Commercial Bank of California Reports Strong Earnings, Continued Growth in First Quarter of 2024
Highlights Include:
- Total assets, total deposits, and net loans all increased significantly as a result of the November 2024 merger with Community Bank of the Bay
- Net income rose sharply due to strengthening revenues and well-managed expenses
- Net interest income increased 58.9% year-over-year, driven by a significant expansion of net interest margin
IRVINE, CALIF. (June 26, 2025) – Commercial Bank of California (“CBC” or “Bank”), a BauerFinancial Four-Star Excellent Bank, today reported net income of $8.8 million for the first quarter of 2025, a substantial increase from the $5.1 million in earnings for the first quarter of 2024.
Reflecting the benefits of the 2024 acquisition of Community Bank of the Bay (“CBB”) and organic growth in earning assets over the prior year, net interest income for the first quarter of 2025 was $30.2 million, an increase of $11.2 million over the $19.0 million total for the comparable period in 2024. Net interest margin significantly expanded from 3.0% in the first quarter of 2024 to 3.5% in the first quarter of 2025. Provisions for credit losses increased from $406,000 in 2024’s first quarter (which included a $352,500 recovery from the prior write-off of the subordinated debt of a failed bank) to $826,000 during the first quarter of 2025. Other operating income rose to $5.0 million in the first quarter of 2025 from $4.0 million in 2024’s comparable period, largely due to a $575,000 gain recognized from selling securities, a $127,000 reduction in a nonmarketable SBIC equity investment value, and a $102,000 increase in payment processing fee income. Other operating expenses increased to $21.9 million in the first quarter of 2025 from a 2024 first quarter total of $15.3 million, an increase of $6.6 million, primarily driven by increases in headcount, branches, data processing and other expenditures as well as a core deposit intangible amortization resulting from the acquisition of CBB.
Over the twelve-month period ended March 31, 2025, CBC’s total assets grew by $1.2 billion, or 48.7%, to $3.6 billion compared to total assets of $2.4 billion at the same point in 2023. Much of this increase in total assets and component categories is attributable to the CBB merger. Net loans expanded from $1.7 billion at March 31, 2024 to $2.5 billion at March 31, 2025, an increase of $811 million or 47.0%. Deposits also increased, by $994 million or 49.8%, to $3.0 billion at March 31, 2025 from $2.0 billion on the comparable date in 2024, primarily driven once again by the impact of the 2024 merger. Borrowings were $299 million and $244 million at March 31, 2025 and 2024, respectively. The borrowing at March 31, 2025 included $100 million inherited from the CBB acquisition.
Total capital increased to $305.2 million at March 31, 2025 from $172.6 million a year earlier. The increase was principally due to the capital treatment of the CBB transaction, CBC’s holding company’s additional capital contributed in support of that transaction, and the retention of earnings from CBC’s continued profitability. CBC’s capital position also benefited from a reduction in the Bank’s Accumulated Other Comprehensive Loss (reflecting declines in the market value of Available-For-Sale securities) thanks to a slight decline in interest rates over the past year. The Bank’s capital ratios continue to be well above all applicable regulatory standards for well-capitalized status, the highest category of capital strength established by banking regulators. Returns on average assets and average equity improved from 0.8% and 12.0% in the first quarter of 2024 to 1.0% and 12.1% in the same period a year later, respectively.
Ash Patel, President and Chief Executive Officer, commented: “The first quarter of 2025 was our first full consolidated quarter of operation following our merger with Community Bank of the Bay. The benefits of that transaction are evident in the substantial balance sheet growth we enjoyed and the resulting increase in CBC’s net income. While the impact of the merger tends to overshadow other factors, an apples-to-apples analysis confirms that Commercial Bank of California began 2025 with a strong first quarter. Underlying the quarter’s success was a continuation of many of the factors that drove our past success: growth in earning assets, leading to continued expansion of net interest income, and solid asset quality.
“In early May of this year, the 2024 merger reached an important milestone with the completion of the IT System conversion that combined our two banks under a single, unified processing platform. Now we are truly One Bank For California. We thank our Northern California clients for their patience during the process, and the dedicated members of the CBC team who worked tirelessly to address the needs of our valued clients.”
Mr. Patel concluded: “As we move forward, CBC will continue its ongoing efforts to expand revenues and manage expenses to further bolster our hallmark financial strength while maintaining earnings growth. CBC’s balance sheet is stronger than ever, and well-positioned to deal with any uncertainties and opportunities that emerge now and in the future. We look forward to delivering our proven banking expertise to new and existing clients in California’s two largest banking markets. But CBC’s current success and bright future only exist because of a sturdy foundation of loyal clients and dedicated team members. I thank you all for your incredible and invaluable loyalty and support.”
About Commercial Bank of California
Commercial Bank of California is a full-service bank and diversified financial services company serving businesses, professionals, and communities in the greater Los Angeles and San Francisco Bay areas of California. 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 banking needs is available at www.cbcal.com.
STATEMENTS OF CONDITION (UNAUDITED)
| ($000’s omitted) | March 31, 2025 | March 31, 2024 | ||
|---|---|---|---|---|
| ASSETS: | ||||
| Cash and due from banks | $ | 22,243 | $ | 17,361 |
| Interest bearing deposits with banks | 424,243 | 174,348 | ||
| Federal funds sold | 6,290 | – | ||
| Cash and cash equivalents | 452,776 | 191,709 | ||
| Investment securities | 494,460 | 427,942 | ||
| Loans | 2,566,620 | 1,744,185 | ||
| Less: allowance for loan and lease losses | 30,615 | 19,251 | ||
| Loans, net | 2,536,005 | 1,724,934 | ||
| Premises and equipment – net | 12,952 | 8,611 | ||
| Other real estate owned | – | – | ||
| Accrued interest receivable and other assets | 129,493 | 85,494 | ||
| Total assets | $ | 3,625,686 | $ | 2,438,690 |
LIABILITIES AND CAPITAL:
| ($000’s omitted) | March 31, 2025 | March 31, 2024 | ||
|---|---|---|---|---|
| Non-interest bearing demand deposits | $ | 1,122,790 | $ | 893,019 |
| Interest bearing demand deposits | 369,741 | 230,253 | ||
| Savings and money market deposits | 1,087,127 | 630,721 | ||
| Time deposits | 411,581 | 243,275 | ||
| Total deposits | 2,991,239 | 1,997,268 | ||
| Fed funds purchased | – | – | ||
| Other borrowings | 299,484 | 244,978 | ||
| Accrued interest payable and other liabilities | 29,799 | 23,839 | ||
| Total liabilities | $ | 3,320,522 | $ | 2,266,085 |
| Stated capital | 228,865 | 122,707 | ||
| Retained earnings | 100,868 | 82,920 | ||
| Accumulated other comprehensive income | –24,570 | -33,022 | ||
| Total capital | $ | 305,163 | $ | 172,605 |
| Total liabilities and capital | $ | 3,625,685 | $ | 2,438,690 |
STATEMENTS OF OPERATIONS (UNAUDITED)
| ($000’s omitted) | 3 Months Ended March 31, 2025 |
3 Months Ended March 31, 2024 |
||
|---|---|---|---|---|
| Interest on loans | $ | 40,098 | $ | 26,404 |
| Interest on deposits with banks | 3,741 | 3,933 | ||
| Interest on investment securities | 4,483 | 3,237 | ||
| Other interest income | 562 | 279 | ||
| Total interest income | 48,884 | 33,853 | ||
| Interest on deposits | 15,316 | 10,191 | ||
| Interest on other borrowings | 3,402 | 4,692 | ||
| Total interest expense | 18,718 | 14,883 | ||
| Net interest income | 30,166 | 18,970 | ||
| Provision for credit losses | 826 | 406 | ||
| Net interest income after provision for credit losses | 29,340 | 18,564 | ||
| Bank service charges and fees | 324 | 299 | ||
| Payment processing fee income | 2,494 | 3,217 | ||
| Other income | 2,188 | 503 | ||
| Other operating income | 5,006 | 4,019 | ||
| Salaries and related benefits | 13,519 | 10,496 | ||
| Occupancy expenses | 1,431 | 964 | ||
| Other expenses | 6,987 | 3,809 | ||
| Total other operating expenses | 21,937 | 15,269 | ||
| Income before provision for income taxes | 12,409 | 7,314 | ||
| Provision for income taxes | 3,577 | 2,193 | ||
| Net income | $ | 8,832 | $ | 5,121 |
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.
Commercial Bank of California
Member FDIC, Equal Housing Lender
