California BanCorp Reports Financial Results for the Third Quarter and Nine Months Ended September 30, 2021

Rhea-AI Summary

California BanCorp (NASDAQ: CALB) reported its financial results for Q3 2021, with a net income of $3.2 million, down 23% from Q2 2021, but up 550% from Q3 2020. Diluted EPS was $0.39, compared to $0.50 in Q2 2021. For the nine months ending September 30, 2021, net income reached $10.2 million, up 305% year-over-year. Total assets rose to $2.05 billion, and total deposits increased by $62.3 million, or 4%. The bank completed a $35 million subordinated debt offering to support growth, while net interest margin decreased to 2.87% due to excess liquidity.

Positive

• Net income of $10.2 million for YTD 2021, a 305% increase YoY.
• Total deposits increased by $62.3 million, or 4%, to $1.74 billion.
• Completed a $35 million subordinated debt offering, enhancing capital for growth.

Negative

• Net income decreased by 23% from Q2 2021.
• Diluted EPS fell from $0.50 in Q2 2021 to $0.39 in Q3 2021.
• Net interest margin decreased to 2.87%, impacted by excess liquidity.

OAKLAND, Calif., Oct. 28, 2021 (GLOBE NEWSWIRE) -- California BanCorp (NASDAQ: CALB), whose subsidiary is California Bank of Commerce, announced today its financial results for the third quarter and nine months ended September 30, 2021.

The Company reported net income of $3.2 million for the third quarter of 2021, representing a decrease of $946,000, or 23%, compared to $4.2 million for the second quarter of 2021 and an increase of $2.7 million, or 550%, compared to $495,000 in the third quarter of 2020. For the nine months ended September 30, 2021, net income was $10.2 million which represented an increase of $7.7 million, or 305%, compared to $2.5 million for the same period in 2020.

Diluted earnings per share of $0.39 for the third quarter of 2021 compared to $0.50 for the second quarter of 2021 and $0.06 in the third quarter of 2020. For the nine months ended September 30, 2021, diluted earnings per share of $1.23 compared to $0.31 for the same period in 2020.

“We continued to execute well on our growth strategies in the third quarter and generate quality balance sheet growth, higher revenue, and an increase in our core earnings power,” said Steven Shelton, President and CEO of California BanCorp. “The diverse commercial banking platform we have built provides us with many sources of growth and continues to produce consistent increases in core loans and deposits. While C&I loan demand was lower this quarter, we continued to have strong production of commercial real estate loans, which helped drive 16% annualized growth in total loans, excluding PPP loans. We continue to steadily add new commercial clients, which is driving strong growth in deposits and loan commitments, although utilization rates on commercial lines of credit remain under 30% and well below historical levels. As of September 30, 2021, we had $485 million of unfunded commitments. As utilization rates return to more normalized levels in the future, we will see an additional catalyst for loan growth. Our loan pipeline remains consistently healthy and we expect to deliver another strong quarter to end 2021 driven by continued loan growth, higher revenue, and more operating leverage.”

“Our strong deposit growth resulted in excess liquidity that negatively impacted our net interest margin in the third quarter,” said Thomas A. Sa, Senior Executive Vice President, Chief Financial Officer and Chief Operating Officer of California BanCorp. “Going forward, we plan to redeploy more of our excess liquidity into the investment securities portfolio to help drive further increases in net interest income. During the third quarter, we also completed a $35 million subordinated debt offering that provides us with additional capital to support our continued balance sheet growth, which will enable us to continue realizing more operating leverage from the infrastructure we have built and further improve our level of profitability in the future.”

Financial Highlights:

Profitability - three months ended September 30, 2021 compared to June 30, 2021

• Net income of $3.2 million and $0.39 per diluted share, compared to $4.2 million and $0.50 per diluted share, respectively.
• Revenue of $15.1 million increased $601,000, or 4%, compared to $14.5 million for the second quarter of 2021.
• Net fees from Paycheck Protection Loans (“PPP”) loans contributed $1.6 million to net interest income compared to $1.7 million for the second quarter of 2021.
• Provision for loan losses increased $1.4 million, primarily due to a release in reserves in the second quarter of $1.1 million due to our continued assessment of qualitative reserves regarding the general macroeconomic changes related to COVID-19 as it pertains to our overall loan portfolio. The provision for loan losses in the third quarter of $300,000 was a result of growth in the loan portfolio.
• Non-interest expense, excluding capitalized loan origination costs, of $11.7 million increased $658,000, or 6%, compared to $11.1 million for the second quarter of 2021 primarily as a result of increased salary related benefits combined with the impact of the current competitive labor market.
  

Profitability - nine months ended September 30, 2021 compared to September 30, 2020

• Net income of $10.2 million and $1.23 per diluted share, compared to $2.5 million and $0.31 per diluted share, respectively.
• Revenue of $43.9 million increased $8.7 million, or 25%, compared to $35.2 million in the prior year.
• Net fees from PPP loans contributed $4.8 million to net interest income compared to $1.7 million in the prior year.
• Provision for loan losses decreased $4.7 million primarily due to a charge-off recognized in the second quarter of 2020 related to a legacy problem loan as well as our continued assessment of qualitative reserves regarding the general macroeconomic changes related to COVID-19 as it pertains to our overall loan portfolio.
• Non-interest expense, excluding capitalized loan origination costs, of $34.3 million compared to $34.1 million for the same period in the prior year.
  

Financial Position – September 30, 2021 compared to June 30, 2021

• Total assets increased by $180.0 million, or 10%, to $2.05 billion.
• Total gross loans decreased by $50.7 million, or 4% to $1.30 billion. Excluding the impact of PPP loans forgiven by the SBA, total gross loans increased during the third quarter by $46.4 million, or 4%, to $1.20 billion.
• Total deposits increased by $62.3 million, or 4% to $1.74 billion.
• Borrowing arrangements increased by $113.8 million primarily due to a sub-debt issuance of $35.0 million and increased borrowings under the Federal Reserve Paycheck Protection Program Liquidity Facility (“PPPLF”).
• Capital ratios remained healthy with a Tier 1 leverage ratio of 7.29%, Tier 1 capital ratio of 9.17% and total risk-based capital ratio of 13.92%.
  

Net Interest Income and Margin:

Net interest income for the quarter ended September 30, 2021 was $13.8 million, an increase of $255,000, or 2%, over $13.6 million for the three months ended June 30, 2021, and an increase of $2.7 million, or 24%, over $11.2 million for the quarter ended September 30, 2020. The increase in net interest income compared to the second quarter of 2021 was primarily attributable to a higher yield on loans as a result of new loan originations replacing the PPP loans that were forgiven during the quarter, combined with growth in other earning assets due to excess liquidity partially offset by an increase in borrowing arrangements. Compared to the third quarter of 2020, the increase in net interest income resulted from growth in earning assets and amortization of fees received on PPP loans offset, in part, by the decline in short-term interest rates.

Net interest income for the nine months ended September 30, 2021 was $40.8 million, an increase of $8.6 million, or 27% over $32.2 million for the nine months ended September 30, 2020. The increase in net interest income was primarily attributable to an increase in interest income as the result of growth in earning assets and amortization of fees received on PPP loans offset, in part, by a decline in short-term interest rates and higher liquidity.

The Company’s net interest margin for the third quarter of 2021 was 2.87% compared to 2.98% for the second quarter of 2021 and 2.41% for the third quarter of 2020. The decrease in margin compared to the prior quarter was primarily due to excess liquidity and a decline in accelerated deferred fees on PPP loans granted forgiveness by the SBA. The increase in margin compared to the third quarter one year ago was primarily due to higher recognition of accelerated deferred fees on PPP loans granted forgiveness by the SBA, offset in part by a decrease in short-term interest rates.

The Company’s net interest margin for the nine months ended September 30, 2021 was 2.92% compared to 2.80% for the same period in 2020.   The increase in margin compared to prior year was primarily due to an increase in fees recognized on PPP loans, partially offset by a decrease in short-term interest rates and higher liquidity.

Non-Interest Income:

The Company’s non-interest income for the quarters ended September 30, 2021, June 30, 2021, and September 30, 2020 was $1.3 million, $956,000 and $1.0 million, respectively. The increase in noninterest income from the prior quarter and the third quarter of 2020 was primarily due to an increase in service charges and loan related fees.

For the nine months ended September 30, 2021, non-interest income of $3.2 million compared to $3.1 million for the same period of 2020. The increase in non-interest income from prior year was the result of an increase in service charges and loan related fees.

Net interest income and non-interest income comprised total revenue of $15.1 million, $14.5 million, and $12.2 million for the quarters ended September 30, 2021, June 30, 2021, and September 30, 2020, respectively. Total revenue for the nine months ended September 30, 2021 and 2020 was $43.9 million and $35.2 million, respectively.

Non-Interest Expense:

The Company’s non-interest expense for the quarters ended September 30, 2021, June 30, 2021, and September 30, 2020 was $10.5 million, $9.8 million, and $10.5 million, respectively. The increase in non-interest expense compared to the second quarter of 2021 was primarily a result of increased salary related benefits, including production-based incentive compensation, combined with the impact of the current competitive labor market. Excluding capitalized loan origination costs, non-interest expenses for the third and second quarters of 2021 and the third quarter of 2020 were $11.7 million, $11.1 million, and $11.5 million, respectively.

Non-interest expense of $30.4 million for the nine months ended September 30, 2021 compared to $27.4 million for the same period of 2020. Excluding capitalized loan origination costs, non-interest expense was $34.3 million for the nine months ended September 30, 2021 and $34.1 million for the same period in 2020 which reflects the Company’s continued focus on managing expenses and leveraging the recent investment in infrastructure to support the continued growth of the Company.  

The Company’s efficiency ratio, the ratio of non-interest expense to revenues, was 69.42%, 67.63%, and 86.32% for the quarters ended September 30, 2021, June 30, 2021, and September 30, 2020, respectively. For the nine months ended September 30, 2021 and 2020, the Company’s efficiency ratio was 69.25% and 77.71%, respectively.

Balance Sheet:

Total assets of $2.05 billion as of September 30, 2021, represented an increase of $180.0 million, or 10%, compared to $1.87 billion at June 30, 2021 and an increase of $76.3 million, or 4%, compared to $1.97 billion at September 30, 2020. The increase in total assets was primarily due to excess liquidity, partially offset by a decrease in loan balances.

Total gross loans decreased by $50.7 million, or 4%, to $1.30 billion at September 30, 2021 compared to $1.35 billion at June 30, 2021 and decreased by $53.2 million, or 4%, compared to $1.36 billion at September 30, 2020. During the third quarter of 2021, SBA loans decreased by $97.6 million primarily due to PPP loan forgiveness. Partially offsetting this decrease, the real estate other portfolio increased by $47.8 million due to organic growth.

Year-over-year, the decrease in the loan portfolio was primarily due to a decrease in SBA loans of $266.8 million as a result of loan forgiveness offset by increases in commercial loans and real estate other loans of $48.8 million and $124.7 million, respectively. The Company also purchased two additional portfolios of residential solar loans totaling approximately $35.5 million.

As a result of the CARES Act PPP, which was launched in April 2020 and re-launched in January 2021, the Company funded approximately $491.3 million in loans. Approximately $393.8 million of those balances have been granted forgiveness by the SBA as of September 30, 2021.

Total deposits increased by $62.3 million, or 4%, to $1.74 billion at September 30, 2021, from $1.68 billion at June 30, 2021 and $304.8 million, or 21%, over $1.44 billion at September 30, 2020. The increase in total deposits from the end of the second quarter of 2021 was primarily due to the growth in money market and savings deposits of $75.7 million, partially offset by a decrease in time deposits of $15.9 million.

Compared to the same period last year, deposit growth was primarily concentrated in noninterest-bearing demand and money market deposits as the result of funding PPP loans combined with organic growth. Non-interest bearing deposits, consisting primarily of commercial business operating accounts, represented 45.4% of total deposits at September 30, 2021, compared to 47.1% at June 30, 2021 and 44.1% at September 30. 2020.

As of September 30, 2021, the Company had borrowing arrangements, excluding junior subordinated debt securities, of $79.5 million compared to no borrowings at June 30, 2021 and $352.7 million as of September 30, 2020. The increase in borrowings during the third quarter of 2021 was comprised primarily of PPPLF activity.

Asset Quality:

The provision for loan losses increased to $300,000 for the third quarter of 2021 compared to $(1.1) million for the second quarter of 2021 and decreased from $850,000 for the third quarter of 2020. Net loan recoveries in the third quarter of 2021 were $31,000, or 0.00% of gross loans, compared to net charge-offs of $237,000, or 0.02% of gross loans, in the second quarter of 2021 and net recoveries of $11,000, or 0.00% of gross loans, in the third quarter 2020.

Non-performing assets (“NPAs”) to total assets of 0.06% at September 30, 2021 compared to 0.07% at June 30, 2021 and 0.03% at September 30, 2020, with non-performing loans of $1.2 million, $1.2 million, and $580,000 respectively, on those dates. The increase in NPAs at September 30, 2021 and June 30, 2021 compared to the September 30, 2020 primarily related to one commercial real estate loan that is well secured and not expected to result in a loss for the Company.

The allowance for loan losses increased by $331,000 to $13.6 million, or 1.04% of total loans, at September 30, 2021, compared to $13.2 million, or 0.98% of total loans, at June 30, 2021 and increased by $186,000 compared to $13.4 million, or 0.99% of total loans, at September 30, 2020. The increase in the allowance as a percentage of total loans in the quarter ended September 30, 2021 compared to the quarters ended June 30, 2021 and September 30, 2020 reflects the Company’s continued assessment of the qualitative reserves in response to general macroeconomic impacts related to COVID-19 combined with continued strong credit quality.  

Capital Adequacy:

At September 30, 2021, shareholders’ equity totaled $147.2 million compared to $143.7 million at June 30, 2021 and $134.6 million one year ago. As a result, the Company’s total risk-based capital ratio, Tier 1 capital ratio and Tier 1 leverage ratio of 13.92%, 9.17%, and 7.29%, respectively, were all substantially above the regulatory standards for “well-capitalized” institutions of 10.00%, 8.00% and 5.00% respectively.

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                        
President and Chief Executive Officer                        
seshelton@bankcbc.com                                                                                                 

Thomas A. Sa, (510) 457-3775
Senior Executive Vice 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.

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; 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; 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, 2020 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 September 30, 2021, which we expect to file with the SEC during the fourth quarter of 2021, and readers of this release are urged to review the additional information that will be contained in that report.

The COVID-19 pandemic has created economic and financial disruptions that have adversely affected, and may continue to adversely affect, our business, operations, financial performance and prospects. Even after the COVID-19 pandemic subsides, it is possible that the U.S. and other major economies experience or continue to experience a prolonged recession, which could materially and adversely affect our business, operations, financial performance and prospects. Statements about the effects of the COVID-19 pandemic on our business, operations, financial performance and prospects may constitute forward-looking statements and are subject to the risk that the actual impacts may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, third parties and us.

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.

FINANCIAL TABLES FOLLOW

	CALIFORNIA BANCORP AND SUBSIDIARY
	SELECTED FINANCIAL INFORMATION (UNAUDITED) - PROFITABILITY
	(Dollars in Thousands, Except Per Share Data)
											Change												Change
	QUARTERLY HIGHLIGHTS:		Q3 2021				Q2 2021				$				%				Q3 2020				$				%
	Interest income		$	15,539			$	15,179			$	360			2	%			$	13,188			$	2,351			18	%
	Interest expense			1,698				1,593				105			7	%				2,000				(302	)		-15	%
	Net interest income			13,841				13,586				255			2	%				11,188				2,653			24	%
	Provision for loan losses			300				(1,100	)			1,400			-127	%				850				(550	)		-65	%
	Net interest income after provision
	provision for loan losses			13,541				14,686				(1,145	)		-8	%				10,338				3,203			31	%
	Non-interest income			1,302				956				346			36	%				1,028				274			27	%
	Non-interest expense			10,513				9,835				678			7	%				10,545				(32	)		-0	%
	Income before income taxes			4,330				5,807				(1,477	)		-25	%				821				3,509			427	%
	Income tax expense			1,114				1,645				(531	)		-32	%				326				788			242	%
	Net income		$	3,216			$	4,162			$	(946	)		-23	%			$	495			$	2,721			550	%
	Diluted earnings per share		$	0.39			$	0.50			$	(0.11	)		-22	%			$	0.06			$	0.33			550	%
	Net interest margin			2.87	%			2.98	%		-11 Basis Points									2.41	%		+46 Basis Points
	Efficiency ratio			69.42	%			67.63	%		+179 Basis Points									86.32	%		-1,690 Basis Points
											Change
	YEAR-TO-DATE HIGHLIGHTS:		Q3 2021				Q3 2020				$				%
	Interest income		$	45,750			$	38,271			$	7,479			20	%
	Interest expense			4,987				6,117				(1,130	)		-18	%
	Net interest income			40,763				32,154				8,609			27	%
	Provision for credit losses			(500	)			4,180				(4,680	)		-112	%
	Net interest income after provision
	for credit losses			41,263				27,974				13,289			48	%
	Non-interest income			3,179				3,096				83			3	%
	Non-interest expense			30,428				27,393				3,035			11	%
	Income before income taxes			14,014				3,677				10,337			281	%
	Income tax expense			3,827				1,159				2,668			230	%
	Net income		$	10,187			$	2,518			$	7,669			305	%
	Diluted earnings per share		$	1.23			$	0.31			$	0.92			297	%
	Net interest margin			2.92	%			2.80	%		+12 Basis Points
	Efficiency ratio			69.25	%			77.71	%		-846 Basis Points

	CALIFORNIA BANCORP AND SUBSIDIARY
	SELECTED FINANCIAL INFORMATION (UNAUDITED) - FINANCIAL POSITION
	(Dollars in Thousands, Except Per Share Data)
											Change												Change
	PERIOD-END HIGHLIGHTS:		Q3 2021				Q2 2021				$				%				Q3 2020				$				%
	Total assets		$	2,049,079			$	1,869,063			$	180,016			10	%			$	1,972,751			$	76,328			4	%
	Gross loans			1,301,972				1,352,639				(50,667	)		-4	%				1,355,164				(53,192	)		-4	%
	Deposits			1,742,054				1,679,772				62,282			4	%				1,437,232				304,822			21	%
	Tangible equity			139,715				136,207				3,508			3	%				127,031				12,684			10	%
	Tangible book value per share		$	16.93			$	16.55			$	0.38			2	%			$	15.59			$	1.35			9	%
	Tangible equity / total assets			6.82	%			7.29	%		-47 Basis Points									6.44	%		+38 Basis Points
	Gross loans / total deposits			74.74	%			80.53	%		-579 Basis Points									94.29	%		-1,955 Basis Points
	Noninterest-bearing deposits /
	total deposits			45.39	%			47.12	%		-174 Basis Points									44.09	%		+130 Basis Points
	QUARTERLY AVERAGE										Change												Change
	HIGHLIGHTS:		Q3 2021				Q2 2021				$				%				Q3 2020				$				%
	Total assets		$	1,985,894			$	1,909,558			$	76,336			4	%			$	1,923,001			$	62,893			3	%
	Total earning assets			1,912,697				1,829,980				82,717			5	%				1,843,072				69,625			4	%
	Gross loans			1,316,080				1,415,729				(99,649	)		-7	%				1,313,092				2,988			0	%
	Deposits			1,718,525				1,607,847				110,678			7	%				1,397,280				321,245			23	%
	Tangible equity			138,833				134,379				4,454			3	%				126,670				12,163			10	%
	Tangible equity / total assets			6.99	%			7.04	%		-5 Basis Points									6.59	%		+40 Basis Points
	Gross loans / total deposits			76.58	%			88.05	%		-1,147 Basis Points									93.97	%		-1,739 Basis Points
	Noninterest-bearing deposits /
	total deposits			45.17	%			45.28	%		-11 Basis Points									43.60	%		+157 Basis Points
	YEAR-TO-DATE AVERAGE										Change
	HIGHLIGHTS:		Q3 2021				Q3 2020				$				%
	Total assets		$	1,940,035			$	1,619,319			$	320,716			20	%
	Total earning assets			1,864,166				1,535,251				328,915			21	%
	Gross loans			1,382,074				1,166,829				215,245			18	%
	Deposits			1,632,257				1,238,765				393,492			32	%
	Tangible equity			134,771				125,401				9,370			7	%
	Tangible equity / total assets			6.95	%			7.74	%		-80 Basis Points
	Gross loans / total deposits			84.67	%			94.19	%		-952 Basis Points
	Noninterest-bearing deposits /
	total deposits			44.82	%			42.75	%		+207 Basis Points

	CALIFORNIA BANCORP AND SUBSIDIARY
	SELECTED INTERIM FINANCIAL INFORMATION (UNAUDITED) - ASSET QUALITY
	(Dollars in Thousands)
	ALLOWANCE FOR LOAN LOSSES:		09/30/21				06/30/21				03/31/21				12/31/20				09/30/20
	Balance, beginning of period		$	13,240			$	14,577			$	14,111			$	13,385			$	12,524
	Provision for loan losses, quarterly			300				(1,100	)			300				700				850
	Charge-offs, quarterly			-				(278	)			-				-				-
	Recoveries, quarterly			31				41				166				26				11
	Balance, end of period		$	13,571			$	13,240			$	14,577			$	14,111			$	13,385
	NONPERFORMING ASSETS:		09/30/21				06/30/21				03/31/21				12/31/20				09/30/20
	Loans accounted for on a non-accrual basis		$	1,233			$	1,234			$	234			$	234			$	580
	Loans with principal or interest contractually
	past due 90 days or more and still accruing
	interest			-				-				-				-				-
	Nonperforming loans		$	1,233			$	1,234			$	234			$	234			$	580
	Other real estate owned			-				-				-				-				-
	Nonperforming assets		$	1,233			$	1,234			$	234			$	234			$	580
	Loans restructured and in compliance with
	modified terms			-				-				-				-				-
	Nonperforming assets and restructured loans		$	1,233			$	1,234			$	234			$	234			$	580
	Nonperforming loans by asset type:
	Commercial		$	-			$	-			$	-			$	-			$	346
	Real estate other			1,000				1,000				-				-				-
	Real estate construction and land			-				-				-				-				-
	SBA			233				234				234				234				234
	Other			-				-				-				-				-
	Nonperforming loans		$	1,233			$	1,234			$	234			$	234			$	580
	ASSET QUALITY:		09/30/21				06/30/21				03/31/21				12/31/20				09/30/20
	Allowance for loan losses / gross loans			1.04	%			0.98	%			0.99	%			1.03	%			0.99	%
	Allowance for loan losses / nonperforming loans			1100.65	%			1072.93	%			6229.49	%			6030.34	%			2307.76	%
	Nonperforming assets / total assets			0.06	%			0.07	%			0.01	%			0.01	%			0.03	%
	Nonperforming loans / gross loans			0.09	%			0.09	%			0.02	%			0.02	%			0.04	%
	Net quarterly charge-offs / gross loans			-0.00	%			0.02	%			-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								Nine months ended
			09/30/21				06/30/21				09/30/20				09/30/21				09/30/20
	INTEREST INCOME
	Loans		$	14,870			$	14,703			$	12,849			$	44,157			$	37,096
	Federal funds sold			199				84				117				371				554
	Investment securities			470				392				222				1,222				621
	Total interest income			15,539				15,179				13,188				45,750				38,271
	INTEREST EXPENSE
	Deposits			1,152				1,138				1,467				3,481				4,981
	Other			546				455				533				1,506				1,136
	Total interest expense			1,698				1,593				2,000				4,987				6,117
	Net interest income			13,841				13,586				11,188				40,763				32,154
	Provision for loan losses			300				(1,100	)			850				(500	)			4,180
	Net interest income after provision
	for loan losses			13,541				14,686				10,338				41,263				27,974
	NON-INTEREST INCOME
	Service charges and other fees			905				638				779				2,184				2,287
	Other non-interest income			397				318				249				995				809
	Total non-interest income			1,302				956				1,028				3,179				3,096
	NON-INTEREST EXPENSE
	Salaries and benefits			6,920				6,374				6,452				19,661				15,051
	Premises and equipment			1,372				1,209				1,359				3,778				3,630
	Other			2,221				2,252				2,734				6,989				8,712
	Total non-interest expense			10,513				9,835				10,545				30,428				27,393
	Income before income taxes			4,330				5,807				821				14,014				3,677
	Income taxes			1,114				1,645				326				3,827				1,159
	NET INCOME		$	3,216			$	4,162			$	495			$	10,187			$	2,518
	EARNINGS PER SHARE
	Basic earnings per share		$	0.39			$	0.51			$	0.06			$	1.24			$	0.31
	Diluted earnings per share		$	0.39			$	0.50			$	0.06			$	1.23			$	0.31
	Average common shares outstanding			8,244,154				8,209,678				8,141,807				8,211,907				8,124,387
	Average common and equivalent
	shares outstanding			8,310,799				8,295,278				8,169,334				8,283,683				8,159,521
	PERFORMANCE MEASURES
	Return on average assets			0.64	%			0.87	%			0.10	%			0.70	%			0.21	%
	Return on average equity			8.72	%			11.76	%			1.47	%			9.57	%			2.53	%
	Return on average tangible equity			9.19	%			12.42	%			1.55	%			10.11	%			2.68	%
	Efficiency ratio			69.42	%			67.63	%			86.32	%			69.25	%			77.71	%

	CALIFORNIA BANCORP AND SUBSIDIARY
	INTERIM CONSOLIDATED BALANCE SHEETS (UNAUDITED)
	(Dollars in Thousands)
			09/30/21				06/30/21				03/31/21				12/31/20				09/30/20
	ASSETS
	Cash and due from banks		$	22,424			$	26,159			$	18,475			$	22,485			$	23,339
	Federal funds sold			578,626				366,347				342,305				396,032				480,555
	Investment securities			82,108				61,142				58,105				55,093				50,906
	Loans:
	Commercial			428,169				425,643				439,044				414,548				379,400
	Real estate other			664,202				616,451				573,520				550,690				539,541
	Real estate construction and land			41,312				41,558				45,550				37,193				36,596
	SBA			107,096				204,734				364,273				317,564				373,921
	Other			61,193				64,253				47,926				49,075				25,706
	Loans, gross			1,301,972				1,352,639				1,470,313				1,369,070				1,355,164
	Unearned fee income			760				(629	)			(1,569	)			523				(1,054	)
	Allowance for loan losses			(13,571	)			(13,240	)			(14,577	)			(14,111	)			(13,385	)
	Loans, net			1,289,161				1,338,770				1,454,167				1,355,482				1,340,725
	Premises and equipment, net			4,227				5,089				5,452				5,778				5,933
	Bank owned life insurance			24,247				24,085				23,920				23,718				23,577
	Goodwill and core deposit intangible			7,524				7,534				7,544				7,554				7,564
	Accrued interest receivable and other assets			40,762				39,937				37,620				39,637				40,152
	Total assets		$	2,049,079			$	1,869,063			$	1,947,588			$	1,905,779			$	1,972,751
	LIABILITIES
	Deposits:
	Demand noninterest-bearing		$	790,646			$	791,580			$	742,574			$	673,100			$	633,726
	Demand interest-bearing			39,679				36,268				33,022				34,869				32,680
	Money market and savings			750,112				674,390				670,517				623,603				582,953
	Time			161,617				177,534				183,602				200,634				187,873
	Total deposits			1,742,054				1,679,772				1,629,715				1,532,206				1,437,232
	Junior subordinated debt securities			59,009				24,745				24,729				24,994				24,990
	Other borrowings			79,536				-				134,819				189,043				352,703
	Accrued interest payable and other liabilities			21,241				20,805				19,147				23,126				23,231
	Total liabilities			1,901,840				1,725,322				1,808,410				1,769,369				1,838,156
	SHAREHOLDERS' EQUITY
	Common stock			109,009				108,417				108,430				107,948				107,776
	Retained earnings			38,008				34,792				30,630				27,821				26,036
	Accumulated other comprehensive (loss)			222				532				118				641				783
	Total shareholders' equity			147,239				143,741				139,178				136,410				134,595
	Total liabilities and shareholders' equity		$	2,049,079			$	1,869,063			$	1,947,588			$	1,905,779			$	1,972,751
				-				-				-				-				-
	CAPITAL ADEQUACY
	Tier I leverage ratio			7.29	%			7.53	%			7.46	%			7.49	%			7.84	%
	Tier I risk-based capital ratio			9.17	%			9.35	%			9.47	%			10.11	%			10.57	%
	Total risk-based capital ratio			13.92	%			11.93	%			12.34	%			13.22	%			13.80	%
	Total equity/ total assets			7.19	%			7.69	%			7.15	%			7.16	%			6.82	%
	Book value per share		$	17.85			$	17.47			$	16.99			$	16.69			$	16.52
	Common shares outstanding			8,250,109				8,229,116				8,189,598				8,171,734				8,149,678

	CALIFORNIA BANCORP AND SUBSIDIARY
	INTERIM CONSOLIDATED AVERAGE BALANCE SHEET AND YIELD DATA (UNAUDITED)
	(Dollars in Thousands)
			Three months ended September 30,											Three months ended June 30,
			2021											2021
							Yields			Interest								Yields			Interest
			Average				or			Income/				Average				or			Income/
			Balance				Rates			Expense				Balance				Rates			Expense
	ASSETS
	Interest earning assets:
	Loans (1)		$	1,316,080			4.48	%		$	14,870			$	1,415,729			4.17	%		$	14,703
	Federal funds sold			530,806			0.15	%			199				355,457			0.09	%			84
	Investment securities			65,811			2.83	%			470				58,794			2.67	%			392
	Total interest earning assets			1,912,697			3.22	%			15,539				1,829,980			3.33	%			15,179
	Noninterest-earning assets:
	Cash and due from banks			18,627											19,147
	All other assets (2)			54,570											60,431
	TOTAL		$	1,985,894										$	1,909,558
	LIABILITIES AND
	SHAREHOLDERS' EQUITY
	Interest-bearing liabilities:
	Deposits:
	Demand		$	36,696			0.09	%		$	8			$	33,861			0.12	%		$	10
	Money market and savings			735,785			0.52	%			961				673,460			0.55	%			925
	Time			169,849			0.43	%			183				172,452			0.47	%			203
	Other			102,287			2.12	%			546				139,458			1.31	%			455
	Total interest-bearing liabilities			1,044,617			0.64	%			1,698				1,019,231			0.63	%			1,593
	Noninterest-bearing liabilities:
	Demand deposits			776,195											728,074
	Accrued expenses and
	other liabilities			18,719											20,334
	Shareholders' equity			146,363											141,919
	TOTAL		$	1,985,894										$	1,909,558
	Net interest income and margin (3)						2.87	%		$	13,841							2.98	%		$	13,586
	(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 fees of $1.0 million and $1.2 million, respectively.
	(2) Other noninterest-earning assets includes the allowance for loan losses of $13.3 million and $14.6 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 September 30,
				2021											2020
							Yields			Interest								Yields			Interest
			Average				or			Income/				Average				or			Income/
			Balance				Rates			Expense				Balance				Rates			Expense
	ASSETS
	Interest earning assets:
	Loans (1)		$	1,316,080			4.48	%		$	14,870			$	1,313,092			3.89	%		$	12,849
	Federal funds sold			530,806			0.15	%			199				490,409			0.09	%			117
	Investment securities			65,811			2.83	%			470				39,571			2.23	%			222
	Total interest earning assets			1,912,697			3.22	%			15,539				1,843,072			2.85	%			13,188
	Noninterest-earning assets:
	Cash and due from banks			18,627											19,789
	All other assets (2)			54,570											60,140
	TOTAL		$	1,985,894										$	1,923,001
	LIABILITIES AND
	SHAREHOLDERS' EQUITY
	Interest-bearing liabilities:
	Deposits:
	Demand		$	36,696			0.09	%		$	8			$	30,877			0.14	%		$	11
	Money market and savings			735,785			0.52	%			961				582,694			0.81	%			1,190
	Time			169,849			0.43	%			183				174,436			0.61	%			266
	Other			102,287			2.12	%			546				369,764			0.57	%			533
	Total interest-bearing liabilities			1,044,617			0.64	%			1,698				1,157,771			0.69	%			2,000
															788,007			0.74	%			1,467
	Noninterest-bearing liabilities:														1,397,280			0.42	%			1,467
	Demand deposits			776,195											609,273
	Accrued expenses and
	other liabilities			18,719											21,717
	Shareholders' equity			146,363											134,240
	TOTAL		$	1,985,894										$	1,923,001
	Net interest income and margin (3)						2.87	%		$	13,841							2.41	%		$	11,188
	(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 fees of $1.0 million and $431,000, respectively.
	(2) Other noninterest-earning assets includes the allowance for loan losses of 13.3 million and $12.5 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)
			Nine months ended September 30,
				2021											2020
							Yields			Interest								Yields			Interest
			Average				or			Income/				Average				or			Income/
			Balance				Rates			Expense				Balance				Rates			Expense
	ASSETS
	Interest earning assets:
	Loans (1)		$	1,382,074			4.27	%		$	44,157			$	1,166,829			4.25	%		$	37,096
	Federal funds sold			422,050			0.12	%			371				334,773			0.22	%			554
	Investment securities			60,042			2.72	%			1,222				33,649			2.47	%			621
	Total interest earning assets			1,864,166			3.28	%			45,750				1,535,251			3.33	%			38,271
	Noninterest-earning assets:
	Cash and due from banks			17,223											20,098
	All other assets (2)			58,646											63,970
	TOTAL		$	1,940,035										$	1,619,319
	LIABILITIES AND
	SHAREHOLDERS' EQUITY
	Interest-bearing liabilities:
	Deposits:
	Demand		$	35,031			0.11	%		$	29			$	26,842			0.12	%		$	25
	Money market and savings			684,995			0.56	%			2,858				528,456			0.93	%			3,677
	Time			180,572			0.44	%			594				153,887			1.11	%			1,279
	Other			144,501			1.39	%			1,506				226,274			0.67	%			1,136
	Total interest-bearing liabilities			1,045,099			0.64	%			4,987				935,459			0.87	%			6,117
															709,185			0.94	%			4,981
	Noninterest-bearing liabilities:														1,238,765			0.54	%			4,981
	Demand deposits			731,659											529,580
	Accrued expenses and
	other liabilities			20,966											21,298
	Shareholders' equity			142,311											132,982
	TOTAL		$	1,940,035										$	1,619,319
	Net interest income and margin (3)						2.92	%		$	40,763							2.80	%		$	32,154
	(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 fees of $3.3 million and $851,000, respectively.
	(2) Other noninterest-earning assets includes the allowance for loan losses of $14.0 million and $12.0 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:		Q3 2021				Q2 2021				Q1 2021				Q4 2020				Q3 2020
	Net interest income		$	13,841			$	13,586			$	13,336			$	12,763			$	11,188
	Non-interest income			1,302				956				921				916				1,028
	Total revenue		$	15,143			$	14,542			$	14,257			$	13,679			$	12,216
	PPP RELATED DEFERRED FEES														Amortization				Deferred
	AND COSTS:		Deferred Balance at Origination												of Deferred				Balance
			2021 Program				2020 Program				Total				Balance				Remaining
	PPP fees		$	4,479			$	9,086			$	13,565			$	10,612			$	2,953
	PPP capitalized loan origination costs			540				2,451				2,991				2,541			$	450
	Net PPP fees		$	3,939			$	6,635			$	10,574			$	8,071			$	2,503
	IMPACT OF PPP ACTIVITY REFLECTED		Amortization of Deferred Balance
	IN NET INTEREST INCOME:		Q3 2021				Q2 2021				Q1 2021				Q4 2020				Q3 2020
	PPP fees		$	1,909			$	2,185			$	2,222			$	2,083			$	1,114
	PPP capitalized loan origination costs			348				514				633				527				266
	Net PPP fees		$	1,561			$	1,671			$	1,589			$	1,556			$	848
	NON-INTEREST EXPENSE:		Q3 2021				Q2 2021				Q1 2021				Q4 2020				Q3 2020
	Total non-interest expense		$	10,513			$	9,835			$	10,080			$	10,416			$	10,545
	Total capitalized loan origination costs			1,197				1,217				1,513				1,198				986
	Total operating expenses, before capitalization
	of loan origination costs		$	11,710			$	11,052			$	11,593			$	11,614			$	11,531
	GROSS LOANS:		09/30/21				06/30/21				03/31/21				12/31/20				09/30/20
	Gross loans		$	1,301,972			$	1,352,639			$	1,470,313			$	1,369,070			$	1,355,164
	PPP loans			97,451				194,472				353,426				306,373				362,088
	Gross loans, excluding PPP loans		$	1,204,521			$	1,158,167			$	1,116,887			$	1,062,697			$	993,076

 

 

FAQ

What were California BanCorp's earnings for Q3 2021?

California BanCorp reported net income of $3.2 million for Q3 2021.

How much did diluted EPS change in Q3 2021?

Diluted EPS decreased to $0.39 in Q3 2021 from $0.50 in Q2 2021.

What was the total asset growth for California BanCorp by September 30, 2021?

Total assets increased by $180 million, reaching $2.05 billion.

What impact did the subordinated debt offering have on California BanCorp?

The $35 million subordinated debt offering provided additional capital to support the bank's growth.

How much did total deposits increase in Q3 2021 for California BanCorp?

Total deposits rose by $62.3 million, or 4%, to $1.74 billion.