California BanCorp Reports Financial Results for the Fourth Quarter and Twelve Months Ended December 31, 2020

Oakland, California, UNITED STATES


OAKLAND, Calif., Jan. 28, 2021 (GLOBE NEWSWIRE) -- California BanCorp (NASDAQ: CALB), whose subsidiary is California Bank of Commerce, announced today its financial results for the fourth quarter and twelve months ended December 31, 2020.

The Company reported net income of $1.8 million for the fourth quarter of 2020, representing an increase of $1.3 million or 261% compared to $495,000 for the third quarter of 2020 and an increase of $1.2 million or 209% compared to $578,000 in the fourth quarter of 2019. For the twelve months ended December 31, 2020, net income was $4.3 million representing a decrease of $2.7 million or 39% compared to $7.0 million for the same period in 2019.

Diluted per share earnings of $0.22 for the fourth quarter of 2020 compared to $0.06 for the third quarter of 2020 and $0.07 in the fourth quarter of 2019. For the twelve months ended December 31, 2020, diluted per share earnings of $0.53 compared to $0.86 for the same period in 2019.

“Our fourth quarter performance reflects continued progress in executing on our growth strategies and the resulting impact on our level of profitability,” said Steven Shelton, President and CEO of California BanCorp. “Excluding PPP loans, our total loans increased at an annualized rate of 28%, as we continue to see the positive impact of our expanded presence in Sacramento, our improved ability to win business with middle-market commercial clients, and the continued growth of niche areas such as sponsor finance. The strong loan growth we are generating is producing the improved operating leverage that we expected and delivering a significant increase in earnings and our level of returns. As we enter 2021, we are well positioned to build on the progress we made in 2020 and continue leveraging the strong commercial banking platform that we have developed. We have a healthy pipeline of new business development opportunities that should help us to continue generating strong balance sheet growth, realizing additional operating leverage, and driving a higher level of earnings.”

Financial Highlights:

Profitability - three months ended December 31, 2020 compared to September 30, 2020

  • Net income of $1.8 million and $0.22 per diluted share, compared to $495,000 and $0.06 per share, respectively.
  • Revenue of $13.7 million increased $1.5 million, or 12%, compared to $12.2 million for the third quarter of 2020.
  • Provision for loan losses decreased $150,000 due to improved credit quality and a continued qualitative reserve assessment in response to general macroeconomic changes related to COVID-19 as it pertains to our overall loan portfolio.
  • Non-interest expense, excluding capitalized loan origination costs, of $11.7 million remained consistent with the third quarter of 2020 level of $11.5 million.

Profitability - twelve months ended December 31, 2020 compared to December 31, 2019

  • Net income of $4.3 million and $0.53 per diluted share, compared to $7.0 million and $0.86 per share, respectively.
  • Revenue of $48.9 million increased $3.7 million, or 8%, compared to $45.2 million in the prior year.
  • Provision for loan losses increased $2.6 million primarily due to a charge-off in the second quarter of 2020 related to a legacy problem loan and funding a qualitative reserve in response to general macroeconomic changes related to COVID-19.
  • Non-interest expense increased by $4.6 million (net of $4.3 million of deferred loan origination costs primarily related to PPP loans and other loan programs to support our clients) as a result of salaries and benefits and other direct expenses pertaining to the strategic expansion of our business.

Financial Position – December 31, 2020 compared to September 30, 2020

  • Total assets decreased by $67.0 million, or 3% to $1.91 billion primarily as the result of our repayment of $158.7 million in borrowings under the Federal Reserve PPPLF, partially offset by deposit growth.
  • Total gross loans increased by $13.9 million, or 1% to $1.37 billion. Excluding the impact of PPP loans forgiven by the SBA, total gross loans increased during the fourth quarter by $69.6 million, or 7%, to $1.06 billion.
  • Total deposits increased by $95.0 million, or 7% to $1.53 billion.
  • Capital ratios, including the impact of PPP loan activity, remain healthy with a tier-one leverage ratio of 7.49%, tier I capital ratio of 10.11% and total risk-based capital ratio of 13.22%.

Business Impact of COVID-19:

In response to the continued evolving COVID-19 pandemic, the Company has focused first on the well-being of its people, customers and communities. Preventative health measures were put in place including elimination of business related travel requirements, mandatory work from home for all employees able to do so, social distancing precautions for all employees in the office and customers visiting branches, and preventative cleaning at offices and branches.

The Company has also focused on business continuity measures including monitoring potential business interruptions, making improvements to our remote working technology, and conducting regular discussions with our technology vendors to ensure full functionality throughout this event.

The Company has taken measures to support customers affected by the pandemic and to maintain strong asset quality, including:

  • Implementing a broad-based risk management strategy to manage credit segments on a real-time basis;
  • Monitoring portfolio risk and related mitigation strategies by segments;
  • Helping business clients receive PPP and other loan products under the CARES Act; following the launch of PPP in early April 2020, we processed 100% of the approximately 730 applications received and all of the applications we submitted to the SBA received approval, resulting in approximately $362.0 million in loan fundings. At December 31, 2020, approximately $55.7 million of these balances have been granted forgiveness by the SBA.
  • Offering flexible repayment options to current clients and a streamlined loan modification process, when appropriate.  Beginning in March 2020, we launched a proactive deferral program that resulted in modification of 383 loans with an aggregate balance of approximately $323.9 million.  At December 31, 2020, only one loan remained on deferral status.

Net Interest Income and Margin:

Net interest income for the quarter ended December 31, 2020 was $12.8 million, an increase of $1.6 million or 14%, over $11.2 million for the three months ended September 30, 2020, and an increase of $2.2 million, or 21%, over $10.6 million for the quarter ended December 31, 2019. The increase in net interest income compared to the third quarter of 2020 was primarily attributable to the accelerated amortization of $708,000 in fees received on PPP loans forgiven by the SBA combined with growth in earning assets. Compared to the fourth quarter of 2019, 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 and higher liquidity.

Net interest income for the twelve months ended December 31, 2020 was $44.9 million, an increase of $4.0 million or 10% over $40.9 million for the twelve months ended December 31, 2019. The increase in net interest income compared to 2019 was primarily attributable to an increase in interest income as the result of amortization of loan fees collected on PPP loans, and an increase in the volume of average earning assets offset by lower yields on earning assets resulting from a decline in short-term interest rates and higher liquidity.

The Company’s net interest margin for the quarter was 2.66% compared to 2.41% for the third quarter of 2020 and 3.90% for the same period in 2019. The increase in margin compared to the prior quarter was primarily due to the impact of recognizing accelerated deferred fees on PPP loans granted forgiveness by the SBA. The decrease in margin from the same period last year was primarily the result of a decrease in short-term interest rates.

Non-Interest Income:

The Company’s non-interest income for the quarters ended December 31, 2020, September 30, 2020, and December 31, 2019 was $916,000, $1.0 million and $1.1 million, respectively. The decrease in noninterest income was primarily due to a decrease in service charges and loan related fees.

For the twelve months ended December 31, 2020, non-interest income of $4.0 million compared to $4.2 million for the same period of 2019. The decrease in non-interest income from prior year was due to lower gains on sales of loans in 2020.

Net interest income and non-interest income comprised total revenue of $13.7 million, $12.2 million, and $11.7 million for the quarters ended December 31, 2020, September 30, 2020, and December 31, 2019, respectively. Total revenue for the years ended 2020 and 2019 was $48.9 million and $45.2 million, respectively.

Non-Interest Expense:

The Company’s non-interest expense for the quarters ended December 31, 2020, September 30, 2020, and December 31, 2019 was $10.4 million, $10.5 million, and $9.8 million, respectively. Compared to the fourth quarter of 2019 the increase in non-interest expense was primarily due to legal and professional fees associated with public company readiness and FDICIA implementation, and an increase in salaries and benefits related to hiring to support strategic expansion.

Non-interest expenses of $37.8 million for the twelve months ended December 31, 2020 compared to $33.2 million for the year ended 2019. Excluding the impact of deferred loan origination costs, the increase of $4.6 million was due primarily to an increase in salaries and benefits related to hiring to support strategic expansion of the Company and nonrecurring costs related to our public registration on NASDAQ and FDICIA implementation.

The Company’s efficiency ratio, the ratio of non-interest expense to revenues, was 76.15% and 77.27% for the fourth quarter and year ended December 31, 2020, respectively, compared to 83.76% and 73.52% for the fourth quarter and year ended December 31, 2019, respectively.

Balance Sheet:

Total assets of $1.91 billion as of December 31, 2020, represented a decrease of $67.0 million, or 3%, compared to $1.97 billion at September 30, 2020 and an increase of $753.7 million, or 65% compared to $1.15 billion at December 31, 2019.

Total loans increased by $13.9 million, or 1% to $1.37 billion at December 31, 2020, from $1.36 billion at September 30, 2020 and $419.4 million, or 44% compared to $949.7 million at December 30, 2019. Loan growth in the fourth quarter of 2020 compared to the third quarter of 2020 was centered in commercial loans and in commercial real estate loans of $35.1 million and $11.1 million, respectively, and an increase in other loans of $23.4 million due to the purchase of a portfolio of residential solar loans. These increases were partially offset by a decrease in SBA loans of $56.4 million primarily due to PPP loan forgiveness.

Year-over-year loan growth was primarily due to the origination of $362.0 million in PPP loans in addition to increases in commercial loans and commercial real estate of $24.8 million and $47.8 million, respectively. In addition, the Company purchased two portfolios of residential solar loans totaling $47.4 million. These increases were partially offset by a decrease in SBA loans primarily due to PPP loan forgiveness.

Total deposits increased by $95.0 million, or 7% to $1.53 billion at December 31, 2020, from $1.44 billion at September 30, 2020 and $544.0 million, or 55% over $988.2 million at December 31, 2019. The increase in total deposits from the end of the third quarter of 2020 was primarily due to growth of money market and savings deposits of $40.6 million and non-interest bearing demand deposits of $39.4 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 and organic growth. Non-interest bearing deposits, primarily commercial business operating accounts, represented 43.9% of total deposits at December 31, 2020, compared to 44.1% at September 30, 2020 and 39.2% at December 31, 2019.

Asset Quality:

The provision for credit losses decreased to $700,000 for the fourth quarter of 2020, compared to $850,000 for the third quarter of 2020 and $1.0 million for the fourth quarter of 2019. Net loan recoveries in the fourth quarter 2020 were $26,000 or 0.00% of gross loans, compared to net recoveries of $11,000, or 0.00%, in the third quarter 2020 and net charge-offs of $338,000, or 0.04%, in the fourth quarter 2019.

Non-performing assets (“NPAs”) to total assets of 0.01% at December 31, 2020, compared to 0.03% at September 30, 2020 and 0.24% at December 31, 2019, with non-performing loans of $234,000, $580,000 and $2.8 million, respectively, on those dates. The decrease in NPAs at December 31, 2020 compared to the prior quarter primarily related to the payoff of one commercial loan.

The allowance for loan losses increased by $726,000, or 5% to $14.1 million, or 1.03% of total loans at December 31, 2020, compared to $13.4 million, or 0.99% at September 30, 2020 and $11.1 million, or 1.17% of total loans at December 31, 2019. The increase in the allowance as a percentage of total loans in the quarter ended December 31, 2020 compared to September 30, 2020 reflects growth in the loan portfolio as well as a continued increase in the qualitative reserves in response to general macroeconomic impacts related to COVID-19. The decrease in the allowance ratio compared to December 31, 2019 reflects the impact of PPP loans, which are guaranteed by the SBA.

Capital Adequacy:

At December 31, 2020, shareholders’ equity totaled $136.4 million compared to $130.3 million one year ago. As a result, the Company’s total risk-based capital ratio, tier one capital ratio and leverage ratio of 13.22%, 10.11%, and 7.49%, respectively, were all substantially above the regulatory standards for “well-capitalized” institutions of 10.00%, 8.00% and 5.00% respectively.

“While we are mindful of the impact of the ongoing pandemic on our broader geographic markets, our level of problem loans continues to be extremely low, which reflects the strength of our commercial borrowers and our conservative underwriting criteria,” said Thomas A. Sa, Senior Executive Vice President, Chief Financial Officer and Chief Operating Officer of California BanCorp. “Our non-performing assets declined to just 0.01% of total assets at the end of 2020 and we continue to have minimal credit losses. Given the strength of our balance sheet, we are well positioned to continue executing on our growth strategies and expanding our commercial client base in 2021.”

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) 457-3751Thomas A. Sa, (510) 457-3775
President and Chief Executive OfficerSenior Executive Vice President
seshelton@bankcbc.com
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, 2019 which is on file with the Securities and Exchange Commission (the “SEC”). Additional information will be set forth in our Annual Report on Form 10-K for the year ended December 31, 2020, which we expect to file with the SEC during the first 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: Q4 2020  Q3 2020  $  %   Q4 2019  $  % 
                       
Interest income $   14,748  $   13,188  $     1,560  12%  $   12,806  $     1,942  15%
Interest expense 1,985  2,000  (15) -1%  2,222  (237) -11%
Net interest income 12,763  11,188  1,575  14%   10,584  2,179  21%
                       
Provision for credit losses 700  850  (150)  -18%  1,000  (300)  -30%
Net interest income after provision                     
provision for credit losses 12,063  10,338  1,725  17%   9,584  2,479  26%
                       
Non-interest income 916  1,028  (112)  -11%  1,146  (230)  -20%
Operating expenses 10,416  10,545  (129)  -1%  9,825  591  6%
Income before income taxes 2,563  821  1,742  212%   905  1,658  183%
                       
Income tax expense 778  326  452  139%   327  451  138%
Net income $     1,785  $        495  $     1,290  261%   $        578  $     1,207  209%
                       
Diluted earnings per share $       0.22  $       0.06  $       0.16  267%   $       0.07  $       0.15  214%
                       
Net interest margin 2.66% 2.41% +25 Basis Points  3.90% -124 Basis Points
                       
Efficiency ratio 76.15%  86.32%  -110 Basis Points  83.76%  -76 Basis Points
                       
                       
        Change          
ANNUAL HIGHLIGHTS: FY 2020  FY 2019  $  %           
                       
Interest income $   53,019  $   49,078  $     3,941  8%           
Interest expense 8,102  8,140  (38)  0%           
Net interest income 44,917  40,938  3,979  10%           
                       
Provision for credit losses 4,880  2,326  2,554  110%           
Net interest income after provision                     
for credit losses 40,037  38,612  1,425  4%           
                       
Non-interest income 4,012  4,248  (236)  -6%          
Operating expenses 37,809  33,223  4,586  14%           
Income before income taxes 6,240  9,637  (3,397)  -35%          
                       
Income tax expense 1,937  2,636  (699)  -27%          
Net income $     4,303  $     7,001  $    (2,698)  -39%          
                       
Diluted earnings per share $       0.53  $       0.86  $      (0.33)  -38%          
                       
Net interest margin 2.76% 4.12% -136 Basis Points          
                       
Efficiency ratio 77.27% 73.52% +375 Basis Points          
                   


CALIFORNIA BANCORP AND SUBSIDIARY
SELECTED FINANCIAL INFORMATION (UNAUDITED) - FINANCIAL POSITION
(Dollars in Thousands, Except Per Share Data)
                      
        Change     Change
PERIOD-END HIGHLIGHTS: Q4 2020  Q3 2020  $  %   Q4 2019  $ % 
                      
Total assets $ 1,905,779  $ 1,972,751  $  (66,972) -3%  $ 1,152,034  $ 753,745 65%
Gross loans 1,369,070  1,355,164  13,906  1%  949,652  419,418 44%
Deposits 1,532,206  1,437,232  94,974  7%   988,236  543,970 55%
Tangible equity 128,856  127,031  1,825  1%   122,661  6,195 5%
                      
Tangible book value per share $        15.77  $        15.59  $       0.18  1%   $        15.16  $       0.61 4%
                      
Tangible equity / total assets 6.76% 6.44% +32 Basis Points    10.65% -389 Basis Points 
Gross loans / total deposits 89.35%  94.29%  -494 Basis Points    96.10%  -6.75 Basis Points 
Noninterest-bearing deposits /                 
total deposits 43.93%  44.09%  -16 Basis Points    39.19%  +474 Basis Points 
                      
                      
QUARTERLY AVERAGE       Change     Change
HIGHLIGHTS: Q4 2020  Q3 2020  $  %   Q4 2019  $ % 
                      
Total assets $ 1,993,661  $ 1,923,001  $   70,660  4%   $ 1,156,611  $ 837,050 72%
Total earning assets 1,910,656  1,843,072  67,584  4%   1,077,218  833,438 77%
Gross loans 1,375,664  1,313,082  62,582  5%   937,973  437,691 47%
Deposits 1,516,441  1,397,280  119,161  9%   994,122  522,319 53%
Tangible equity 127,981  126,670  1,311  1%   122,684  5,297 4%
                      
Tangible equity / total assets 6.42%  6.59%  -19 Basis Points    10.61% -419 Basis Points 
Gross loans / total deposits 90.72%  93.97%  -325 Basis Points    94.35% -363 Basis Points 
Noninterest-bearing deposits /                 
total deposits 44.68%  43.60%  +108 Basis Points    38.47% +621 Basis Points 
                      
                      
ANNUAL AVERAGE       Change         
HIGHLIGHTS: FY 2020  FY 2019  $  %          
                      
Total assets $ 1,713,416  $ 1,064,452  $ 648,964  61%          
Total earning assets 1,629,615  992,680  636,935  64%          
Gross loans 1,219,324  903,922  315,402  35%          
Deposits 1,308,564  893,893  414,671  46%          
Tangible equity 126,343  119,176  7,167  6%          
                      
Tangible equity / total assets 7.37%  11.20%  -383 Basis Points           
Gross loans / total deposits 93.18%  101.12%  -794 Basis Points           
Noninterest-bearing deposits /                   
total deposits 43.31%  38.34%  +497 Basis Points           
                    


CALIFORNIA BANCORP AND SUBSIDIARY
SELECTED INTERIM FINANCIAL INFORMATION (UNAUDITED) - ASSET QUALITY
(Dollars in Thousands)
                
ALLOWANCE FOR CREDIT LOSSES: 12-31-20  09-30-20  06-30-20  03-31-20  12-31-19 
                
                
Balance, beginning of period $  13,385  $  12,524  $  11,565  $  11,075  $  10,413 
Provision for credit losses, quarterly 700  850  2,930  400  1,000 
Charge-offs, quarterly -  -  (1,976) -  (348)
Recoveries, quarterly 26  11  5  90  10 
Balance, end of period $  14,111  $  13,385  $  12,524  $  11,565  $  11,075 
                
                
                
                
NONPERFORMING ASSETS: 12-31-20  09-30-20  06-30-20  03-31-20  12-31-19 
                
Loans accounted for on a non-accrual basis $       234  $       580  $    1,243  $    2,650  $    2,753 
Loans with principal or interest contractually               
past due 90 days or more and still accruing               
interest -  -  -  -  - 
Nonperforming loans $       234  $       580  $    1,243  $    2,650  $    2,753 
Other real estate owned -  -  -  -  - 
Nonperforming assets $       234  $       580  $    1,243  $    2,650  $    2,753 
                
Loans restructured and in compliance with               
modified terms -  -  -  624  646 
Nonperforming assets and restructured loans $       234  $       580  $    1,243  $    3,274  $    3,399 
                
Nonperforming loans by asset type:               
Commercial -  346  1,008  2,306  2,409 
Real estate other -  -  -  -  - 
Real estate construction and land -  -  -  -  - 
SBA 234  234  235  344  344 
Other -  -  -  -  - 
Nonperforming loans $       234  $       580  $    1,243  $    2,650  $    2,753 
                
                
                
                
ASSET QUALITY: 12-31-20  09-30-20  06-30-20  03-31-20  12-31-19 
                
Allowance for credit losses / gross loans 1.03% 0.99% 0.96%  1.19% 1.17%
Allowance for credit losses / nonperforming loans 6030.34%  2307.76%  1007.56%  436.42%  402.29%
Nonperforming assets / total assets 0.01%  0.03%  0.07%  0.22%  0.24%
Nonperforming loans / gross loans 0.02%  0.04%  0.10%  0.27%  0.29%
Net quarterly charge-offs / gross loans 0.00%  0.00%  0.15%  -0.01%  0.04%
                


CALIFORNIA BANCORP AND SUBSIDIARY
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
 
  Three months ended Twelve months ended
  12-31-20  09-30-20  12-31-19  12-31-20  12-31-19 
                
INTEREST INCOME               
Loans $   14,305  $   12,849  $   12,132  $   51,401  $   46,915 
Federal funds sold 131  117  443  685  999 
Investment securities 312  222  231  933  1,164 
Total interest income 14,748  13,188  12,806  53,019  49,078 
                
INTEREST EXPENSE               
Deposits 1,359  1,467  2,096  6,341  7,209 
Other 626  533  126  1,761  931 
Total interest expense 1,985  2,000  2,222  8,102  8,140 
                
Net interest income 12,763  11,188  10,584  44,917  40,938 
Provision for credit losses 700  850  1,000  4,880  2,326 
Net interest income after provision               
for credit losses 12,063  10,338  9,584  40,037  38,612 
                
NON-INTEREST INCOME               
Service charges and other fees 662  779  852  2,949  3,003 
Gain on sale of SBA loans -  -  17  -  253 
Other non-interest income 254  249  277  1,063  992 
Total non-interest income 916  1,028  1,146  4,012  4,248 
                
OPERATING EXPENSES               
Salaries and benefits 7,072  6,452  5,769  22,122  20,674 
Premises and equipment 1,125  1,359  1,159  4,755  3,502 
Other 2,219  2,734  2,897  10,932  9,047 
Total operating expenses 10,416  10,545  9,825  37,809  33,223 
                
Income before income taxes 2,563  821  905  6,240  9,637 
Income taxes 778  326  327  1,937  2,636 
                
NET INCOME $     1,785  $        495  $        578  $     4,303  $     7,001 
                
EARNINGS PER SHARE               
Basic earnings per share $       0.22  $       0.06  $       0.07  $       0.53  $       0.87 
Diluted earnings per share $       0.22  $       0.06  $       0.07  $       0.53  $       0.86 
Average common shares outstanding 8,152,052  8,141,807  8,074,285  8,131,325  8,048,793 
Average common and equivalent               
shares outstanding 8,203,931  8,169,334  8,162,585  8,169,082  8,132,093 
                
PERFORMANCE MEASURES               
Return on average assets 0.36% 0.10% 0.20% 0.25% 0.66%
Return on average equity 5.25%  1.47%  1.76%  3.22%  5.52%
Return on average tangible equity 5.55%  1.55%  1.87%  3.41%  5.87%
Efficiency ratio 76.15%  86.32%  83.76%  77.27%  73.52%
                


CALIFORNIA BANCORP AND SUBSIDIARY
INTERIM CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in Thousands)
                
  12-31-20  09-30-02  06-30-20  03-31-20  12-31-19 
                
ASSETS               
Cash and due from banks $       22,485  $       23,339  $       22,246  $       22,792  $       19,579 
Federal funds sold 396,032  480,555  485,823  117,818  94,763 
Investment securities 55,093  50,906  39,723  34,344  28,555 
Loans:               
Commercial 414,548  379,400  365,881  416,308  389,746 
Real estate other 550,690  539,541  508,916  496,765  502,929 
Real estate construction and land 37,193  36,596  49,524  41,697  42,519 
SBA 317,564  373,921  373,429  12,797  12,830 
Other 49,075  25,706  1,731  1,378  1,628 
Loans, gross 1,369,070  1,355,164  1,299,481  968,945  949,652 
Unearned fee income 523  (1,054) (1,569) 2,902  2,555 
Allowance for credit losses (14,111) (13,385)  (12,524)  (11,565) (11,075)
Loans, net 1,355,482  1,340,725  1,285,388  960,282  941,132 
Premises and equipment, net 5,778  5,933  4,709  3,427  3,668 
Bank owned life insurance 23,718  23,577  23,434  23,284  22,316 
Goodwill and core deposit intangible 7,554  7,564  7,575  7,585  7,595 
Accrued interest receivable and other assets39,637  40,152  41,528  37,950  34,426 
Total assets $  1,905,779  $  1,972,751  $  1,910,426  $  1,207,482  $  1,152,034 
                
LIABILITIES                
Deposits:               
Demand noninterest-bearing $     673,100  $     633,726  $     643,354  $     403,248  $     387,267 
Demand interest-bearing 34,869  32,680  28,769  21,083  25,178 
Money market and savings 623,603  582,953  549,084  459,712  455,436 
Time 200,634  187,873  164,495  144,818  120,355 
Total deposits 1,532,206  1,437,232  1,385,702  1,028,861  988,236 
                
Junior subordinated debt securities 24,994  24,990  4,986  4,981  4,977 
Other borrowings 189,043  352,703  364,703  22,000  10,000 
Accrued interest payable and other liabilities 23,126  23,231  21,370  20,447  18,565 
Total liabilities 1,769,369  1,838,156  1,776,761  1,076,289  1,021,778 
                
SHAREHOLDERS' EQUITY               
Common stock 107,947  107,776  107,241  106,790  106,427 
Retained earnings 27,822  26,036  25,541  23,991  23,518 
Accumulated other comprehensive (loss) 641  783  883  412  311 
Total shareholders' equity 136,410  134,595  133,665  131,193  130,256 
Total liabilities and shareholders' equity $  1,905,779  $  1,972,751  $  1,910,426  $  1,207,482  $  1,152,034 
                
CAPITAL ADEQUACY               
Tier I leverage ratio 7.49%  7.84%  8.13%  10.66%  10.64%
Tier I risk-based capital ratio 10.11%  10.57%  11.27%  10.62%  10.58%
Total risk-based capital ratio 13.22%  13.80%  12.87%  12.07%  11.99%
Total equity/ total assets 7.16%  6.82%  7.00%  10.87%  11.31%
Book value per share $         16.69  $         16.52  $         16.43  $         16.15  $         16.09 
                
Common shares outstanding 8,171,734  8,149,678  8,133,457  8,121,848  8,092,966 
                


CALIFORNIA BANCORP AND SUBSIDIARY
INTERIM CONSOLIDATED AVERAGE BALANCE SHEET AND YIELD DATA (UNAUDITED)
(Dollars in Thousands)
 
    Three months ended December 31,     Three months ended September 30,  
  2020 2020
               
    Yields  Interest   Yields  Interest
  Average or  Income/ Average or  Income/
  Balance Rates  Expense Balance Rates  Expense
ASSETS              
Interest earning assets:              
Loans (1) $  1,375,664 4.14% $   14,305 $  1,313,092 3.89% $   12,849
Federal funds sold 480,790 0.11%  131 490,409 0.09%  117
Investment securities 54,202 2.29%  312 39,571 2.23%  222
Total interest earning assets 1,910,656 3.07%  14,748 1,843,072 2.85%  13,188
               
Noninterest-earning assets:              
Cash and due from banks 20,616      19,789     
All other assets (2) 62,389      60,140     
TOTAL $  1,993,661      $  1,923,001     
               
LIABILITIES AND              
  SHAREHOLDERS' EQUITY              
Interest-bearing liabilities:              
Deposits:              
Demand $       33,674 0.13%  $          11 $       30,877 0.14%  $          11
Money market and savings 604,578 0.74%  1,118 582,694 0.81%  1,190
Time 200,606 0.46%  230 174,436 0.61%  266
Other 318,570 0.78%  626 369,764 0.57%  533
Total interest-bearing liabilities 1,157,428 0.68%  1,985 1,157,771 0.69%  2,000
               
Noninterest-bearing liabilities:              
Demand deposits 677,583      609,273     
Accrued expenses and              
other liabilities 23,466      21,717     
Shareholders' equity 135,184      134,240     
TOTAL $  1,993,661      $  1,923,001     
               
Net interest income and margin (3)   2.66%  $   12,763   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 deferred loan fees of $494,000 and $431,000, respectively.
(2) Other noninterest-earning assets includes the allowance for credit losses of $13.4 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)
 
  Three months ended December 31,
  2020 2019
               
    Yields  Interest   Yields  Interest
  Average or  Income/ Average or  Income/
  Balance Rates  Expense Balance Rates  Expense
ASSETS              
Interest earning assets:              
Loans (1) $  1,375,664 4.14% $   14,305 $     937,973 5.13% $   12,132
Federal funds sold 480,790 0.11%  131 107,089 1.64%  443
Investment securities 54,202 2.29%  312 32,156 2.85%  231
Total interest earning assets 1,910,656 3.07%  14,748 1,077,218 4.72%  12,806
               
Noninterest-earning assets:              
Cash and due from banks 20,616      22,680     
All other assets (2) 62,389      56,713     
TOTAL $  1,993,661      $  1,156,611     
               
LIABILITIES AND              
SHAREHOLDERS' EQUITY              
Interest-bearing liabilities:              
Deposits:              
Demand $       33,674 0.13%  $          11 $       23,563 0.10%  $            6
Money market and savings 604,578 0.74%  1,118 459,697 1.25%  1,444
Time 200,606 0.46%  230 128,436 2.00%  646
Other 318,570 0.78%  626 14,976 3.34%  126
Total interest-bearing liabilities 1,157,428 0.68%  1,985 626,672 1.41%  2,222
               
Noninterest-bearing liabilities:              
Demand deposits 677,583      382,426     
Accrued expenses and              
other liabilities 23,466      17,289     
Shareholders' equity 135,184      130,224     
TOTAL $  1,993,661      $  1,156,611     
               
Net interest income and margin (3)   2.66%  $   12,763   3.90%  $   10,584
               
(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 deferred loan fees (costs) of $494,000 and $(294,000), respectively.
(2) Other noninterest-earning assets includes the allowance for credit losses of 13.4 million and $10.4 million, respectively.
(3) Net interest margin is net interest income divided by total interest-earning assets.
 


CALIFORNIA BANCORP AND SUBSIDIARY
INTERIM CONSOLIDATED AVERAGE BALANCE SHEET AND YIELD DATA (UNAUDITED)
(Dollars in Thousands)
 
  Twelve months ended December 31,
  2020  2019 
               
    Yields  Interest   Yields  Interest
  Average or  Income/ Average or  Income/
  Balance Rates  Expense Balance Rates  Expense
ASSETS              
Interest earning assets:              
Loans (1) $  1,219,324 4.22% $   51,401 $     903,922 5.19% $   46,915
Federal funds sold 371,476 0.18%  685 50,891 1.96%  999
Investment securities 38,815 2.40%  933 37,867 3.07%  1,164
Total interest earning assets 1,629,615 3.25%  53,019 992,680 4.94%  49,078
               
Noninterest-earning assets:              
Cash and due from banks 20,810      19,663     
All other assets (2) 62,991      52,109     
TOTAL $  1,713,416      $  1,064,452     
               
LIABILITIES AND              
SHAREHOLDERS' EQUITY              
Interest-bearing liabilities:              
Deposits:              
Demand $       28,559 0.13%  $          36 $       24,451 0.10%  $          24
Money market and savings 547,592 0.88%  4,795 411,745 1.17%  4,806
Time 165,630 0.91%  1,510 114,977 2.07%  2,379
Other 249,474 0.71%  1,761 29,717 3.13%  931
Total interest-bearing liabilities 991,255 0.82%  8,102 580,890 1.40%  8,140
               
Noninterest-bearing liabilities:              
Demand deposits 566,783      342,720     
Accrued expenses and              
other liabilities 21,843      14,125     
Shareholders' equity 133,535      126,717     
TOTAL $  1,713,416      $  1,064,452     
               
Net interest income and margin (3)   2.76%  $   44,917   4.12%  $   40,938
               
(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 deferred loan fees (costs) of $1.6 million and $(1.1)million, respectively.
(2) Other noninterest-earning assets includes the allowance for credit losses of $12.3 million and $11.1 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: 12-31-20 09-30-20 06-30-20 03-31-20 12-31-19
           
Net interest income $      12,763 $      11,188 $      10,785 $      10,182 $      10,584
Non-interest income 916 1,028 777 1,290 1,146
Total revenue $      13,679 $      12,216 $      11,562 $      11,472 $      11,730
           
           
           
         Deferred   Deferred 
IMPACT OF PPP ACTIVITY REFLECTED IN  Amortization of Deferred Balance    Balance at   Balance 
    NET INTEREST INCOME: 12-31-20 09-30-20 06-30-20 Origination Remaining
           
PPP fees $        2,083 $        1,114 $        1,099 $        9,086 $        4,790
PPP capitalized loan origination costs 527 266 253 2,451 1,405
Net PPP fees $        1,556 $           848 $           846 $        6,635 $        3,385
           
           
           
           
OPERATING EXPENSES: 12-31-20 09-30-20 06-30-20 03-31-20 12-31-19
           
Total operating expenses $      10,416 $      10,545 $        6,440 $      10,447 $        9,825
Capitalized loan origination costs 1,277 986 4,797 912 1,136
Total operating expenses, before capitalization          
of deferred loan origination costs $      11,693 $      11,531 $      11,237 $      11,359 $      10,961
           
           
           
           
GROSS LOANS: 12-31-20 09-30-20 06-30-20 03-31-20 12-31-19
           
Gross loans $ 1,369,070 $ 1,355,164 $ 1,299,481 $    968,945 $    949,652
PPP loans 306,373 362,088 361,632 - -
Gross loans, excluding PPP loans $ 1,062,697 $    993,076 $    937,849 $    968,945 $    949,652