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California BanCorp Reports Financial Results for the First Quarter Ended March 31, 2023
来源: Nasdaq GlobeNewswire / 26 4月 2023 16:30:01 America/New_York
OAKLAND, Calif., April 26, 2023 (GLOBE NEWSWIRE) -- California BanCorp (NASDAQ: CALB), whose subsidiary is California Bank of Commerce, announced today its financial results for the first quarter ended March 31, 2023.
The Company reported net income of $5.5 million for the first quarter of 2023, representing a decrease of $2.2 million, or 29%, compared to $7.7 million for the fourth quarter of 2022 and an increase of $1.8 million, or 48%, compared to $3.7 million in the first quarter of 2022.
Diluted earnings per share of $0.64 for the first quarter of 2023 compared to $0.91 for the fourth quarter of 2022 and $0.44 for the first quarter of 2022.
“Despite the more challenging operating environment that we saw during the first quarter, we continued to generate strong financial performance with our return on average assets remaining above 1%,” said Steven Shelton, Chief Executive Officer of California BanCorp. “While being more conservative in our approach to new loan production, we continued to generate high quality lending opportunities that resulted in our total loans increasing at a 6% annualized rate in the first quarter, with most of the growth coming in our commercial portfolio. During the first two months of the quarter, we saw the usual seasonal outflows of deposits largely related to tax payments and profit distributions among our clients, followed by an increase in deposits during March as existing clients rebuilt their account balances and we continued to add new deposit relationships. Due to the strong relationships we have with our clients based on the level of service and expertise that we provide, as well as the high level of operating accounts that we maintain, we have built a sticky deposit base that has demonstrated excellent stability during the turmoil that has impacted the banking industry over the past two months.”
“While our deposit base was stable in March, we increased our liquidity through short-term borrowings and brokered deposits, which had an impact on our level of profitability in the first quarter, but we believed was prudent from a risk management perspective. The short-term nature of the borrowings and brokered deposits provides us with the flexibility to make adjustments in our funding mix as market conditions change, which should positively impact our net interest margin. Our primary goal this year is to continue to develop deposit relationships with high quality commercial clients that maintain their operating accounts with the bank. We believe the current challenges in the broader banking industry have made the environment more favorable for attracting new clients given our strong balance sheet and the compelling value proposition that we can offer. We believe our success in adding new clients will contribute to the continued long-term profitable growth of the company and further increase the value of our franchise,” said Mr. Shelton.
Financial Highlights:
Profitability - three months ended March 31, 2023 compared to December 31, 2022
- Net income of $5.5 million and $0.64 per diluted share, compared to $7.7 million and $0.91 per share, respectively.
- Revenue of $19.9 million decreased $3.9 million, or 17%, from $23.8 million for the fourth quarter of 2022.
- Net interest income of $18.8 million decreased $3.1 million, or 14%, compared to $21.9 million for the fourth quarter of 2022.
- Provision for loan losses of $358,000 decreased $742,000, or 67%, from $1.1 million for the fourth quarter of 2022.
- Non-interest income of $1.1 million decreased $855,000, or 44%, compared to 2.0 million for the fourth quarter of 2022.
- Non-interest expense, excluding capitalized loan origination costs, of $12.5 million decreased $179,000, or 1%, compared to $12.7 million for the fourth quarter of 2022.
Financial Position – March 31, 2023 compared to December 31, 2022
- Total assets increased by $6.8 million to $2.05 billion; average total assets decreased by $113.9 million to $1.97 billion.
- Gross loans increased by $23.8 million to $1.62 billion; average gross loans decreased by $39.0 million to $1.58 billion.
- Deposits decreased by $74.1 million to $1.72 billion; average deposits decreased by $85.8 million to $1.70 billion. Insured and collateralized deposits represented 53% of the total deposit portfolio at March 31, 2023.
- Other borrowings were $75.0 million at March 31, 2023 compared to no balances outstanding at December 31, 2022.
- Tangible book value per share of $20.48 increased by $0.70, or 4%.
Net Interest Income and Margin:
Net interest income for the quarter ended March 31, 2023 was $18.8 million, representing a decrease of $3.1 million, or 14%, from $21.9 million for the three months ended December 31, 2022, and an increase of $4.2 million, or 29%, from $14.5 million for the quarter ended March 31, 2022. The decrease in net interest income compared to the fourth quarter of 2022 was primarily attributable to lower balances of average earning assets and a decrease in net interest margin. Additionally, during the fourth quarter of 2022, commercial loans totaling $57.9 million that were previously purchased at a discount were paid off, resulting in the remaining unamortized discount of $1.4 million being accelerated into interest income. Compared to the first quarter of 2022, the increase in net interest income resulted from a more favorable mix of earning assets and the rising rate environment, which positively impacted net interest margin.
The Company’s net interest margin for the first quarter of 2023 was 4.02%, compared to 4.32% for the fourth quarter of 2022 and 3.19% for the same period in 2022. The decrease in margin compared to the prior quarter was primarily due to lower average earning assets, an increase in the cost of deposits and other borrowings, and the accelerated loan fees recognized in the fourth quarter of 2022. The increase in margin compared to the first quarter of 2022 was primarily due to growth in the loan portfolio and increased yields on earning assets, partially offset by an increase in the cost of deposits and other borrowings.
Non-Interest Income:
The Company’s non-interest income for the quarters ended March 31, 2023, December 31, 2022, and March 31, 2022 was $1.1 million, $2.0 million, and $2.5 million, respectively. The decrease in non-interest income from the fourth quarter of 2022 was primarily due to a decrease in loan related fees. The decrease in non-interest income from the same period in the prior year was attributable to a gain of $1.4 million recognized on the sale of a portion of our solar loan portfolio during the first quarter of 2022.
Net interest income and non-interest income comprised total revenue of $19.9 million, $23.8 million, and $17.1 million for the quarters ended March 31, 2023, December 31, 2022, and March 31, 2022, respectively.
Non-Interest Expense:
The Company’s non-interest expense for the quarters ended March 31, 2023, December 31, 2022, and March 31, 2022 was $11.8 million, $11.7 million, and $10.9 million, respectively. The increase in non-interest expense from the prior periods was primarily due to an increase in salaries and benefits related to investments to support the continued growth of the business, combined with a decrease in capitalized loan origination costs and an increase in loan administration expenses. Excluding capitalized loan origination costs, non-interest expense for the first quarter of 2023, the fourth quarter of 2022 and the first quarter of 2022 was $12.5 million, $12.7 million, and $11.9 million, respectively.
The Company’s efficiency ratio, the ratio of non-interest expense to revenues, was 59.62%, 49.17%, and 63.99% for the quarters ended March 31, 2023, December 31, 2022, and March 31, 2022, respectively.
Balance Sheet:
Total assets of $2.05 billion as of March 31, 2023 represented an increase of $6.9 million compared to $2.04 billion at December 31, 2022, and increased $189.5 million compared to total assets of $1.86 billion at March 31, 2022. The increase in total assets from the prior quarter was primarily due to growth of the loan portfolio, partially offset by decreased liquidity related to the seasonal outflow of deposits that occurs at the beginning of the year for many of our business clients. Compared to the same period in the prior year, total assets increased primarily due to strong loan growth in the commercial and real estate other portfolios.
Total gross loans were $1.62 billion at March 31, 2023, compared to $1.59 billion at December 31, 2022 and $1.40 billion at March 31, 2022. During the first quarter of 2023, commercial and real estate other loans increased by $27.2 million, or 2%, due to organic growth, partially offset by decreases in SBA, and other loans related to the ordinary course of business. Compared to the same period in the prior year, commercial, real estate other, and real estate construction and land loans increased by $133.7 million, or 26%, $111.8 million, or 15%, and $12.7 million, or 25%, respectively, due to organic growth. These increases were partially offset by a decrease in SBA loans of $38.4 million, or 87%, primarily due to PPP loan forgiveness, and a decrease in other loans of $3.0 million, or 7%, due to normal loan activity.
Total deposits decreased by $74.1 million, or 4%, to $1.72 billion at March 31, 2023, from $1.79 billion at December 31, 2022, and increased by $117.1 million, or 7%, from $1.60 billion at March 31, 2022. The decrease in total deposits from the end of the fourth quarter of 2022 was primarily due to the seasonal outflow of deposits that occurs at the beginning of the year and was comprised of decreases in non-interest bearing demand deposits of $71.0 million, interest bearing demand deposits of $7.0 million, and money market and savings deposits of $54.2 million. These decreases were partially offset by an increase in time deposits of $58.1 million as a result of higher balances of short-term brokered certificates of deposits which were added to temporarily increase liquidity. Compared to the same period last year, the increase in total deposits was primarily concentrated in time deposits, partially offset by a reduction in demand deposits and money market and savings deposits as a result of outflows related to forgiveness of PPP loans. Non-interest bearing deposits, primarily commercial business operating accounts, represented 43.1% of total deposits at March 31, 2023, compared to 45.3% at December 31, 2022 and 46.7% at March 31, 2022.
As of March 31, 2023, the Company had outstanding borrowings of $75.0 million, excluding junior subordinated debt securities, compared to no outstanding borrowings at December 31, 2022 and $32.2 million of outstanding borrowings at March 31, 2022.
Asset Quality:
The provision for credit losses decreased to $358,000 for the first quarter of 2023, compared to $1.1 million for the fourth quarter of 2022 and $950,000 for the first quarter of 2022. The Company had net loan charge-offs of $247,000, or 0.02% of gross loans, during the first quarter of 2023 and $650,000, or 0.04% of gross loans, during the fourth quarter of 2022. The Company had net loan recoveries of $1,000, or 0.00% of gross loans, during the first quarter of 2022.
Non-performing assets (“NPAs”) to total assets were 0.01% at March 31, 2023, compared to 0.06% at December 31, 2022 and 0.03% at March 31, 2022, with non-performing loans of $222,000, $1.3 million and $549,000, respectively, on those dates.
The allowance for credit losses was $17.1 million, or 1.06% of total loans, at March 31, 2023, compared to the allowance for loan losses of $17.0 million, or 1.07% of total loans, at December 31, 2022 and $15.0 million, or 1.07% of total loans, at March 31, 2022. On January 1, 2023, the Company adopted the new current expected credit losses (CECL) standard. The Company’s allowance for credit losses to total loans upon adoption on January 1, 2023 was 1.07% and remained consistent with the coverage as of December 31, 2022.
Capital Adequacy:
At March 31, 2023, shareholders’ equity totaled $178.6 million, compared to $172.3 million at December 31, 2022 and $154.6 million one year ago. Additionally, at March 31, 2023, the Company’s total risk-based capital ratio, tier one capital ratio, and leverage ratio were 12.08%, 8.54%, and 8.76%, respectively; all of which were above the regulatory standards of 10.00%, 8.00%, and 5.00%, respectively, for “well-capitalized” institutions.
“Our strong financial performance and prudent balance sheet management resulted in an increase in all of our capital ratios and a 4% increase in our tangible book value per share during the first quarter,” said Thomas A. Sa, President, Chief Financial Officer and Chief Operating Officer of California BanCorp. “We have high levels of capital and liquidity, a stable deposit base, a low level of unrealized losses in our investment portfolio, and exceptional asset quality with minimal exposure to areas of concern such as office commercial real estate loans in major metropolitan areas. As such, we believe we are very well positioned to effectively manage through the current challenging environment and continue growing our client base given the fundamental strength of our franchise.”
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, call us at 510-457-3751, or visit us 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.comUse 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.
Forward-Looking Information:
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 financial results in the future 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; uncertainties related to the coronavirus pandemic; the impact of higher inflation rates; 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, loan demand, interest income and interest rate margins and, therefore, the Company’s future operating results; 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, 2022 which is on file with the Securities and Exchange Commission (the “SEC”). Additional information will be set forth in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, which we expect to file with the SEC during the second quarter of 2023, and readers of this release are urged to review the additional information that will be contained in that report.
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 FINANCIAL INFORMATION (UNAUDITED) - PROFITABILITY (Dollars in Thousands, Except Per Share Data) Change Change QUARTERLY HIGHLIGHTS: Q1 2023 Q4 2022 $ % Q1 2022 $ % Interest income $ 25,539 $ 27,480 $ (1,941 ) -7 % $ 15,924 $ 9,615 60 % Interest expense 6,782 5,620 1,162 21 % 1,398 5,384 385 % Net interest income 18,757 21,860 (3,103 ) -14 % 14,526 4,231 29 % Provision for credit losses 358 1,100 (742 ) -67 % 950 (592 ) -62 % Net interest income after provision for credit losses 18,399 20,760 (2,361 ) -11 % 13,576 4,823 36 % Non-interest income 1,107 1,962 (855 ) -44 % 2,534 (1,427 ) -56 % Non-interest expense 11,843 11,713 130 1 % 10,916 927 8 % Income before income taxes 7,663 11,009 (3,346 ) -30 % 5,194 2,469 48 % Income tax expense 2,212 3,340 (1,128 ) -34 % 1,521 691 45 % Net income $ 5,451 $ 7,669 $ (2,218 ) -29 % $ 3,673 $ 1,778 48 % Diluted earnings per share $ 0.64 $ 0.91 $ (0.27 ) -30 % $ 0.44 $ 0.20 45 % Net interest margin 4.02 % 4.32 % -30 Basis Points 3.19 % +83 Basis Points Efficiency ratio 59.62 % 49.17 % +1045 Basis Points 63.99 % -437 Basis Points CALIFORNIA BANCORP AND SUBSIDIARY SELECTED FINANCIAL INFORMATION (UNAUDITED) - FINANCIAL POSITION (Dollars in Thousands, Except Per Share Data) Change Change PERIOD-END HIGHLIGHTS: Q1 2023 Q4 2022 $ % Q1 2022 $ % Total assets $ 2,049,053 $ 2,042,215 $ 6,838 0 % $ 1,859,595 $ 189,458 10 % Gross loans 1,617,263 1,593,421 23,842 1 % 1,400,474 216,789 15 % Deposits 1,717,610 1,791,740 (74,130 ) -4 % 1,600,522 117,088 7 % Tangible equity 171,099 164,782 6,317 4 % 147,068 24,031 16 % Tangible book value per share $ 20.48 $ 19.78 $ 0.70 4 % $ 17.78 $ 2.70 15 % Tangible equity / total assets 8.35 % 8.07 % +28 Basis Points 7.91 % +44 Basis Points Gross loans / total deposits 94.16 % 88.93 % +523 Basis Points 87.50 % +666 Basis Points Noninterest-bearing deposits / total deposits 43.12 % 45.30 % -218 Basis Points 46.65 % -353 Basis Points QUARTERLY AVERAGE Change Change HIGHLIGHTS: Q1 2023 Q4 2022 $ % Q1 2022 $ % Total assets $ 1,974,266 $ 2,088,206 $ (113,940 ) -5 % $ 1,928,542 $ 45,724 2 % Total earning assets 1,893,940 2,007,243 (113,303 ) -6 % 1,846,225 47,715 3 % Gross loans 1,582,332 1,621,322 (38,990 ) -2 % 1,371,187 211,145 15 % Deposits 1,699,930 1,785,693 (85,763 ) -5 % 1,652,013 47,917 3 % Tangible equity 169,454 161,919 7,535 5 % 146,032 23,422 16 % Tangible equity / total assets 8.58 % 7.75 % +83 Basis Points 7.57 % +101 Basis Points Gross loans / total deposits 93.08 % 90.80 % +228 Basis Points 83.00 % +1008 Basis Points Noninterest-bearing deposits / total deposits 42.88 % 44.47 % -159 Basis Points 44.88 % -200 Basis Points CALIFORNIA BANCORP AND SUBSIDIARY SELECTED INTERIM FINANCIAL INFORMATION (UNAUDITED) - ASSET QUALITY (Dollars in Thousands) ALLOWANCE FOR CREDIT LOSSES: 03/31/23 12/31/22 09/30/22 06/30/22 03/31/22 Balance, beginning of period $ 17,005 $ 16,555 $ 15,957 $ 15,032 $ 14,081 CECL adjustment (13 ) - - - - Provision for credit losses, quarterly 358 1,100 800 925 950 Charge-offs, quarterly (247 ) (650 ) (202 ) - - Recoveries, quarterly - - - - 1 Balance, end of period $ 17,103 $ 17,005 $ 16,555 $ 15,957 $ 15,032 NONPERFORMING ASSETS: 03/31/23 12/31/22 09/30/22 06/30/22 03/31/22 Loans accounted for on a non-accrual basis $ 222 $ 1,250 $ 182 $ 549 $ 549 Loans with principal or interest contractually past due 90 days or more and still accruing interest - - 161 - - Nonperforming loans $ 222 $ 1,250 $ 343 $ 549 $ 549 Other real estate owned - - - - - Nonperforming assets $ 222 $ 1,250 $ 343 $ 549 $ 549 Loans restructured and in compliance with modified terms - - - - - Nonperforming assets and restructured loans $ 222 $ 1,250 $ 343 $ 549 $ 549 Nonperforming loans by asset type: Commercial $ - $ 1,028 $ 161 $ - $ - Real estate other - - - - - Real estate construction and land - - - - - SBA 222 222 182 549 549 Other - - - - - Nonperforming loans $ 222 $ 1,250 $ 343 $ 549 $ 549 ASSET QUALITY: 03/31/23 12/31/22 09/30/22 06/30/22 03/31/22 Allowance for credit losses / gross loans 1.06 % 1.07 % 1.04 % 1.06 % 1.07 % Allowance for credit losses / nonperforming loans 7704.05 % 1360.40 % 4826.53 % 2906.56 % 2738.07 % Nonperforming assets / total assets 0.01 % 0.06 % 0.02 % 0.03 % 0.03 % Nonperforming loans / gross loans 0.01 % 0.08 % 0.02 % 0.04 % 0.04 % Net quarterly charge-offs / gross loans 0.02 % 0.04 % 0.01 % 0.00 % -0.00 % CALIFORNIA BANCORP AND SUBSIDIARY INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Dollars in Thousands, Except Per Share Data) Three months ended 03/31/23 12/31/22 03/31/22 INTEREST INCOME Loans $ 22,472 $ 23,972 $ 14,886 Federal funds sold 1,760 2,236 136 Investment securities 1,307 1,272 902 Total interest income 25,539 27,480 15,924 INTEREST EXPENSE Deposits 6,022 4,536 806 Other 760 1,084 592 Total interest expense 6,782 5,620 1,398 Net interest income 18,757 21,860 14,526 Provision for credit losses 358 1,100 950 Net interest income after provision for credit losses 18,399 20,760 13,576 NON-INTEREST INCOME Service charges and other fees 863 1,653 889 Gain on sale of loans - - 1,393 Other non-interest income 244 309 252 Total non-interest income 1,107 1,962 2,534 NON-INTEREST EXPENSE Salaries and benefits 7,876 7,443 7,093 Premises and equipment 1,180 1,249 1,302 Other 2,787 3,021 2,521 Total non-interest expense 11,843 11,713 10,916 Income before income taxes 7,663 11,009 5,194 Income taxes 2,212 3,340 1,521 NET INCOME $ 5,451 $ 7,669 $ 3,673 EARNINGS PER SHARE Basic earnings per share $ 0.65 $ 0.92 $ 0.44 Diluted earnings per share $ 0.64 $ 0.91 $ 0.44 Average common shares outstanding 8,339,080 8,330,145 8,276,761 Average common and equivalent shares outstanding 8,492,067 8,463,738 8,392,802 PERFORMANCE MEASURES Return on average assets 1.12 % 1.46 % 0.77 % Return on average equity 12.50 % 17.96 % 9.70 % Return on average tangible equity 13.05 % 18.79 % 10.20 % Efficiency ratio 59.62 % 49.17 % 63.99 % CALIFORNIA BANCORP AND SUBSIDIARY INTERIM CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Dollars in Thousands) 03/31/23 12/31/22 09/30/22 06/30/22 03/31/22 ASSETS Cash and due from banks $ 15,121 $ 16,686 $ 24,709 $ 20,378 $ 18,228 Federal funds sold 198,804 215,696 216,345 138,057 206,305 Investment securities 153,769 155,878 157,531 165,309 171,764 Loans: Commercial 656,519 634,535 643,131 589,562 522,808 Real estate other 853,431 848,241 824,867 794,504 741,651 Real estate construction and land 63,928 63,730 71,523 63,189 51,204 SBA 5,610 7,220 8,565 13,310 44,040 Other 37,775 39,695 39,815 39,814 40,771 Loans, gross 1,617,263 1,593,421 1,587,901 1,500,379 1,400,474 Unamortized net deferred loan costs (fees) 1,765 2,040 1,902 2,570 2,434 Allowance for credit losses (17,103 ) (17,005 ) (16,555 ) (15,957 ) (15,032 ) Loans, net 1,601,925 1,578,456 1,573,248 1,486,992 1,387,876 Premises and equipment, net 2,848 3,072 3,382 3,736 4,047 Bank owned life insurance 25,334 25,127 24,955 24,788 24,614 Goodwill and core deposit intangible 7,462 7,472 7,483 7,493 7,503 Accrued interest receivable and other assets 43,790 39,828 40,848 38,599 39,258 Total assets $ 2,049,053 $ 2,042,215 $ 2,048,501 $ 1,885,352 $ 1,859,595 LIABILITIES Deposits: Demand noninterest-bearing $ 740,650 $ 811,671 $ 758,716 $ 715,432 $ 746,673 Demand interest-bearing 30,798 37,815 35,183 45,511 36,419 Money market and savings 616,864 671,016 597,244 626,156 686,781 Time 329,298 271,238 317,935 165,040 130,649 Total deposits 1,717,610 1,791,740 1,709,078 1,552,139 1,600,522 Junior subordinated debt securities 54,186 54,152 54,117 54,097 54,063 Other borrowings 75,000 - 100,000 100,000 32,166 Accrued interest payable and other liabilities 23,696 24,069 21,248 20,372 18,273 Total liabilities 1,870,492 1,869,961 1,884,443 1,726,608 1,705,024 SHAREHOLDERS' EQUITY Common stock 111,609 111,257 110,786 110,289 109,815 Retained earnings 68,082 62,297 54,628 49,106 44,862 Accumulated other comprehensive (loss) (1,130 ) (1,300 ) (1,356 ) (651 ) (106 ) Total shareholders' equity 178,561 172,254 164,058 158,744 154,571 Total liabilities and shareholders' equity $ 2,049,053 $ 2,042,215 $ 2,048,501 $ 1,885,352 $ 1,859,595 - - - - CAPITAL ADEQUACY Tier I leverage ratio 8.76 % 7.98 % 8.21 % 8.27 % 7.84 % Tier I risk-based capital ratio 8.54 % 8.23 % 7.98 % 8.09 % 8.49 % Total risk-based capital ratio 12.08 % 11.77 % 11.57 % 11.84 % 12.49 % Total equity/ total assets 8.71 % 8.43 % 8.01 % 8.42 % 8.31 % Book value per share $ 21.37 $ 20.67 $ 19.70 $ 19.09 $ 18.69 Common shares outstanding 8,355,378 8,332,479 8,327,781 8,317,161 8,270,901 CALIFORNIA BANCORP AND SUBSIDIARY INTERIM CONSOLIDATED AVERAGE BALANCE SHEET AND YIELD DATA (UNAUDITED) (Dollars in Thousands) Three months ended March 31, Three months ended December 31, 2023 2022 Yields Interest Yields Interest Average or Income/ Average or Income/ Balance Rates Expense Balance Rates Expense ASSETS Interest earning assets: Loans (1) $ 1,582,332 5.76 % $ 22,472 $ 1,621,322 5.87 % $ 23,972 Federal funds sold 156,941 4.55 % 1,760 229,209 3.87 % 2,236 Investment securities 154,667 3.43 % 1,307 156,712 3.22 % 1,272 Total interest earning assets 1,893,940 5.47 % 25,539 2,007,243 5.43 % 27,480 Noninterest-earning assets: Cash and due from banks 18,098 20,692 All other assets (2) 62,228 60,271 TOTAL $ 1,974,266 $ 2,088,206 LIABILITIES AND SHAREHOLDERS' EQUITY Interest-bearing liabilities: Deposits: Demand $ 34,032 0.08 % $ 7 $ 39,582 0.06 % $ 6 Money market and savings 626,666 2.01 % 3,104 647,213 1.45 % 2,359 Time 310,246 3.81 % 2,911 304,784 2.83 % 2,171 Other 71,108 4.33 % 760 110,650 3.89 % 1,084 Total interest-bearing liabilities 1,042,052 2.64 % 6,782 1,102,229 2.02 % 5,620 Noninterest-bearing liabilities: Demand deposits 728,986 794,114 Accrued expenses and other liabilities 26,307 22,467 Shareholders' equity 176,921 169,396 TOTAL $ 1,974,266 $ 2,088,206 Net interest income and margin (3) 4.02 % $ 18,757 4.32 % $ 21,860 (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) fees of $(226,000) and $1.0 million, respectively. (2) Other noninterest-earning assets includes the allowance for credit losses of $17.0 million and $16.5 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 March 31, 2023 2022 Yields Interest Yields Interest Average or Income/ Average or Income/ Balance Rates Expense Balance Rates Expense ASSETS Interest earning assets: Loans (1) $ 1,582,332 5.76 % $ 22,472 $ 1,371,187 4.40 % $ 14,886 Federal funds sold 156,941 4.55 % 1,760 345,394 0.16 % 136 Investment securities 154,667 3.43 % 1,307 129,644 2.82 % 902 Total interest earning assets 1,893,940 5.47 % 25,539 1,846,225 3.50 % 15,924 Noninterest-earning assets: Cash and due from banks 18,098 18,748 All other assets (2) 62,228 63,569 TOTAL $ 1,974,266 $ 1,928,542 LIABILITIES AND SHAREHOLDERS' EQUITY Interest-bearing liabilities: Deposits: Demand $ 34,032 0.08 % $ 7 $ 38,197 0.10 % $ 9 Money market and savings 626,666 2.01 % 3,104 723,109 0.37 % 665 Time 310,246 3.81 % 2,911 149,293 0.36 % 132 Other 71,108 4.33 % 760 100,664 2.39 % 592 Total interest-bearing liabilities 1,042,052 2.64 % 6,782 1,011,263 0.56 % 1,398 Noninterest-bearing liabilities: Demand deposits 728,986 741,414 Accrued expenses and other liabilities 26,307 22,325 Shareholders' equity 176,921 153,540 TOTAL $ 1,974,266 $ 1,928,542 Net interest income and margin (3) 4.02 % $ 18,757 3.19 % $ 14,526 (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) fees of $(226,000) and $318,000, respectively. (2) Other noninterest-earning assets includes the allowance for credit losses of $17.0 million and $14.1 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) REVENUE: Three months ended 03/31/23 12/31/22 09/30/22 06/30/22 03/31/22 Net interest income $ 18,757 $ 21,860 $ 18,363 $ 16,223 $ 14,526 Non-interest income 1,107 1,962 1,484 1,394 2,534 Total revenue $ 19,864 $ 23,822 $ 19,847 $ 17,617 $ 17,060 NON-INTEREST EXPENSE: Three months ended 03/31/23 12/31/22 09/30/22 06/30/22 03/31/22 Non-interest expense $ 11,843 $ 11,713 $ 11,217 $ 10,819 $ 10,916 Capitalized loan origination costs 651 960 1,102 1,073 984 Total operating expenses, before capitalization of loan origination costs $ 12,494 $ 12,673 $ 12,319 $ 11,892 $ 11,900