California Bancorp · NASDAQ:BCAL
California Bancorp — Q1 2024 Earnings Presentation
22 slides from California Bancorp's earnings presentation, Apr 29, 2024
Slide 1: Investor Presentation Q1 2024
Exhibit 99.2 INVESTOR PRESENTATION Q1 2024 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 $1.92 billion in assets and a (1) market capitalization of ~$186 million ► Majority of executive management join
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: First Quarter 2024 Highlights
FIRST QUARTER 2024 HIGHLIGHTS Continued Strong ▪ Adjusted Net income of $4.8 million Financial Performance ▪ Adjusted Diluted EPS of $0.57 Excluding ▪ Adjusted ROA of 1.02%, Adjusted ROE of 9.71% and Adjusted ROTCE of 10.08% Merger-Related Expense ▪ Net interest margin increased 1 bp to 3.89% Positi
Slide 6: Branch Light, Commercial Focused Business Bank
BRANCH LIGHT, COMMERCIAL FOCUSED BUSINESS BANK LOAN GROWTH BUSINESS MODEL OVERVIEW $2,000 2015 – Q1’24 CAGR ► Middle market commercial banking focus Total gross loans = 13.9% $1,500 $2 • Privately owned companies with $30 million - $300 million in Gross loans (ex. PPP) = 13.9% $73 annual revenue $30
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 Completed Holding Company formed Finance in February 2015 – Q1’24 Completed $25.0 $4 million private placement expansion into 2020 in June 2017 million private Asset CAGR offering at $12.86 per shar
Slide 10: Strong Core Deposit Base
STRONG CORE DEPOSIT BASE DEPOSIT COMPOSITION HISTORICAL DEPOSIT COMPOSITION $1,792 Time deposits Demand $1,800 2015 – Q1’24 CAGR $1,680 20% deposits $1,640 $1,625 DDA: 13.4% 39% $1,532 $1,600 Total Deposits: 14.4% $1,400 $1,200 $988 Money market Interest bearing $1,000 & savings demand deposits $874
Slide 11: Diversified Commercial Loan Portfolio
DIVERSIFIED COMMERCIAL LOAN PORTFOLIO (1) LOAN PORTFOLIO COMPOSITION HISTORICAL LOAN COMPOSITION 2017 – 2024 CAGR Other 3% C&I: 11.7% $1,560 $1,521 $1,593 $1,600 Construction 2% $1,377 $1,369 Total Loans: 11.8% $950 $1,100 $847 $627 $635 $610 $474 $415 $600 $390 Commercial 40% $341 CRE - Non-Owner O
Slide 12: New Loan Production in 1Q24
NEW LOAN PRODUCTION IN 1Q24 (1) BOOKING NEW LOANS AT ATTRACTIVE RATES ► Funded new loans with balances of $11 million in 1Q24 compared to $64 million in 4Q23 and $42 million in 1Q23 ► Weighted average rate on newly funded loans was 7.82% in 1Q24 compared to 8.86% in 4Q23 and 7.72% in 1Q23 ► 1Q24 new
Slide 13: CRE Loan Portfolio – Investor CRE
CRE LOAN PORTFOLIO – INVESTOR CRE ► Conservatively underwriting portfolio with an average LTV of 49% ► Active risk management, stress testing, and evaluation of portfolio results in early recognition and resolution of potential problem credits, consistently strong asset quality, and minimal losses i
Slide 14: CRE Loan Portfolio – Investor CRE: Office
CRE LOAN PORTFOLIO – INVESTOR CRE: OFFICE (1) CRE PORTFOLIO COMPOSITION INVESTOR CRE OFFICE COMPOSITION CRE Office Investor - $100 million (7% of Total Loans) Medical/Dental - $39 million CRE Other - $667 million (3% of Total Loans) CRE Office OO - $67 million (44% of Total Loans) (4% of Total Loans
Slide 15: 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 5% 2% 7% 7% Other Food Manufacturing 6% Pharmacies and Retail Misc. Real Estate & Drug Retailers 24% 9% All Others <4%
Slide 16: Asset Quality Trends
ASSET QUALITY TRENDS (1) (1) RESERVES / LOANS NET CHARGE-OFFS (RECOVERIES) ($000S) $2,500 1.4% $2,052 $1,872 $2,000 1.2% 1.28% 1.17% 1.0% $1,500 1.07% 1.05% 1.03% 1.03% 1.02% 0.8% $851 $1,000 0.6% $348 $500 $149 0.4% $34 $0 0.2% -$65 -$500 0.0% 2018 2019 2020 2021 2022 2023 1Q24 2018 2019 2020 2021
Slide 17: Historical Profitability Trends
HISTORICAL PROFITABILITY TRENDS ROAA ROATCE $4.00 15% 1.5% 13.76% $2.56 $3.00 12% $2.51 12.12% 1.0% $2.00 1.09% $1.61 1.08% 9% 9.78% $1.19 9.37% $0.85 $0.86 0.80% 7.95% $1.00 $0.53 7.71% 6% 0.68% 0.5% $0.45 0.69% 0.94% 5.87% 0.66% $0.00 3% 0.25% 3.41% 0.0% -$1.00 0% 2017 2018 2019 2020 2021 2022 202
Slide 18: 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 19: Capital Ratios – Bank Only
CAPITAL RATIOS – BANK ONLY TCE / TA LEVERAGE RATIO 16% 16% 12% 12% 12.72% 12.14% 12.63% 12.09% 10.44% 10.23% 10.42% 10.35% 9.51% 8% 8% 9.36% 8.02% 7.20% 4% 4% 0% 0% 2019 2020 2021 2022 2023 1Q24 2019 2020 2021 2022 2023 1Q24 TOTAL CAPITAL RATIO TIER 1 RATIO 16% 16% 13.63% 12% 12.96% 12% 12.32% 12.25
Slide 20: 2024 Outlook and Priorities
2024 OUTLOOK AND PRIORITIES High levels of capital, liquidity and reserves, along with conservatively EXCEPTIONALLY STRONG underwritten loan portfolio, positions company well to manage through BALANCE SHEET continued uncertain economic environment Capitalize on growing reputation and increased scale
Slide 21: 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 22: Please send questions to ir@bankcbc.com
Please send questions to ir@bankcbc.com Or Call 510.457.3751 CaliforniaBankofCommerce.com