California Bancorp · NASDAQ:BCAL
California Bancorp — Q4 2023 Earnings Presentation
22 slides from California Bancorp's earnings presentation, Jan 30, 2024
Slide 1: Investor Presentation Q4 2023
Exhibit 99.2 INVESTOR PRESENTATION Q4 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 $1.99 billion in assets and a (1) market capitalization of ~$208 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: 4th Quarter 2023 Highlights
th 4 QUARTER 2023 HIGHLIGHTS § Net income of $5.3 million Continued Strong § Diluted EPS of $0.63 Financial Performance § ROA of 1.07%, ROE of 10.88% and NIM of 3.88% § Total deposits decreased slightly from end of prior quarter Stable Deposit Base § Noninterest-bearing deposits remain above 40% of
Slide 6: Branch Light, Commercial Focused Business Bank
BRANCH LIGHT, COMMERCIAL FOCUSED BUSINESS BANK LOAN GROWTH BUSINESS MODEL OVERVIEW $2,000 2015 – 2023 CAGR ► Middle market commercial banking focus Total gross loans = 14.8% $1,500 $2 • Privately owned companies with $30 million - $300 million in Gross loans (ex. PPP) = 14.8% $73 annual revenue $306
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 – 2023 Completed Holding Company formed Finance in February Completed $25.0 $4 million private placement expansion into Asset 2020 in June 2017 million private offering at $12.86 per share to t
Slide 10: Strong Core Deposit Base
STRONG CORE DEPOSIT BASE DEPOSIT COMPOSITION HISTORICAL DEPOSIT COMPOSITION Time deposits $1,792 $1,800 2015 – 2023 CAGR Demand 19% $1,680 $1,625 DDA: 14.3% deposits $1,532 $1,600 40% Total Deposits: 14.7% $1,400 $1,200 Money market $988 $1,000 Interest bearing & savings $874 $812 $771 deposits dema
Slide 11: Diversified Commercial Loan Portfolio
DIVERSIFIED COMMERCIAL LOAN PORTFOLIO (1) LOAN PORTFOLIO COMPOSITION HISTORICAL LOAN COMPOSITION 2017 – 2023 CAGR Other 3% $1,560 $1,593 $1,600 C&I: 11.2% $1,377 Construction 2% $1,369 Total Loans: 13.4% $950 $1,100 $847 $733 $635 $627 $474 $415 $600 $390 $341 Commercial 40% $329 CRE - Non-Owner 40%
Slide 12: New Loan Production in 4Q23
NEW LOAN PRODUCTION IN 4Q23 (1) BOOKING NEW LOANS AT ATTRACTIVE RATES ► Funded new loans with balances of $64 million in 4Q23 compared to $46 million in 3Q23 and $131 million in 4Q22 ► Weighted average rate on newly funded loans was 8.86% in 4Q23 compared to 8.34% in 3Q23 and 6.72% in 4Q22 ► 4Q23 ne
Slide 13: CRE Loan Portfolio – Investor CRE
CRE LOAN PORTFOLIO – INVESTOR CRE CONSERVATIVELY UNDERWRITTEN PORTFOLIO WITH AVERAGE LTV OF 48.7% (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 9% Other Other California 48% Bay Area 19% Industria
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 (6% of Total Loans) Medical/Dental - $40 million (2% of Total Loans) CRE Office OO - $75 million (5% of Total Loans) Office - $60 million (4% of Total Loans) CRE
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 23% 3% 7% 11% All Others <4% 4% Other Management Misc. Retail Consulting Services Real Estate & Leasing 10% Home Health
Slide 16: 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% 1.03% 1.02% 0.8% $851 $1,000 0.6% $500 $618 $149 0.4% $34 $0 0.2% -$65 -$500 0.0% 2017 2018 2019 2020 2021 2022 2023 2017 2018 2019 2020
Slide 17: Historical Profitability Trends
HISTORICAL PROFITABILITY TRENDS ROAA ROATCE $3.00 15% $2.56 $2.51 1.5% $2.50 13.76% 12% $2.00 $1.61 12.12% $1.19 1.0% $1.50 1.09% 1.08% 9% $0.85 $0.86 9.78% 9.37% $1.00 $0.53 7.71% $0.50 6% 0.68% 0.5% 0.69% 0.94% 5.87% 0.66% $0.00 3% -$0.50 0.25% 3.41% 0.0% -$1.00 0% 2017 2018 2019 2020 2021 2022 20
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% 12.14% 12.09% 11.31% 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 2023 2018 2019 2020 2021 2022 2023 TIER 1 RATIO TOTAL CAPITAL RATIO 16% 16% 12% 12.96% 12% 12.52% 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: Questions and Investor Relations Contact
Please send questions to ir@bankcbc.com Or Call 510.457.3751 CaliforniaBankofCommerce.com