INVESTOR PRESENTATION
Q3 2023
Steven E. Shelton | Thomas A. Sa |
CEO | President, CFO & COO |
FORWARD-LOOKING STATEMENTS
During the course of the presentation and any transcript that may result, written or otherwise, California BanCorp (the "Company") may make projections or other forward-looking statements regarding a variety of items. Such forward-looking statements are based upon current expectations and involve risks and uncertainties. Actual results may differ materially from those stated in any forward-looking statement based on a number of important factors and risks.
Although the Company may indicate and believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect and therefore, there can be no assurance that the results contemplated in the forward-looking statements will be realized.
The Company undertakes no obligation to release publicly the results of any revisions to the forward-looking statements included herein to reflect events or circumstances after today, or to reflect the occurrence of unanticipated events. The Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
2
OVERVIEW OF CALIFORNIA BANCORP
FOCUSED REGIONAL OFFICE FOOTPRINT | COMPANY OVERVIEW | |
Walnut Creek
- Headquarters/Regional Office in Oakland
- Regional Offices in San Jose, Walnut Creek and Sacramento
- Branch services in Walnut Creek
(1) Based on CALB's stock price of $20.10 as of 9/29/2023
- Established in 2007 as a relationship focused commercial business bank serving Northern California with $1.98 billion in assets and a market capitalization of ~$169 million(1)
- Majority of executive management joined the bank at inception
- Significant commercial core deposit base
- Primary relationship managers with average banking experience of over 25 years and average loan books of $45 million
- Positioned to leverage recent investments to enhance our platform and extend our markets
FINANCIAL SNAPSHOT - 9/30/23
Balance Sheet | ($mm) | Q3 2023 Profitability | (%) | |
Assets | 1,984 | ROAA | 1.08 | |
Loans | 1,573 | ROATCE | 11.81 | |
Deposits | 1,707 | Net Interest Margin | 3.86 | |
Tangible Equity | 183 | Efficiency Ratio | 59.64 | |
Loans/ Deposits (%) | 92% | Cost of Deposits | 2.07 |
Loan Composition | (%) | Deposit Composition | (%) |
C&I Loans / Gross Loans | 40.3 | DDA/ Total Deposits | 40.2 |
CRE Loans / Gross Loans | 54.6 | Core Deposits/ Total Deposits | 81.3 |
Capital Ratios | |||
(Consolidated) | (%) | Credit Metrics | (%) |
TCE / TA | 9.24 | NPAs / Loans & OREO | 0.08 |
Leverage Ratio | 9.27 | NPAs / Assets | 0.06 |
Tier 1 Ratio | 9.34 | Reserves / Gross Loans | 1.01 |
TRBC Ratio | 13.00 | NCOs / Avg. Loans | 0.00 |
3
INVESTMENT HIGHLIGHTS
Branch light, commercial focused business bank with strong middle market relationships throughout Northern California
Quality core deposit
franchise and commercial
relationship strategy
Experienced management | ||
team and seasoned C&I | Proven organic and | |
relationship teams with strong | acquisitive growth story | |
ties to the local markets | ||
Disciplined underwriting | Strong earnings outlook as | |
standards with best-in-class | efficiencies from investments | |
asset quality metrics | are realized | |
3
4
3rd QUARTER 2023 HIGHLIGHTS
Continued Strong
Financial Performance
Stable Deposit Base
Conservative Approach to
New Loan Production
Increases in Capital Ratios and
Tangible Book Value
Continued Strong
Asset Quality
- Net income of $5.4 million
- Diluted EPS of $0.64
- ROA of 1.08%, ROE of 11.35% and NIM of 3.86%
- Total deposits decreased slightly from end of prior quarter
- Noninterest-bearingdeposits remain above 40% of total deposits
- Decline in noninterest-bearing deposits largely related to period-end fluctuations
- Total loans declined slightly from end of prior quarter as conservative underwriting criteria and pricing discipline result in lower loan production
- Decline in construction portfolio as projects were completed and paid off, partially offset by increase in commercial loans resulting from new full banking relationships
- Strong financial performance and prudent balance sheet management drives increases in all capital ratios from end of prior quarter
- Minimal AOCI impact
- TBV/share increased 3.2% during 3Q23
- Non-performingassets to total assets remain low at 0.06%
- Net recoveries in the quarter
- Allowance to NPLs of 1,288%
5
BRANCH LIGHT, COMMERCIAL FOCUSED BUSINESS BANK
BUSINESS MODEL OVERVIEW
- Middle market commercial banking focus
- Privately owned companies with $30 million - $300 million in annual revenue
- Clients with minimum lending relationships of $2 million or $1 million in deposits
- Portfolio managed over the long term to ~39% C&I loans and ~43% noninterest-bearing deposits
- Investing in other asset generating business lines
- Asset-BasedLending division established in July 2011
- Practice Acquisition division established in March 2011
- Construction division established December 2015
- Sponsor Finance division established in February 2020
- Strong core commercial deposit generation strategy
- Utilize technology with minimal branches
- Provide commercial cash management services to middle market clients
- Dedicated treasury management sales team and platform
IMPRESSIVE LOAN GROWTH
$2,000 | 2015 - Q3'23 CAGR | ||||||||||||||
$1,500 | Total gross loans = 15.4% | $2 | |||||||||||||
Gross loans (ex. PPP) = 15.4% | $306 | $73 | |||||||||||||
$1,000 | |||||||||||||||
$1,591 | $1,573 | ||||||||||||||
$500 | $518 | $628 | $733 | $847 | $950 | $1,063 | $1,304 | ||||||||
$0 | |||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | Q3-2023 | |||||||
Gross Loans (ex. PPP) | PPP Loans | ||||||||||||||
STRONG DEPOSIT GROWTH | |||||||||||||||
$2,000 | 2015 - Q3'23 | ||||||||||||||
$1,800 | |||||||||||||||
$1,600 | CAGR = 16.0% | $1,680 | $1,792 | $1,707 | |||||||||||
$1,400 | $1,532 | ||||||||||||||
$1,200 | |||||||||||||||
$1,000 | $988 | ||||||||||||||
$800 | $760 | $874 | |||||||||||||
$600 | |||||||||||||||
$650 | |||||||||||||||
$400 | $542 | ||||||||||||||
$200 | |||||||||||||||
$0 | |||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | Q3-2023 | |||||||
Dollars in millions | 6 |
Data as of 12/31 for each respective year |
TAKING SHARE FROM NATIONAL/REGIONAL BANKS
PRODUCT AND SERVICE DIFFERENTIATION
Combine Capabilities of a Big Bank with the High Service Levels of a Community Bank
- Attract top talent with deep market experience to compete against and win business from large banks
- Professional team with a consultative delivery process
- Invest in systems, tools, and technology for success in niche markets
- Offer clients access to key decision makers
- Ability to execute quickly, with market leading responsiveness
OUR "TYPICAL CLIENT"
~$75 M | $8 M | $3 M | ||
revolving line | ||||
in annual | equipment | |||
with $3 M average | ||||
revenue | term loan | |||
outstanding | ||||
$5 M | $3 M | $5 M | ||
commercial real | demand deposit | money market | ||
accounts to hold | ||||
estate loan | operating account | |||
surplus deposits | ||||
Fee income driven by commercial portfolio account analysis
and treasury management services
INDUSTRY & SPECIALTY LENDING FOCUS Commercial Banking Focused on Four Core Industries
Manufacturing | |||||||
and | Professional | Contractor | Investor CRE | ||||
Distribution | |||||||
Specialty Lending Groups | |||||||
Practice | Asset Based | Sponsor | Construction | ||||
Acquisition | Lending | Finance | |||||
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EXPERIENCED MANAGEMENT TEAM
► Previously served as an Executive Vice President of the Bank primarily responsible for managing | |||||||||
Steven E. Shelton, | Years at CALB: 16 | production since the Bank's founding in 2007 | |||||||
CEO | Years in Industry: 37 | ► | Served for thirteen years in various executive management positions including President of | ||||||
CivicBank of Commerce | |||||||||
Thomas A. Sa, | Joined 2019 | ► More than 30 years' experience in executive finance and risk management roles, most recently | |||||||
serving as Chief Risk Officer for Western Alliance Bank. | |||||||||
President, CFO & COO | Years in Industry: 33 | ► | Previously served in various executive and director roles at Bridge Bank and its holding company | ||||||
Bridge Capital Holdings (BBNK), including Chief Financial Officer and Chief Strategy Officer. | |||||||||
Vivian Mui, | ► Previously served as Deputy Chief Credit Officer and part of senior management from 2007 | ||||||||
Years at CALB: 16 | to 2018 | ||||||||
SEVP & CCO | Years in Industry: 20 | ► | 17 years of experience in various positions including lending and credit administration at | ||||||
Mechanics Bank | |||||||||
Scott Myers | Joined 2019 | ► | Veteran banker with more than 15 years banking experience in the Sacramento area | ||||||
SEVP & CLO | Years in Industry: 25 | ► | Previously served as Wells Fargo Senior Vice President and Sacramento Region Manager | ||||||
Michele Wirfel, | Years at CALB: 16 | ► | Previously served as the Bank's Executive Vice President & East Bay Market President | ||||||
SEVP & CBO | Years in Industry: 30 | ► Has worked in financial management and commercial banking since 1991 in various executive | |||||||
management positions including regional manager for CivicBank of Commerce | |||||||||
Tom M. Dorrance, | Years at CALB: 16 | ► Previously served as a Senior Vice President and Chief Information Officer for North Bay Bancorp | |||||||
► | Has worked in financial management and commercial banking since 1992 including I.T. | ||||||||
SEVP Technology & Operations | Years in Industry: 29 | ||||||||
Manager at CivicBank of Commerce |
John Lindstedt, | Years at CALB: 16 |
Years in Industry: 53 | |
SEVP & CCO Emeritus |
- Served as Executive Vice President and CCO from 2007 through 2017
- Previously served in various executive management positions including Executive Vice President and Senior Lending Officer for Wells Fargo's corporate bank and President & CCO of CivicBank of Commerce
8
DEMONSTRATED GROWTH TRACK RECORD
SUCCESSFUL EXPANSION THROUGHOUT NORTHERN CALIFORNIA
Bank founded in
$4 million private placement offering at $12.86 per share to payoff SBLF in May 2016
Completed acquisition of Pan Pacific Bank ($131 million in assets) in December 2015
$16 million common stock
offering at $9.90 per share to
fund growth in June 2014
Holding Company formed
in June 2017
Walnut Creek LPO opened
in July 2017
Completed $25.0
million private
offering of
common stockin
August 2018
Completed
expansion into
the
Sacramento
Region
Launched Sponsor
Finance in February
2020
Listed on the
NASDAQ stock
market in March
2020
Completed $20 million sub-debt offering in September 2020
2015 -
Q3'23 Asset
CAGR of
15.4%
Completed
$35 million
sub-debt offering in August 2021
March 2007 with
$27.5 million in
capital
Practice Acquisition
Division opened in
March 2011
San Jose ABL Division opened in July 2011
$21.76 | |||||||||||||
$19.78 | |||||||||||||
$15. | 77 | $17.33 | $2,042 | ||||||||||
$2,015 | |||||||||||||
$15.16 | $1,906 | $1,984 | |||||||||||
$14.20 |
$8.58 | $8.21 | $8.90 | |||||||||||
$9.61 $10.48 $10.19 $11.16 $12.01
$1,152
$7.94 | |||||||||
$7.04 | |||||||||
$6.70 | |||||||||
$53 | $137 | $194 | $240 | $299 | $350 |
$653 $765 $866
$365 $446
$1,006
2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 Q3-2023 | ||
Dollars in millions | Assets ($mm) | TBVPS | |||||||||||||||
Tangible book value per share and capital offering price adjusted for historical stock splits | 9 | ||||||||||||||||
Data as of 12/31 for each respective year |
STRONG AND GROWING CORE DEPOSIT BASE
DEPOSIT COMPOSITION | HISTORICAL DEPOSIT COMPOSITION | |
Time deposits
19%Demand deposits
40%
2015 -Q3'23 CAGR
DDA: 15.5%
Total Deposits: 16.0%
$1,680 | $1,792 | $1,707 | $1,800 |
$1,532 | $1,600 | ||
$1,400 |
Money market | |
& savings | Interest bearing |
deposits | |
demand deposits | |
39% | |
2% | |
DEPOSIT PORTFOLIO HIGHLIGHTS-9/30/23
- Deposits decreased slightly during 3Q23 primarily due to fluctuations in period end balances of noninterest-bearing deposits
- Resilient core deposit base driven by commercial clients
$1,200 | ||||||||
$988 | $1,000 | |||||||
$874 | $771 | $812 | ||||||
$761 | $687 | |||||||
$673 | 46% | 45% | $800 | |||||
$650 | ||||||||
$542 | 44% | 40% $600 | ||||||
$285 | $315 | $352 | $387 | $400 | ||||
$225 | 40% | 39% | ||||||
41% | ||||||||
44% | $200 | |||||||
42% | ||||||||
$0 | ||||||||
2015 2016 2017 | 2018 | 2019 2020 2021 | 2022 | Q3-2023 |
- 95%+ of commercial relationships hold deposits at the bank
- Core deposits comprise 81% of total deposits
- Utilize remote deposit capture and commercial cash management to generate and retain deposits
Cost of
Deposits
Core
Deposit Mix
Total Deposits | NIB Deposits | ||||||||||||||||||
0.23% | 0.24% | 0.35% | 0.55% | 0.81% | 0.48% | 0.27% | 0.47% | 2.07% | |||||||||||
94% | 93% | 94% | 91% | 88% | 87% | 91% | 85% | 81% |
- Treasury management division established in Q4-2019
Dollars in millions | |
Core deposits defined as total deposits less time deposits and brokered deposits. | 10 |
Data as of 12/31 for each respective year |
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Disclaimer
California BanCorp published this content on 26 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 October 2023 08:27:42 UTC.