financial market news about silicon valley bank

Highlights Include:

  • Total assets, total deposits, investment securities, and loans all increased significantly over prior-year levels
  • 2022 net income increased by 11.5% year-over-year, the highest net income to date
  • Net interest income increased 33.4% year-over-year, representing CBC’s highest yearly net interest income in its history
  • Provision expense increased to keep pace with loan growth; all credit quality metrics remained strong

IRVINE, CALIF. (March 29, 2023) – Commercial Bank of California (“CBC” or “Bank”) today reported net income of $17.9 million for the full year 2022, compared to the $16.0 million earned in 2021.  The full-year results for 2022 represented a return on average assets (“ROA”) of 0.9% and a return on average equity (“ROE”) of 11.6%, compared with 0.9% and 10.7%, respectively, in 2021.

Net interest income increased by $16.2 million in 2022 compared to 2021, reflecting continued growth in earning assets over the prior year’s levels.  Net interest income was augmented by higher fee income recognized from payment processing activities and service charges on deposit accounts.  Other income fell in 2022 primarily due to the absence of 2021’s one time recognition of fees and fair value adjustment on Paycheck Protection Program loans made in response to the COVID-19 pandemic.  To keep pace with loan growth, provisions for loan losses were $3.0 million in 2022 versus $2.1 million in 2021. 

At December 31, 2022, total assets were $2.1 billion, compared to $2.0 billion at this point a year ago.  The Bank continued to record significant growth in loans, which rose to $1.5 billion at December 31, 2022 from a 2021 total of $1.2 billion.  Deposits also enjoyed meaningful growth, rising from $1.7 billion at December 31, 2021 to $1.8 billion at the end of December 2022, representing a year-over-year growth rate of 5.3%. The growth in deposits was due in part to CBC’s payment processing division, which grew thanks to increasing contactless and online payments activity.  The mix of non-interest-bearing demand deposits remained strong at 48.8% of total deposits at December 31, 2022 and the loan-to-deposit ratio was 81.7%.

Total equity capital at December 31, 2022 was $148.4 million, versus the prior year-end equity capital of $165.0 million.  CBC’s continued profitable operation contributed to capital, with the year-over-year decrease primarily reflecting a decline in the valuation of the Bank’s available-for-sale (AFS) securities portfolio resulting from increases in interest rates during 2022.  Excluding the unrealized after-tax loss included in accumulated other comprehensive income, total equity capital at December 31, 2022 and 2021 was $183.6 million and $165.6 million, respectively. The book value of held-to-maturity (HTM) investment securities at December 31, 2022 was $60.7 million, representing 12.3% of the total book value of investment securities, with an unrealized loss of $1.8 million.

At December 31, 2022, the Bank’s Tier 1 Leverage Ratio, Tier-1 Risk-Based Ratio, and Total Risk-Based Capital Ratio were 8.40%, 10.42%, and 11.55%, respectively.  The Bank’s capital ratios continue to reflect its sound capital position; at the end of 2022 all ratios exceeded the current well-capitalized standards, the highest category of capital strength established by banking regulators.

Ash Patel, President and Chief Executive Officer, commented: “In light of recent events in the banking system, the importance of strong relationships is clearer than ever.  Our clients know that CBC has always been there to provide support during trying times, and the same holds true today.  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 long-standing practice of maintaining high liquidity as a hedge against possible deposit outflows, including the maintenance of credit facilities with the Federal Reserve, Federal Home Loan Bank, and other contingent funding sources should they ever prove necessary.  As a result, CBC’s balance sheet remains well-positioned to deal with today’s economic environment as well as the changes that will inevitably emerge in the future.  CBC has always represented a safe haven in troubling times, and that has never been more true than today.  That’s one of the advantages of being a privately-held financial institution.  We don’t have to sacrifice safety for profitability.”

He continued:  “Against this backdrop, we are pleased with CBC’s progress and operating results.  Our 2022 profitability ranks as the strongest in our history, thanks to continued growth in earning assets, robust expansion of net interest income, and solid asset quality.  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 resiliance and strong client relationships remain key to our success, enabling us to deal with today’s business environment 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.  Our confidence in the future of CBC is undiminished, but would not be possible without the firm foundation that you represent.  We thank our clients, team members, and friends for their unflinching 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)December 31, 2022December 31, 2021
Cash and due from banks$18,010$72,151
Interest bearing deposits with banks142,049487,314
Federal funds sold
Cash and cash equivalents160,059559,465
Investment securities433,135253,863
Less:  allowance for loan and lease losses18,05217,300
Loans, net1,448,7431,159,265
Premises and equipment – net12,1062,136
Other real estate owned
Accrued interest receivable and other assets75,79853,812
Total assets$2,129,841$2,028,541


($000’s omitted)December 31, 2022December 31, 2021
Non-interest bearing demand deposits876,725852,619
Interest bearing demand deposits105,88650,692
Savings and money market deposits681,173753,948
Time deposits131,50647,501
Total deposits1,795,2901,704,760
Other borrowings160,000140,000
Accrued interest payable and other liabilities26,14518,782
Total liabilities$1,981,435$1,863,542
Stated capital120,558120,430
Retained earnings62,99545,142
Accumulated other comprehensive income-35,147-573
Total capital$148,406$164,999
Total liabilities and capital$2,129,841$2,028,541


($000’s omitted)12 Months Ended
December 31, 2022
12 Months Ended
December 31, 2021
Interest on loans$64,160$49,843
Interest on deposits with banks2,554678
Interest on investment securities8,7832,790
Other interest income505346
Total interest income76,00253,657
Interest on deposits9,7734,930
Interest on other borrowings1,444146
Total interest expense11,2175,076
Net interest income64,78548,581
Provision for loan losses3,0002,050
Net interest income after provision for loan losses61,78546,531
Bank service charges and fees1,1701,022
Payment processing fee income13,8579,342
Other income2,3088,474
Other operating income17,33518,838
Salaries and related benefits36,74328,811
Occupancy expenses4,0064,229
Other expenses13,08810,357
Total other operating expenses53,83743,397
Income before provision for income taxes25,28321,972
Provision for income taxes7,4315,968
Net income$17,852$16,004

Nicole Inal