stability and flexibility to deal with changing times

IRVINE, Calif. (August 31, 2023) – Commercial Bank of California (“CBC” or “Bank”), a BauerFinancial Four-Star Excellent Bank, today reported net income of $6.3 million for the first half of 2023, compared to $7.9 million for the first six months of 2022. For the second quarter of 2023, the Bank’s net income was $3.4 million, versus net income of $4.3 million for the same period of 2022. Net interest income for the first six months of 2023 increased by 10.8%, or $3.2 million, to $32.7 million compared to $29.5 million in the prior year-to-date period reflecting growth in earning assets and rising asset yields. In addition, this gain was augmented by higher fee income from payment processing activities. Provisions for credit losses (including credit losses of $750 thousand related to investment securities) totaled $2.8 million in the first half of 2023, an increase from the $525 thousand recorded for 2022’s first half, but despite this increase credit quality and borrower performance has remained strong thus far in 2023.

CBC’s total assets at June 30, 2023 grew by $312.4 million, or 16.1%, to $2.3 billion, compared to total assets of $1.9 billion at this time a year ago.  Loans rose from $1.3 billion at June 30, 2022 to $1.6 billion at June 30, 2023, an increase of $276.5 million, or 21.4%.  Deposits increased to $1.9 billion at June 30, 2023 from $1.8 billion on the same date in 2022, an increase of $97.6 million, or 5.5%.  CBC’s deposit growth over the past twelve months was attributable to solid contributions from both retail deposits generated by its regional offices (including the specialty deposit group) and brokered deposits. Non-interest-bearing demand deposits represented 46.6% of total deposits at June 30, 2023, and the loan-to-deposit ratio was 84.0%.  Average non-interest-bearing demand deposits of the Bank’s payment processing division remained strong over the reporting period, reflecting effective marketing and the continuing rise in contactless and online payments. 

Total capital at June 30, 2023 was $157.4 million, an increase over the comparable 2022 figure of $145.9 million, with the retention of earnings from CBC’s continued profitability being partially offset by unrealized losses on investment securities.  CBC’s Tier 1 Leverage Ratio stood at 8.04% as of June 30, 2023, and the Bank’s capital ratios continue to exceed the current regulatory standards for well-capitalized institutions.

Ash Patel, President and Chief Executive Officer, commented: “Since our last report, relative stability has returned to the U.S. banking system, which is good news indeed.  As you will recall, a bank failure in the first quarter of 2023 led us to write off an investment security of the failed bank, but the improved conditions sharply reduce the likelihood of a similar recurrence.  While there will undoubtedly still be occasional bumps in the road, the industry turmoil of the first quarter of 2023 appears to be behind us.  Of course, the rising interest rates that spawned that turmoil are still with us, and continue to impact CBC, our clients, and the U.S. economy as a whole.  And the stubborn inflation that triggered the Federal Reserve’s interest rate hikes in the first place continues to have an effect on the cost of doing business for us all.”

He continued: “CBC’s profitability for the first six months of 2023 dipped compared to the same period a year ago, but given today’s economic backdrop, the reduction is understandable.  On the one hand, growth in earning assets and the current high interest rates resulted in record interest income.  Unfortunately, most of those gains were absorbed by higher deposit costs resulting from the rising interest rates.  Payments revenues continued to increase, but inflation contributed to higher salary and other non-interest expenses.  The net result of these factors was the modest decline in profitability that CBC experienced through the second quarter of 2023.  But as before, CBC remains fundamentally sound and successful, and we look for our profitability to rebound as we return to more normal conditions.  The factors that make CBC successful – our continued growth in earning assets, our expansion of net interest income, and the solid asset quality that has long been a CBC hallmark – remain fully in place.  Those attributes, combined with our ongoing efforts to expand revenues and manage expenses, will enable us to maintain our positive momentum and further increase our financial strength.”

Mr. Patel concluded: “The recent turmoil and its aftermath reinforces our long-held belief in the importance of relationships and prudent financial management.  CBC’s balance sheet remains well-positioned to deal with today’s economic environment and whatever changes emerge in the future, meaning that CBC and its clients are able to capitalize on the opportunities that are already beginning to emerge from the turmoil of the recent past.  It bears repeating that CBC’s bright future would not be possible without you.  We thank our clients, team members, and friends for their incomparable loyalty and support.”

About Commercial Bank of California

Commercial Bank of California is a full-service bank and diversified financial services company serving the business and professional communities of Los Angeles and Orange counties. Recognized as a BauerFinancial, Inc. “Four-Star Excellent Bank” for its financial strength and stability, CBC provides the financial expertise of a major bank while maintaining a commitment to personalized service for every CBC client.  More information about CBC’s custom solutions for your business is available at www.cbcal.com.


($000’s omitted)June 30, 2023June 30, 2022
Cash and due from banks$19,122$36,061
Interest bearing deposits with banks170,997136,370
Federal funds sold
Cash and cash equivalents190,119172,431
Investment securities422,106410,187
Less:  allowance for loan and lease losses18,91817,368
Loans, net1,550,9251,276,006
Premises and equipment – net10,64213,122
Other real estate owned
Accrued interest receivable and other assets79,48069,135
Total assets$2,253,272$1,940,881


($000’s omitted)June 30, 2023June 30, 2022
Non-interest bearing demand deposits$870,258$923,328
Interest bearing demand deposits340,996114,522
Savings and money market deposits554,250687,044
Time deposits103,53346,521
Total deposits1,869,0371,771,415
Accrued interest payable and other liabilities26,80823,550
Total liabilities$2,095,845$1,794,965
Stated capital121,465120,430
Retained earnings68,96853,013
Accumulated other comprehensive income-33,006-27,527
Total capital$157,427$145,916
Total liabilities and capital$2,253,272$1,940,881


($000’s omitted)Three Months Ended
June 30, 2023
Three Months Ended
June 30, 2022
Interest on loans$42,198$28,195
Interest on deposits with banks4,355584
Interest on investment securities5,6163,512
Other interest income335239
Total interest income52,50432,530
Interest on deposits15,9953,028
Interest on other borrowings3,8102
Total interest expense19,8053,030
Net interest income32,69929,500
Provision for credit losses2,755525
Net interest income after provision for credit losses29,94428,975
Bank service charges and fees573607
Payment processing fee income5,8205,295
Other income1,6492,658
Other operating income8,0428,560
Salaries and related benefits20,12317,763
Occupancy expenses2,0352,067
Other expenses7,0046,665
Total other operating expenses29,16226,495
Income before provision for income taxes8,82411,040
Provision for income taxes2,5323,168
Net income$6,292$7,872
This report includes “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.  All statements, other than statements of historical fact, included herein may constitute forward-looking statements.  Although Commercial Bank of California believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.  Important factors that could cause actual results to differ materially from Commercial Bank of California’s expectations include fluctuations in interest rates, inflation, government regulations, and economic conditions and competition in the geographic and business areas in which Commercial Bank of California conducts its operations.

Nicole Inal