California Bancorp · NASDAQ:BCAL
California Bancorp — Q2 2022 Earnings Presentation
23 slides from California Bancorp's earnings presentation, Aug 1, 2022
Slide 1: Investor Presentation Q2 2022
INVESTOR PRESENTATION Q2 2022 Steven E. Shelton CEO Thomas A. Sa President, CFO & COO Scott Myers SEVP, Chief Lending Officer 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 $19.27 as of 6/30/2022 Total gross loans excluding PPP loans of $7.8 million 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 200
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: 2nd Quarter 2022 Highlights
Loan Growth and Greater Operating Leverage Drive Increased Profitability Record Quarter of Loan Production 2nd QUARTER 2022 HIGHLIGHTS Net income of $4.2 million, up from $3.7 million in Q1 2022 Diluted EPS of $0.51, up from $0.44 in Q1 2022 ROA of 0.91%, up from 0.77% in Q1 2022 $166 million of new
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 ~40% 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 –2Q22 CAGR DDA: 19.5% Total Deposits: 17.6% 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: 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 – 2Q22 CAGR C&I: 13.8% Total Loans: 17.3% 4.88% 96%
Slide 12: New Loan Production Improved in 2Q22
NEW LOAN PRODUCTION IMPROVED IN 2Q22 BOOKING NEW LOANS AT ATTRACTIVE RATES(1) NEW LOAN FUNDINGS(1) WTD. AVG. RATE ON NEW LOANS(1) Funded new loans with balances of $167 million in 2Q22 compared to $117 million in 1Q22 and $93 million in 2Q21 Weighted average rate on newly funded loans was 4.57% in 2
Slide 13: CRE Loan Portfolio – Investor CRE
CRE LOAN PORTFOLIO – INVESTOR CRE CONSERVATIVELY UNDERWRITTEN PORTFOLIO WITH AVERAGE LTV OF 50.1% INVESTOR CRE BY PROPERTY TYPE(1) INVESTOR CRE BY GEOGRAPHIC BREAKDOWN (1) Data as a percent of total investor CRE, $518 million Data as of 6/30/2022
Slide 14: 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, $590 million Data as a percent of total Sponsor Finance Loans, $129 million
Slide 15: Paycheck Protection Program (PPP) Detail
PAYCHECK PROTECTION PROGRAM (PPP) DETAIL 18 PPP loans with balances of $7.8 million (1% of total loans) as of 6/30/22 compared to 101 PPP loans with balances of $37 million (3% of total loans) as of 3/31/22 6 first round PPP loans with balances of $1.5 million (0.1% of total loans) 12 second round P
Slide 16: Asset Quality Trends
NET CHARGE-OFFS (RECOVERIES) ($000S)(1) NONPERFORMING ASSETS RESERVES / LOANS NCOS (RECOVERIES) / AVG. LOANS (%)(1) Net charge-offs for 2020 were concentrated in 2Q20 related to non-systemic issues 1.08% ex. PPP ASSET QUALITY TRENDS 1.07% ex. PPP
Slide 17: Historical Profitability Trends
ROATCE NET INTEREST MARGIN ROAA EFFICIENCY RATIO HISTORICAL PROFITABILITY TRENDS *EPS for 2022 YTD represents TTM
Slide 18: Expense Levels Are Stabilizing
EXPENSE LEVELS ARE STABILIZING Operating expenses before capitalized loan origination costs are stabilizing following investments in talent, product development and technology over last two years Continued strong balance sheet growth and slower expense growth are expected to drive profitability impr
Slide 19: 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 20: Well Positioned for Rising Rates
WELL POSITIONED FOR RISING RATES Cash and cash equivalents accounted for 8.6% of interest-earnings assets at 6/30/22 High percentage of variable rate loans that will reprice within a year (approximately 32% of total loans) Benefit to average loan yields will increase with each additional rate hike N
Slide 21: 2022 Outlook and Priorities
2022 OUTLOOK AND PRIORITIES EFFICIENCY GROWTH Fully capitalize on the infrastructure put in place to generate revenue growth rate that is at least twice as large as expense growth rate Healthy economic conditions in our markets and strong value proposition enabling us to take market share should con
Slide 22: 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 23: Questions and Contact Information
Please send questions to ir@bankcbc.com Or Call 510.457.3751 CaliforniaBankofCommerce.com