California Bancorp · NASDAQ:BCAL
California Bancorp — Q1 2024 Earnings Presentation
33 slides from California Bancorp's earnings presentation, Apr 29, 2024
Slide 1: Investor Presentation
Investor Presentation March 31, 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements ‘CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS. “Tos communicaton nay conan certain foward ooking statements, ncang but ot nite to cata plans, execations, projections and statements aout te benef the proposed merger the Merge) of Souther caiferia Racor CB" and Caifo
Slide 3: Company Overview
Slide 4: Investment Highlights
Investment Highlights NW Market and Footprint & Southern California is the world’s 14" largest economy" ® Bank's footprint covers one of the best small business banking markets in the U.S. {one million small to medium-sized businesses in San Diego, Orange, Los Angeles, Ventura, Imperial and Kern cou
Slide 5: Southern California Bancorp
Southern California Bancorp Seuvatey 24.4% 5e¥r Asset AGRE : 24.9% Deposits’ S-¥e Deposit CAGR® SOUTHERN BANK OF ‘CALIFORNIA SOUTHERN BANCORP ‘CALIFORNIA,
Slide 6: Attractive Market Position
Attractive Market Position Strategic locations in commercial 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 worle 2023 Population Small Businesses behind Germany anc aheac of I
Slide 7: High Growth Franchise
High Growth Franchise [=== == Acquired Bank of Santa Clarita ‘Announced definitive merger (§425MM Assets) agreement with California BanCoro Ye _ LO Never 00 ca $2,260 $2284 a $2,290 Since 2019, total assets have grown eee aneroliss organically and through strategic ‘May 2020 acquisitions by $1.5 bil
Slide 8: 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 Oticer of Chie Financial Officer of Bank Chief Banking Officer of Bank of CalfornaBancoroand Bankot California Bancorpand Bank ot South
Slide 9: Our Vision for a Premier Banking Franchise
Our Vision for a Premier Banking Franchise Strong Leadership ® Provide expertise in commercial and industrial, and commercial real estate lending to small and middle-market businesses ®& High-touch relationship management team & Experienced teams living and working in their respective Southern Calif
Slide 10: Financial Highlights
Slide 11: Q1 2024 Results
Q1 2024 Results Financial Results Key Metrics (for the quarter ended March 31, 2024) (for the quarter ended March 31, 2024) $4.9 Million 0.86% Net Income Return on Average Assets $0.26 Diluted Earnings Per 6.85% Share Return on Average Common Equity $6.9 Million ae Pre-tax, Pre-provision = 9 Income
Slide 12: Q1 2024 Results Continued
Q1 2024 Results Continued Strong Balance Sheet Credit Quality Metrics (at March 31, 2024) (At March 31, 2024) $2.29 Billion 0.84% Total Assets Non-performing Assets/Total Assets $1.89 Billion 0.33% Total Loans* Non-performing Loans/Total Loans* $1.93 Billion 1.23% Total Deposits Allowance for Credit
Slide 13: 2023 Results
2023 Results Financial Results Key Metrics (for the year ended December 31, (for the year ended December 31, 2023) ate 9 $25.9 Million 1.12% Net Income Return on Average Assets $1.39 Diluted Earnings Per 9.48% Share Return on Average Common Equity $37.8 Million aon Pre-tax, Pre-provision 7 9 Income
Slide 14: Net Interest Margin
Net Interest Margin Yield on Earning Assets, for three months ended March 31, 2024 assets (Sin thousands) Avg. Balance ne Yield “otal loans $1,909,271 $28,584 6.02% “Taxable debt securities 126803 1,213 3.85% Tax-exempt debt securities? 53,842 306 2.89% Deposits in other financial institutions 54,05
Slide 15: Allowance for Credit Losses
Allowance for Credit Losses as of and for the Three Months Ended March 31, 2024 ($314.1) thousand provision breakdown > The $331 thousand reversal of credit losses forthe frst quarter of 2024 included a $314 thousand reversal of credit losses for loans held for investment and a $17 thousand negative
Slide 16: Negligible Impact of Unrealized Losses on Capital
Negligible Impact of Unrealized Losses on Capital = Total net unrealized losses after-tax were 3.26% of CET1 Capital as of March 31, 2024. = Even if interest rates rise another 300 bps, the Bank’s capital ratios remain above Well-Capitalized guidelines Parallel Rate Shock Scenarios (8 in Thousands)
Slide 17: Debt Securities, AOCI and Tangible Common Equity
Debt Securities, AOCI? and Tangible Common Equity? As of March 31, 2024 1.3% hax AFS Securities (fair value) 70.3% of portfolio, 3.7% yield? : portfolio, 2.3% yield? mUSsgency MES MSBASecurties SULS.Teessury MUS.Agency MUS.CMO. mTaxable Municipals mTax Exempt Municipals $265.0 n20% $260.0 $255.0 so
Slide 18: Low-Cost Core Deposits
Low-Cost Core Deposits Se the quarter ended: 100% 80% 250% 20% 2.00% 1.81% 2.05% 1.56%, so sox 1.29% con oom 0.80% 50% 050% 40% 0.00% . 1023 2023 3023 4023 3024 30% F ——————_ Total Deposits ($MM) 20% $2,100, _ See __Ssi6 338 $1964 ai son 10% $1,300, $1,800, 0% $1,700 spans e/s0p23 9/30/2028 2psifn07
Slide 19: Significant Access to Liquidity & Funding Capacity
Significant Access to Liquidity & Funding Capacity Liquidity. liquidity (as of 3/31/24) ‘As of 3/31/2024 ($ in milions) Cash $ 5 ¢ - ¢$ ws = On-Balance Sheet Cash = $86.5 million AFS Securities 127.0 - 127.0 = Total Borrowing Capacity = $699.7 million FHLB 499.3 104.0 395.3 = Total Available Borrowi
Slide 20: Diverse Loan Portfolio
Diverse Loan Portfolio Total Loan Portfolio 1, as of March 31, 20 Total CRE * by Location 4, Commercially Focused | Relationship Based other .2% Multifamily | 9.7%. 1-4SFR 7.9% Total Loans * $1.89 billion ‘CRE Others 9.5% Construction & Land Dev 12.8% cantante California - Ventura 63% Riverside _ |
Slide 21: Loan Portfolio
Loan Portfolio Total Loans 1 (SMM), at the period ended [contractual Maturity Summary for the next 3 years as of March 31, 2024 $2,000 ($ in millions) <1year 12 Years > 2-3 Years $1,200 Total loans $456.2 24.2% $158.2. 8.4% $112.5 6.0% “Yield on Loans, CRE Office and Medical/Dental Office $71 04% $5
Slide 22: Low LTV Commercial Real Estate Loans
Low LTV Commercial Real Estate Loans >65%1070% "ay, co % + Total CRE loans: 90% $1.02 billion en be + 639% CRE NOO, >60% 10.6596 379% CRE OO we tai 208 on 2 No past due 355% 10.60% 2 loans % 70% + No nonperforming loans pe os + Low weighted a average LTV 50% 49% CRE ~ Industrial 176 $2947 $1.7 52% 4
Slide 23: CRE Office and Medical/Dental Office Loans
CRE Office and Medical/Dental Office Loans CRE Office Distribution by LTV?, as of March 31, 2024 CRE Office and Medical/Dental Office by Location 3, as of March Loan Size No. of Average Loan ” Gitethiats (Sin millions) isan _leararios 2 Ske Weighted Avg. TV} sli mtn <$05 33 $93 $0.3, 45% a >$05-$2 4
Slide 24: Multifamily Loans
Multifamily Loans Multifamily Loans Distribution by LTV 4, as of March 31, 2024 Multifamily Loans by Location 3, as of march 31, Outof state, No. of Average Loan Weighted 0.6% Loans _ Balance? Size Avg. LTV < $0.5 22 $6.4 $0.3 33% >$0.5 -$2 29 $33.7 $1.2 49%, >$2-$5 24 $77.0 $3.2 58% >$5-$10 6 $397
Slide 25: Disciplined Credit Culture
Disciplined Credit Culture NPAs / Assets 1.00% asox 0.840% \Nonaccrual Loans 0.60% 14 Family $ $ $ $$ 0.40% CRE & Multifamily 1 14272 13,004 13,004 6.153 g 9% Construction . . . . - Consumer . . . . _ 0.00% comnaeal 7 : : : : Sn a Total Nonacerual Loans $40 $14272 $13,004 $13,004 $6,153 ALL/ Total L
Slide 26: Investing for the Future
Investing for the Future. Noninterest Expense (SMM) Total Revenue: for the quarter ended for the quarter ended se 83% —— 84% x0 = $26.5 s200 5.9% coon as $245 $241 $225 5 $0.5 $150 s00% 7 s100 100% s $15.0 $14.6 $148 $15.3 $0 200% wo 3 4023 1024 ° 0 es hn case Merger expense =~ 8 i " 1023 2023 3023
Slide 27: While Building Value for Shareholders
While Building Value for Shareholders Net Income? (SMM) Tangible Book Value Per Share (TBVPS)** s100 tiem 10.92% ——7.20%6 S30 soo 220 500 $00 ooo 1024 Pre-Tax Pre-Provision Income? (SMM) Diluted Earnings Per Share? $0.44 $114 $0.36 : i in - 2023 sans sat SOUTHERN, : "ALIFORNIA SOUTHERN 2 FChuiFORNIA
Slide 28: Strong Capital Base
Strong Capital Base Tangible Common Equity Ratio!? | Total Risk-Based Capital Ratio’? | Risk-Based F Total Risk-Based Copia ato™ | Ratio?? 137% 118% 1022 202 SOUTHERN ‘CALIFORNIA BANCORP nae 20% so 40221023 BANK OF SOUTHERN = CALIFORNIA. 3 201% 103% 3022 2022 3x2 4022 _ 1023 | tiert Ratio”? | 12% to
Slide 29: Appendix
y cea A - lm Appendix
Slide 30: 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 common equity ratio by excluding the balance of intanginle ass
Slide 31: Non-GAAP Reconciliation
Non-GAAP Reconciliation 1d 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 ratio represents the ratio o
Slide 32: Non-GAAP Reconciliation
Non-GAAP Reconciliation Pre-tax, pre-provision income and adjusted pre-tax, pre-provision income are non-US. 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 calculate
Slide 33: 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