California Bancorp · NASDAQ:BCAL
California Bancorp — Southern California Bancorp \ CA — Q3 2023 Earnings Presentation
35 slides from California Bancorp's earnings presentation, Oct 26, 2023
Slide 1: Investor Presentation
SOUTHERN » CALIFORNIA Investor Presentation September 30, 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS In addition to historical information, this release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to expectations, belie
Slide 3: Company Overview
Slide 4: Investment Highlights
Investment Highlights AW Market and Footprint & Southern California is the world’s 16" largest economy? & Bank's footprint covers one of the best small business banking markets in the U.S. (980,000 small to mediumsized businesses in San Diego, Orange, Los Angeles, Ventura counties and the Inland Emp
Slide 5: Southern California Bancorp
Southern California Bancorp BCAL San Diego Nasdaq Headquarters $253M| | $2.3B Market Cap! 24.7% 5.Yr Asset CAGR® 4 $2.0B | | 25.7% Bank Deposits? 5-¥r Deposit Acquisitions? SOUTHERN 1. Marketa a tober23, 2003 saad 2 ver the ast 20 yeas ‘CALIFORNIA SOUTHERN the 5 BANCORP CALIFORNIA. >
Slide 6: Attractive Market Position
Attractive Market Position Strategic locations in commercial markets with enormous potential customer base San Bernardino California is the largest banking market in the United States California GOP Largest economy in the 2022 Population ‘Small Businesses world, behind Germany and ahead of India BCA
Slide 7: Southern California Small Business Market Offers One of the Best Opportunities
Southern California Small Business Market Offers One of the Best Opportunities in the U.S. for Commercial Banking Key Takeaway: = Southern California is the largest market for small business operating companies in the United States CO) - eo ° e q e@ e. ll 6 r >100K Businesses NN @ 7 \ @ 3 -75K eusne
Slide 8: High Growth Franchise
High Growth Franchise {222% 0.0.0. ($425MM Assets) % November 2020 s2260 | 52284 $2292 $2,909 $2,314 David Rainer joined BCAL . Since 2019, total assets have grown on organically and through strategic ‘Acquired CalWest Bancorp acquisitions by $1.5 billion, or 178%, meme | sora ree) : : $1,579 powere
Slide 9: Experienced Leadership Team
Experienced Leadership Team David Rich Thomas Jean Sam Rainer Hernandez Dolan Carandang Kunianski Chairman and CEO of Southern President of Southern Chief Operating Officer of Chief Financial Officer of Bank Chief Banking Officer of Bank of Southern California California Bancorp and Bank of Californ
Slide 10: Our Vision for a Premier Banking Franchise
Our Vision for a Premier Banking Franchise Strong Leadership & Experienced teams living and working in their respective Southern California communities, and actively involved in local organizations ‘& Reputation and credibility of leadership attracts top talent in the market, ‘& Bank Advisory Boards
Slide 11: Financial Highlights
Slide 12: Q3 2023 Results
Q3 2023 Results Financial Results Key Metrics (for the quarter ended Sept. 30, 2023) (for the quarter ended Sept. 30, 2023) $6.6 Million 1.12% Net Income Return on Average Assets (ROAA) $0.35 Diluted Earnings Per 9.38% Share Return on Average Common Equity (ROACE) $9.3 Million a Pre-tax, Pre-provisi
Slide 13: Q3 2023 Results Continued
Q3 2023 Results Continued Strong Balance Sheet Credit Quality Metrics (At Sept. 30, 2023) (At Sept. 30, 2023) $2.31 Billion 0.62% Total Assets Non-performing Assets/Total Assets $1.94 Billion 0.74% Total Loans* Non-performing Loans/Total Loans* aT 9 $1.98 Billion 1.24% Total Deposits Allowance for C
Slide 14: Year-to-Date 2023 Results
Year-to-Date 2023 Results Financial Results Key Metrics. (for the nine-month period ended Sept. 30, 2023) (for the nine-month period ended Sept. $21.5 Million 1.25% Net Income Return on Average Assets (ROAA) $1.15 ‘ Diluted Earnings Per 10.63% Share Return on Average Common Equity (ROACE) $30.7 Mill
Slide 15: 2022 Results
2022 Results Financial Results Key Metrics (for the year ended December 31, 2022) (for the year ended December 31, 2022) $16.1 Million 0.70% Net Income Return on Average Assets (ROAA) $0.88 Diluted Earnings Per 6.44% Share Return on Average Common Equity (ROACE) $27.4 Million 4.06% Pre-tax, Pre-prov
Slide 16: Net Interest Margin
SOUTHERN: ‘CALIFORNIA BANCORP Net Interest Margin Yield on Earning Assets, for three months ended Sept. 30, 2023 [assets i$ in thousands Total loans, Taxable debt securities Tax-exempt debt securities! Deposits in other financial institutions Fed fund sold/resale agreements Restricted stock investme
Slide 17: Allowance for Credit Losses (ACL)
Allowance for Credit Losses (ACL) ($162k) $24,040K ($972k) a a 23.9056 2000) 1.26%! tune, 2023 1.24% 1 at eptember 30, be, Ss Ge Coe, ines "og Oey < a see Mo. 2s, ee re The $96 thousand reversal of provision for credit losses for the third quarter of 2023 included a $202 thousand provision for credi
Slide 18: Negligible Impact of Unrealized Losses on Capital
Negligible Impact of Unrealized Losses on Capital = Total net unrealized losses after-tax were 5.69% of CET1 Capital as of Sept. 30, 2023. = Even if interest rates rise another 300 bps, the Bank's capital ratios remain above Well-Capitalized guidelines. (Sin Thousands) zm EE” Em ‘Available for Sale
Slide 19: Debt Securities, AOCI and Tangible Common Equity
Debt Securities, AOCI* and Tangible Common Equity2 As of Sept 30, 2023 hates ork toatl ESS oss portfolio, 3.2% yield? HTM Securities (book value) 32% of portfolio, 2.3% yield? US Agency MOS. MSBASccurtes MUL. Treasury MUS.Agency MUS.CMO wToable Municipals mTox Exempt Municipals $260.0 ED 10.5% 12.0%
Slide 20: Low-Cost Core Deposits
Low-Cost Core Deposits ——=S= ee the quarter ended: as 1.80% 1.56% . = wos re 0.25% 2022-3022, 4022, 12320233003 100% Total Deposits (SMM) . BB vo os ws ws = poe $1,986 $1,982 $1,984 - » $2,000 $1932 1,800 $1,800 i 1,700 9730/22 npn 31723 6/30/23 973072003 $1800 ‘Noninterest-bearing Demand m Money Ma
Slide 21: Significant Access to Liquidity & Funding Capacity
Significant Access to Liquidity & Funding Capacity = = “anesagine ment As of 9730/23 (Sin millions) = On-Balance Sheet Cash = $95.1 million Cash 8 1S : 8 95.1 AFS Securities 4118 . 1118 = Total Borrowing Capacity = $714.8 million FHLB 488.6 58.0 430.6 = Total Available Borrowing Capacity = $656.8mil
Slide 22: Diverse Loan Portfolio
Diverse Loan Portfolio Total Loan? Portfolio, as of sept. 30, 2023 Commercially Focused | Relationship Based Other0.1% Multifamily 11.3% 1-4SFR 7.3% Total Loans + $1.9 billion CRE- Others 9.5% (CRE - Special Purpose 5.6% Construction & Land Dev 12.3% 3 Location by counties of Caifons, eeept out of s
Slide 23: Loan Portfolio
Loan Portfolio Total Loans! (SMM), at the period ended $1,935 1,907 $1,914 = $1,895 = LJ UJ 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 Yield on Loans, for the quarter ended sain 5.91% aes 5.78% a ‘S.97% 5.aZ sam 50 soo 450% 3224022, 12323303 | BB, CALORNIA "ALIFORNIA SQUTHERN BANCORP contrac
Slide 24: Low LTV Commercial Real Estate Loans
Low LTV Commercial Real Estate Loans Total CRE Distribution by LTV3, as of september 30, 2023 CRE NOO vs CRE OO by Property Type , as of september 30, 202 > 70% 100% 13% — * Total CRE loans: o% 90% $1.0 billion + 63% CRE NOO, 37% CRE OO 260% to 65% <50% Bom + No past due 12% 50% loans 70% CCRE-Self
Slide 25: CRE Office Loans
CRE Office Loans CRE Office Distribution by LTV1, as of september 30, 20: CRE Office by Location 3, as of september 30, No. of Average Loan Weighted Avg, Loans _Balance2 Size uv < $0.5 48 $123 $0.3 40% >$0.5 -$2 64 $593 $0.9 49% >$2-$5 15 $43.0 $2.9 51% >§5-$10 6 $425 $7.4 56% >$10 - $20 2 $33.7 $16
Slide 26: Multifamily Loans
Multifamily Loans Multifamily Loans Distribution by LTV 4, as of september 30, 2023 Multifamily Loans by Location 3, as of september Out of State, 0.2% Average Loan Weighted Avg. Balance? itv 19 $5.7 $0.3 35% 32 $35.8 $1.1 47% California ~ Others, 7.7% 26 $83.8 $3.2 59% >$5 - $10 8 $50.9 $6.4 56% >$
Slide 27: Disciplined Credit Culture
Disciplined Credit Culture NPAs / Assets Adequate Reserves ft 0.800% At quarter end: 0.600% 0.617% ‘Nonacerual Loans ee 1-4 Family sa 3S. * CRE & Multifamily 3 2 - 1 14272 0.200% Construction - - : 7 - 9 0.002% 0.002% 0.00% 2% Consumer : : : : = 9.000% peat 7 : 18 : 3022 4022 10232023 sors Total Non
Slide 28: Investing for the Future
Investing for the Future. Noninterest Expense (SMM) Total Revenue? (SMM) for the quarter ended: for the quarter ended: 9250 sox Our successful recruitment of in-market talent 61.4% positions us well for the future _, 7.1% Growth x0 coon ————— $265 = $244 $245 spat sso sox $225 $04 20 s100 200% $14.2
Slide 29: While Creating Value for Shareholders
.... While aoe Value for shareholders 10.92% 15.64% 14.97% 11.60% Pre-Tax Pre-Provision Income’? (SMM) Diluted Earnings Per Share? $0.44 $0.38 ; : qT ; 7 T 7 ; SOUTHERN: ‘CALIFORNIA SOUTHERN Th 29 ‘CALIFORNIA
Slide 30: Strong Capital Base
Strong Capital Base ., ia naam 29% new os Oe 110% 109% am TR 101% 8% 20% 92% gay 92% i I [ | 1 i xa ani 102 20223023 Steere 20223023 ET Risk- = FTotal Risk-Based Capital Ratio | Ratio’ Leverage Ratio”? 163% tie 1% 150% rose 12% ase om 133% 100% 101% 99% 101% 6% 3 9.6% HHI lil 1 | | | | | : T on aon
Slide 31: Appendix
Appendix
Slide 32: Non-GAAP Reconciliation
Non-GAAP Reconciliation Tangible common equity to tangible assets (the "tangible comman equity ratio") and tangible book value per share are non-U.S. GAAP financial measures derived from U.S. GAAP-based amounts. We calculate the tangible commen equity ratio by excluding the balance of intanglale ass
Slide 33: Non-GAAP Reconciliation
Non-GAAP Reconciliation Efficiency ratio and adjusted efficiency ratio are non-U.S. 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 r
Slide 34: 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 caleulate pre-tax, pre provision income by excluding income tax and provision for credit losses from net income, We calculate
Slide 35: 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 e
Southern California Bancorp \ CA — Q3 2023 Earnings Presentation on 6ix