Beach Cities Commercial Bank Reports First Quarterly Profit as Asset Growth and Deposit Mix Improvements Strengthen Financial Position in Q3 2025
Beach Cities Commercial Bank headquartered in Southern California and operating under the brand identity Beach Cities Commercial Bank, announced its financial results for the quarter ended September 30, 2025. The report reflects meaningful progress in profitability, disciplined expense management, and continued customer growth across the Bank’s commercial markets, even as it works to optimize its funding mix and navigate a competitive interest rate environment.
Beach Cities Commercial Bank is a relatively new institution in the regional banking landscape. Incorporated in California on April 11, 2022, the Bank officially opened its doors to customers on June 12, 2023, following the receipt of required regulatory approvals. Since entering the market, it has positioned itself as a relationship-driven commercial bank serving small and mid-sized businesses, professionals, and entrepreneurs across Southern California. The Bank operates full-service locations in Irvine and Encinitas, California, offering business and personal deposit accounts, specialized commercial lending programs, and a suite of modern digital banking and cash management solutions.
Banking Services and Market Focus
The Bank’s lending portfolio spans several core business segments, including:
- Commercial real estate lending for owner-occupied and investor properties
- Commercial and industrial (C&I) loans to fund growth, working capital, and equipment needs
- Guidance lines supporting bridge financing
- Revolving lines of credit
- Small Business Administration (SBA) 7(a) and 504 loans
- SBA Express and state-guaranteed financing programs
With a technology-forward operating platform and digital cash management tools, Beach Cities Commercial Bank aims to simplify treasury and operating efficiency for business clients, enabling them to concentrate on their operations rather than administrative banking tasks.
Financial Performance Highlights — Third Quarter 2025
For the quarter ended September 30, 2025, the Bank recorded net income of $14.5 thousand, marking its first quarterly profit. This compares to a net loss of $260.7 thousand in the second quarter of 2025, reflecting improved operational discipline and gradual maturation of earning assets.
Balance Sheet Growth and Composition
As of September 30, 2025:
| Metric | Q3 2025 Result | Change vs. Q3 2024 | Change vs. Q2 2025 |
|---|---|---|---|
| Total Assets | $156.5 million | +$59.5M (+61%) | -$5.9M (-4%) |
| Total Loans | $128.1 million | +$49.9M (+64%) | -$3.3M (-3%) |
| Total Deposits | $132.0 million | +$56.2M (+74%) | improved deposit mix |
Loan balances declined slightly from the prior quarter due to expected payoffs, which are common for commercial and bridge-based lending portfolios. Deposits, however, continue to grow, while the Bank strategically reduced reliance on high-cost institutional certificates of deposit (CDs) by $8.2 million, replacing a portion of this funding with $7.2 million in additional core money market balances during the quarter.
Liquidity and Capital Position
The Bank’s liquidity profile remains strong:
- $25.1 million in on-balance-sheet liquidity (16.06% of total assets)
- $21.4 million in unused borrowing capacity through the Federal Home Loan Bank of San Francisco and correspondent banks (13.7% of total assets)
Shareholders’ equity totaled $14.94 million as of September 30, 2025. Although it decreased by $488 thousand from December 31, 2024, due to cumulative operating losses incurred earlier in the year, equity stabilized quarter-over-quarter. The Bank’s Tier 1 capital to average assets ratio of 9.28% remains comfortably above regulatory “well-capitalized” thresholds.
Income Statement Performance
During the third quarter of 2025, total interest income increased to $2.80 million, up 1.4% from $2.77 million in the prior quarter. The Bank’s loan portfolio continued to yield strong returns, with an average yield of 7.66%, sustaining a net interest margin (NIM) of 3.44%.
Interest expense rose modestly quarter-over-quarter, driven by:
- Higher balances in short-term institutional CDs
- Increased borrowing utilization from the Federal Home Loan Bank of San Francisco
Interest expense on deposits totaled $1.25 million, compared to $1.21 million in Q2 2025. Borrowing interest expense increased to $55.7 thousand, up from $47.1 thousand in the prior quarter. Even with these increases, net interest income saw only a slight decrease of $8 thousand quarter-over-quarter.
The Bank is actively executing a deposit cost management strategy to shift away from expensive wholesale funding toward non-interest-bearing operating accounts and core commercial deposits.
Non-Interest Income and Operating Expenses
Loan sale gains amounted to $25 thousand in Q3 2025, down from $168 thousand in Q2 due to lower transactional sale activity in the quarter.
Total operating expenses were $1.54 million, representing a 17.9% reduction from $1.88 million in the second quarter. The decrease was driven by:
- Lower salary and benefits expense associated with open CEO and loan processor positions
- A decline in legal costs from $49 thousand to $14.5 thousand, reflecting the completion of one-time personnel-related matters from Q2
The Bank emphasized that expense discipline and process efficiency improvements will continue to be strategic priorities as it works toward sustained profitability.
Credit Quality and Risk Management
Credit performance remains exceptionally strong with:
- No delinquent loans
- No non-performing assets
- A reserve for credit losses of $1.272 million, equal to 0.99% of total loans
Chief Credit Officer Matt Blackmer highlighted the positive momentum in both loan production and portfolio health, stating, “The Bank’s asset quality continues to remain strong with no delinquent and non-performing loans on its balance sheet. Our quality deal flow for both loans and deposits looks strong.”
Leadership and Governance Updates
During the quarter, the Bank held its second annual shareholders’ meeting, achieving over 80% shareholder participation. Three new directors and one returning director were added to the Board. Chairperson Angela Bienert noted that the Bank is in the final stages of its search for a new Chief Executive Officer, with expectations of hiring during the fourth quarter.
Chief Financial Officer Najam Saiduddin described achieving the Bank’s first quarterly profit as a key milestone, stating, “Achieving sustained profitability is our main priority.”
About Beach Cities Commercial Bank
Beach Cities Commercial Bank is a full-service community and commercial banking institution serving businesses, professionals, and real estate owners across Southern California. The Bank offers a comprehensive suite of loan solutions and treasury services designed to meet the operating and financing needs of today’s business community. The Bank’s common stock trades on the OTCQB market under the symbol BCCB.
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