Highlights Include:

  • Total assets, total deposits, investment securities, and net loans all increased significantly over prior-year levels
  • Net interest income increased 33.1% year-over-year, representing CBC’s highest nine-month net interest income in its history
  • Core earnings (excluding one-time recognition of PPP-related fees and fair value adjustments) expanded dramatically compared to the results for the prior year-to-date period, reflecting higher net interest income and payment processing fee income

IRVINE, CALIF. (December 22, 2022) – Commercial Bank of California (“CBC” or “Bank”), a BauerFinancial Four-Star Excellent Bank, today reported net income of $13.5 million for the first nine months of 2022, an increase from the $11.1 million recorded in the first nine months of 2021. For the third quarter of 2022, the Bank’s net income was $5.7 million, compared to net income of $3.5 million for the same period of 2021. Net interest income for the first nine months of 2022 increased by 33.1%, or $11.8 million, to $47.4 million from $35.6 million in the prior year-to-date period due to growth in earning assets and rising asset yields. Provisions for loan losses totaled $1.3 million for the first nine months of 2022, compared to $2.1 million for the comparable period a year ago, as credit quality and borrower performance continued to be strong thus far in 2022.

The improvement in CBC’s profitability is even more dramatic after adjusting for 2021’s substantial nonrecurring revenues and fair value adjustments from Paycheck Protection Program (“PPP”) loans. CBC’s after-tax “core earnings” absent PPP-related nonrecurring items were $14.1 million for the first nine months of 2022, compared to a core earnings figure of $7.7 million for the like period of 2021. As previously reported, during the first nine months of 2021, the Bank recognized over $5.6 million in origination fees relating to the PPP loans. The Bank also recorded an adjustment to income of $1.1 million during the same period of 2021 to measure the PPP loans at fair value at September 30, 2021. In contrast, CBC recognized no PPP origination fees in the first half of 2022, and recorded an adjustment to income of $746,000 to reflect the fair value of the remaining PPP loans at September 30, 2022.

At $1.9 billion, CBC’s total assets at September 30, 2022 were $165.4 million, or 9.4%, above the total assets of $1.7 billion on that date a year ago. Net loans rose to $1.3 billion at September 30, 2022, from $1.1 billion on September 30, 2021, an increase of $269.3 million, or 25.0%. Deposits stood at $1.7 billion at September 30, 2022 versus $1.6 billion on the same date in 2021, an increase of $154.3 million, or 9.7%. CBC’s payment processing division contributed 57% of the overall deposit increase, thanks to expanded marketing efforts and the continuing rise in contactless and online payments. The Bank’s regional offices generated the remaining 43% of the deposit growth over the past twelve months.

Total capital at September 30, 2022 was $140.4 million, down from $160.6 million at the same point in 2021. 2022’s Stated capital and retained earnings exceeded the comparable 2021 figures, but this growth was offset by unrealized losses on investment securities. CBC’s Tier 1 Leverage Ratio stood at 8.70% as of September 30, 2022, and all of the Bank’s capital ratios continue to exceed the current regulatory standards for well-capitalized institutions, the highest capital category established by banking regulators.

Ash Patel, President and Chief Executive Officer, commented: “Without question, the biggest cloud on the economic horizon is the Federal Reserve’s continued campaign of raising interest rates to bring inflation back under control. While the higher rates have led to a short-term improvement in CBC’s margins, the longer term impact on borrower confidence and credit quality is more difficult to predict. CBC remains prepared to work with our clients and prospects to help them navigate the current environment as well as whatever changes lie ahead. In doing so, we benefit from CBC’s determined actions in recent years to reduce our sensitivity to changing rates. As a result, CBC’s balance sheet remains well-positioned to deal with today’s rising rate environment as well as the changes that will inevitably emerge in the future.

He continued: “Given the context of of today’s changing economic environment, we remain pleased with CBC’s progress and operating results. Our profitability for the third quarter and initial nine months of 2022 were both among the strongest in our history, thanks to continued growth in earning assets, robust expansion of net interest income, and solid asset quality. As in earlier periods, our 2022 results are even more impressive when 2021’s net revenue from PPP loans is excluded from the prior-year comparison. Our after-tax “core earnings” excluding one-time PPP-related fees and fair value adjustments grew by 83% in the first nine months of 2022 compared to the same period of 2021. But while we are gratified by our progress, much work remains. CBC will continue its efforts to expand revenues and manage expenses so as to further increase our financial strength and maintain our positive momentum.”

Mr. Patel concluded: “CBC’s hallmark financial strength and flexibility remain the key to our success, enabling us to deal with today’s interest rate fluctuations while achieving excellent earnings performance. Thanks to our financial strength, CBC and its clients are well positioned to capitalize on the opportunities that are always a byproduct of periods of stress like those we are now experiencing. CBC best days still lie ahead, but our confidence in the future of CBC would not be possible without the firm foundation that you represent. We thank our clients, team members, and friends for their steadfast 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.


($000s omitted)September 30, 2022September 30, 2021
Cash and due from banks$ 12,795$ 71,937
Interest bearing deposits with banks42,562322,730
Fed funds sold 10,000
Cash and cash equivalents 55,357394,667
Investment securities437,738242,410
Less: allowance for loan and lease losses17,60517,294
Loans, net1,348,1761,078,907
Premises and equipment – net12,5412,019
Other real estate owned
Accrued interest receivable and other assets75,66846,125
Total assets$ 1,929,480$ 1,764,128
Non-interest bearing deposits$ 892,364$ 799,679
Interest bearing demand deposits112,67255,400
Savings and money market deposits697,785682,536
Time deposits40,55351,498
Total deposits1,743,3741,589,113
Accrued interest payable and other liabilities24,67714,393
Total liabilities1,789,0511,603,506
Stated capital120,821119,430
Retained earnings58,72240,210
Accumulated other comprehensive income (loss)-39,114980
Total capital140,429160,620
Total liabilities and capital$ 1,929,480$ 1,764,126


($000’s omitted)Nine Months Ended
September 30, 2022
Nine Months Ended
September 30, 2022
Interest on loans $ 44,986$ 36,842
Interest on deposits with banks 1,393458
Interest on investment securities 5,9361,848
Other interest income348229
Total interest income 52,66339,377
Interest on deposits5,2223,594
Interest on borrowings12146
Total interest expense5,2343,740
Net interest income47,42935,637
Provision for loan losses 1,2502,050
Net interest income after provision for loan losses 46,17933,587
Bank service charges and fees878699
Payment processing fee income10,3616,876
Other income2,0366,568
Other operating income13,27514,143
Salaries and related benefits27,69321,855
Occupancy expenses3,0383,201
Other expenses9,5867,616
Total other operating expenses40,31732,672
Income before provision for income taxes19,13715,058
Provision for income taxes5,5573,986
Net income$ 13,580$ 11,072

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.