California Bancorp · NASDAQ:BCAL
California Bancorp — Q1 2023 Earnings Presentation
24 slides from California Bancorp's earnings presentation, May 15, 2023
Slide 1: Investor Presentation Q1 2023
INVESTOR PRESENTATION Q1 2023 Steven E. Shelton CEO Thomas A. Sa President, CFO & COO Exhibit 99.1
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 $19.51 as of 3/31/2023 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 2007 as a relationship focused commercial business bank s
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: 1st Quarter 2023 Highlights
Continued Strong Financial Performance Despite More Challenging Environment Solid Loan Growth While Being Conservative on New Production 1st QUARTER 2023 HIGHLIGHTS Net income of $5.5 million Diluted EPS of $0.64 ROA of 1.12%, ROE of 12.50% and NIM of 4.02% Total loans increased at an annualized rat
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 ~41% 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 –Q1’23 CAGR DDA: 17.9% Total Deposits: 17.2% 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: Deposit Base Characteristics
DEPOSIT BASE CHARACTERISTICS Granular, well diversified deposit base No meaningful industry concentrations No venture capital or crypto-related deposits High percentage of deposits related to operating accounts and credit facilities creates sticky deposit base Strong deposit pipeline centered in ope
Slide 12: 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 – Q1’23 CAGR C&I: 14.1% Total Loans: 16.3% 4.88% 96%
Slide 13: New Loan Production in 1Q23
NEW LOAN PRODUCTION IN 1Q23 BOOKING NEW LOANS AT ATTRACTIVE RATES(1) NEW LOAN FUNDINGS(1) WTD. AVG. RATE ON NEW LOANS(1) Funded new loans with balances of $42 million in 1Q23 compared to $130 million in 4Q22 and $117 million in 1Q22 Weighted average rate on newly funded loans was 7.72% in 1Q23 compa
Slide 14: CRE Loan Portfolio – Investor CRE
CRE LOAN PORTFOLIO – INVESTOR CRE CONSERVATIVELY UNDERWRITTEN PORTFOLIO WITH AVERAGE LTV OF 48.9% INVESTOR CRE BY PROPERTY TYPE(1) INVESTOR CRE BY GEOGRAPHIC BREAKDOWN (1) Data as a percent of total investor CRE, $576 million Data as of 3/31/2023
Slide 15: CRE Loan Portfolio – Investor CRE: Retail
CRE LOAN PORTFOLIO – INVESTOR CRE: RETAIL Total of 66 loans: 55 Recourse & 11 Non-Recourse INVESTOR RETAIL: SINGLE VS MULTI TENANT INVESTOR RETAIL BY GEOGRAPHIC BREAKDOWN Data as a percent of total investor CRE Retail, $185 million Data as of 3/31/2023
Slide 16: 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, $656 million Data as a percent of total Sponsor Finance Loans, $228 million
Slide 17: 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 10.6% of total loan portfolio No exposure to
Slide 18: Asset Quality Trends
NET CHARGE-OFFS (RECOVERIES) ($000S)(1) NONPERFORMING ASSETS RESERVES / LOANS (1) NCOS (RECOVERIES) / AVG. LOANS (%)(2) CECL Methodology adopted 1/1/2023 Net charge-offs for 2020 were concentrated in 2Q20 related to non-systemic issues ASSET QUALITY TRENDS
Slide 19: Historical Profitability Trends
ROATCE NET INTEREST MARGIN ROAA EFFICIENCY RATIO HISTORICAL PROFITABILITY TRENDS
Slide 20: 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 21: 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 22: 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 23: 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 24: Please send questions to ir@bankcbc.com
Please send questions to ir@bankcbc.com Or Call 510.457.3751 CaliforniaBankofCommerce.com