California BanCorp Reports Financial Results for the Second Quarter and Six Months Ended June 30, 2024

Rhea-AI Summary

California BanCorp (NASDAQ: CALB) reported a net loss of $5.9 million for Q2 2024, down from $3.8 million net income in Q1 2024 and $5.4 million in Q2 2023. The company's diluted EPS was $(0.68) for Q2 2024. The results were impacted by a $13.5 million provision for credit losses. Total assets decreased to $1.92 billion, with total gross loans down to $1.49 billion. Total deposits remained stable at $1.64 billion. The company's net interest margin was 3.71% for Q2 2024. Non-performing assets to total assets increased to 1.13%. The company maintains strong capital ratios, with a total risk-based capital ratio of 13.93%.

Positive

• Maintained stable total deposits at $1.64 billion
• Strong capital ratios with total risk-based capital ratio of 13.93%
• Increase in noninterest-bearing deposits, representing 39% of total deposits

Negative

• Net loss of $5.9 million for Q2 2024, down from $3.8 million net income in Q1 2024
• Diluted EPS decreased to $(0.68) for Q2 2024 from $0.45 in Q1 2024
• $13.5 million provision for credit losses in Q2 2024
• Total gross loans decreased by $33.2 million to $1.49 billion
• Net interest margin declined to 3.71% from 3.89% in Q1 2024
• Non-performing assets to total assets increased to 1.13% from 0.08% in Q1 2024

OAKLAND, Calif., July 29, 2024 (GLOBE NEWSWIRE) -- California BanCorp (NASDAQ: CALB) (the “Company”), whose subsidiary is California Bank of Commerce, announced today its financial results for the second quarter and six months ended June 30, 2024.

The Company reported a net loss of $5.9 million for the second quarter of 2024, representing a decrease of $9.7 million, or 254%, compared to net income of $3.8 million for the first quarter of 2024 and a decrease of $11.3 million, or 208%, compared to $5.4 million in the second quarter of 2023. For the six months ended June 30, 2024, the Company reported a net loss of $2.0 million representing a decrease of $12.9 million, or 119%, compared to net income of $10.9 million for the same period in 2023.

Diluted earnings per share of $(0.68) for the second quarter of 2024, compared to $0.45 for the first quarter of 2024 and $0.65 for the second quarter of 2023. For the six months ended June 30, 2024, diluted earnings per share of $(0.24), compared to $1.29 for the same period in 2023.

"As we announced earlier this month, on July 17, 2024, at their respective shareholder meetings, shareholders of Southern California Bancorp and California BanCorp approved the merger of the two companies, and we expect the transaction to close on July 31, 2024,” said Steven Shelton, Chief Executive Officer of California BanCorp. “Our second quarter results were impacted by a $13.5 million provision for credit losses, largely as the result of stepped up resolution activity on loans individually identified during a rigorous review of our loan portfolio. During the quarter, we focused our efforts on an active strategy of de-risking our balance sheet and remained measured in our new loan production, which led to a decline in total loans. At the same time, we continued to add new commercial relationships that helped contribute to an increase in our balances of noninterest-bearing deposits. We look forward to closing our merger and capitalizing on the strong market position of our combined entity to continue adding attractive commercial relationships, generating profitable growth, and further enhancing the value of our franchise in the coming years.”

Financial Highlights:

Profitability - three months ended June 30, 2024 compared to March 31, 2024

• Net loss of $5.9 million and $(0.68) per diluted share, compared to net income of $3.8 million and $0.45 per share, respectively.
• Revenue of $18.3 million decreased $1.1 million, or 6%, from $19.4 million for the first quarter of 2024 (See Interim Consolidated Non-GAAP Data).
• Net interest income of $16.8 million decreased $892,000, or 5%, compared to $17.7 million for the first quarter of 2024.
• Provision for credit losses of $13.5 million increased $13.4 million from $126,000 for the first quarter of 2024.
• Non-interest income of $1.5 million decreased $187,000, or 11%, compared to $1.7 million for the first quarter of 2024.
• Non-interest expense, excluding merger related expenses, of $12.5 million decreased $139,000, or 1%, compared to $12.7 million for the first quarter of 2024 (See Interim Consolidated Non-GAAP Data).

Profitability - six months ended June 30, 2024 compared to June 30, 2023

• Net loss of $2.0 million and $(0.24) per diluted share, compared to net income of $10.9 million and $1.29 per diluted share, respectively.
• Revenue of $37.8 million decreased $1.8 million, or 5%, compared to $39.6 million in the prior year (See Interim Consolidated Non-GAAP Data).
• Net interest income of $34.5 million decreased $2.9 million, or 8%, compared to $37.4 million for the same period in the prior year.
• Provision for credit losses of $13.6 million increased $12.8 million from $802,000 for the six months ended June 30, 2023.
• Non-interest income of $3.2 million increased $981,000, or 44%, from $2.2 million for the same period in the prior year.
• Non-interest expense, excluding merger related expenses, of $25.2 million increased $1.8 million, or 8%, compared to $23.4 million for the six months ended June 30, 2023 (See Interim Consolidated Non-GAAP Data).

Financial Position – June 30, 2024 compared to March 31, 2024

• Total assets decreased by $5.2 million to $1.92 billion; average total assets decreased by $7.0 million to $1.91 billion.
• Total gross loans decreased by $33.2 million to $1.49 billion; average total gross loans decreased by $11.1 million to $1.51 billion.
• Total deposits decreased by $827,000 to $1.64 billion; average total deposits decreased by $7.0 million to $1.62 billion.
• The Company had no other borrowings at June 30, 2024 or March 31, 2024.
• Capital ratios remain healthy with a tier I leverage ratio of 9.93%, tier I capital ratio of 10.06%, and total risk-based capital ratio of 13.93%.
• Book value per share of $23.07 decreased by $0.72, or 3%.
• Tangible book value per share of $22.20 decreased by $0.71, or 3% (See Interim Consolidated Non-GAAP Data).
  

Net Interest Income and Margin:

Net interest income for the quarter ended June 30, 2024 was $16.8 million, representing a decrease of $892,000, or 5%, from $17.7 million for the three months ended March 31, 2024, and a decrease of $1.8 million, or 10%, from $18.6 million for the quarter ended June 30, 2023. The decrease in net interest income compared to the first quarter of 2024 was primarily attributable to lower yields on interest earning assets. Compared to the second quarter of 2023, the decrease in net interest income resulted from a lower balance of average earning assets which was driven by a reduction in loan balances as a result of conservative underwriting combined with decreased demand and pay-offs occurring in the normal course of business. Additionally, during the current period the Company incurred higher yields on interest-bearing deposits.

Net interest income for the six months ended June 30, 2024 was $34.5 million, a decrease of $2.9 million, or 8% from $37.4 million for the six months ended June 30, 2023. The decrease in net interest income was primarily attributable to an increase in higher yields on interest-bearing deposits.

The Company’s net interest margin for the second quarter of 2024 was 3.71%, compared to 3.89% for the first quarter of 2024 and 3.93% for the same period in 2023. The Company’s net interest margin for the six months ended June 30, 2024 was 3.80% compared to 3.98% for the same period in 2023.

Non-Interest Income:

The Company’s non-interest income for the quarters ended June 30, 2024, March 31, 2024, and June 30, 2023 was $1.5 million, $1.7 million, and $1.1 million, respectively. For the six months ended June 30, 2024, non-interest income of $3.2 million compared to $2.2 million for the same period of 2023. The fluctuations in non-interest income from the prior periods were primarily due to service charges and loan related fees.

Net interest income and non-interest income comprised total revenue of $18.3 million, $19.4 million, and $19.8 million for the quarters ended June 30, 2024, March 31, 2024, and June 30, 2023, respectively. Total revenue for the six months ended June 30, 2024 and 2023 was $37.8 million and $39.6 million, respectively (See Interim Consolidated Non-GAAP Data).

Non-Interest Expense:

The Company’s non-interest expense for the quarters ended June 30, 2024, March 31, 2024, and June 30, 2023 was $13.2 million, $13.7 million, and $11.6 million, respectively. Non-interest expense of $26.9 million for the six months ended June 30, 2024 increased by $3.5 million, or 15%, compared to $23.4 million for the same period of 2023. The fluctuations in non-interest expense from the prior periods was primarily due to the recognition of merger related expenses. Additionally, compared to the same periods in the prior year, the Company incurred increases in salaries and benefits as well as premises and equipment.

Excluding the impact of merger related expenses, non-interest expense for the second quarter of 2024, the first quarter of 2024 and the second quarter of 2023 was $12.5 million, $12.7 million, and $11.6 million, respectively. For the six months ended June 30, 2024 and 2023, non-interest expense excluding the impact of merger related expenses was $25.2 million and $23.4 million, respectively (See Interim Consolidated Non-GAAP Data).

The Company’s efficiency ratio, the ratio of non-interest expense to revenues, was 71.90%, 70.57%, and 58.66% for the quarters ended June 30, 2024, March 31, 2024, and June 30, 2023, respectively. Excluding the impact of merger related expenses, the Company’s efficiency ratio was 68.38% and 65.29% for the second and first quarters of 2024, respectively. For the six months ended June 30, 2024 and 2023, the Company’s efficiency ratio was 71.22% and 59.14%, respectively. Excluding the impact of merger related expenses, the Company’s efficiency ratio was 66.79% for the six months ended June 30, 2024 (See Interim Consolidated Non-GAAP Data).

Balance Sheet:

Total assets were $1.92 billion as of June 30, 2024 and March 31, 2024, compared to total assets of $2.00 billion at June 30, 2023. The decrease in total assets from the prior year was primarily due to conservative new loan production, combined with decreased liquidity related to a reduction in noninterest-bearing deposits.

Total gross loans decreased by $33.2 million, or 2%, to $1.49 billion at June 30, 2024, from $1.52 billion at March 31, 2024 and decreased $95.9 million, or 6%, from $1.58 billion at June 30, 2023. During the second quarter of 2024, commercial loans increased by $1.7 million, or less than 1%, real estate related loans decreased by $33.0 million, or 4%, and other loans decreased $1.9 million, or 5%. Compared to the same period in the prior year, commercial, real estate other, real estate construction and land, and other loans decreased by $10.1 million, or 2%, $34.8 million, or 4%, $45.1 million, or 74%, and $5.9 million, or 13%, respectively.

Total deposits of $1.64 billion at June 30, 2024 remained unchanged from March 31, 2024, and decreased by $99.6 million, or 6%, from $1.74 billion at June 30, 2023. Compared to the same period last year, the decrease in total deposits was primarily concentrated in noninterest-bearing demand deposits. Noninterest-bearing deposits, primarily commercial business operating accounts, represented 39% of total deposits at both June 30, 2024 and March 31, 2024 and represented 43% of total deposits at June 30, 2023.

Excluding junior subordinated debt securities, the Company had no outstanding borrowings at June 30, 2024, March 31, 2024 or June 30, 2023.

Asset Quality:

The provision for credit losses on loans was $13.7 million for the second quarter of 2024, compared to $301,000 for the first quarter of 2024 and $340,000 for the second quarter of 2023. The Company had net loan charge-offs of $13.3 million, or 0.89% of gross loans, during the second quarter of 2024, net loan charge-offs of $348,000, or 0.02% of gross loans during the first quarter of 2024 and no charge-offs or recoveries during the second quarter of 2023.

Non-performing assets (“NPAs”) to total assets were 1.13% at June 30, 2024, compared to 0.08% at March 31, 2024 and 0.01% at June 30, 2023, with non-performing loans of $21.7 million, $1.5 million and $181,000, respectively, on those dates.

The allowance for credit losses on loans was $16.3 million, or 1.10% of total loans, at June 30, 2024, compared to $16.0 million, or 1.05% of total loans, at March 31, 2024 and $15.7 million, or 0.99% of total loans, at June 30, 2023.

The allowance for credit losses on unfunded loan commitments was $1.8 million, or 0.33% of total unfunded loan commitments, at June 30, 2024, compared to $2.0 million, or 0.32% of total unfunded loan commitments, at March 31, 2024 and $1.9 million, or 0.31% of total unfunded loan commitments, at June 30, 2023.

Capital Adequacy:

At June 30, 2024, shareholders’ equity totaled $195.5 million, compared to $200.7 million at March 31, 2024 and $184.2 million one year ago. Additionally, at June 30, 2024, the Company’s total risk-based capital ratio, tier one capital ratio, and leverage ratio were 13.93%, 10.06%, and 9.93%, respectively; all of which were above the regulatory standards of 10.00%, 8.00%, and 5.00%, respectively, for “well-capitalized” institutions.

About California BanCorp:

California BanCorp, the parent company for California Bank of Commerce, offers a broad range of commercial banking services to closely held businesses and professionals located throughout Northern California. The Company’s common stock trades on the Nasdaq Global Select marketplace under the symbol CALB. For more information on California BanCorp, please visit our website at www.californiabankofcommerce.com.

Contacts:

Steven E. Shelton, (510) 457-3751
Chief Executive Officer
seshelton@bankcbc.com

Thomas A. Sa, (510) 457-3775
President, Chief Financial Officer and Chief Operating Officer
tsa@bankcbc.com

Use of Non-GAAP Financial Information:

This press release contains both financial measures based on GAAP and non-GAAP. Non-GAAP financial measures are used where management believes them to be helpful in understanding the Company’s results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. The non-GAAP financial measures included in this press release include: Total Revenue; Adjusted non-interest expense; Adjusted Efficiency Ratio; Tangible Equity to Tangible Assets Ratio; Quarterly and Year-to-Date Average Tangible Equity to Tangible Assets Ratio; and Tangible Book Value Per Share.

Forward-Looking Statements:

Statements in this news release regarding expectations and beliefs about future financial performance and financial condition, as well as trends in the Company’s business and markets are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," "outlook," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." The forward-looking statements in this news release are based on current information and on assumptions that the Company makes about future events and circumstances that are subject to a number of risks and uncertainties that are often difficult to predict and beyond the Company’s control. As a result of those risks and uncertainties, the Company’s actual future performance or financial results could differ, possibly materially, from those expressed in or implied by the forward-looking statements contained in this news release and could cause the Company to make changes to future plans. Those risks and uncertainties include, but are not limited to, the risk of incurring loan losses, which is an inherent risk of the banking business; the risk that the Company will not be able to continue its internal growth rate; the occurrence of any event, change or other circumstances that could give rise to the right of the Company or Southern California Bancorp to terminate their agreement with respect to the pending merger; the outcome of any legal proceedings that may be instituted against the Company or Southern California Bancorp; delays in completing the merger with Southern California Bancorp; the failure to satisfy any of the other conditions to the merger on a timely basis or at all; the ability to complete the merger and integration of the Company and Southern California Bancorp successfully; costs being greater than anticipated; cost savings being less than anticipated; the risk that the merger disrupts the business of the Company, Southern California Bancorp or the combined company; the risk that the United States economy will experience slowed growth or recession or will be adversely affected by domestic or international economic conditions and risks associated with the Federal Reserve Board taking actions with respect to interest rates, any of which could adversely affect, among other things, the values of real estate collateral supporting many of the Company’s loans, interest income and interest rate margins and, therefore, the Company’s future operating results; the impacts of the failure of other depository institutions on investor and depositor sentiments and preferences; the Company’s ability to manage its liquidity; risks associated with changes in income tax laws and regulations; and risks associated with seeking new client relationships and maintaining existing client relationships. Readers of this news release are encouraged to review the additional information regarding these and other risks and uncertainties to which our business is subject that are contained in our Annual Report on Form 10-K for the year ended December 31, 2023 which is on file with the Securities and Exchange Commission (the “SEC”).

Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this news release, which speak only as of today's date, or to make predictions based solely on historical financial performance. The Company disclaims any obligation to update forward-looking statements contained in this news release, whether as a result of new information, future events or otherwise, except as may be required by law.

FINANCIAL TABLES FOLLOW

	CALIFORNIA BANCORP AND SUBSIDIARY
	SELECTED INTERIM FINANCIAL INFORMATION (UNAUDITED) - PROFITABILITY
	(Dollars in Thousands, Except Per Share Data)
											Change												Change
	QUARTERLY HIGHLIGHTS:		Q2 2024				Q1 2024				$				%				Q2 2023				$				%
	Interest income		$	26,748			$	27,382			$	(634	)		-2	%			$	27,172			$	(424	)		-2	%
	Interest expense			9,925				9,667				258			3	%				8,526				1,399			16	%
	Net interest income			16,823				17,715				(892	)		-5	%				18,646				(1,823	)		-10	%
	Provision for credit losses			13,506				126				13,380			10619	%				444				13,062			2942	%
	Net interest income after provision for credit losses			3,317				17,589				(14,272	)		-81	%				18,202				(14,885	)		-82	%
	Non-interest income			1,518				1,705				(187	)		-11	%				1,135				383			34	%
	Non-interest expense(1)			13,188				13,704				(516	)		-4	%				11,603				1,585			14	%
	Income before income taxes			(8,353	)			5,590				(13,943	)		-249	%				7,734				(16,087	)		-208	%
	Income tax expense			(2,492	)			1,773				(4,265	)		-241	%				2,294				(4,786	)		-209	%
	Net income		$	(5,861	)		$	3,817			$	(9,678	)		-254	%			$	5,440			$	(11,301	)		-208	%
	Diluted earnings per share		$	(0.68	)		$	0.45			$	(1.13	)		-251	%			$	0.65			$	(1.33	)		-205	%
	Net interest margin			3.71	%			3.89	%		-18 Basis Points									3.93	%		-22 Basis Points
	Efficiency ratio(1)			71.90	%			70.57	%		+133 Basis Points									58.66	%		+1324 Basis Points
											Change
	YEAR-TO-DATE HIGHLIGHTS:			2024				2023			$				%
	Interest income		$	54,130			$	52,711			$	1,419			3	%
	Interest expense			19,592				15,308				4,284			28	%
	Net interest income			34,538				37,403				(2,865	)		-8	%
	Provision for credit losses			13,632				802				12,830			1600	%
	Net interest income after provision for credit losses			20,906				36,601				(15,695	)		-43	%
	Non-interest income			3,223				2,242				981			44	%
	Non-interest expense(1)			26,892				23,446				3,446			15	%
	Income before income taxes			(2,763	)			15,397				(18,160	)		-118	%
	Income tax expense			(719	)			4,506				(5,225	)		-116	%
	Net income		$	(2,044	)		$	10,891			$	(12,935	)		-119	%
	Diluted earnings per share		$	(0.24	)		$	1.29			$	(1.53	)		-119	%
	Net interest margin			3.80	%			3.98	%		-18 Basis Points
	Efficiency ratio(1)			71.22	%			59.14	%		+1208 Basis Points
	(1)See pro-forma balances and ratios, excluding the impact of merger related expenses - Interim Consolidated Non-GAAP Data

	CALIFORNIA BANCORP AND SUBSIDIARY
	SELECTED INTERIM FINANCIAL INFORMATION (UNAUDITED) - FINANCIAL POSITION
	(Dollars in Thousands, Except Per Share Data)
											Change												Change
	PERIOD-END HIGHLIGHTS:		Q2 2024				Q1 2024				$				%				Q2 2023				$				%
	Total assets		$	1,917,389			$	1,922,541			$	(5,152	)		-0	%			$	2,005,646			$	(88,257	)		-4	%
	Gross loans			1,487,697				1,520,891				(33,194	)		-2	%				1,583,631				(95,934	)		-6	%
	Deposits			1,638,689				1,639,516				(827	)		-0	%				1,738,296				(99,607	)		-6	%
	Tangible equity(1)			188,042				193,263				(5,221	)		-3	%				176,783				11,259			6	%
	Tangible book value per share(1)		$	22.20			$	22.91			$	(0.71	)		-3	%			$	21.09			$	1.11			5	%
	Tangible equity / tangible assets(1)			9.85	%			10.09	%		-24 Basis Points									8.85	%		+100 Basis Points
	Gross loans / total deposits			90.79	%			92.76	%		-197 Basis Points									91.10	%		-31 Basis Points
	Noninterest-bearing deposits / total deposits			39.31	%			38.64	%		+67 Basis Points									42.69	%		-338 Basis Points
	QUARTERLY AVERAGE										Change												Change
	HIGHLIGHTS:		Q2 2024				Q1 2024				$				%				Q2 2023				$				%
	Total assets		$	1,909,125			$	1,916,142			$	(7,017	)		-0	%			$	1,983,877			$	(74,752	)		-4	%
	Total earning assets			1,823,785				1,831,333				(7,548	)		-0	%				1,900,918				(77,133	)		-4	%
	Gross loans			1,507,625				1,518,722				(11,097	)		-1	%				1,577,529				(69,904	)		-4	%
	Deposits			1,622,673				1,629,636				(6,963	)		-0	%				1,684,008				(61,335	)		-4	%
	Tangible equity(1)			196,841				193,094				3,747			2	%				175,783				21,058			12	%
	Tangible equity / tangible assets(1)			10.35	%			10.12	%		+23 Basis Points									8.89	%		+146 Basis Points
	Gross loans / total deposits			92.91	%			93.19	%		-28 Basis Points									93.68	%		-77 Basis Points
	Noninterest-bearing deposits / total deposits			39.55	%			40.34	%		-79 Basis Points									42.65	%		-310 Basis Points
	YEAR-TO-DATE AVERAGE										Change
	HIGHLIGHTS:		Q2 2024				Q2 2023				$				%
	Total assets		$	1,912,634			$	1,979,107			$	(66,473	)		-3	%
	Total earning assets			1,827,558				1,897,448				(69,890	)		-4	%
	Gross loans			1,513,173				1,579,917				(66,744	)		-4	%
	Deposits			1,626,155				1,691,925				(65,770	)		-4	%
	Tangible equity(1)			194,967				172,636				22,331			13	%
	Tangible equity / tangible assets(1)			10.23	%			8.76	%		+147 Basis Points
	Gross loans / total deposits			93.05	%			93.38	%		-33 Basis Points
	Noninterest-bearing deposits / total deposits			39.94	%			42.76	%		-282 Basis Points
	(1)See Interim Consolidated Non-GAAP Data

	CALIFORNIA BANCORP AND SUBSIDIARY
	SELECTED INTERIM FINANCIAL INFORMATION (UNAUDITED) - ASSET QUALITY
	(Dollars in Thousands)
	ALLOWANCE FOR CREDIT LOSSES (LOANS):		06/30/24				03/31/24				12/31/23				09/30/23				06/30/23
	Balance, beginning of period		$	15,981			$	16,028			$	15,921			$	15,722			$	15,382
	CECL adjustment			-				-				-				-				-
	Provision for credit losses, quarterly			13,668				301				87				121				340
	Charge-offs, quarterly			(13,351	)			(439	)			-				(156	)			-
	Recoveries, quarterly			50				91				20				234				-
	Balance, end of period		$	16,348			$	15,981			$	16,028			$	15,921			$	15,722
	NONPERFORMING ASSETS:		06/30/24				03/31/24				12/31/23				09/30/23				06/30/23
	Loans accounted for on a non-accrual basis		$	21,463			$	1,212			$	3,781			$	1,236			$	181
	Loans with principal or interest contractually past due 90 days or more and still accruing interest			244				240				-				-				-
	Nonperforming loans		$	21,707			$	1,452			$	3,781			$	1,236			$	181
	Other real estate owned			-				-				-				-				-
	Nonperforming assets		$	21,707			$	1,452			$	3,781			$	1,236			$	181
	Nonperforming loans by asset type:
	Commercial		$	9,624			$	1,159			$	3,728			$	1,183			$	-
	Real estate other			11,515				-				-				-				-
	Real estate construction and land			-				-				-				-				-
	SBA			324				53				53				53				181
	Other			244				240				-				-				-
	Nonperforming loans		$	21,707			$	1,452			$	3,781			$	1,236			$	181
	ASSET QUALITY:		06/30/24				03/31/24				12/31/23				09/30/23				06/30/23
	Allowance for credit losses (loans) / gross loans			1.10	%			1.05	%			1.03	%			1.01	%			0.99	%
	Allowance for credit losses (loans) / nonperforming loans			75.31	%			1100.62	%			423.91	%			1288.11	%			8686.19	%
	Nonperforming assets / total assets			1.13	%			0.08	%			0.19	%			0.06	%			0.01	%
	Nonperforming loans / gross loans			1.46	%			0.10	%			0.24	%			0.08	%			0.01	%
	Net quarterly charge-offs / gross loans			0.89	%			0.02	%			-0.00	%			-0.00	%			0.00	%

	CALIFORNIA BANCORP AND SUBSIDIARY
	INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
	(Dollars in Thousands, Except Per Share Data)
			Three months ended												Six months ended
			06/30/24				03/31/24				06/30/23				06/30/24				06/30/23
	INTEREST INCOME
	Loans		$	22,962			$	23,574			$	23,476			$	46,536			$	45,948
	Federal funds sold			2,542				2,334				2,238				4,876				3,998
	Investment securities			1,244				1,474				1,458				2,718				2,765
	Total interest income			26,748				27,382				27,172				54,130				52,711
	INTEREST EXPENSE
	Deposits			9,366				9,096				7,493				18,462				13,515
	Other			559				571				1,033				1,130				1,793
	Total interest expense			9,925				9,667				8,526				19,592				15,308
	Net interest income			16,823				17,715				18,646				34,538				37,403
	Provision for credit losses			13,506				126				444				13,632				802
	Net interest income after provision for credit losses			3,317				17,589				18,202				20,906				36,601
	NON-INTEREST INCOME
	Service charges and other fees			1,147				1,379				867				2,526				1,730
	Other non-interest income			371				326				268				697				512
	Total non-interest income			1,518				1,705				1,135				3,223				2,242
	NON-INTEREST EXPENSE(1)
	Salaries and benefits			8,925				8,852				7,831				17,777				15,707
	Premises and equipment			1,431				1,452				1,168				2,883				2,348
	Merger related expenses			647				1,024				-				1,671				-
	Other			2,185				2,376				2,604				4,561				5,391
	Total non-interest expense			13,188				13,704				11,603				26,892				23,446
	Income before income taxes			(8,353	)			5,590				7,734				(2,763	)			15,397
	Income taxes			(2,492	)			1,773				2,294				(719	)			4,506
	NET INCOME		$	(5,861	)		$	3,817			$	5,440			$	(2,044	)		$	10,891
	EARNINGS PER SHARE
	Basic earnings per share		$	(0.69	)		$	0.45			$	0.65			$	(0.24	)		$	1.30
	Diluted earnings per share		$	(0.68	)		$	0.45			$	0.65			$	(0.24	)		$	1.29
	Average common shares outstanding			8,456,488				8,413,735				8,369,907				8,480,654				8,354,564
	Average common and equivalent shares outstanding			8,558,432				8,566,712				8,414,213				8,610,179				8,442,607
	PERFORMANCE MEASURES
	Return on average assets			-1.23	%			0.80	%			1.10	%			-0.21	%			1.11	%
	Return on average equity			-11.54	%			7.66	%			11.91	%			-2.03	%			12.19	%
	Return on average tangible equity			-11.98	%			7.95	%			12.41	%			-2.11	%			12.72	%
	Efficiency ratio(1)			71.90	%			70.57	%			58.66	%			71.22	%			59.14	%
	(1)See pro-forma balances and ratios, excluding the impact of merger related expenses - Interim Consolidated Non-GAAP Data

	CALIFORNIA BANCORP AND SUBSIDIARY
	INTERIM CONSOLIDATED BALANCE SHEETS (UNAUDITED)
	(Dollars in Thousands)
			06/30/24				03/31/24				12/31/23				09/30/23				06/30/23
	ASSETS
	Cash and due from banks		$	14,036			$	12,071			$	27,520			$	17,128			$	19,763
	Federal funds sold			217,713				191,027				184,834				181,854				187,904
	Investment securities			125,303				126,918				145,401				149,244				151,129
	Loans:
	Commercial			612,208				610,459				626,615				633,902				622,270
	Real estate other			821,551				834,143				849,306				858,611				856,344
	Real estate construction and land			15,467				35,886				44,186				40,003				60,595
	SBA			3,678				3,919				4,032				4,415				4,936
	Other			34,793				36,484				35,394				36,184				39,486
	Loans, gross			1,487,697				1,520,891				1,559,533				1,573,115				1,583,631
	Unamortized net deferred loan costs (fees)			1,708				1,223				1,107				1,312				1,637
	Allowance for credit losses			(16,348	)			(15,981	)			(16,028	)			(15,921	)			(15,722	)
	Loans, net			1,473,057				1,506,133				1,544,612				1,558,506				1,569,546
	Premises and equipment, net			1,763				1,987				2,207				2,432				2,625
	Bank owned life insurance			26,273				26,084				25,878				25,697				25,519
	Goodwill and core deposit intangible			7,415				7,422				7,432				7,442				7,452
	Accrued interest receivable and other assets			51,829				50,899				48,021				41,614				41,708
	Total assets		$	1,917,389			$	1,922,541			$	1,985,905			$	1,983,917			$	2,005,646
	LIABILITIES
	Deposits:
	Demand noninterest-bearing		$	644,179			$	633,489			$	657,302			$	686,723			$	742,160
	Demand interest-bearing			22,550				21,911				26,715				28,533				29,324
	Money market and savings			633,880				656,236				631,015				672,119				633,620
	Time			338,080				327,880				310,212				319,706				333,192
	Total deposits			1,638,689				1,639,516				1,625,244				1,707,081				1,738,296
	Junior subordinated debt securities			54,360				54,326				54,291				54,256				54,221
	Other borrowings			-				-				75,000				-				-
	Accrued interest payable and other liabilities			28,883				28,014				34,909				32,465				28,894
	Total liabilities			1,721,932				1,721,856				1,789,444				1,793,802				1,821,411
	SHAREHOLDERS' EQUITY
	Common stock			114,095				113,566				113,227				112,656				112,167
	Retained earnings			82,121				87,982				84,165				78,824				73,423
	Accumulated other comprehensive loss			(759	)			(863	)			(931	)			(1,365	)			(1,355	)
	Total shareholders' equity			195,457				200,685				196,461				190,115				184,235
	Total liabilities and shareholders' equity		$	1,917,389			$	1,922,541			$	1,985,905			$	1,983,917			$	2,005,646
	CAPITAL ADEQUACY
	Tier I leverage ratio			9.93	%			10.17	%			9.61	%			9.27	%			9.01	%
	Tier I risk-based capital ratio			10.06	%			10.15	%			9.53	%			9.34	%			9.07	%
	Total risk-based capital ratio			13.93	%			13.93	%			13.16	%			13.00	%			12.73	%
	Total equity/ total assets			10.19	%			10.44	%			9.89	%			9.58	%			9.19	%
	Book value per share		$	23.07			$	23.79			$	23.38			$	22.64			$	21.98
	Common shares outstanding			8,472,038				8,436,732				8,402,482				8,395,483				8,383,772

	CALIFORNIA BANCORP AND SUBSIDIARY
	INTERIM CONSOLIDATED AVERAGE BALANCE SHEET AND YIELD DATA (UNAUDITED)
	(Dollars in Thousands)
			Three months ended June 30,										Three months ended March 31,
				2024										2024
							Yields			Interest							Yields			Interest
			Average				or			Income/			Average				or			Income/
			Balance				Rates			Expense			Balance				Rates			Expense
	ASSETS
	Interest earning assets:
	Loans (1)		$	1,507,625			6.13	%		$	22,962		$	1,518,722			6.24	%		$	23,574
	Federal funds sold			190,007			5.38	%			2,542			174,551			5.38	%			2,334
	Investment securities			126,153			3.97	%			1,244			138,060			4.29	%			1,474
	Total interest earning assets			1,823,785			5.90	%			26,748			1,831,333			6.01	%			27,382
	Noninterest-earning assets:
	Cash and due from banks			17,526										18,858
	All other assets (2)			67,814										65,951
	TOTAL		$	1,909,125									$	1,916,142
	LIABILITIES AND SHAREHOLDERS' EQUITY
	Interest-bearing liabilities:
	Deposits:
	Demand		$	23,735			0.22	%			13		$	24,736			0.20	%			12
	Money market and savings			637,301			3.24	%			5,128			635,696			3.12	%			4,928
	Time			319,899			5.31	%			4,225			311,884			5.36	%			4,156
	Other			54,339			4.14	%			559			55,130			4.17	%			571
	Total interest-bearing liabilities			1,035,274			3.86	%			9,925			1,027,446			3.78	%			9,667
	Noninterest-bearing liabilities:
	Demand deposits			641,738										657,320
	Accrued expenses and other liabilities			27,855										30,856
	Shareholders' equity			204,258										200,520
	TOTAL		$	1,909,125									$	1,916,142
	Net interest income and margin (3)						3.71	%		$	16,823						3.89	%		$	17,715
	(1) Nonperforming loans are included in average loan balances. No adjustment has been made for these loans in the calculation of yields. Interest income on loans includes amortization of net deferred loan costs of $197,000 and $34,000, respectively.
	(2) Other noninterest-earning assets includes the allowance for credit losses of $15.2 million and $16.1 million, respectively.
	(3) Net interest margin is net interest income divided by total interest-earning assets.

	CALIFORNIA BANCORP AND SUBSIDIARY
	INTERIM CONSOLIDATED AVERAGE BALANCE SHEET AND YIELD DATA (UNAUDITED)
	(Dollars in Thousands)
			Three months ended June 30,
				2024									2023
						Yields			Interest						Yields			Interest
			Average			or			Income/			Average			or			Income/
			Balance			Rates			Expense			Balance			Rates			Expense
	ASSETS
	Interest earning assets:
	Loans (1)		$	1,507,625		6.13	%		$	22,962		$	1,577,529		5.97	%		$	23,476
	Federal funds sold			190,007		5.38	%			2,542			170,608		5.26	%			2,238
	Investment securities			126,153		3.97	%			1,244			152,781		3.83	%			1,458
	Total interest earning assets			1,823,785		5.90	%			26,748			1,900,918		5.73	%			27,172
	Noninterest-earning assets:
	Cash and due from banks			17,526									19,207
	All other assets (2)			67,814									63,752
	TOTAL		$	1,909,125								$	1,983,877
	LIABILITIES AND SHAREHOLDERS' EQUITY
	Interest-bearing liabilities:
	Deposits:
	Demand		$	23,735		0.22	%			13		$	30,346		0.16	%			12
	Money market and savings			637,301		3.24	%			5,128			609,200		2.50	%			3,793
	Time			319,899		5.31	%			4,225			326,291		4.53	%			3,688
	Other			54,339		4.14	%			559			90,188		4.59	%			1,033
	Total interest-bearing liabilities			1,035,274		3.86	%			9,925			1,056,025		3.24	%			8,526
	Noninterest-bearing liabilities:
	Demand deposits			641,738									718,171
	Accrued expenses and other liabilities			27,855									26,441
	Shareholders' equity			204,258									183,240
	TOTAL		$	1,909,125								$	1,983,877
	Net interest income and margin (3)					3.71	%		$	16,823					3.93	%		$	18,646
	(1) Nonperforming loans are included in average loan balances. No adjustment has been made for these loans in the calculation of yields. Interest income on loans includes amortization of net deferred loan costs of $197,000 and $175,000, respectively.
	(2) Other noninterest-earning assets includes the allowance for credit losses of $15.2 million and $15.4 million, respectively.
	(3) Net interest margin is net interest income divided by total interest-earning assets.

	CALIFORNIA BANCORP AND SUBSIDIARY
	INTERIM CONSOLIDATED AVERAGE BALANCE SHEET AND YIELD DATA (UNAUDITED)
	(Dollars in Thousands)
			Six months ended June 30,
				2024										2023
							Yields			Interest						Yields			Interest
			Average				or			Income/			Average			or			Income/
			Balance				Rates			Expense			Balance			Rates			Expense
	ASSETS
	Interest earning assets:
	Loans (1)		$	1,513,173			6.18	%		$	46,536		$	1,579,917		5.86	%		$	45,948
	Federal funds sold			182,279			5.38	%			4,876			163,812		4.92	%			3,998
	Investment securities			132,106			4.14	%			2,718			153,719		3.63	%			2,765
	Total interest earning assets			1,827,558			5.96	%			54,130			1,897,448		5.60	%			52,711
	Noninterest-earning assets:
	Cash and due from banks			18,192										18,656
	All other assets (2)			66,884										63,003
	TOTAL		$	1,912,634									$	1,979,107
	LIABILITIES AND SHAREHOLDERS' EQUITY
	Interest-bearing liabilities:
	Deposits:
	Demand		$	24,236			0.21	%			25		$	32,179		0.12	%			19
	Money market and savings			636,499			3.18	%			10,056			617,885		2.25	%			6,897
	Time			315,891			5.34	%			8,381			318,313		4.18	%			6,599
	Other			54,734			4.15	%			1,130			80,701		4.48	%			1,793
	Total interest-bearing liabilities			1,031,360			3.82	%			19,592			1,049,078		2.94	%			15,308
	Noninterest-bearing liabilities:
	Demand deposits			649,529										723,548
	Accrued expenses and other liabilities			29,356										26,383
	Shareholders' equity			202,389										180,098
	TOTAL		$	1,912,634									$	1,979,107
	Net interest income and margin (3)						3.80	%		$	34,538					3.98	%		$	37,403
	(1) Nonperforming loans are included in average loan balances. No adjustment has been made for these loans in the calculation of
	yields. Interest income on loans includes amortization of net deferred loan costs of $231,000 and $401,000, respectively.
	(2) Other noninterest-earning assets includes the allowance for loan losses of $15.7 million and $16.2 million, respectively.
	(3) Net interest margin is net interest income divided by total interest-earning assets.

	CALIFORNIA BANCORP AND SUBSIDIARY
	INTERIM CONSOLIDATED NON GAAP DATA (UNAUDITED)
	(Dollars in Thousands, Except Per Share Data)
	TOTAL REVENUE:		Three months ended												Six months ended
			06/30/24				03/31/24				06/30/23				06/30/24				06/30/23
	Net interest income		$	16,823			$	17,715			$	18,646			$	34,538			$	37,403
	Non-interest income			1,518				1,705				1,135				3,223				2,242
	Total revenue		$	18,341			$	19,420			$	19,781			$	37,761			$	39,645
			Three months ended												Six months ended
	ADJUSTED NON-INTEREST EXPENSE AND EFFICIENCY RATIO:		06/30/24				03/31/24				06/30/23				06/30/24				06/30/23
	Non-interest expense		$	13,188			$	13,704			$	11,603			$	26,892			$	23,446
	Less: Merger related expenses			(647	)			(1,024	)			-				(1,671	)			-
	Total non-interest expense, before merger related expenses		$	12,541			$	12,680			$	11,603			$	25,221			$	23,446
	Total revenue		$	18,341			$	19,420			$	19,781			$	37,761			$	39,645
	Adjusted efficiency ratio			68.38	%			65.29	%			58.66	%			66.79	%			59.14	%
	AVERAGE TANGIBLE EQUITY /		Three months ended												Six months ended
	AVERAGE TANGIBLE ASSETS:		06/30/24				03/31/24				06/30/23				06/30/24				06/30/23
	Total assets		$	1,909,125			$	1,916,142			$	1,983,877			$	1,912,634			$	1,979,107
	Goodwill and core deposit intangibles			7,417				7,426				7,457				7,422				7,462
	Tangible assets		$	1,901,708			$	1,908,716			$	1,976,420			$	1,905,212			$	1,971,645
	Total shareholders' equity		$	204,258			$	200,520			$	183,240			$	202,389			$	180,098
	Goodwill and core deposit intangibles			7,417				7,426				7,457				7,422				7,462
	Tangible equity		$	196,841			$	193,094			$	175,783			$	194,967			$	172,636
	Tangible equity / tangible assets			10.35	%			10.12	%			8.89	%			10.23	%			8.76	%

	CALIFORNIA BANCORP AND SUBSIDIARY
	INTERIM CONSOLIDATED NON-GAAP DATA (UNAUDITED)
	(Dollars in Thousands)
	TANGIBLE EQUITY / TANGIBLE ASSETS:		06/30/24				03/31/24				12/31/23				09/30/23				06/30/23
	Total assets		$	1,917,389			$	1,922,541			$	1,985,905			$	1,983,917			$	2,005,646
	Goodwill and core deposit intangibles			7,415				7,422				7,432				7,442				7,452
	Tangible assets		$	1,909,974			$	1,915,119			$	1,978,473			$	1,976,475			$	1,998,194
	Total shareholders' equity		$	195,457			$	200,685			$	196,461			$	190,115			$	184,235
	Goodwill and core deposit intangibles			7,415				7,422				7,432				7,442				7,452
	Tangible equity		$	188,042			$	193,263			$	189,029			$	182,673			$	176,783
	Tangible equity / tangible assets			9.85	%			10.09	%			9.55	%			9.24	%			8.85	%
	BOOK VALUE PER SHARE:		06/30/24				03/31/24				12/31/23				09/30/23				06/30/23
	Total shareholders' equity		$	195,457			$	200,685			$	196,461			$	190,115			$	184,235
	Common shares outstanding			8,472,038				8,436,732				8,402,482				8,395,483				8,383,772
	Total shareholders' equity / common shares outstanding		$	23.07			$	23.79			$	23.38			$	22.64			$	21.98
	TANGIBLE BOOK VALUE PER SHARE:		06/30/24				03/31/24				12/31/23				09/30/23				06/30/23
	Tangible equity		$	188,042			$	193,263			$	189,029			$	182,673			$	176,783
	Common shares outstanding			8,472,038				8,436,732				8,402,482				8,395,483				8,383,772
	Tangible equity / common shares outstanding		$	22.20			$	22.91			$	22.50			$	21.76			$	21.09

FAQ

What was California BanCorp's (CALB) net income for Q2 2024?

California BanCorp reported a net loss of $5.9 million for Q2 2024.

How did CALB's Q2 2024 earnings compare to the previous quarter?

CALB's Q2 2024 net loss of $5.9 million was a decrease of $9.7 million compared to net income of $3.8 million in Q1 2024.

What was the main factor affecting CALB's Q2 2024 results?

The main factor was a $13.5 million provision for credit losses, largely due to stepped-up resolution activity on individually identified loans.

How did CALB's total deposits change in Q2 2024?

CALB's total deposits remained relatively stable, decreasing by only $827,000 to $1.64 billion in Q2 2024.

What was CALB's net interest margin for Q2 2024?

CALB's net interest margin for Q2 2024 was 3.71%, down from 3.89% in Q1 2024.