California Bancorp · NASDAQ:BCAL
California Bancorp — Q4 2022 Earnings Presentation
23 slides from California Bancorp's earnings presentation, Jan 26, 2023
Slide 1: Investor Presentation Q4 2022
INVESTOR PRESENTATION Q4 2022 Steven E. Shelton CEO Thomas A. Sa President, CFO & COO Exhibit 99.2
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
Based on CALB’s stock price of $23.78 as of 12/31/2022 Total gross loans excluding PPP loans of $2.4 million Walnut Creek Headquarters/Regional Office in Oakland Regional Offices in San Jose, Walnut Creek and Sacramento Branch services in Walnut Creek OVERVIEW OF CALIFORNIA BANCORP Established in 20
Slide 4: Investment Highlights
Branch light, commercial focused business bank with strong middle market relationships throughout Northern California Strong earnings outlook as efficiencies from investments are realized Proven organic and acquisitive growth story Experienced management team and seasoned C&I relationship teams with
Slide 5: 4th Quarter 2022 Highlights
Continued Increase in Profitability Conservative Approach to New Loan Production and Risk Management 4th QUARTER 2022 HIGHLIGHTS Net income of $7.7 million, up from $5.5 million in Q3 2022 Diluted EPS of $0.91, up from $0.66 in Q3 2022 ROA of 1.46%, up from 1.13% in Q3 2022 Efficiency ratio improved
Slide 6: Branch Light, Commercial Focused Business Bank
BRANCH LIGHT, COMMERCIAL FOCUSED BUSINESS BANK Middle market commercial banking focus Privately owned companies with $30 million - $300 million in annual revenue Clients with minimum lending relationships of $2 million or $1 million in deposits Portfolio managed over the long term to ~40% C&I loans
Slide 7: Taking Share from National/Regional Banks
TAKING SHARE FROM NATIONAL/REGIONAL BANKS Combine Capabilities of a Big Bank with the High Service Levels of a Community Bank Attract top talent with deep market experience to compete against and win business from large banks Professional team with a consultative delivery process Invest in systems,
Slide 8: Experienced Management Team
EXPERIENCED MANAGEMENT TEAM Served as Executive Vice President and CCO from 2007 through 2017 Previously served in various executive management positions including Executive Vice President and Senior Lending Officer for Wells Fargo’s corporate bank and President & CCO of CivicBank of Commerce John L
Slide 9: Demonstrated Growth Track Record
Dollars in millions Tangible book value per share and capital offering price adjusted for historical stock splits Data as of 12/31 for each respective year DEMONSTRATED GROWTH TRACK RECORD $16 million common stock offering at $9.90 per share to fund growth in June 2014 $4 million private placement o
Slide 10: Strong and Growing Core Deposit Base
Dollars in millions Core deposits defined as total deposits less time deposits and brokered deposits. Data as of 12/31 for each respective year 2015 –2022 CAGR DDA: 20.1% Total Deposits: 18.6% 0.23% 0.24% 0.35% Cost of Deposits 94% 93% 94% Core Deposit Mix 0.81% 88% 0.55% 91% 0.48% 87% 0.27% 91% 42%
Slide 11: Diversified Commercial Loan Portfolio
Dollars in millions Data as of 12/31 for each respective year Excludes PPP loans DIVERSIFIED COMMERCIAL LOAN PORTFOLIO HISTORICAL LOAN COMPOSITION(1) OPERATING LOC USAGE LOAN PORTFOLIO COMPOSITION GROSS LOAN FUNDING VS. NET LOAN GROWTH(2) (3) 2017 – 2022 CAGR C&I: 14.0% Total Loans: 16.8% 4.88% 96%
Slide 12: New Loan Production Improved in 4Q22
NEW LOAN PRODUCTION IMPROVED IN 4Q22 BOOKING NEW LOANS AT ATTRACTIVE RATES(1) NEW LOAN FUNDINGS(1) WTD. AVG. RATE ON NEW LOANS(1) Funded new loans with balances of $130 million in 4Q22 compared to $124 million in 3Q22 and $119 million in 4Q21 Weighted average rate on newly funded loans was 6.72% in
Slide 13: CRE Loan Portfolio – Investor CRE
CRE LOAN PORTFOLIO – INVESTOR CRE CONSERVATIVELY UNDERWRITTEN PORTFOLIO WITH AVERAGE LTV OF 49.9% INVESTOR CRE BY PROPERTY TYPE(1) INVESTOR CRE BY GEOGRAPHIC BREAKDOWN (1) Data as a percent of total investor CRE, $575 million Data as of 12/31/2022
Slide 14: CRE Loan Portfolio – Investor CRE: Retail
CRE LOAN PORTFOLIO – INVESTOR CRE: RETAIL Total of 67 loans: 55 Recourse & 12 Non-Recourse INVESTOR RETAIL: SINGLE VS MULTI TENANT INVESTOR RETAIL BY GEOGRAPHIC BREAKDOWN Data as a percent of total investor CRE Retail, $189 million Data as of 12/31/2022
Slide 15: Commercial Loan Portfolio
COMMERCIAL LOAN PORTFOLIO WELL-DIVERSIFIED PORTFOLIO WITH FOCUS ON STRONG BORROWERS IN RECESSION RESISTANT INDUSTRIES COMMERCIAL LOAN PORTFOLIO(1) COMMERCIAL – SPONSOR FINANCE(2) Data as a percent of total Commercial Loans, $634 million Data as a percent of total Sponsor Finance Loans, $263 million
Slide 16: Loan Portfolio Characteristics
Loan Portfolio Characteristics Conservatively underwritten, well diversified loan portfolio with low LTVs and high DCRs Little to no exposure to areas most likely to be impacted by a recession No consumer loans Minimal SBA loans Office CRE represents just 10.8% of total loan portfolio No exposure to
Slide 17: Asset Quality Trends
NET CHARGE-OFFS (RECOVERIES) ($000S)(1) NONPERFORMING ASSETS RESERVES / LOANS NCOS (RECOVERIES) / AVG. LOANS (%)(1) Net charge-offs for 2020 were concentrated in 2Q20 related to non-systemic issues ASSET QUALITY TRENDS
Slide 18: Historical Profitability Trends
ROATCE NET INTEREST MARGIN ROAA EFFICIENCY RATIO HISTORICAL PROFITABILITY TRENDS
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 expense
Slide 20: Capital Ratios – Bank Only
CAPITAL RATIOS – BANK ONLY Data as of 12/31 for each respective year Closed subordinated debt offerings to support consolidated capital ratios totaling $20 million in 2020 and $35 million in 2021 LEVERAGE RATIO TIER 1 RATIO TCE / TA TOTAL CAPITAL RATIO
Slide 21: 2023 Outlook and Priorities
2023 OUTLOOK AND PRIORITIES CONSERVATIVE LOAN PRODUCTION CONTINUE GROWING DEPOSIT MARKET SHARE Remain conservative in new loan production until economic conditions improve with near-term focus primarily on high quality C&I loans Capitalize on growing reputation and increased scale to continue adding
Slide 22: Summary
Northern California commercial business bank with a disciplined approach to credit underwriting Proven organic and acquisition growth capabilities Strong commercial loan portfolio with corresponding commercial relationship deposits Experienced management team and seasoned C&I relationship managers K
Slide 23: Please send questions to ir@bankcbc.com
Please send questions to ir@bankcbc.com Or Call 510.457.3751 CaliforniaBankofCommerce.com