California BanCorp Reports Financial Results for the Second Quarter and Six Months Ended June 30, 2021

Thursday, 29. July 2021 22:30

OAKLAND, Calif., July 29, 2021 (GLOBE NEWSWIRE) -- California BanCorp (NASDAQ: CALB), whose subsidiary is California Bank of Commerce, announced today its financial results for the second quarter and six months ended June 30, 2021.

The Company reported net income of $4.2 million for the second quarter of 2021, representing an increase of $1.4 million, or 48%, compared to $2.8 million for the first quarter of 2021 and an increase of $2.6 million, or 169%, compared to $1.6 million in the second quarter of 2020. For the six months ended June 30, 2021, net income was $7.0 million representing an increase of $5.0 million, or 245%, compared to $2.0 million for the same period in 2020.

Diluted per share earnings of $0.50 for the second quarter of 2021 compared to $0.34 for the first quarter of 2021 and $0.19 in the second quarter of 2020. For the six months ended June 30, 2021, diluted per share earnings of $0.84 compared to $0.25 for the same period in 2020.

“We delivered another record quarter of earnings in the second quarter driven by positive trends across most areas of the Company that resulted in a higher level of revenue, improved operating leverage, and increased profitability,” said Steven Shelton, President and CEO of California BanCorp. “Our volume of loan production increased during the second quarter across all of our targeted areas in the portfolio while we maintained discipline in pricing and underwriting criteria. This resulted in 15% annualized loan growth, excluding PPP loans, and stable average loan yields that helped support our net interest margin. The investments we have made to strengthen our Treasury Management platform have also enabled us to continue winning new deposit relationships with larger commercial clients that have more complex cash management requirements, which drove a $49.0 million increase in our non-interest bearing deposits during the second quarter. Our loan pipeline remains strong, which should result in continued loan growth in the second half of the year and additional progress on redeploying our excess liquidity into higher yielding earning assets. As we continue to drive revenue growth, we expect to realize additional operating leverage and further improvement in our core level of profitability, excluding the impact of PPP-related income.”

Financial Highlights:

Profitability - three months ended June 30, 2021 compared to March 31, 2021

  • Net income of $4.2 million and $0.50 per diluted share, compared to $2.8 million and $0.34 per share, respectively.
  • Revenue of $14.5 million increased $285,000, or 2%, compared to $14.3 million for the first quarter of 2021.
  • Provision for loan losses decreased $1.4 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.
  • Non-interest expense, excluding capitalized loan origination costs, of $11.1 million decreased $541,000, or 5%, compared to $11.6 million for the first quarter of 2021 primarily as a result of the seasonal nature of increased payroll taxes typically recognized in the first quarter of the year.

Profitability - six months ended June 30, 2021 compared to June 30, 2020

  • Net income of $7.0 million and $0.84 per diluted share, compared to $2.0 million and $0.25 per share, respectively.
  • Revenue of $28.8 million increased $5.8 million, or 25%, compared to $23.0 million in the prior year.
  • Provision for loan losses decreased $4.1 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 $22.6 million remained consistent with the same period in the prior year.

Financial Position – June 30, 2021 compared to March 31, 2021

  • Total assets decreased by $78.5 million, or 4%, to $1.87 billion due to utilizing the increased liquidity generated from a reduction in Paycheck Protection (“PPP”) loans to repay outstanding borrowing arrangements.
  • Total gross loans decreased by $117.7 million, or 8% to $1.35 billion. Excluding the impact of PPP loans forgiven by the SBA, partially offset by new PPP loans funded under the re-launch of the PPP program, total gross loans increased during the second quarter by $41.3 million, or 4%, to $1.16 billion.
  • Total deposits increased by $50.1 million, or 3% to $1.68 billion.
  • Borrowing arrangements decreased by $134.8 million primarily due to repayment of the Federal Reserve Paycheck Protection Program Liquidity Facility (“PPPLF”).
  • Capital ratios remained healthy with a tier-one leverage ratio of 7.53%, tier I capital ratio of 9.35% and total risk-based capital ratio of 11.93%.

Net Interest Income and Margin:

Net interest income for the quarter ended June 30, 2021 was $13.6 million, an increase of $250,000, or 2%, over $13.3 million for the three months ended March 31, 2021, and an increase of $2.8 million, or 26%, over $10.8 million for the quarter ended June 30, 2020. The increase in net interest income compared to the first quarter of 2021 was primarily attributable to the accelerated amortization of fees received on PPP loans forgiven by the SBA combined with a reduction in the average cost of deposits and the repayment of previously outstanding borrowing arrangements. Compared to the second 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 six months ended June 30, 2021 was $26.9 million, an increase of $5.9 million, or 28% over $21.0 million for the six months ended June 30, 2020. The increase in net interest income 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 second quarter of 2021 was 2.98% compared to 2.94% for the first quarter of 2021 and 2.59% for the second quarter of 2020. The increase in margin compared to the prior quarter and the second quarter one year ago was primarily due to the impact of recognizing 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 six months ended June 30, 2021 was 2.96% compared to 3.06% for the same period in 2020.   The decrease in margin compared to prior year was primarily due to a decrease in short-term interest rates and higher liquidity, partially offset by fees recognized on PPP loans.

Non-Interest Income:

The Company’s non-interest income for the quarters ended June 30, 2021, March 31, 2021, and June 30, 2020 was $956,000, $921,000 and $777,000, respectively. The increase in noninterest income from the second quarter of 2020 was primarily due to an increase in service charges and loan related fees.

For the six months ended June 30, 2021, non-interest income of $1.9 million compared to $2.1 million for the same period of 2020. The decrease in non-interest income from prior year was due to higher than normal loan related fees recognized in the first quarter of 2020.

Net interest income and non-interest income comprised total revenue of $14.5 million, $14.3 million, and $11.6 million for the quarters ended June 30, 2021, March 31, 2021, and June 30, 2020, respectively. Total revenue for the six months ended June 30, 2021 and 2020 was $28.8 million and $23.0 million, respectively.

Non-Interest Expense:

The Company’s non-interest expense for the quarters ended June 30, 2021, March 31, 2021, and June 30, 2020 was $9.8 million, $10.1 million, and $6.4 million, respectively. The decrease in non-interest expense compared to the first quarter of 2021 was primarily a result of the seasonal nature of increased payroll taxes typically recognized in the first quarter of the year. Compared to the second quarter of 2020, the increase in non-interest expense was primarily due to higher capitalized loan origination costs recognized in the second quarter of 2020 related to funding of PPP loans. Excluding capitalized loan origination costs, non-interest expenses for the second quarter of 2021 decreased approximately $185,000 compared to the second quarter of 2020.

Non-interest expense of $19.9 million for the six months ended June 30, 2021 compared to $16.8 million for the same period of 2020. Excluding capitalized loan origination costs, non-interest expense was $22.6 million for both of the six months ended June 30, 2021 and 2020 which reflects the Company’s continued focus on managing expenses and utilizing 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 67.63%, 70.70%, and 55.70% for the quarters ended June 30, 2021, March 31, 2021, and June 30, 2020, respectively. For the six months ended June 30, 2021 and 2020, the Company’s efficiency ratio was 69.15% and 73.14%, respectively.

“Over the past year we have achieved core loan growth of $220.3 million, or 23%, and deposit growth of $294.0 million, or 21%, which has driven year over year growth in revenue of $5.8 million, or 25%, while keeping expenses flat, excluding capitalized loan origination costs,” said Thomas A. Sa, Senior Executive Vice President, Chief Financial Officer and Chief Operating Officer. “Our success in managing operating expenses has been a key driver of the operating leverage that continues to progress in our results.”

Balance Sheet:

Total assets of $1.87 billion as of June 30, 2021, represented a decrease of $78.5 million, or 4%, compared to $1.95 billion at March 31, 2021 and a decrease of $41.4 million, or 2%, compared to $1.91 billion at June 30, 2020. The decrease in total assets was due to utilizing excess liquidity to repay outstanding borrowing arrangements.

Total gross loans decreased by $117.7 million, or 8%, to $1.35 billion at June 30, 2021 compared to $1.47 billion at March 31, 2021 and increased by $53.2 million, or 4%, compared to $1.30 billion at June 30, 2020. During the second quarter of 2021, SBA loans decreased by $160.0 million primarily due to PPP loan forgiveness and commercial loans decreased by $13.4 million due to payoffs and paydowns that occurred in the normal course of business. Partially offsetting this decrease, the real estate other portfolio increased by $42.9 million due to organic growth and the other loan portfolio increased by $16.3 million primarily due to the purchase of additional residential solar loans.

Year-over-year loan growth was primarily due to increases in commercial loans and real estate other loans of $59.8 million and $107.5 million, respectively. In addition, the Company purchased three portfolios of residential solar loans totaling approximately $62.6 million. These increases were offset, in part, by a decrease in SBA loans of $168.7 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 $486.7 million in loans. Approximately $292.2 million of those balances have been granted forgiveness by the SBA as of June 30, 2021.

Total deposits increased by $50.1 million, or 3%, to $1.68 billion at June 30, 2021, from $1.63 billion at March 31, 2021 and $294.0 million, or 21%, over $1.39 billion at June 30, 2020. The increase in total deposits from the end of the first quarter of 2021 was primarily due to growth of non-interest bearing demand deposits of $49.0 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 47.1% of total deposits at June 30, 2021, compared to 45.6% at March 31, 2021 and 46.4% at June 30. 2020.

The Company had no borrowing arrangements, excluding junior subordinated debt securities, as of June 30, 2021 compared to $134.8 million at March 31, 2021 and $364.7 million as of June 30, 2020. The Company utilized excess liquidity, including funds generated from the reduction of PPP loans, to repay its borrowing arrangements which were comprised primarily of the PPPLF.

Asset Quality:

The provision for loan losses decreased to $(1.1) million for the second quarter of 2021, compared to $300,000 for the first quarter of 2021 and $2.9 million for the second quarter of 2020. Net loan charge-offs in the second quarter of 2021 were $237,000 or 0.02% of gross loans, compared to net recoveries of $166,000, or 0.01% of gross loans, in the first quarter of 2021 and net charge-offs of $2.0 million, or 0.15% of gross loans, in the second quarter 2020.

Non-performing assets (“NPAs”) to total assets of 0.07% at June 30, 2021 compared to 0.01% at March 31, 2021 and 0.07% at June 30, 2020, with non-performing loans of $1.2 million, $234,000 and $1.2 million, respectively, on those dates. The increase in NPAs at June 30, 2021 compared to the prior quarter 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 decreased by $1.3 million to $13.2 million, or 0.98% of total loans at June 30, 2021, compared to $14.5 million, or 0.99% of total loans at March 31, 2021 and increased by $716,000 compared to $12.5 million, or 0.96% of total loans at June 30, 2020. The decrease in the allowance as a percentage of total loans in the quarter ended June 30, 2021 compared to March 31, 2021 reflects the Company’s continued assessment of the qualitative reserves in response to general macroeconomic impacts related to COVID-19. The increase in the allowance ratio compared to June 30, 2020 is due to the charge-off activity recognized in the second quarter of 2020.

The Company undertook measures to support customers affected by the COVID-19 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;
  • Offering flexible repayment options to current clients and a streamlined loan modification process, when appropriate.  Shortly after the onset of the pandemic in 2020, we launched a proactive deferral program that resulted in the modification of 383 loans with an aggregate balance of approximately $323.9 million. At June 30, 2021, four loans totaling $9.5 million remained on a deferred status or have had a structure modification under the CARES Act guidelines.

Capital Adequacy:

At June 30, 2021, shareholders’ equity totaled $143.7 million compared to $139.2 million at March 31, 2021 and $133.7 million one year ago. As a result, the Company’s total risk-based capital ratio, tier one capital ratio and leverage ratio of 11.93%, 9.35%, and 7.53%, 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 June 30, 2021, which we expect to file with the SEC during the third 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.

 

CALIFORNIA BANCORP AND SUBSIDIARY
SELECTED FINANCIAL INFORMATION (UNAUDITED) - PROFITABILITY
(Dollars in Thousands, Except Per Share Data)
                
      Change    Change
QUARTERLY HIGHLIGHTS: Q2 2021 Q1 2021 $ %  Q2 2020 $ %
                
Interest income $15,179  $15,032  $147  1%  $12,781  $2,398  19%
Interest expense  1,593   1,696   (103) -6%   1,996   (403) -20%
    Net interest income  13,586   13,336   250  2%   10,785   2,801  26%
                
Provision for loan losses  (1,100)  300   (1,400) -467%   2,930   (4,030) -138%
    Net interest income after provision              
    provision for loan losses  14,686   13,036   1,650  13%   7,855   6,831  87%
                
Non-interest income  956   921   35  4%   777   179  23%
Non-interest expense  9,835   10,080   (245) -2%   6,440   3,395  53%
    Income before income taxes  5,807   3,877   1,930  50%   2,192   3,615  165%
                
Income tax expense  1,645   1,068   577  54%   642   1,003  156%
    Net income $4,162  $2,809  $1,353  48%  $1,550  $2,612  169%
                
Diluted earnings per share $0.50  $0.34  $0.16  47%  $0.19  $0.31  163%
                
Net interest margin  2.98%  2.94% +4 Basis Points   2.59% +39 Basis Points
                
Efficiency ratio  67.63%  70.70% -307 Basis Points   55.70% +1,193 Basis Points


    Change
YEAR-TO-DATE HIGHLIGHTS: Q2 2021 Q2 2020 $ %
         
Interest income $30,211  $25,083  $5,128  20%
Interest expense  3,289   4,117   (828) -20%
    Net interest income  26,922   20,966   5,956  28%
         
Provision for credit losses  (800)  3,330   (4,130) -124%
    Net interest income after provision       
    for credit losses  27,722   17,636   10,086  57%
         
Non-interest income  1,877   2,068   (191) -9%
Non-interest expense  19,915   16,847   3,068  18%
    Income before income taxes  9,684   2,857   6,827  239%
         
Income tax expense  2,713   834   1,879  225%
    Net income $6,971  $2,023  $4,948  245%
         
Diluted earnings per share $0.84  $0.25  $0.59  236%
         
Net interest margin  2.96%  3.06% -10 Basis Points
         
Efficiency ratio  69.15%  73.14% -399 Basis Points
         


CALIFORNIA BANCORP AND SUBSIDIARY
SELECTED FINANCIAL INFORMATION (UNAUDITED) - FINANCIAL POSITION
(Dollars in Thousands, Except Per Share Data)
                
      Change    Change
PERIOD-END HIGHLIGHTS: Q2 2021 Q1 2021 $ %  Q2 2020 $ %
                
Total assets $1,869,063  $1,947,588  $(78,525) -4%  $1,910,426  $(41,363) -2%
Gross loans  1,352,639   1,470,313   (117,674) -8%   1,299,481   53,158  4%
Deposits  1,679,772   1,629,715   50,057  3%   1,385,702   294,070  21%
Tangible equity  136,207   131,634   4,573  3%   126,090   10,117  8%
                
Tangible book value per share $16.55  $16.07  $0.48  3%  $15.50  $1.05  7%
                
Tangible equity / total assets  7.29%  6.76% +53 Basis Points   6.60% +69 Basis Points
Gross loans / total deposits  80.53%  90.22% -969 Basis Points   93.78% -1,325 Basis Points
Noninterest-bearing deposits /           
    total deposits  47.12%  45.56% +156 Basis Points   46.43% +69 Basis Points
                
                
                
                
QUARTERLY AVERAGE     Change    Change
HIGHLIGHTS: Q2 2021 Q1 2021 $ %  Q2 2020 $ %
                
Total assets $1,909,558  $1,922,739  $(13,181) -1%  $1,763,638  $145,920  8%
Total earning assets  1,829,980   1,839,437   (9,457) -1%   1,675,382   154,598  9%
Gross loans  1,415,729   1,415,506   223  0%   1,233,488   182,241  15%
Deposits  1,607,847   1,569,170   38,677  2%   1,317,024   290,823  22%
Tangible equity  134,379   129,865   4,514  3%   125,767   8,612  7%
                
Tangible equity / total assets  7.04%  6.75% +29 Basis Points   7.13% -9 Basis Points
Gross loans / total deposits  88.05%  90.21% -216 Basis Points   93.66% -561 Basis Points
Noninterest-bearing deposits /           
    total deposits  45.28%  43.97% +131 Basis Points   45.81% -53 Basis Points
                


YEAR-TO-DATE AVERAGE     Change
HIGHLIGHTS: Q2 2021 Q2 2020 $ %
         
Total assets $1,916,725  $1,463,858  $452,867  31%
Total earning assets  1,835,028   1,379,808   455,220  33%
Gross loans  1,415,618   1,092,895   322,723  30%
Deposits  1,588,408   1,158,629   429,779  37%
Tangible equity  132,706   124,760   7,946  6%
         
Tangible equity / total assets  6.92%  8.52% -160 Basis Points
Gross loans / total deposits  89.12%  94.33% -521 Basis Points
Noninterest-bearing deposits /      
    total deposits  44.64%  42.23% +241 Basis Points
         


CALIFORNIA BANCORP AND SUBSIDIARY
SELECTED INTERIM FINANCIAL INFORMATION (UNAUDITED) - ASSET QUALITY
(Dollars in Thousands)
           
           
ALLOWANCE FOR LOAN LOSSES: 06/30/21 03/31/21 12/31/20 09/30/20 06/30/20
           
           
Balance, beginning of period $14,577  $14,111  $13,385  $12,524  $11,565 
Provision for loan losses, quarterly  (1,100)  300   700   850   2,930 
Charge-offs, quarterly  (278)  -   -   -   (1,976)
Recoveries, quarterly  41   166   26   11   5 
Balance, end of period $13,240  $14,577  $14,111  $13,385  $12,524 
           
           
           
           
NONPERFORMING ASSETS: 06/30/21 03/31/21 12/31/20 09/30/20 06/30/20
           
Loans accounted for on a non-accrual basis $1,234  $234  $234  $580  $1,243 
Loans with principal or interest contractually          
  past due 90 days or more and still accruing          
  interest  -   -   -   -   - 
      Nonperforming loans $1,234  $234  $234  $580  $1,243 
Other real estate owned  -   -   -   -   - 
      Nonperforming assets $1,234  $234  $234  $580  $1,243 
           
Loans restructured and in compliance with          
  modified terms  -   -   -   -   - 
      Nonperforming assets and restructured loans $1,234  $234  $234  $580  $1,243 
           
           
Nonperforming loans by asset type:          
      Commercial $-  $-  $-  $346  $1,008 
      Real estate other  1,000   -   -   -   - 
      Real estate construction and land  -   -   -   -   - 
      SBA  234   234   234   234   235 
      Other  -   -   -   -   - 
      Nonperforming loans $1,234  $234  $234  $580  $1,243 
           
           
           
           
ASSET QUALITY: 06/30/21 03/31/21 12/31/20 09/30/20 06/30/20
           
Allowance for loan losses / gross loans  0.98%  0.99%  1.03%  0.99%  0.96%
Allowance for loan losses / nonperforming loans  1072.93%  6229.49%  6030.34%  2307.76%  1007.56%
Nonperforming assets / total assets  0.07%  0.01%  0.01%  0.03%  0.07%
Nonperforming loans / gross loans  0.09%  0.02%  0.02%  0.04%  0.10%
Net quarterly charge-offs / gross loans  0.02%  -0.01%  0.00%  0.00%  0.15%
           


CALIFORNIA BANCORP AND SUBSIDIARY
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
           
    Three months ended
  Six months ended
  06/30/21 03/31/21 06/30/20 06/30/21 06/30/20
           
INTEREST INCOME          
Loans $14,703  $14,584  $12,466  $29,287  $24,248 
Federal funds sold  84   88   108   172   437 
Investment securities  392   360   207   752   398 
     Total interest income  15,179   15,032   12,781   30,211   25,083 
           
INTEREST EXPENSE          
Deposits  1,138   1,191   1,521   2,329   3,515 
Other  455   505   475   960   602 
    Total interest expense  1,593   1,696   1,996   3,289   4,117 
           
Net interest income  13,586   13,336   10,785   26,922   20,966 
Provision for loan losses  (1,100)  300   2,930   (800)  3,330 
Net interest income after provision          
     for loan losses  14,686   13,036   7,855   27,722   17,636 
           
NON-INTEREST INCOME          
Service charges and other fees  638   641   537   1,279   1,508 
Other non-interest income  318   280   240   598   560 
     Total non-interest income  956   921   777   1,877   2,068 
           
NON-INTEREST EXPENSE          
Salaries and benefits  6,374   6,367   2,121   12,741   8,598 
Premises and equipment  1,209   1,197   1,132   2,406   2,271 
Other  2,252   2,516   3,187   4,768   5,978 
     Total non-interest expense  9,835   10,080   6,440   19,915   16,847 
           
Income before income taxes  5,807   3,877   2,192   9,684   2,857 
Income taxes  1,645   1,068   642   2,713   834 
           
NET INCOME $4,162  $2,809  $1,550  $6,971  $2,023 
           
EARNINGS PER SHARE          
Basic earnings per share $0.51  $0.34  $0.19  $0.85  $0.25 
Diluted earnings per share $0.50  $0.34  $0.19  $0.84  $0.25 
Average common shares outstanding  8,209,678   8,179,667   8,127,911   8,195,380   8,115,575 
Average common and equivalent          
  shares outstanding  8,295,278   8,242,467   8,165,938   8,275,510   8,160,152 
           
PERFORMANCE MEASURES          
Return on average assets  0.87%  0.59%  0.35%  0.73%  0.28%
Return on average equity  11.76%  8.29%  4.68%  10.02%  3.07%
Return on average tangible equity  12.42%  8.77%  4.95%  10.59%  3.26%
Efficiency ratio  67.63%  70.70%  55.70%  69.15%  73.14%
           


CALIFORNIA BANCORP AND SUBSIDIARY
INTERIM CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in Thousands)
           
           
  06/30/21 03/31/21 12/31/20 09/30/20 06/30/20
           
ASSETS          
Cash and due from banks $26,159  $18,475  $22,485  $23,339  $22,246 
Federal funds sold  366,347   342,305   396,032   480,555   485,823 
Investment securities  61,142   58,105   55,093   50,906   39,723 
Loans:          
  Commercial  425,643   439,044   414,548   379,400   365,881 
  Real estate other  616,451   573,520   550,690   539,541   508,916 
  Real estate construction and land  41,558   45,550   37,193   36,596   49,524 
  SBA  204,734   364,273   317,564   373,921   373,429 
  Other  64,253   47,926   49,075   25,706   1,731 
     Loans, gross  1,352,639   1,470,313   1,369,070   1,355,164   1,299,481 
  Unearned fee income  (629)  (1,569)  523   (1,054)  (1,569)
  Allowance for loan losses  (13,240)  (14,577)  (14,111)  (13,385)  (12,524)
     Loans, net  1,338,770   1,454,167   1,355,482   1,340,725   1,285,388 
Premises and equipment, net  5,089   5,452   5,778   5,933   4,709 
Bank owned life insurance  24,085   23,920   23,718   23,577   23,434 
Goodwill and core deposit intangible  7,534   7,544   7,554   7,564   7,575 
Accrued interest receivable and other assets 39,937   37,620   39,637   40,152   41,528 
     Total assets $1,869,063  $1,947,588  $1,905,779  $1,972,751  $1,910,426 
           
LIABILITIES           
Deposits:          
  Demand noninterest-bearing $791,580  $742,574  $673,100  $633,726  $643,354 
  Demand interest-bearing  36,268   33,022   34,869   32,680   28,769 
  Money market and savings  674,390   670,517   623,603   582,953   549,084 
  Time  177,534   183,602   200,634   187,873   164,495 
     Total deposits  1,679,772   1,629,715   1,532,206   1,437,232   1,385,702 
           
Junior subordinated debt securities  24,745   24,729   24,994   24,990   4,986 
Other borrowings  -   134,819   189,043   352,703   364,703 
Accrued interest payable and other liabilities 20,805   19,147   23,126   23,231   21,370 
     Total liabilities  1,725,322   1,808,410   1,769,369   1,838,156   1,776,761 
           
SHAREHOLDERS' EQUITY          
Common stock  108,417   108,430   107,948   107,776   107,241 
Retained earnings  34,792   30,630   27,821   26,036   25,541 
Accumulated other comprehensive (loss)  532   118   641   783   883 
     Total shareholders' equity  143,741   139,178   136,410   134,595   133,665 
     Total liabilities and shareholders' equity $1,869,063  $1,947,588  $1,905,779  $1,972,751  $1,910,426 
   -   -   -   -   - 
CAPITAL ADEQUACY          
Tier I leverage ratio  7.53%  7.46%  7.49%  7.84%  8.13%
Tier I risk-based capital ratio  9.35%  9.47%  10.11%  10.57%  11.27%
Total risk-based capital ratio  11.93%  12.34%  13.22%  13.80%  12.87%
Total equity/ total assets  7.69%  7.15%  7.16%  6.82%  7.00%
Book value per share $17.47  $16.99  $16.69  $16.52  $16.43 
           
Common shares outstanding  8,229,116   8,189,598   8,171,734   8,149,678   8,133,457 


CALIFORNIA BANCORP AND SUBSIDIARY
INTERIM CONSOLIDATED AVERAGE BALANCE SHEET AND YIELD DATA (UNAUDITED)
(Dollars in Thousands)
             
             
    Three months ended June 30,
 Three months ended March 31,
   2021   2021
             
    Yields Interest   Yields Interest
  Average or Income/ Average or Income/
  Balance Rates Expense Balance Rates Expense
ASSETS            
Interest earning assets:            
  Loans (1) $1,415,729 4.17% $14,703  $1,415,506 4.18% $14,584
  Federal funds sold  355,457 0.09%  84   369,223 0.10%  88
  Investment securities  58,794 2.67%  392   54,708 2.67%  360
Total interest earning assets  1,829,980 3.33%  15,179   1,839,437 3.31%  15,032
            
Noninterest-earning assets:            
  Cash and due from banks  19,147      23,033    
  All other assets (2)  60,431      60,269    
      TOTAL $1,909,558     $1,922,739    
             
LIABILITIES AND            
  SHAREHOLDERS' EQUITY            
Interest-bearing liabilities:            
  Deposits:            
     Demand $33,861 0.12% $10  $34,512 0.13% $11
     Money market and savings  673,460 0.55%  925   644,740 0.61%  972
     Time  172,452 0.47%  203   199,953 0.42%  208
  Other  139,458 1.31%  455   192,803 1.06%  505
Total interest-bearing liabilities  1,019,231 0.63%  1,593   1,072,008 0.64%  1,696
             
Noninterest-bearing liabilities:            
   Demand deposits  728,074      689,965    
   Accrued expenses and            
     other liabilities  20,334      23,351    
Shareholders' equity  141,919      137,415    
    TOTAL $1,909,558     $1,922,739    
             
Net interest income and margin (3)   2.98% $13,586    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 $1.2 million and $1.1 million, respectively.
(2) Other noninterest-earning assets includes the allowance for loan losses of $14.6 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 AVERAGE BALANCE SHEET AND YIELD DATA (UNAUDITED)
(Dollars in Thousands)
             
       Three months ended June 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) $1,415,729 4.17% $14,703 $1,233,488 4.06% $12,466
  Federal funds sold  355,457 0.09%  84  408,879 0.11%  108
  Investment securities  58,794 2.67%  392  33,015 2.52%  207
Total interest earning assets  1,829,980 3.33%  15,179  1,675,382 3.07%  12,781
            
Noninterest-earning assets:            
  Cash and due from banks  19,147      21,118    
  All other assets (2)  60,431      67,138    
      TOTAL $1,909,558     $1,763,638    
             
LIABILITIES AND            
  SHAREHOLDERS' EQUITY            
Interest-bearing liabilities:            
  Deposits:            
     Demand $33,861 0.12% $10 $25,857 0.11% $7
     Money market and savings  673,460 0.55%  925  525,586 0.82%  1,075
     Time  172,452 0.47%  203  162,293 1.09%  439
  Other  139,458 1.31%  455  292,239 0.65%  475
Total interest-bearing liabilities  1,019,231 0.63%  1,593  1,005,975 0.80%  1,996
             
Noninterest-bearing liabilities:            
   Demand deposits  728,074      603,288    
   Accrued expenses and            
     other liabilities  20,334      21,027    
Shareholders' equity  141,919      133,348    
    TOTAL $1,909,558     $1,763,638    
             
Net interest income and margin (3)   2.98% $13,586   2.59% $10,785
             
             
(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 $1.2 million and $414,000, respectively.
(2) Other noninterest-earning assets includes the allowance for loan losses of 14.6 million and $12.2 million, respectively.
(3) Net interest margin is net interest income divided by total interest-earning assets.     


CALIFORNIA BANCORP AND SUBSIDIARY
INTERIM CONSOLIDATED AVERAGE BALANCE SHEET AND YIELD DATA (UNAUDITED)
(Dollars in Thousands)
             
       Six months ended June 30,
   2021   2020
             
    Yields Interest   Yields Interest
  Average or Income/ Average or Income/
  Balance Rates Expense Balance Rates Expense
ASSETS            
Interest earning assets:            
  Loans (1) $1,415,618 4.17% $29,287  $1,092,895 4.46% $24,248
  Federal funds sold  362,301 0.10%  172   256,258 0.34%  437
  Investment securities  57,109 2.66%  752   30,655 2.61%  398
Total interest earning assets  1,835,028 3.32%  30,211   1,379,808 3.66%  25,083
            
Noninterest-earning assets:            
  Cash and due from banks  20,978      14,952    
  All other assets (2)  60,719      69,098    
      TOTAL $1,916,725     $1,463,858    
             
LIABILITIES AND            
  SHAREHOLDERS' EQUITY            
Interest-bearing liabilities:            
  Deposits:            
    Demand $34,185 0.12% $21  $24,802 0.11% $14
    Money market and savings  659,180 0.58%  1,897   501,039 1.00%  2,486
    Time  186,021 0.45%  411   143,499 1.42%  1,015
  Other  165,957 1.17%  960   153,741 0.79%  602
Total interest-bearing liabilities  1,045,343 0.63%  3,289   823,081 1.01%  4,117
             
Noninterest-bearing liabilities:            
   Demand deposits  709,022      489,289    
   Accrued expenses and            
     other liabilities  22,109      19,142    
Shareholders' equity  140,251      132,346    
    TOTAL $1,916,725     $1,463,858    
             
Net interest income and margin (3)   2.96% $26,922    3.06% $20,966
             
             
(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 $2.3 million and $121,000, respectively.
(2) Other noninterest-earning assets includes the allowance for loan losses of $14.4 million and $11.7 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: Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q2 2020
           
Net interest income $13,586  $13,336  $12,763 $11,188 $10,785
Non-interest income  956   921   916  1,028  777
Total revenue $14,542  $14,257  $13,679 $12,216 $11,562
           
           
           
           
PPP RELATED DEFERRED FEES AND COSTS:      AmortizationDeferred
  Deferred Balance at Origination of Deferred Balance
  2021 Program2020 ProgramTotal Balance Remaining
           
PPP fees $4,479  $9,086  $13,565 $8,703 $4,862
PPP capitalized loan origination costs  540   2,451   2,991  2,193 $798
Net PPP fees $3,939  $6,635  $10,574 $6,510 $4,064
           
           
           
IMPACT OF PPP ACTIVITY REFLECTED IN Amortization of Deferred Balance
    NET INTEREST INCOME: Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q2 2020
           
PPP fees $2,185  $2,222  $2,083 $1,114 $1,099
PPP capitalized loan origination costs  514   633   527  266  253
Net PPP fees $1,671  $1,589  $1,556 $848 $846
           
           
           
           
NON-INTEREST EXPENSE: Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q2 2020
           
Total non-interest expense $9,835  $10,080  $10,416 $10,545 $6,440
Total capitalized loan origination costs  1,217   1,513   1,198  986  4,797
Total operating expenses, before capitalization          
    of loan origination costs $11,052  $11,593  $11,614 $11,531 $11,237
           
           
           
           
GROSS LOANS: 06/30/21 03/31/21 12/31/20 09/30/20 06/30/20
           
Gross loans $1,352,639$1,470,313$1,369,070$1,355,164$1,299,481
PPP loans  194,472   353,426   306,373  362,088  361,632
Gross loans, excluding PPP loans $1,158,167  $1,116,887  $1,062,697 $993,076 $937,849
           

 

 

 


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