California Bancorp · NASDAQ:BCAL
California Bancorp — Q2 2023 Earnings Presentation
23 slides from California Bancorp's earnings presentation, Jul 27, 2023
Slide 1: Investor Presentation Q2 2023
Exhibit 99.2 INVESTOR PRESENTATION Q2 2023 Steven E. Shelton Thomas A. Sa CEO President, CFO & COO
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS During the course of the presentation and any transcript that may result, written or otherwise, California BanCorp (the “Company”) may make projections or other forward-looking statements regarding a variety of items. Such forward-looking statements are based upon current
Slide 3: Overview of California BanCorp
OVERVIEW OF CALIFORNIA BANCORP FOCUSED REGIONAL OFFICE FOOTPRINT COMPANY OVERVIEW ► Established in 2007 as a relationship focused commercial business bank serving Northern California with $2.0 billion in assets and a (1) market capitalization of ~$126 million ► Majority of executive management joine
Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS Branch light, commercial Experienced management focused business bank with team and seasoned C&I Proven organic and strong middle market relationship teams with strong acquisitive growth story relationships throughout ties to the local markets Northern California Strong earning
Slide 5: 2nd Quarter 2023 Highlights
nd 2 QUARTER 2023 HIGHLIGHTS § Net income of $5.4 million Continued Strong § Diluted EPS of $0.65 Financial Performance § ROA of 1.10%, ROE of 11.91% and NIM of 3.93% § Total deposits increased from end of prior quarter Stable Deposit Base § Noninterest-bearing deposits remain above 40% of total dep
Slide 6: Branch Light, Commercial Focused Business Bank
BRANCH LIGHT, COMMERCIAL FOCUSED BUSINESS BANK IMPRESSIVE LOAN GROWTH BUSINESS MODEL OVERVIEW $2,000 2015 – Q2’23 CAGR ► Middle market commercial banking focus Total gross loans = 16% $1,500 $2 • Privately owned companies with $30 million - $300 million in Gross loans (ex. PPP) = 16% $73 annual reve
Slide 7: Taking Share from National/Regional Banks
TAKING SHARE FROM NATIONAL/REGIONAL BANKS PRODUCT AND SERVICE DIFFERENTIATION OUR “TYPICAL CLIENT” Combine Capabilities of a Big Bank with the $8 M ~$75 M $3 M High Service Levels of a Community Bank revolving line in annual equipment with $3 M average ► Attract top talent with deep market experienc
Slide 8: Experienced Management Team
EXPERIENCED MANAGEMENT TEAM ► Previously served as an Executive Vice President of the Bank primarily responsible for managing production since the Bank’s founding in 2007 Years at CALB: 16 Steven E. Shelton, Age : 58 ► Served for thirteen years in various executive management positions including Pre
Slide 9: Demonstrated Growth Track Record
DEMONSTRATED GROWTH TRACK RECORD SUCCESSFUL EXPANSION THROUGHOUT NORTHERN CALIFORNIA Launched Sponsor 2015 – Completed Holding Company formed Finance in February Completed $25.0 $4 million private placement expansion into Q2’23 Asset 2020 in June 2017 million private offering at $12.86 per share to
Slide 10: Strong and Growing Core Deposit Base
STRONG AND GROWING CORE DEPOSIT BASE DEPOSIT COMPOSITION HISTORICAL DEPOSIT COMPOSITION Time deposits $1,792 $1,738 $1,800 19% 2015 –Q2’23 CAGR $1,680 Demand DDA: 17.2% deposits $1,532 $1,600 Total Deposits: 16.8% 43% $1,400 $1,200 Money market $988 & savings $1,000 deposits $874 $812 $742 Interest
Slide 11: Deposit Base Characteristics
DEPOSIT BASE CHARACTERISTICS ►Granular, well diversified deposit base ►No meaningful industry concentrations ►No venture capital or crypto-related deposits ►High percentage of deposits related to operating accounts and credit facilities creates sticky deposit base ►Strong deposit pipeline centered i
Slide 12: Diversified Commercial Loan Portfolio
DIVERSIFIED COMMERCIAL LOAN PORTFOLIO (1) LOAN PORTFOLIO COMPOSITION HISTORICAL LOAN COMPOSITION 2017 – Q2’23 CAGR Other 3% $1,584 $1,593 $1,600 C&I: 12.3% $1,377 $1,369 Construction 4% Total Loans: 15.0% $950 $1,100 $847 $733 $635 $622 $474 $415 $600 $390 Commercial 39% $341 $329 CRE - Non-Owner 40
Slide 13: New Loan Production in 2Q23
NEW LOAN PRODUCTION IN 2Q23 (1) BOOKING NEW LOANS AT ATTRACTIVE RATES ► Funded new loans with balances of $43 million in 2Q23 compared to $42 million in 1Q23 and $167 million in 2Q22 ► Weighted average rate on newly funded loans was 8.41% in 1Q23 compared to 7.72% in 1Q23 and 4.57% in 2Q22 ► 2Q23 ne
Slide 14: CRE Loan Portfolio – Investor CRE
CRE LOAN PORTFOLIO – INVESTOR CRE CONSERVATIVELY UNDERWRITTEN PORTFOLIO WITH AVERAGE LTV OF 48.9% (1) (1) INVESTOR CRE BY PROPERTY TYPE INVESTOR CRE BY GEOGRAPHIC BREAKDOWN 4% 1% 15% Mobile Home Land Out of State Park 6% Multi-Family 32% 6% Retail Other 9% Other California 48% Bay Area 19% Industria
Slide 15: CRE Loan Portfolio – Investor CRE: Office
CRE LOAN PORTFOLIO – INVESTOR CRE: OFFICE (1) CRE PORTFOLIO COMPOSITION INVESTOR CRE OFFICE COMPOSITION CRE Office Investor - $98 million (6% of Total Loans) Medical/Dental - $34 million (2% of Total Loans) CRE Office OO - $73 million (5% of Total Loans) Office - $64 million (4% of Total Loans) CRE
Slide 16: Commercial Loan Portfolio
COMMERCIAL LOAN PORTFOLIO WELL-DIVERSIFIED PORTFOLIO WITH FOCUS ON STRONG BORROWERS IN RECESSION RESISTANT INDUSTRIES (1) (2) COMMERCIAL LOAN PORTFOLIO COMMERCIAL – SPONSOR FINANCE 11% 9% 4% 6% Home Health Care Other Schools and 26% 4% Misc. Services Instruction Retail All Others <4% Real Estate & 8
Slide 17: Asset Quality Trends
ASSET QUALITY TRENDS (1) (1) RESERVES / LOANS NET CHARGE-OFFS (RECOVERIES) ($000S) $2,500 1.4% $2,000 1.2% 1.28% 1.27% $2,052 1.17% $1,872 1.0% $1,500 1.07% 1.03% 1.02% 0.99% 0.8% $851 $1,000 0.6% $500 $247 $618 0.4% $34 $0 0.2% -$65 -$500 0.0% 2017 2018 2019 2020 2021 2022 YTD 2023 2017 2018 2019 2
Slide 18: Historical Profitability Trends
HISTORICAL PROFITABILITY TRENDS ROAA ROATCE $2.51 1.2% 15% $2.50 1.11% 1.0% $2.00 13.76% 1.08% $1.61 12% 12.72% $1.19 $1.50 0.8% $0.85 $0.86 9% $1.00 $1.29 9.78% $0.53 9.37% 0.6% 0.94% 0.68% $0.50 0.69% 0.66% 7.71% 6% 0.4% $0.00 5.87% 0.2% 0.25% -$0.50 3% 3.41% 0.0% -$1.00 0% 2017 2018 2019 2020 202
Slide 19: Disciplined Expense Management Driving Greater Operating Leverage
Disciplined Expense Management Driving Greater Operating Leverage ► Investment phase in 2018-2019 (talent, product development, and technology) built highly leverageable infrastructure and strong commercial banking team ► Following investment phase, revenue growth rate has been well in excess of exp
Slide 20: Capital Ratios – Bank Only
CAPITAL RATIOS – BANK ONLY TCE / TA LEVERAGE RATIO 16% 16% 12% 12% 11.42% 11.31% 11.32% 10.44% 10.95% 10.23% 10.42% 10.35% 9.51% 8% 8% 9.36% 8.02% 7.20% 4% 4% 0% 0% 2018 2019 2020 2021 2022 2Q2023 2018 2019 2020 2021 2022 2Q2023 TOTAL CAPITAL RATIO TIER 1 RATIO 16% 16% 12% 12% 12.52% 12.46% 12.32% 1
Slide 21: 2023 Outlook and Priorities
2023 OUTLOOK AND PRIORITIES CONSERVATIVE Remain conservative in new loan production until economic conditions LOAN PRODUCTION improve with near-term focus primarily on high quality C&I loans CONTINUE GROWING Capitalize on growing reputation and increased scale to continue DEPOSIT MARKET SHARE adding
Slide 22: Summary
SUMMARY Northern California Strong commercial loan Experienced management commercial business bank portfolio with corresponding team and seasoned C&I with a disciplined approach commercial relationship relationship managers to credit underwriting deposits Keen focus on relationship Proven organic an
Slide 23: Please send questions to ir@bankcbc.com
Please send questions to ir@bankcbc.com Or Call 510.457.3751 CaliforniaBankofCommerce.com