California Bancorp · NASDAQ:BCAL
California Bancorp — Merger or Acquisition (July 2024)
34 slides from California Bancorp's merger presentation, Jul 29, 2024
Slide 1: Investor Presentation
Investor Presentation June 30, 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This communication may contain certain forward-looking statements, including but not limited to certain plans, expectations, projections and statements about the benefits of the proposed merger (the “Merger”) of Southern
Slide 3: Company Overview
Slide 4: Investment Highlights
Investment Highlights AW Market and Footprint ® Southern California is the world’s 14** largest economy" &. Bank's footprint covers one of the best small business banking markets in the U.S. (one million small to medium-sized businesses in San Diego, Orange, Los Angeles, Ventura, Imperial and Kern c
Slide 5: Southern California Bancorp
Southern California Bancorp At a Glance Branch Footprint San Diego Headquarters Bank Acquisitions? ectt dae oly 15,2004 rer thepast 30 yeu ‘eophnes9.2086 2 ‘Cempound annual routh ot [CAGR) over veearpetiod ended June, 2024, SOUTHERN BANK oF ‘CALIFORNIA SOUTHERN BANCORP ‘CALIFORNIA,
Slide 6: Attractive Market Position
Attractive Market Position San Bernardino Riverside California is the Largest Banking Market in the United States California GOP orld 2023 Population small Businesses BCAUs Footprint is in the Largest Banking Market in California omy in the 7 Small Businesses hind ahead of Indo Banks in SoCal Median
Slide 7: High Growth Franchise
High Growth Franchise October 2021 Acquired Bank of Santa Clarita ($425MM Assets) January 2024 Announced definitive merger ‘agreement with California Bancorp % November 2020 958 Since 2019, total assets have grown David Ralnenioined BCA organically and through strategic ‘May 2020 rac ei e Acquired C
Slide 8: Experienced Leadership Team
Experienced Leadership Team David Rich Thomas Jean Sam Rainer Hernandez Dolan Carandang Kunianski Cheirnan and CEO of Southern President of Southern Chief Operating Officer of Chit Financial Oficerof Bank Chie Banking Ofcer of Bankof California Bancorp and Bank of California Bancorp and Bank of ‘Sou
Slide 9: Our Vision for a Premier Banking Franchise
Our Vision for a Premier Banking Franchise Strong Leadership & Provide expertise in commercial and industrial, and commercial real estate lending to small and middle-market businesses Experienced teams living and working in their respective Southern California communities, and actively involved in l
Slide 10: Financial Highlights
Slide 11: Q2 2024 Results
Q2 2024 Results Financial Results Key Metrics (for the quarter ended June 30, 20 (for the quarter ended June $0.2 Million 0.03% Net Income Return on Average Assets $0.01 ‘0, Diluted Earnings Per 0.26% Share Return on Average Common Equity $3.2 Million 3.94% Pre-tax, Pre-provision = Income (PTPP)! Ne
Slide 12: Q2 2024 Results Continued
Q2 2024 Results Continued Strong Balance Sheet Credit Quality Metrics (At June 30, 2024) (At Juni 2024) $2.29 Billion 0.20% Total Assets Non-performing Assets/Total Assets $1.88 Billion 0.25% Total Loans? Non-performing Loans/Total Loans Held § for Investment 1.94 Billion e Total Deposits 1.31% Allo
Slide 13: 2023 Results
2023 Results Financial Results Key Metrics {for the year ended Decembs (for the year ended Decemb $25.9 Million 1.12% Net Income Return on Average Assets $1.39 5 Diluted Earnings Per 9.48% Share Return on Average Common Equity $37.8 Million 4.33% Pre-tax, Pre-provision = = Income ! Net Interest Marg
Slide 14: Net Interest Margin
Net Interest Margin Yield on Earning Assets, forthree months ended June 20, $1,882,845 $29,057 123,906 1,229 53,754 306 47,417 638 19,062 261 17,001, 358, Total loans Taxable debt securities Tax-exernpt debt securities! Deposits in other financial institutions Fed fund sold/resale agreements Restric
Slide 15: Negligible Impact of Unrealized Losses on Capital
Negligible Impact of Unrealized Losses on Capital = Total net unrealized losses after-tax were 3.27% of CET1 Capital as of June 30, 2024. = Even if interest rates rise another 300 bps, the Bank's capital ratios remain above Well-Capitalized guidelines. hn Thousands P2024] ‘Available for Sale (AFS) U
Slide 16: Debt Securities, AOCI and Tangible Common Equity
Pa v2 Debt Securities, AOCI* and Tangible Common Equit As of June 30, 2024 AFS Securities (fair value) 71.8% of portfolio, 3.7% yield 0% HTM Securities (book value) 28.2% of portfolio, 2.4% yield? a $265.0 $260.0 $255.0 $250.0 $245.0 $240.0 $235.0 $230.0 $225.0 $220.0 Sinmilions 2023 3023 4023 1024
Slide 17: Low-Cost Core Deposits
Low-Cost Core Deposits Deposit Mix and Growth Cost of Deposits for at quarter ended: the quarter ended: 00%, % = 250% % 20% cs sone ax 0% om 1.50% 0% ow oe oom 050% as so 2% a om 2023 3073 aan 1024 rea son ‘etal Hal Danete oe s2300 S200 3m 35% $1,900 10% 31300 $1,700 o% $1800 sana 9/30/2023 sap 3/31
Slide 18: Significant Access to Liquidity & Funding Capacity
Significant Access to Liquidity & Funding Capacity =a “een mt AS of 6/80/2024 (Sinmitions) Cash $ 4048 . s 404.8 = On-Balance Sheet Cash = $104.8 million AFS Seourties 1236 F 1236 = Total Borrowing Capacity = $699.3 million FHLB 4848 107.0 3778 © Total Available Borrowing Capacity = $592.3 million F
Slide 19: Allowance for Credit Losses
Allowance for Credit Losses as of and for the Three Months Ended June 30, 2024 cu) 1.18% NN a Mae 31, 2024 (ShA570) > The $2.9 million provision for credit losses for the second quarter of 2024 included a $3.0 provision for credit losses for loans held for investment and a $97 thousand negative prov
Slide 20: Loans Held for Investment by Risk Category
Loans Held for Investment by Risk Category Special Pass Mention Substandard Doubtful Loss __Nonaccrual Total (Sin Thousands; June 30, 2024 Construction and Land Development $ 14371 $ - $ 10701 $ - $ - $ - $205,072 Real Estate - Other: 1-4Family Residential 153,579 a9 2,895 - - - 157,323 Multifamily
Slide 21: Diverse Loan Portfolio
Diverse Loan Portfolio Total Loan Portfolio 4, a of June 30, 2024 Total CRE ° by Location 4, as of June 30, 2024 Commercially Focused | Relationship Based California - Ventura 6% Other'd.1% California - . Out of State Riverside . 6% Multifamily 1% 10.0%. California. Others 11% CRE - Office eins Tota
Slide 22: Loan Portfolio
Loan Portfolio Total Loans ! ($MM), $2,000 at the period ended 1,200 1,600 $1400 1,200 $1,000 208 2020 4028 124 202 Yield on Loans, for the quarter ended 650% 6.08% 6.21% 97% too, 591% 550% 5.00% 450% 2023 3023 4023 1024 2024 [contractual Maturity Summary for the next3 years as of June 30, 2024 Cons
Slide 23: Low LTV Commercial Real Estate Loans
Low LTV Commercial Real Estate Loans Total CRE" Distribution by LTV, aso 202: CRE NOO vs CRE OO by Property Type as of June 20, 2024 DesKIg > 7m 70% 10% 100% Total CRE loans or IN 20% $1.04 billion _ = 6396 CRE NOO, > = 37%CRE OO 10% 70% No past due ‘50% to 55% loans 41% = - 60% No sn maton toons Ba
Slide 24: CRE Office and Medical/Dental Office Loans
CRE Office and Medical/Dental Office Loans CRE Office Distribution by LTV?, of June 30, 2024 CRE Office and Medical/Dental Office by Location ?, as of June 30, 2 Loan Size No. of ‘Average Loan California- Out of State ($ in millions) loans Balance? size Weighted Avg. LTV oe 13% < $05 35 $10.2 $0.3 3
Slide 25: Multifamily Loans
Multifamily Loans Multifamily Loans Distribution by LTV 3, as of June 30, 2024 Multifamily Loans by Location 3, as of June 30, 2024 Out of state, No. of Average Loan Weighted 0.6% Loans _Balance2 Size Avg. LTV 24 $6.1 $0.3 34%. 28 $328 $1.2 49% 24 $79.2 $3.3 58%. California - >$5- $10 4 $28.5 $7.1 5
Slide 26: Credit Profile
Credit Profile NPAs / Assets 000% At quarter end: 0.800% 0.55% 0.600% ‘Nonacerual Loans 1-4 Family $ = $ $- $ 0.400% CRE & Multifamily 114272 13,004 61534696 9q90 a6 Construction - - - - - Consumer - - - : - 0.000% Commercial 39 : - = 202330234023 10242024 Total Nonacerial $40 Sida 91300436153 $4686
Slide 27: Noninterest Expense and Total Revenue
$250 $200 $150 $100 $50 $00 SOUTHERN ‘CALIFORNIA BANCORP Noninterest Expense and Total Revenue Total Revenue? (SMM) for the quarter ended: Noninterest Expense (SMM) for the quarter ended: $14.6 $153 200% 300% 2023 3023 4023 1024 2024 a Nerinterest expense ‘ms Merger expense tency rato = = Adjusted e
Slide 28: Income Metrics
Income Metrics Net Income? (SMM) Tangible Book Value Per Share (TBVPS)** ‘$80 1.18% 1.12% 1.25% ‘sano 11.60% 10.92% 7.20% 7.91% s60 075% _-0.86% 100% g1350 a ce 4 $49 0.2 $13.08 ze ) oho : 0.03% 025% $1250 s00 Se a0 2023 3023 023 1024 2024 aad 3003 2008 sm Netincome now anne Pre-Tax Pre-Provision In
Slide 29: Strong Capital Base
Strong Capital Base 3K 113K og 131K 133% um osx 103% (103% «105K 104 ax aK D8 TH TTL zor. 302 2003 3023-423 1242024 ae ror 32 402 2003 323423 ta 204 Total Risk-Based Capital Ratio”? 14308 soe 12% oq SK «LIK 117% 12.03% 126% 130% 33% 15% ex 120% OE ros% lil TH zor. 3am 4ce2 1320733003 2022 3@2 a2 102
Slide 30: Appendix
Appendix
Slide 31: Non-GAAP Reconciliation
Non-GAAP Reconciliation Pre-tax, pre-provision income and adjusted pre-tax, pre-provision income are non-U.S. GAAP financial measures derived from U.S. GAAP-based amounts. We calculate pre-tax, pre- provision income by excluding income tax and provision for credit losses from net income. We calculat
Slide 32: Non-GAAP Reconciliation
Non-GAAP Reconciliation Efficiency ratio and adjusted efficiency ratio are non-US. GAAP financial measures derived from U.S. GAAP-based amounts, The efficiency ratio represents the ratio of noninterest expense to the sum of net interest income and total noninterest income. The adjusted efficiency ra
Slide 33: Non-GAAP Reconciliation
Non-GAAP Reconciliation Tangible comman equity to tangible assets (the "tangible common equity ratio") and tangible book value per share are non-U.S. GAAP financtal measures derived from US. GAAP-based amounts. We calculate the tangible common equity ratio by excluding the balance of intangible asse
Slide 34: Non-GAAP Reconciliation
Non-GAAP Reconciliation ‘The following table presents a reconciliation of non-GAAP financial measures to GAAP measures for; (1) adjusted net income, (2} average tangible common equity, (3) adjusted return on average assets, (4) adjusted return on average equity, (5) return on average tangible common
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