California Bancorp · NASDAQ:BCAL
California Bancorp — Southern California Bancorp \ CA — Q2 2023 Earnings Presentation
34 slides from California Bancorp's earnings presentation, Jul 25, 2023
Slide 1: Investor Presentation June 30, 2023
SOUTHERN _CALIFORNIA BANCORP Investor Presentation June 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 medium-sized businesses in San Diego, Orange, Los Angeles, Ventura counties and the Inland Em
Slide 5: Southern California Bancorp
Southern California Bancorp Ata Glance Branch Footprint San Diego Headquarters, 5.¥r Asset CAGR* Acquisitions? SOUTHERN BANK OF ‘CALIFORNIA SOUTHERN 5 BANCORP ‘CALIFORNIA
Slide 6: Attractive Market Position
Attractive Market Position locations in mmercial markets with enormous potential customer base San Bernardino Riverside California is the largest banking market in the United States California GDP Largest economy in the 2022 Population Small Businesses world, behind India and ahead of United Kingdom
Slide 7: Southern California Small Business Market Offers One of the Best Opportunities
Southern California Small Business Market Offers One of the Best Opportun he U.S. for Commercial Bank Key Takeaway: = Southern California is the largest market for small business operating companies in the United States o} \ @ D (Over 980K small businesses with 1-499 1°. ‘employees exist in Southern
Slide 8: High Growth Franchise
High Growth Franchise ae ‘Acquired Bank of Santa Clarita (§425MM Assets) © November 2020 $2,284 © $2,292 $2,309 David Rainer joined BCAL $2,260 Since 2019, total assets have grown is organically and through strategic acquisitions Aeuiled CalWest Bancorp by $1.5 billion, or 178%, powered by a GSLIMM
Slide 9: Experienced Leadership Team
Experienced Leadership Team David Rich Thomas Jean Sam Peter Rainer Hernandez Dolan Carandang Kunianski Nutz Cherman and CEO ofSouthemn —_—Presidentof Southern Chief Operating Officer of Chie Financial Offierof Bank Chief Banking Officer af Bankof Chie Credit Officer of Bank of California Bancorp an
Slide 10: Our Vision for a Premier Banking Franchise
Our Vision for a Premier Banking Franchise Strong Leadership Growth Strategy ‘® Provide expertise in commercial and industrial, & Experienced teams living and working in their and commercial real estate lending to small and respective Southern California communities, middle-market businesses and act
Slide 11: Financial Highlights
Slide 12: Q2 2023 Results
Q2 2023 Results Financial Results Key Metrics (for the quarter ended June 30, 2023) (for the quarter ended June 30, 2023) $6.7 Million 1.18% Net Income Return on Average Assets (ROAA) $0.36 " Diluted Earnings Per 9.93% Share Return, on Average Common Equity (ROACE) $9.9 Million ame Pre-tax, Pre-prov
Slide 13: Q2 2023 Results Continued
Q2 2023 Results Continued Strong Balance Sheet Continued Strong Credit Quality (At June 30, 2023) (AtJune 30, 2 $2.31 Billion 0.002% Total Assets Non-performing Assets/Total Assets $1.91 Billion 0.002% Total Loans? Non-performing Loans/Total Loans iit 9 $1.98 Billion 1.26% Total Deposits Allowance f
Slide 14: Year-to-Date 2023 Results
Year-to-Date 2023 Results Financial Results Key Metrics month period ended June (for the six-month period ended June 30, 2023) $14.9 Million 1.32% Net Income Return on Average Assets (ROAA) $0.80 * Diluted Earnings Per 11.29% Share Return on Average Common Equity (ROACE) $21.4 Million Pre-tax, Pre-p
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 9 Diluted Earnings Per 6.44% Share Return, on Average Common Equity (ROACE) $27.4 Million anes Pre-tax, Pre-pr
Slide 16: Net Interest Income and Net Interest Margin
Total loans Yield on Earning Assets, for three months ended June 30, 2 Taxable debt securities Net Interest Margin Avg. Balan $1,900,033 $27,987 106,208 833 Interest-bearing NOW accounts Money market and savings accounts Cost of Funds, for three months ended June 3 wg. Balance $308,863 662,487 ‘Tax-
Slide 17: Allowance for Credit Losses
Allowance for Credit Losses saaax (S102K) $24,030 ($1356) God ($356k) + The $15 thousand reversal of provision for credit losses included a $120 thousand of provision for credit losses for loans and a $135 thousand negative provision for unfunded commitments. ‘The change in provision was due mostly
Slide 18: Negligible Impact of Unrealized Losses on Capital
Negligible Impact of Unrealized Losses on Capital = Total net unrealized losses after-tax were 3.95% of CET1 Capital as of June 30, 2023. = Even if interest rates rise another 300 bps, the Bank's capital ratios remain above Well-Capitalized guidelines. Parallel Rate Shock Scenarios (Sin Towson) =m P
Slide 19: Debt Securities, AOCI and Tangible Common Equity
Debt Securities, AOCI* and Tangible Common Equity? As of June 30, 2023 AFS Securities (fair value) 69% of portfolio, 2.9% yield HTM Securities (book value) 31% of portfolio, 3.3% yield sox MUS Agency MS MSBASecurties NUS. Treasury MUS.Agency BUS.CMO Taxable Municipals m Tax Exempt Municpale $250.0 1
Slide 20: Low-Cost Core Deposits
Low-Cost Core Deposits cost of Deposits f ie geareeenise, 100% = E E. 1.40% so = “ese 1.29% = a 1.00% oom 0% a.com com : se sag sil 0.25% o.0o% “bee 0222022302242 2023 = Total Deposits (SMM) . fs 2100 $2030 $2020 19% i 1.881 wae aH Sis er $1986 38 $1900 10% 1200 $1,700 La $1,600 s/30/22 sjp0rea apse
Slide 21: Significant Access to Liquidity & Funding Capacity
Significant Access to Liquidity & Funding Capacity liquidity (as of 6/30/23) As of 6/30/23 (8 in millions) 1 hy h tr Cash $ 4046 $ 7 $ 1046 On-Balance Sheet Cash = $104.6 million AFS Securities 420.0 . 420.0 = Total Borrowing Capacity = $670.3 million FHLB 468.5 63.5 405.0 = Total Available Borrowin
Slide 22: Diverse Loan Portfolio
Diverse Loan Portfolio Total Loan? Portfolio, as of June 30, 2023 Commercially Focused | Relationship Based California - California-Ventura’% our ot state Multifamily ther 0.3% oa be 11.0% 1-4 SFR : oom me Others \ 11% Total CRE Loans} California - $959 million Orange 11% Total Loans * $1.9 billion
Slide 23: Loan Portfolio
Loan Portfolio Total Loans! (SMM), at the period ended [contractual Maturity Summary for the next 3 years as of June 30, 2023 (sin millions) < year 4-2 Years > 2-3 Years 1914 %of total %of total %of total 51,907 $1,895 : $toans_ _$ loans _$ Loans ane Construction & land development $M86 78% $1008 «5
Slide 24: Low LTV Commercial Real Estate Loans
Low LTV Commercial Real Estate Loans Total CRE Distribution by LTV?, as of,June 30, CRE NOO vs CRE OO by Property Type >5%t 770% 100% a sxJune 30,2023: 90% + Total CRE loans: 260% 0 $959 million 65% + 63% CRE NOO, 11% = 37% CREOO < 50% CRE-Self Storage, * No past due 78596 to 60% oe 70% + 8.5% loans
Slide 25: CRE Office Loans
CRE Office Loans CRE Office Distribution by LTV}, as of June 30, CRE Office by Location 3, No. of Average Loan Weighted Avg.| Loans _ Balance? Size Lv < $0.5 48 $13.2 $0.3 38% >$0.5 -$2 61 $586 $1.0 49% >$2-$5 14 $38.7 $2.8 54% >$5-$10 7 $477 $6.8 46% >$10- $20 2 $33.7 $16.9 49% > $20 au $249 $24.9
Slide 26: Disciplined Credit Culture
Disciplined Credit Culture At quarter end: Nonacerual Loans 1-4 Family $604 $41 $39 $ & CRE & Multifamily 3 3 2 7 1 Construction ’ = : = 2: Consumer : . . . - Commercial a8. 4 “ 1 39 Total Nonaccruel Loans sess $48 S41 SSO ‘Accruing Loans Past Due 90 days or - 7 7 7 More ‘Total Nonperforming Loans s
Slide 27: Investing for the Future
Investing for the Future. pense (SMM) Total Revenue? (SMM) quarter ended: for the quarter ended: Noninterest for th Our successful recruitment of in-market talent 50 700% pee positions us well for the future __, $200 ail a0 3.9% Growth a as $265 50.0% * $24.1 ' $28.5 sis0 is $225 if =“ 20 s100 $ sc
Slide 28: While Building Value for Shareholders
. While Building Value for sharehalciers 13,06% 15.64% 14.97% 11.60% 0.00% me T5PS ion Income *? (SMM) Diluted Earnings (Loss) Per Share? $0.44 J il ; J 1] ' : 2 103 20 222 4022 Pre-Tax Pre-Provi: bea 04) 1, Non-GAAP financial measure. A reconciliation to the comparable GAAP measurement is provided
Slide 29: Strong Capital Base
Strong Capital Base om 20% 15% ag 2% ieee 3% 10% 109% ome 82% giy 92% ] l rT | ll | poat oni aant 0222022 302240221023 2023 2 Total Risk-Based Capital Ratio”? Leverage Ratio”* 170% te 161% 12% 137% tne 119% 120% 126% 12.0% 109% | l | | | | | LL il l 3022 303: a ee ror 3021 sand 40221282028 1. Non-GA
Slide 30: Appendix
Slide 31: Non-GAAP Reconciliation
Non-GAAP Reconciliation Tangible common equity to tangible assets (the "tangible common 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 common equity ratio by excluding the balance of intangible ass
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 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 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
Southern California Bancorp \ CA — Q2 2023 Earnings Presentation on 6ix