California BanCorp Reports Financial Results for the First Quarter Ended March 31, 2022
OAKLAND, Calif., April 28, 2022 (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, 2022.
The Company reported net income of $3.7 million for the first quarter of 2022, representing an increase of $492,000, or 15%, compared to $3.2 million for the fourth quarter of 2021 and an increase of $864,000, or 31%, compared to $2.8 million in the first quarter of 2021.
Diluted per share earnings of $0.44 for the first quarter of 2022 compared to $0.38 for the fourth quarter of 2021 and $0.34 for the first quarter of 2021.
"We continued to execute well on our strategies to generate profitable growth in the first quarter, leading to positive trends in revenue, net interest margin, and efficiencies, which resulted in a higher level of earnings and returns," said Steven Shelton, President and CEO of California BanCorp. "We had another strong quarter of loan production that was well balanced across all of our asset classes. Excluding PPP loans and loan sales, we had annualized loan growth of 31% in the first quarter, which enabled us to redeploy more of our excess liquidity into higher yielding earning assets, expand our net interest margin, and generate a higher level of profitability. Our loan pipeline remains strong and we remain well positioned to benefit from further increases in interest rates, which should enable us to continue generating higher levels of revenue, realizing more operating leverage, and continuing to drive profitable growth. While higher interest rates and inflationary pressures create more uncertainty around the operating environment over the remainder of the year, we believe our strong new client acquisition capabilities and value proposition will enable us to continue taking market share, while maintaining healthy asset quality in our well diversified, conservatively underwritten loan portfolio."
"During the first quarter, we sold approximately $40 million of non-core loans from our solar financing portfolio, which enabled us to monetize the value of these loans, while also shortening the duration of our loan portfolio," said Thomas A. Sa, Senior Executive Vice President, Chief Financial Officer and Chief Operating Officer of California BanCorp. "In addition, through proactive management of our investment portfolio, we were able to minimize the accounting impact of the increase in interest rates on our tangible book value. During the first quarter, our tangible book value per share increased 3% from the end of the prior quarter due to our strong financial performance."
Financial Highlights:
Profitability - three months ended March 31, 2022 compared to December 31, 2021
- Net income of $3.7 million and $0.44 per diluted share, compared to $3.2 million and $0.38 per share, respectively.
- Revenue of $17.1 million increased $2.1 million, or 14%, compared to $15.0 million for the fourth quarter of 2021.
- Net fees from Paycheck Protection Program ("PPP") loans contributed $791,000 to net interest income compared to $708,000 for the fourth quarter of 2021.
- Provision for loan losses of $950,000 increased $446,000, or 88%, primarily as a result of growth in the commercial and real estate other loan portfolios combined with continued adjustments in the qualitative reserve assessment in response to general macroeconomic changes.
- Non-interest income of $2.5 million increased $1.5 million, or 155%, primarily due to a gain recognized on the sale of a portion of our solar loan portfolio.
- Non-interest expense, excluding capitalized loan origination costs, of $11.9 million compared to $11.6 million for the fourth quarter of 2021.
Financial Position – March 31, 2022 compared to December 31, 2021
- Total assets decreased by $155.4 million, or 8%, to $1.86 billion.
- Total gross loans increased by $23.8 million, or 2%, to $1.40 billion. Excluding the impact of PPP loans forgiven by the SBA, total gross loans increased during the first quarter by $59.4 million, or 5%, to $1.36 billion.
- Total deposits decreased by $79.6 million, or 5%, to $1.60 billion.
- Total borrowings decreased by $74.2 million, or 70%, to $32.2 million due to repayment of a short term borrowing as well as borrowings under the Federal Reserve Paycheck Protection Program Liquidity Facility ("PPPLF").
- Capital ratios remain healthy with a tier-one leverage ratio of 7.84%, tier I capital ratio of 8.63% and total risk-based capital ratio of 12.71%.
Net Interest Income and Margin:
Net interest income for the quarter ended March 31, 2022 was $14.5 million, an increase of $559,000 or 4%, from $14.0 million for the three months ended December 31, 2021, and an increase of $1.2 million, or 9%, from $13.3 million for the quarter ended March 31, 2021. The increase in net interest income compared to the fourth quarter of 2021 was primarily attributable to the growth of the loan portfolio combined with a reduction in the average cost of deposits. Compared to the first quarter of 2021, the increase in net interest income resulted from a more favorable mix of earning assets offset, in part, by a reduction in the amortization of net fees received on PPP loans.
The Company's net interest margin for the first quarter of 2022 was 3.19%, compared to 2.81% for the fourth quarter of 2021 and 2.94% for the same period in 2021. The increase in margin compared to the prior quarter was primarily due to a more favorable mix of earning assets combined with a reduction in the average cost of deposits. The increase in margin from the same period last year was primarily the result of an increase in loan yields resulting from growth in the commercial and real estate other loan portfolios combined with a reduction in the average cost of deposits, partially offset by a reduction of net fees recognized on PPP loans.
Non-Interest Income:
The Company's non-interest income for the quarters ended March 31, 2022, December 31, 2021, and March 31, 2021 was $2.5 million, $994,000 and $921,000, respectively. The increase in non-interest income compared to the fourth quarter of 2021 and the first quarter of 2021 was primarily due to a gain of $1.4 million recognized on the sale of a portion of our solar loan portfolio.
Net interest income and non-interest income comprised total revenue of $17.1 million, $15.0 million, and $14.3 million for the quarters ended March 31, 2022, December 31, 2021, and March 31, 2021, respectively.
Non-Interest Expense:
The Company's non-interest expense for the quarters ended March 31, 2022, December 31, 2021, and March 31, 2021 was $10.9 million, $10.0 million, and $10.1 million, respectively. The increase in non-interest expense was primarily due to a reduction in capitalized loan origination costs combined with an increase in salaries and benefits related to investments to support the continued growth of the business and the seasonal impact of higher payroll taxes. Excluding capitalized loan origination costs, non-interest expense for the first quarter of 2022, the fourth quarter of 2021 and the first quarter of 2021 was $11.9 million, $11.6 million, and $11.6 million, respectively.
The Company's efficiency ratio, the ratio of non-interest expense to revenues, was 63.99%, 66.90%, and 70.70% for the quarters ended March 31, 2022, December 31, 2021, and March 31, 2021, respectively.
Balance Sheet:
Total assets of $1.86 billion as of March 31, 2022, represented a decrease of $155.4 million, or 8%, compared to $2.01 billion at December 31, 2021 and a decrease of $88.0 million, or 5%, compared to $1.95 billion at March 31, 2021. The decrease in total assets from previous quarters was primarily due to decreased liquidity resulting from deposit outflows related to forgiveness of PPP loans combined with a reduction in PPPLF activity.
Total gross loans increased by $23.8 million, or 2%, to $1.40 billion at March 31, 2022, from $1.38 billion at December 31, 2021 and decreased by $69.8 million, or 5% compared to $1.47 billion at March 31, 2021.
During the first quarter of 2022, commercial and real estate other loans increased by $48.5 million and $44.4 million, respectively, due to organic growth. Partially offsetting these increases within the total loan portfolio, SBA loans decreased by $37.4 million primarily due to PPP loan forgiveness. Additionally, during the first quarter of 2022, the Company sold $39.8 million of residential solar loans.
Year-over-year, commercial and real estate other loans increased by $83.8 million and $168.1 million, respectively, due to organic growth. These increases were partially offset by a decrease in SBA loans of $320.2 million primarily due to PPP loan forgiveness.
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 $454.4 million of those balances have been granted forgiveness by the SBA as of March 31, 2022.
Total deposits decreased by $79.6 million, or 5%, to $1.60 billion at March 31, 2022, from $1.68 billion at December 31, 2021 and decreased by $29.2 million, or 2%, from $1.63 billion at March 31, 2021. The decrease in total deposits from the end of the fourth quarter of 2021 was primarily due to a reduction in non-interest bearing demand deposits of $24.5 million, money market and savings deposits of $30.7 million, and time deposits of $23.6 million.
Compared to the same period last year, the decrease in total deposits was primarily concentrated in time deposits as the result of reduced reliance on brokered certificates of deposit. Non-interest bearing deposits, primarily commercial business operating accounts, represented 46.7% of total deposits at March 31, 2022, compared to 45.9% at December 31, 2021 and 45.6% at March 31, 2021.
As of March 31, 2022, the Company had outstanding borrowings, excluding junior subordinated debt securities, of $32.2 million, compared to $106.4 million at December 31, 2021 and $134.8 million at March 31, 2021. The decrease in borrowings during the first quarter of 2022 was comprised primarily of the repayment of a $50.0 million short-term FHLB advance combined with a $24.2 million reduction in PPPLF activity.
Asset Quality:
The provision for credit losses increased to $950,000 for the first quarter of 2022, compared to $504,000 for the fourth quarter of 2021 and $300,000 for the first quarter of 2021. Net loan recoveries in the first quarter of 2022 were $1,000 or 0.00% of gross loans, compared to net recoveries of $6,000, or 0.00%, in the fourth quarter of 2021 and net recoveries of $166,000, or 0.01%, in the first quarter of 2021.
Non-performing assets ("NPAs") to total assets of 0.03% at March 31, 2022 compared to 0.01% at December 31, 2021 and 0.01% at March 31, 2021, with non-performing loans of $549,000, $232,000 and $234,000, respectively, on those dates.
The allowance for loan losses increased by $951,000 to $15.0 million, or 1.07% of total loans, at March 31, 2022, compared to $14.1 million, or 1.02% of total loans, at December 31, 2021 and $14.6 million, or 0.99% of total loans at March 31, 2021. The increase in the allowance as a percentage of total loans at March 31, 2022 compared to December 31, 2021 and March 31, 2021 reflects an increase in the qualitative reserve assessment in response to general macroeconomic changes pertaining to the mix of our loan portfolio.
Capital Adequacy:
At March 31, 2022, shareholders' equity totaled $154.6 million compared to $150.8 million at December 31, 2021 and $139.2 million one year ago. As a result, the Company's total risk-based capital ratio, tier one capital ratio and leverage ratio of 12.49%, 8.49%, and 7.84%, respectively, were all 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
[email protected]
Thomas A. Sa, (510) 457-3775
Senior Executive Vice President
Chief Financial Officer and Chief Operating Officer
[email protected]
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, 2021 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, 2022, which we expect to file with the SEC during the second quarter of 2022, 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 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 2022 | Q4 2021 | $ | % | Q1 2021 | $ | % | ||||||||||||||||||||
| Interest income | $ | 15,924 | $ | 15,543 | $ | 381 | 2 | % | $ | 15,032 | $ | 892 | 6 | % | |||||||||||||
| Interest expense | 1,398 | 1,576 | (178 | ) | -11 | % | 1,696 | (298 | ) | -18 | % | ||||||||||||||||
| Net interest income | 14,526 | 13,967 | 559 | 4 | % | 13,336 | 1,190 | 9 | % | ||||||||||||||||||
| Provision for loan losses | 950 | 504 | 446 | 88 | % | 300 | 650 | 217 | % | ||||||||||||||||||
| Net interest income after provision for loan losses | 13,576 | 13,463 | 113 | 1 | % | 13,036 | 540 | 4 | % | ||||||||||||||||||
| Non-interest income | 2,534 | 994 | 1,540 | 155 | % | 921 | 1,613 | 175 | % | ||||||||||||||||||
| Non-interest expense | 10,916 | 10,009 | 907 | 9 | % | 10,080 | 836 | 8 | % | ||||||||||||||||||
| Income before income taxes | 5,194 | 4,448 | 746 | 17 | % | 3,877 | 1,317 | 34 | % | ||||||||||||||||||
| Income tax expense | 1,521 | 1,267 | 254 | 20 | % | 1,068 | 453 | 42 | % | ||||||||||||||||||
| Net income | $ | 3,673 | $ | 3,181 | $ | 492 | 15 | % | $ | 2,809 | $ | 864 | 31 | % | |||||||||||||
| Diluted earnings per share | $ | 0.44 | $ | 0.38 | $ | 0.06 | 16 | % | $ | 0.34 | $ | 0.10 | 29 | % | |||||||||||||
| Net interest margin | 3.19 | % | 2.81 | % | +38 Basis Points | 2.94 | % | +25 Basis Points | |||||||||||||||||||
| Efficiency ratio | 63.99 | % | 66.90 | % | -291 Basis Points | 70.70 | % | -671 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 2022 | Q4 2021 | $ | % | Q1 2021 | $ | % | ||||||||||||||||||||
| Total assets | $ | 1,859,595 | $ | 2,014,996 | $ | (155,401 | ) | -8 | % | $ | 1,947,588 | $ | (87,993 | ) | -5 | % | |||||||||||
| Gross loans | 1,400,474 | 1,376,649 | 23,825 | 2 | % | 1,470,313 | (69,839 | ) | -5 | % | |||||||||||||||||
| Deposits | 1,600,522 | 1,680,138 | (79,616 | ) | -5 | % | 1,629,715 | (29,193 | ) | -2 | % | ||||||||||||||||
| Tangible equity | 147,068 | 143,241 | 3,827 | 3 | % | 131,634 | 15,434 | 12 | % | ||||||||||||||||||
| Tangible book value per share | $ | 17.78 | $ | 17.33 | $ | 0.45 | 3 | % | $ | 16.07 | $ | 1.71 | 11 | % | |||||||||||||
| Tangible equity / total assets | 7.91 | % | 7.11 | % | +80 Basis Points | 6.76 | % | +115 Basis Points | |||||||||||||||||||
| Gross loans / total deposits | 87.50 | % | 81.94 | % | +556 Basis Points | 90.22 | % | -272 Basis Points | |||||||||||||||||||
| Noninterest-bearing deposits / total deposits | 46.65 | % | 45.90 | % | +75 Basis Points | 45.56 | % | +109 Basis Points | |||||||||||||||||||
| Change | Change | ||||||||||||||||||||||||||
| QUARTERLY AVERAGE HIGHLIGHTS: | Q1 2022 | Q4 2021 | $ | % | Q1 2021 | $ | % | ||||||||||||||||||||
| Total assets | $ | 1,928,542 | $ | 2,054,490 | $ | (125,948 | ) | -6 | % | $ | 1,922,739 | $ | 5,803 | 0 | % | ||||||||||||
| Total earning assets | 1,846,225 | 1,971,558 | (125,333 | ) | -6 | % | 1,839,437 | 6,788 | 0 | % | |||||||||||||||||
| Gross loans | 1,371,187 | 1,330,044 | 41,143 | 3 | % | 1,415,506 | (44,319 | ) | -3 | % | |||||||||||||||||
| Deposits | 1,652,013 | 1,759,592 | (107,579 | ) | -6 | % | 1,569,170 | 82,843 | 5 | % | |||||||||||||||||
| Tangible equity | 146,032 | 142,118 | 3,914 | 3 | % | 129,865 | 16,167 | 12 | % | ||||||||||||||||||
| Tangible equity / total assets | 7.57 | % | 6.92 | % | +65 Basis Points | 6.75 | % | +82 Basis Points | |||||||||||||||||||
| Gross loans / total deposits | 83.00 | % | 75.59 | % | +741 Basis Points | 90.21 | % | -721 Basis Points | |||||||||||||||||||
| Noninterest-bearing deposits / total deposits | 44.88 | % | 45.24 | % | -36 Basis Points | 43.97 | % | +91 Basis Points | |||||||||||||||||||
| CALIFORNIA BANCORP AND SUBSIDIARY | ||||||||||||||||||||
| SELECTED INTERIM FINANCIAL INFORMATION (UNAUDITED) - ASSET QUALITY | ||||||||||||||||||||
| (Dollars in Thousands) | ||||||||||||||||||||
| ALLOWANCE FOR LOAN LOSSES: | 03/31/22 | 12/31/21 | 09/30/21 | 06/30/21 | 03/31/21 | |||||||||||||||
| Balance, beginning of period | $ | 14,081 | $ | 13,571 | $ | 13,240 | $ | 14,577 | $ | 14,111 | ||||||||||
| Provision for loan losses, quarterly | 950 | 504 | 300 | (1,100 | ) | 300 | ||||||||||||||
| Charge-offs, quarterly | - | - | - | (278 | ) | - | ||||||||||||||
| Recoveries, quarterly | 1 | 6 | 31 | 41 | 166 | |||||||||||||||
| Balance, end of period | $ | 15,032 | $ | 14,081 | $ | 13,571 | $ | 13,240 | $ | 14,577 | ||||||||||
| NONPERFORMING ASSETS: | 03/31/22 | 12/31/21 | 09/30/21 | 06/30/21 | 03/31/21 | |||||||||||||||
| Loans accounted for on a non-accrual basis | $ | 549 | $ | 232 | $ | 1,233 | $ | 1,234 | $ | 234 | ||||||||||
| Loans with principal or interest contractually past due 90 days or more and still accruing interest | - | - | - | - | - | |||||||||||||||
| Nonperforming loans | $ | 549 | $ | 232 | $ | 1,233 | $ | 1,234 | $ | 234 | ||||||||||
| Other real estate owned | - | - | - | - | - | |||||||||||||||
| Nonperforming assets | $ | 549 | $ | 232 | $ | 1,233 | $ | 1,234 | $ | 234 | ||||||||||
| Loans restructured and in compliance with modified terms | - | - | - | - | - | |||||||||||||||
| Nonperforming assets and restructured loans | $ | 549 | $ | 232 | $ | 1,233 | $ | 1,234 | $ | 234 | ||||||||||
| Nonperforming loans by asset type: | ||||||||||||||||||||
| Commercial | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
| Real estate other | - | - | 1,000 | 1,000 | - | |||||||||||||||
| Real estate construction and land | - | - | - | - | - | |||||||||||||||
| SBA | 549 | 232 | 233 | 234 | 234 | |||||||||||||||
| Other | - | - | - | - | - | |||||||||||||||
| Nonperforming loans | $ | 549 | $ | 232 | $ | 1,233 | $ | 1,234 | $ | 234 | ||||||||||
| ASSET QUALITY: | 03/31/22 | 12/31/21 | 09/30/21 | 06/30/21 | 03/31/21 | |||||||||||||||
| Allowance for loan losses / gross loans | 1.07 | % | 1.02 | % | 1.04 | % | 0.98 | % | 0.99 | % | ||||||||||
| Allowance for loan losses / nonperforming loans | 2738.07 | % | 6069.40 | % | 1100.65 | % | 1072.93 | % | 6229.49 | % | ||||||||||
| Nonperforming assets / total assets | 0.03 | % | 0.01 | % | 0.06 | % | 0.07 | % | 0.01 | % | ||||||||||
| Nonperforming loans / gross loans | 0.04 | % | 0.02 | % | 0.09 | % | 0.09 | % | 0.02 | % | ||||||||||
| Net quarterly charge-offs / gross loans | -0.00 | % | -0.00 | % | -0.00 | % | 0.02 | % | -0.01 | % | ||||||||||
| CALIFORNIA BANCORP AND SUBSIDIARY | |||||||||||
| INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||||||
| (Dollars in Thousands, Except Per Share Data) | |||||||||||
| Three months ended | |||||||||||
| 03/31/22 | 12/31/21 | 03/31/21 | |||||||||
| INTEREST INCOME | |||||||||||
| Loans | $ | 14,886 | $ | 14,520 | $ | 14,584 | |||||
| Federal funds sold | 136 | 216 | 88 | ||||||||
| Investment securities | 902 | 807 | 360 | ||||||||
| Total interest income | 15,924 | 15,543 | 15,032 | ||||||||
| INTEREST EXPENSE | |||||||||||
| Deposits | 806 | 937 | 1,191 | ||||||||
| Other | 592 | 639 | 505 | ||||||||
| Total interest expense | 1,398 | 1,576 | 1,696 | ||||||||
| Net interest income | 14,526 | 13,967 | 13,336 | ||||||||
| Provision for loan losses | 950 | 504 | 300 | ||||||||
| Net interest income after provision for loan losses | 13,576 | 13,463 | 13,036 | ||||||||
| NON-INTEREST INCOME | |||||||||||
| Service charges and other fees | 889 | 1,038 | 641 | ||||||||
| Gain on sale of loans | 1,393 | - | - | ||||||||
| Other non-interest income | 252 | (44 | ) | 280 | |||||||
| Total non-interest income | 2,534 | 994 | 921 | ||||||||
| NON-INTEREST EXPENSE | |||||||||||
| Salaries and benefits | 7,093 | 6,370 | 6,367 | ||||||||
| Premises and equipment | 1,302 | 1,320 | 1,197 | ||||||||
| Other | 2,521 | 2,319 | 2,516 | ||||||||
| Total non-interest expense | 10,916 | 10,009 | 10,080 | ||||||||
| Income before income taxes | 5,194 | 4,448 | 3,877 | ||||||||
| Income taxes | 1,521 | 1,267 | 1,068 | ||||||||
| NET INCOME | $ | 3,673 | $ | 3,181 | $ | 2,809 | |||||
| EARNINGS PER SHARE | |||||||||||
| Basic earnings per share | $ | 0.44 | $ | 0.39 | $ | 0.34 | |||||
| Diluted earnings per share | $ | 0.44 | $ | 0.38 | $ | 0.34 | |||||
| Average common shares outstanding | 8,276,761 | 8,255,340 | 8,179,667 | ||||||||
| Average common and equivalent shares outstanding | 8,392,802 | 8,342,032 | 8,242,467 | ||||||||
| PERFORMANCE MEASURES | |||||||||||
| Return on average assets | 0.77 | % | 0.61 | % | 0.59 | % | |||||
| Return on average equity | 9.70 | % | 8.43 | % | 8.29 | % | |||||
| Return on average tangible equity | 10.20 | % | 8.88 | % | 8.77 | % | |||||
| Efficiency ratio | 63.99 | % | 66.90 | % | 70.70 | % | |||||
| CALIFORNIA BANCORP AND SUBSIDIARY | ||||||||||||||||||||
| INTERIM CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||||||||||||||||
| (Dollars in Thousands) | ||||||||||||||||||||
| 03/31/22 | 12/31/21 | 09/30/21 | 06/30/21 | 03/31/21 | ||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and due from banks | $ | 18,228 | $ | 4,539 | $ | 22,424 | $ | 26,159 | $ | 18,475 | ||||||||||
| Federal funds sold | 206,305 | 465,917 | 578,626 | 366,347 | 342,305 | |||||||||||||||
| Investment securities | 171,764 | 103,278 | 82,108 | 61,142 | 58,105 | |||||||||||||||
| Loans: | ||||||||||||||||||||
| Commercial | 522,808 | 474,281 | 428,169 | 425,643 | 439,044 | |||||||||||||||
| Real estate other | 741,651 | 697,212 | 664,202 | 616,451 | 573,520 | |||||||||||||||
| Real estate construction and land | 51,204 | 43,194 | 41,312 | 41,558 | 45,550 | |||||||||||||||
| SBA | 44,040 | 81,403 | 107,096 | 204,734 | 364,273 | |||||||||||||||
| Other | 40,771 | 80,559 | 61,193 | 64,253 | 47,926 | |||||||||||||||
| Loans, gross | 1,400,474 | 1,376,649 | 1,301,972 | 1,352,639 | 1,470,313 | |||||||||||||||
| Unamortized net deferred loan costs (fees) | 2,434 | 1,688 | 760 | (629 | ) | (1,569 | ) | |||||||||||||
| Allowance for loan losses | (15,032 | ) | (14,081 | ) | (13,571 | ) | (13,240 | ) | (14,577 | ) | ||||||||||
| Loans, net | 1,387,876 | 1,364,256 | 1,289,161 | 1,338,770 | 1,454,167 | |||||||||||||||
| Premises and equipment, net | 4,047 | 4,405 | 4,227 | 5,089 | 5,452 | |||||||||||||||
| Bank owned life insurance | 24,614 | 24,412 | 24,247 | 24,085 | 23,920 | |||||||||||||||
| Goodwill and core deposit intangible | 7,503 | 7,513 | 7,524 | 7,534 | 7,544 | |||||||||||||||
| Accrued interest receivable and other assets | 39,258 | 40,676 | 40,762 | 39,937 | 37,620 | |||||||||||||||
| Total assets | $ | 1,859,595 | $ | 2,014,996 | $ | 2,049,079 | $ | 1,869,063 | $ | 1,947,588 | ||||||||||
| LIABILITIES | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Demand noninterest-bearing | $ | 746,673 | $ | 771,205 | $ | 790,646 | $ | 791,580 | $ | 742,574 | ||||||||||
| Demand interest-bearing | 36,419 | 37,250 | 39,679 | 36,268 | 33,022 | |||||||||||||||
| Money market and savings | 686,781 | 717,480 | 750,112 | 674,390 | 670,517 | |||||||||||||||
| Time | 130,649 | 154,203 | 161,617 | 177,534 | 183,602 | |||||||||||||||
| Total deposits | 1,600,522 | 1,680,138 | 1,742,054 | 1,679,772 | 1,629,715 | |||||||||||||||
| Junior subordinated debt securities | 54,063 | 54,028 | 59,009 | 24,745 | 24,729 | |||||||||||||||
| Other borrowings | 32,166 | 106,387 | 79,536 | - | 134,819 | |||||||||||||||
| Accrued interest payable and other liabilities | 18,273 | 23,689 | 21,241 | 20,805 | 19,147 | |||||||||||||||
| Total liabilities | 1,705,024 | 1,864,242 | 1,901,840 | 1,725,322 | 1,808,410 | |||||||||||||||
| SHAREHOLDERS' EQUITY | ||||||||||||||||||||
| Common stock | 109,815 | 109,473 | 109,009 | 108,417 | 108,430 | |||||||||||||||
| Retained earnings | 44,862 | 41,189 | 38,008 | 34,792 | 30,630 | |||||||||||||||
| Accumulated other comprehensive (loss) | (106 | ) | 92 | 222 | 532 | 118 | ||||||||||||||
| Total shareholders' equity | 154,571 | 150,754 | 147,239 | 143,741 | 139,178 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 1,859,595 | $ | 2,014,996 | $ | 2,049,079 | $ | 1,869,063 | $ | 1,947,588 | ||||||||||
| CAPITAL ADEQUACY | ||||||||||||||||||||
| Tier I leverage ratio | 7.84 | % | 7.23 | % | 7.29 | % | 7.53 | % | 7.46 | % | ||||||||||
| Tier I risk-based capital ratio | 8.49 | % | 8.62 | % | 9.17 | % | 9.35 | % | 9.47 | % | ||||||||||
| Total risk-based capital ratio | 12.49 | % | 12.75 | % | 13.92 | % | 11.93 | % | 12.34 | % | ||||||||||
| Total equity/ total assets | 8.31 | % | 7.48 | % | 7.19 | % | 7.69 | % | 7.15 | % | ||||||||||
| Book value per share | $ | 18.69 | $ | 18.24 | $ | 17.85 | $ | 17.47 | $ | 16.99 | ||||||||||
| Common shares outstanding | 8,270,901 | 8,264,300 | 8,250,109 | 8,229,116 | 8,189,598 | |||||||||||||||
| 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, | ||||||||||||||||||||
| 2022 | 2021 | ||||||||||||||||||||
| Yields | Interest | Yields | Interest | ||||||||||||||||||
| Average | or | Income/ | Average | or | Income/ | ||||||||||||||||
| Balance | Rates | Expense | Balance | Rates | Expense | ||||||||||||||||
| ASSETS | |||||||||||||||||||||
| Interest earning assets: | |||||||||||||||||||||
| Loans (1) | $ | 1,371,187 | 4.40 | % | $ | 14,886 | $ | 1,330,044 | 4.33 | % | $ | 14,520 | |||||||||
| Federal funds sold | 345,394 | 0.16 | % | 136 | 536,503 | 0.16 | % | 216 | |||||||||||||
| Investment securities | 129,644 | 2.82 | % | 902 | 105,011 | 3.05 | % | 807 | |||||||||||||
| Total interest earning assets | 1,846,225 | 3.50 | % | 15,924 | 1,971,558 | 3.13 | % | 15,543 | |||||||||||||
| Noninterest-earning assets: | |||||||||||||||||||||
| Cash and due from banks | 18,748 | 18,886 | |||||||||||||||||||
| All other assets (2) | 63,569 | 64,046 | |||||||||||||||||||
| TOTAL | $ | 1,928,542 | $ | 2,054,490 | |||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||
| Deposits: | |||||||||||||||||||||
| Demand | $ | 38,197 | 0.10 | % | $ | 9 | $ | 37,379 | 0.10 | % | $ | 9 | |||||||||
| Money market and savings | 723,109 | 0.37 | % | 665 | 766,826 | 0.40 | % | 769 | |||||||||||||
| Time | 149,293 | 0.36 | % | 132 | 159,420 | 0.40 | % | 159 | |||||||||||||
| Other | 100,664 | 2.39 | % | 592 | 122,722 | 2.07 | % | 639 | |||||||||||||
| Total interest-bearing liabilities | 1,011,263 | 0.56 | % | 1,398 | 1,086,347 | 0.58 | % | 1,576 | |||||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||||
| Demand deposits | 741,414 | 795,967 | |||||||||||||||||||
| Accrued expenses and other liabilities | 22,325 | 22,539 | |||||||||||||||||||
| Shareholders' equity | 153,540 | 149,637 | |||||||||||||||||||
| TOTAL | $ | 1,928,542 | $ | 2,054,490 | |||||||||||||||||
| Net interest income and margin (3) | 3.19 | % | $ | 14,526 | 2.81 | % | $ | 13,967 | |||||||||||||
| (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 $318,000 and $125,000, respectively. | |||||||||||||||||||||
| (2) Other noninterest-earning assets includes the allowance for loan losses of $14.1 million and $13.6 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 March 31, | |||||||||||||||||||||
| 2022 | 2021 | ||||||||||||||||||||
| Yields | Interest | Yields | Interest | ||||||||||||||||||
| Average | or | Income/ | Average | or | Income/ | ||||||||||||||||
| Balance | Rates | Expense | Balance | Rates | Expense | ||||||||||||||||
| ASSETS | |||||||||||||||||||||
| Interest earning assets: | |||||||||||||||||||||
| Loans (1) | $ | 1,371,187 | 4.40 | % | $ | 14,886 | $ | 1,415,506 | 4.18 | % | $ | 14,584 | |||||||||
| Federal funds sold | 345,394 | 0.16 | % | 136 | 369,223 | 0.10 | % | 88 | |||||||||||||
| Investment securities | 129,644 | 2.82 | % | 902 | 54,708 | 2.67 | % | 360 | |||||||||||||
| Total interest earning assets | 1,846,225 | 3.50 | % | 15,924 | 1,839,437 | 3.31 | % | 15,032 | |||||||||||||
| Noninterest-earning assets: | |||||||||||||||||||||
| Cash and due from banks | 18,748 | 23,033 | |||||||||||||||||||
| All other assets (2) | 63,569 | 60,269 | |||||||||||||||||||
| TOTAL | $ | 1,928,542 | $ | 1,922,739 | |||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||
| Deposits: | |||||||||||||||||||||
| Demand | $ | 38,197 | 0.10 | % | $ | 9 | $ | 34,512 | 0.13 | % | $ | 11 | |||||||||
| Money market and savings | 723,109 | 0.37 | % | 665 | 644,740 | 0.61 | % | 972 | |||||||||||||
| Time | 149,293 | 0.36 | % | 132 | 199,953 | 0.42 | % | 208 | |||||||||||||
| Other | 100,664 | 2.39 | % | 592 | 192,803 | 1.06 | % | 505 | |||||||||||||
| Total interest-bearing liabilities | 1,011,263 | 0.56 | % | 1,398 | 1,072,008 | 0.64 | % | 1,696 | |||||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||||
| Demand deposits | 741,414 | 689,965 | |||||||||||||||||||
| Accrued expenses and other liabilities | 22,325 | 23,351 | |||||||||||||||||||
| Shareholders' equity | 153,540 | 137,415 | |||||||||||||||||||
| TOTAL | $ | 1,928,542 | $ | 1,922,739 | |||||||||||||||||
| Net interest income and margin (3) | 3.19 | % | $ | 14,526 | 2.94 | % | $ | 13,336 | |||||||||||||
| (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 $318,000 and $1.2 million, respectively. | |||||||||||||||||||||
| (2) Other noninterest-earning assets includes the allowance for loan losses of $14.1 million and $14.2 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) | ||||||||||||||||||||
| REVENUE: | Q1 2022 | Q4 2021 | Q3 2021 | Q2 2021 | Q1 2021 | |||||||||||||||
| Net interest income | $ | 14,526 | $ | 13,967 | $ | 13,841 | $ | 13,586 | $ | 13,336 | ||||||||||
| Non-interest income | 2,534 | 994 | 1,302 | 956 | 921 | |||||||||||||||
| Total revenue | $ | 17,060 | $ | 14,961 | $ | 15,143 | $ | 14,542 | $ | 14,257 | ||||||||||
| Amortization | Deferred | |||||||||||||||||||
| PPP RELATED DEFERRED FEES AND COSTS: | Deferred Balance at Origination | of Deferred | Balance | |||||||||||||||||
| 2021 Program | 2020 Program | Total | Balance | Remaining | ||||||||||||||||
| PPP fees | $ | 4,479 | $ | 9,086 | $ | 13,565 | $ | 12,443 | $ | 1,122 | ||||||||||
| PPP capitalized loan origination costs | 540 | 2,451 | 2,991 | 2,868 | $ | 123 | ||||||||||||||
| Net PPP fees | $ | 3,939 | $ | 6,635 | $ | 10,574 | $ | 9,575 | $ | 999 | ||||||||||
| Amortization of Deferred Balance | ||||||||||||||||||||
| IMPACT OF PPP ACTIVITY REFLECTED IN NET INTEREST INCOME: | Q1 2022 | Q4 2021 | Q3 2021 | Q2 2021 | Q1 2021 | |||||||||||||||
| PPP fees | $ | 1,014 | $ | 817 | $ | 1,909 | $ | 2,185 | $ | 2,222 | ||||||||||
| PPP capitalized loan origination costs | 223 | 109 | 348 | 514 | 633 | |||||||||||||||
| Net PPP fees | $ | 791 | $ | 708 | $ | 1,561 | $ | 1,671 | $ | 1,589 | ||||||||||
| NON-INTEREST EXPENSE: | Q1 2022 | Q4 2021 | Q3 2021 | Q2 2021 | Q1 2021 | |||||||||||||||
| Total non-interest expense | $ | 10,916 | $ | 10,009 | $ | 10,513 | $ | 9,835 | $ | 10,080 | ||||||||||
| Total capitalized loan origination costs | 984 | 1,601 | 1,197 | 1,217 | 1,513 | |||||||||||||||
| Total operating expenses, before capitalization of loan origination costs | $ | 11,900 | $ | 11,610 | $ | 11,710 | $ | 11,052 | $ | 11,593 | ||||||||||
| GROSS LOANS: | Q1 2022 | 12/31/21 | 09/30/21 | 06/30/21 | 03/31/21 | |||||||||||||||
| Gross loans | $ | 1,400,474 | $ | 1,376,649 | $ | 1,301,972 | $ | 1,352,639 | $ | 1,470,313 | ||||||||||
| PPP loans | 36,905 | 72,527 | 97,451 | 194,472 | 353,426 | |||||||||||||||
| Gross loans, excluding PPP loans | $ | 1,363,569 | $ | 1,304,122 | $ | 1,204,521 | $ | 1,158,167 | $ | 1,116,887 | ||||||||||
