Beach Cities Commercial Bank Announces Second Quarter 2024 Financial Results

Beach Cities Commercial Bank, www.beachcitiescb.com (OTCQB: BCCB) (the "Bank"), today announced financial results for the quarter ended, June 30, 2024.

Beach Cities Commercial Bank (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 includes 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 $81.2 million as of June 30, 2024, which increased by $33.2 million from December 31, 2023 (69.3% growth).
• Total loans were $63.1 million as of June 30, 2024, which increased by $41.1 million from December 31, 2023 (185.9% growth).
• Total deposits were $61.3 million as of June 30, 2024, which increased by $35.5 million from December 31, 2023 (124.7%).
• Total liquidity remains very high at $14.3 million, which equates to 17.7% of the Bank's total assets. The Bank also maintains contingent borrowing sources at $25.9 million which equates to 32% of total assets.
• The loan portfolio average yield was at 8% which is contributing to a healthy net interest margin at 4.14% as of June 30, 2024.
• The Bank maintains a reserve for credit losses of $726,000 which equates to 1.15% of total loans. As of June 30, 2024, the Bank had Zero dollars in delinquent, and non-performing loans.

The Bank reported second quarter net loss of $1.27 million and year-to-date net loss of $2.59 million. As the Bank continued to grow its loan portfolio, the interest income increased, which decreased the Bank’s quarterly net loss. The second quarter’s net loss of $1.27 million decreased from the first quarter’s loss of $1.33 million by $62k or 4.7%.

During the second quarter, 2024, the total interest income was $1.27 million compared to $863,000 recorded during the first quarter, 2024, an increase of 47%. The Bank’s interest expense mainly from the interest-bearing deposits was $557,882 for the second quarter, 2024, compared to $283,838 for the first quarter, 2024, an increase of 96%. 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 second quarter, 2024, net interest income increased by $135,564 from the first quarter 2024, an increase of 23%.

Total non-interest expenses for the second quarter, 2024, were $1.8 million compared to $1.67 million incurred during the first quarter 2024, an increase of $137k (8.2%). The increases were in the data processing expense and professional/legal categories. This was the result of completing several technology-related projects using an outside consultant. As these buildout projects get fully implemented, the Bank’s reliance on outside consultants is expected to phase out in the third quarter, 2024.

As noted above, the Bank’s liquidity remains above 17% 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 June 30, 2024, total contingent borrowing sources unused totaled $25.9 million or 32% of total assets outstanding.

“The Bank completed its first full year in operations in June 2024, and during this period, has made tremendous progress in growing the Bank,” noted H. Kent Falk, CEO.

“During the first start-up quarter, the Bank invested its resources in implementing its technology platform, and as more products and services became live, we have seen incredible growth in lending and attracting good clients within the Southern California region. We have a great board of directors and a team of associates put together that continue to work diligently to offer excellent products and services to our clients. We are very excited about our future,”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. For more information, please visit www.beachcitiescb.com.

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 by use of 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 are not guaranteeing of 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.

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