California Bancorp · NASDAQ:BCAL
California Bancorp — Merger or Acquisition (January 2024)
34 slides from California Bancorp's merger presentation, Jan 30, 2024
Slide 1: Investor Presentation December 31, 2023
SOUTHERN ~ CALIFORNIA BANCORP Investor Presentation December 31, 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS ‘Ths communion may contain certain foarddooting statements, ndusing but ot ited a cera las, expectations, pojeclions and sateen about the beefs af the proposed merger the "Merge" of Southern Calfori Bancorp ("CB") and Ca
Slide 3: Company Overview
Slide 4: Investment Highlights
Investment Highlights AW 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 to mediumsized businesses in San Diego, Orange, Los Angeles, Ventura, Imperial and Kern counties
Slide 5: Southern California Bancorp At a Glance
Southern California Bancorp Ata Glance Branch Footprint 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 Largest economy in the California GOP world, behind Germany and 2023 Population Small Businesses ahead of
Slide 7: High Growth Franchise
High Growth Franchise oe Acquired Bank of Santa Clarita ($425KM Assets) vf, November 2020 2200 $2,284 $2,360 Since 2019, total assets have grown avid Raines joined Bea) organically and through strategic May 2020 said ie 5 Acquired CalWest Bancorp acquisitions by $1.5 billion, or 184%, (S311MM assets
Slide 8: Experienced Leadership Team
Experienced Leadership Team David Rainer Chairman and CEO of Southern California Bancorp and Bank of Southern California, N.A. Banking Experience: > 40 Years Peter Nutz Chief Credit Officer of Bank of Southern California, NA. Banking Experience: >20 Years Rich Hernandez President of Southern Califor
Slide 9: Our Vision for a Premier Banking Franchise
Our Vision for a Premier Banking Franchise Strong Leadership Growth Strategy ‘& 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, ‘& Ban
Slide 10: Financial Highlights
Slide 11: Q4 2023 Results
Q4 2023 Results Financial Results Key Metrics (for the quarter ended Dec. 31, 2023) (for the quarter ended Dec. 31, 2023) $4.4 Million | 0.75% Net Income Return on Average Assets (ROAA) $0.24 Diluted Earnings Per 6.21% Share a on Average Common Equity (ROACE) $7.1 Million 4.05% Pre-tax, Pre-provisio
Slide 12: Q4 2023 Results Continued
Q4 2023 Results Continued Strong Balance Sheet Credit Quality Metrics (At Dec. 31, 2023) (At Dec. 31, 2023) $2.36 Billion 0.55% Total Assets Non-performing Assets/Total Assets $1.96 Billion 0.66% Total Loans* Non-performing Loans/Total Loans? $1.94 Billion 1.20% Total Deposits Allowance for Credit L
Slide 13: 2023 Results
2023 Results Financial Results Key Metrics (for the year ended December 31, 2023) (for the year ended December 31, 2023) $25.9 Million | 1.12% Net Income Return on Average Assets (ROAA) $1.39 9.48% Diluted Earnings Per % Share Return on Average Common Equity (ROACE) $37.8 Million Pre-tax, Pre-provis
Slide 14: 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 a on Average Common Equity (ROACE) $27.9 Million 4.06% Pre-tax, Pre-provisi
Slide 15: Net Interest Margin and Average Balances
[assets Is in thousands Total loans Taxable debt securities Tax-exempt debt securities! ‘Avg Balance Income Net Interest Margin Yield on Earning Assets, for three months ended Dec, 31, 2023 Liabilities and Shareholders’ Equity (Sin thousands) $1,954,396 $29,968 113,375 991 53,644 353 Interest-bearin
Slide 16: Allowance for Credit Losses
Allowance for Credit Losses as of and for the three months ended December 31, 2023 $22,705K 51,268 s221k $22,569K ($1826) ($7254) > The $824 thousand provision for credit losses for the fourth quarter of 2023 included a $1.1 million provision for credit losses for loans and a $307 thousand negative
Slide 17: Negligible Impact of Unrealized Losses on Capital
Negligible Impact of Unrealized Losses on Capital = Total net unrealized losses after-tax were 2.48% of CET1 Capital as of December 31, 2023. «= Even if interest rates rise another 300 bps, the Bank's capital ratios remain above Well-Capitalized guidelines Parallel Rate Shock Scenarios (Sin Thousand
Slide 18: Debt Securities, AOCI and Tangible Common Equity
Debt Securities, AOCI* and Tangible Common Equity? As of Dec. 31, 2023 AFS Securities (fair value) 719% of Portfolio, 3.6% yield? portfolio, 2.3% yield? $260.0 710.5% 720.7% 12.0% —_— $250.0 $a. 100% $240.0 $230.0 Sin ions $220.0 $210.0 $200.0 4022 1023 2023 3023 4Q23 mmr Tangible Equity net of AOCI
Slide 19: Low-Cost Core Deposits
Low-Cost Core Deposits (ost of Deposits for the quarter ended: 10% 0% 200% 1.81% = 00% 1.56% - 0% 1.60% 109% 140% 70% 1.20% 20m 9.51% aso = aso a sox ass 20% 00% 0% 4022 1023 2023 3023 4023 20% i P Total Deposits (SMM) 20% sac 3386 susas 388 $2,000 $1,932 sua 10% $1,900, $1,800, % $1,700 napa sysuas
Slide 20: Significant Access to Liquidity & Funding Capacity
Significant Access to Liquidity & Funding Capacity FundingiGaneery | muse | WEEICTEIERTS = Ample access to on-Balance Sheet (BS) and off-BS, i liquidity (as of 12/31/23) As of 12/31/23 (Sin millions) Cash $ 868 OS . $ 868 = On-Balance Sheet Cash = $86.8 million AFS Securities 130.0 - 130.0 * Total B
Slide 21: Diverse Loan Portfolio
Diverse Loan Portfolio nber. 31, 2023 Total CRE by Location 3, as of December. 31, 2023 Commercially Focused | Relationship Based Total Loan Portfolio 1, as ofo. California ~ alfcenia- Ventura 6% Out of State Othero.3% Riverside Multifamily ™% ” 11.3%, 1-4 SER California - 7.3% Others 11% Total CRE
Slide 22: Loan Portfolio
Loan Portfolio Total Loans! (SMM), at the period ended Contractual Maturity Summary for the next 3 years as of December 31, 2023, (Sin mitions) <iyear 1:2 Years > 2-3 Years $1,965 Sof total ‘%of total %of total $boans_ _$ _toans__$ Loans $1,935 Construction & land development $1577 «80% $710.36 ~—SI
Slide 23: Low LTV Commercial Real Estate Loans
Low LTV Commercial Real Estate Loans Total CRE Distribution by LTV+, as of December 31, 2023, CRE NOO vs CRE OO by Property Type, as of December 31, 2023, > 70% 7 265% t070% "oye 100% om 7 + Total CRE loans: 0% $1.0 billion 00% to 68% + 63% CRENOO, 11% 37% CRE OO 80% + No past due 4 loans 355% 10 60
Slide 24: CRE Office Loans
CRE Office Loans CRE Office Distribution by LTV}, as of December 31, 2023, No. of Average Loan Weighted Avg, Loans _ Balance? Size uv < $0.5 47 $12.6 $0.3, 39% >$0.5 - $2 61 $58.2 $1.0 49% >$2-$5 15 $42.8 $2.9 50% >$5-$10 6 $42.3 $7.4 56% >$10 - $20 2 $33.6 $16.8 49% > $20 1 $24.9 $24.9 55% CRE ~ Of
Slide 25: Multifamily Loans
Multifamily Loans Multifamily Loans Distribution by LTV 4, as of De Multifamily Loans by Location 3, as of December 31, 2023 Out of state, 0.5% No. of ‘Average Loan Weighted Avg. loans _ Balance? Size iv <$0.5 21 $6.1 $0.3 33% >$0.5-$2 31 $35.0 $1.1 48%. California >$2-$5 26 $83.6 $3.2 59% Pomreaie
Slide 26: Disciplined Credit Culture
Disciplined Credit Culture NPAs / Assets Adequate Reserves / 0.800% At quarter end. 0.617% ossi% 0.600% = ‘Nonacerual Loans 0.400% 1a Family aS ee & CRE & Multifamily 2 - 1 14,272 13,008 0.200% Construction 7 : : : 7 0.002% 0.00% Consumer - . . . ~ 9.000% pear : 143 : : 40221023 ars sas 4028 Total N
Slide 27: Investing for the Future
Investing for the Future. Noninterest Expense (SMM) Total Revenue? (SMM) for the quarter ended for the quarter ended: 250 700% 20 61.4% 68.3% $265 59.6% L 56.8% + $24.5 $20.0 o 60.0% cay $244 Sisk L $22.5 | 150 soon 29 s100 209% 5 $15 $146 14.8 $15.3 Gen $150 $146 $a. $50 200% 10 $0.0 20.0% . 4022 1
Slide 28: Value for Shareholders
While ote Value for shareholders 10.92% 15.64% 14.97% 14.60% aig TT Pre-Tax Pre-Provision Income”? (SMM) Diluted Earnings Per Share? $12.3 $0.44 S114 $0.36 $0.35 i ll | a [J ie - sors 4023 SQUTHERN, a a "ALIFORNIA SOUTHERN PE CALIFORNIA
Slide 29: Strong Capital Base
Strong Capital Base 2% 10.70% 29% 105% ture 121% 124% 12.60% 10.3% 110% 109% 111% f TT | ! l | | | son 1022 a2 102320233023 a2 sant eee eereneral 2022 3023 4023 Total Risk-Based FTotal Rsk Based Capital Ratio | Ratio’ 2% 13.50% rz6m 0% 3K 1% mI 118% 118% 120% tage 12% SK I | | | | Hil | | | fH aera
Slide 30: Appendix
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-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 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 tex and provision for credit losses from net income, We calculat
Slide 34: Non-GAAP Reconciliation
Non-GAAP Reconciliation The following table presents a reconeiliation 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
California BanCorp — Merger or Acquisition (January 2024) on 6ix