Executive Appointment - California Bank of Commerce appoints Jerry Legg as Senior Vice President, Director of Public Sector Banking, effective November 12, 2024 [1] - Legg will report to Executive Vice President, Specialty Banking Manager Chris Barr and operate from the Bank's Sacramento office [1] Professional Background - Jerry Legg brings over 30 years of experience in public sector banking, including roles at Public Trust Advisors, Five Star Bank, River City Bank, Rabobank, and the California State Treasurer's Office [2] - Legg holds a Bachelor of Science degree from Rutgers University [3] Company Overview - California BanCorp (NASDAQ: BCAL) is a registered bank holding company headquartered in San Diego, California [4] - Its subsidiary, California Bank of Commerce, offers financial products and services to individuals, professionals, and small to medium-sized businesses through 14 branch offices and four loan production offices in California [4] - The bank emphasizes a solutions-driven, relationship-based approach to banking, providing accessibility to decision-makers and fostering strong client partnerships [4]

[Third Quarter 2024 Highlights](index=1&type=section&id=Third%20Quarter%202024%20Highlights) The Southern California Bancorp merger transformed the quarter, expanding the balance sheet but resulting in a net loss from one-time provisions and merger expenses, despite improved net interest margin - Completed the merger with Southern California Bancorp on July 31, 2024, creating a combined entity with approximately **$4.25 billion in assets** and 14 branches[3](index=3&type=chunk)[4](index=4&type=chunk) Q3 2024 Key Financial Results | Metric | Q3 2024 | Q2 2024 | Q3 2023 | | :--- | :--- | :--- | :--- | | Net (Loss) Income | ($16.5M) | $0.19M | $6.6M | | Diluted (Loss) EPS | ($0.59) | $0.01 | $0.35 | | Adjusted Net Income (non-GAAP) | $9.1M | N/A | N/A | - The quarterly net loss was primarily due to a **$15.0 million after-tax 'day one' provision for credit losses** and **$10.6 million in after-tax merger-related expenses**[4](index=4&type=chunk)[7](index=7&type=chunk) - Post-merger balance sheet growth was substantial, with total assets reaching **$4.36 billion**, total loans **$3.23 billion**, and total deposits **$3.74 billion**[6](index=6&type=chunk) - Net interest margin expanded to **4.43%** from 3.94% in the prior quarter, while the allowance for credit losses (ACL) to total loans increased to **1.80%**[4](index=4&type=chunk)[6](index=6&type=chunk) [Third Quarter Operating Results](index=2&type=section&id=Third%20Quarter%20Operating%20Results) Operating results show a net loss primarily due to one-time merger costs, despite significant growth in net interest income and margin, while provision for credit losses and noninterest expenses also surged [Net Loss](index=2&type=section&id=Net%20Loss) California BanCorp reported a net loss for Q3 2024, primarily driven by a significant after-tax CECL provision and merger expenses Net (Loss) Income and EPS Comparison | Metric | Q3 2024 | Q2 2024 | | :--- | :--- | :--- | | Net (Loss) Income | ($16.5M) | $0.19M | | Diluted (Loss) EPS | ($0.59) | $0.01 | | Adjusted Net Income (non-GAAP) | $9.1M | N/A | - The quarter's results were negatively impacted by a **$15.0 million after-tax 'day one' CECL provision** (**$0.54 per share**) and **$10.6 million in after-tax merger expenses** (**$0.38 per share**)[7](index=7&type=chunk) [Net Interest Income and Net Interest Margin](index=2&type=section&id=Net%20Interest%20Income%20and%20Net%20Interest%20Margin) Net interest income significantly increased in Q3 2024 due to the merger, expanding the net interest margin, driven by higher earning asset yields and purchase accounting accretion Net Interest Income and Margin Performance | Metric | Q3 2024 | Q2 2024 | | :--- | :--- | :--- | | Net Interest Income | $36.9M | $21.0M | | Net Interest Margin | 4.43% | 3.94% | | Average Total Loan Yield | 6.79% | 6.21% | | Cost of Funds | 2.19% | 2.21% | - Accretion income from purchase accounting on acquired loans contributed **$4.1 million**, increasing the net interest margin by **46 basis points**[9](index=9&type=chunk) - The cost of funds decreased by **2 basis points** to **2.19%**, aided by a decrease in the cost of interest-bearing deposits and an increase in noninterest-bearing deposits[10](index=10&type=chunk) [Provision for Credit Losses](index=3&type=section&id=Provision%20for%20Credit%20Losses) The company recorded a substantial provision for credit losses in Q3 2024, primarily due to a one-time initial provision related to acquired non-PCD loans and unfunded commitments from the merger Provision for Credit Losses (PCL) | Period | PCL Amount | | :--- | :--- | | Q3 2024 | $23.0M | | Q2 2024 | $2.9M | - The increase was largely driven by a one-time initial provision for credit losses on acquired non-PCD loans (**$18.5 million**) and unfunded commitments (**$2.7 million**) following the merger[12](index=12&type=chunk) [Noninterest Income](index=3&type=section&id=Noninterest%20Income) Noninterest income remained stable in Q3 2024, as merger-related increases were offset by a valuation allowance on Other Real Estate Owned (OREO) Noninterest Income Comparison | Period | Noninterest Income | | :--- | :--- | | Q3 2024 | $1.2M | | Q2 2024 | $1.2M | - Merger-related increases in deposit fees and other income were offset by a **$614 thousand valuation allowance** on OREO due to a decline in the property's fair value[13](index=13&type=chunk) [Noninterest Expense](index=4&type=section&id=Noninterest%20Expense) Total noninterest expense nearly doubled in Q3 2024, driven almost entirely by merger-related costs, leading to a significantly higher efficiency ratio, which would be lower excluding these expenses Noninterest Expense and Efficiency Ratio | Metric | Q3 2024 | Q2 2024 | | :--- | :--- | :--- | | Total Noninterest Expense | $37.7M | $19.0M | | Merger and Related Expenses | $14.6M | $0.5M | | Efficiency Ratio (non-GAAP) | 98.9% | 85.7% | | Adjusted Efficiency Ratio (non-GAAP) | 60.5% | 83.5% | - Merger expenses included **$6.2 million in retention/severance**, **$2.3 million in advisory fees**, and **$4.5 million in information technology costs**[15](index=15&type=chunk) [Income Tax](index=4&type=section&id=Income%20Tax) The company recorded an income tax benefit in Q3 2024, compared to an expense in Q2, with the effective tax rate decreasing, influenced by equity awards and non-deductible merger expenses Income Tax (Benefit) Expense | Metric | Q3 2024 | Q2 2024 | | :--- | :--- | :--- | | Income Tax (Benefit) Expense | ($6.1M) | $88K | | Effective Tax Rate | 26.9% | 31.7% | [Balance Sheet Analysis](index=4&type=section&id=Balance%20Sheet) The Southern California Bancorp merger dramatically reshaped the balance sheet, significantly increasing total assets, loans, and deposits, while enhancing liquidity by repaying FHLB borrowings [Assets](index=4&type=section&id=Assets) Total assets significantly increased at September 30, 2024, primarily driven by the merger, which added substantial assets and resulted in preliminary goodwill Total Assets Growth | Date | Total Assets | | :--- | :--- | | Sep 30, 2024 | $4.36B | | Jun 30, 2024 | $2.29B | - The increase was primarily due to the merger, which added **$1.86 billion in assets** and created **$74.7 million in preliminary goodwill**[18](index=18&type=chunk) [Loans](index=4&type=section&id=Loans) Total loans held for investment significantly increased at the end of Q3, almost entirely due to acquiring loans through the merger Total Loans Held for Investment | Date | Total Loans | | :--- | :--- | | Sep 30, 2024 | $3.20B | | Jun 30, 2024 | $1.88B | - The loan growth was primarily driven by the **$1.36 billion fair value of loans acquired in the merger**[19](index=19&type=chunk) [Deposits](index=4&type=section&id=Deposits) Total deposits significantly increased at September 30, 2024, primarily due to the merger, with noninterest-bearing demand deposits also growing Deposit Composition | Metric | Sep 30, 2024 | Jun 30, 2024 | | :--- | :--- | :--- | | Total Deposits | $3.74B | $1.94B | | Noninterest-bearing Deposits | $1.37B | $0.67B | | % Noninterest-bearing | 36.6% | 34.4% | - The company used excess cash from the merger to pay off **$131.9 million** in high-cost brokered time deposits during the quarter[20](index=20&type=chunk) [Liquidity and Borrowings](index=5&type=section&id=Federal%20Home%20Loan%20Bank%20(FHLB)%20and%20Liquidity) The company significantly improved liquidity by repaying all FHLB borrowings using merger cash, resulting in substantial available borrowing capacity and the assumption of subordinated borrowings - All FHLB borrowings were repaid during the third quarter using liquidity from the merger[21](index=21&type=chunk) - Total available borrowing capacity was **$1.23 billion** at September 30, 2024, with an additional **$159.3 million** in unpledged liquid securities and **$614.4 million** in cash[22](index=22&type=chunk) - The company assumed subordinated borrowings of **$55.0 million** in connection with the merger[23](index=23&type=chunk) [Asset Quality](index=5&type=section&id=Asset%20Quality) Asset quality metrics weakened post-merger, with total non-performing assets significantly increasing due to acquired nonaccrual PCD loans and legacy loan downgrades, while the allowance for credit losses also rose Non-Performing Assets (NPA) Comparison | Metric | Sep 30, 2024 | Jun 30, 2024 | | :--- | :--- | :--- | | Total NPAs | $29.8M | $4.7M | | NPAs to Total Assets | 0.68% | 0.20% | - The increase in NPAs was mainly due to **$13.9 million of nonaccrual PCD loans** acquired in the merger and the downgrade of a **$12.7 million legacy loan relationship**[25](index=25&type=chunk) Allowance for Credit Losses (ACL) Ratios | Metric | Sep 30, 2024 | Jun 30, 2024 | | :--- | :--- | :--- | | Total ACL | $57.6M | $24.6M | | ALL to Total Loans | 1.67% | 1.27% | | ACL to Total Loans | 1.80% | 1.31% | [Capital](index=6&type=section&id=Capital) Capital levels were impacted by the merger and net loss, with tangible book value per common share decreasing, primarily due to the net loss and new share issuance, though regulatory capital ratios remain above 'well-capitalized' minimums Tangible Book Value (TBV) Per Share | Date | TBV per Common Share (non-GAAP) | | :--- | :--- | | Sep 30, 2024 | $11.28 | | Jun 30, 2024 | $13.71 | - The decrease in TBV was primarily impacted by the net loss for the quarter and the equity issued in connection with the merger[31](index=31&type=chunk) - The Company's capital exceeds the minimums required to be **'well-capitalized,'** the highest regulatory capital category[32](index=32&type=chunk) [Financial Statements and Tables](index=7&type=section&id=Financial%20Statements%20and%20Tables) This section presents detailed unaudited financial statements, including Financial Highlights, Allowance for Credit Losses roll-forward, Consolidated Balance Sheets, Income Statements, and Average Balance Sheets with yield analysis [GAAP to Non-GAAP Reconciliation](index=18&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation) This section reconciles GAAP to non-GAAP financial measures, providing a clearer view of core performance by excluding significant one-time items like the after-tax 'day one' provision for non-PCD loans and merger-related expenses - The non-GAAP measures are presented to provide investors with information used by management to assess performance, excluding the impact of significant, non-recurring items like merger expenses[52](index=52&type=chunk) Reconciliation of Net (Loss) Income to Adjusted Net Income (Q3 2024) | Description | Amount (in thousands) | | :--- | :--- | | Net (Loss) Income (GAAP) | ($16,464) | | Add: After-tax Day1 provision | $14,978 | | Add: After-tax merger expenses | $10,576 | | **Adjusted Net Income (non-GAAP)** | **$9,090** | Reconciliation of Efficiency Ratio (Q3 2024) | Metric | Value | | :--- | :--- | | Efficiency Ratio (non-GAAP) | 98.9% | | Adjusted Efficiency Ratio (non-GAAP) | 60.5% |

Core Insights - Southern California Gas Co. (SoCalGas) CEO Scott Drury received the Shift Diverse Business Solutions Transformative Leader Award for his leadership in sustainability, safety, and supplier diversity [2][3] - In 2023, SoCalGas achieved 44% of its total goods and services spending from diverse businesses, surpassing the California Public Utilities Commission (CPUC) diverse spending goal for the 31st consecutive year [3][4] - SoCalGas has invested nearly $6 billion over the past seven years in diverse business enterprises, including those owned by minorities, women, disabled veterans, and LGBT individuals [3][4] Company Initiatives - Under Drury's leadership, SoCalGas aims to reach 45% spending with diverse business enterprises by 2025 as part of its ASPIRE 2045 sustainability strategy [3] - The ASPIRE 2045 strategy also includes a goal of achieving net zero greenhouse gas emissions by 2045 and focuses on safety, diversity, equity, and inclusion in the workplace [3][4] - SoCalGas hosted the Minority Business Enterprise Connect Summit, connecting diverse businesses with over 40 state and federal agencies and prime contractors, facilitating $400 billion in federal contract opportunities [4] Industry Impact - Drury emphasized that supplier diversity can drive innovation, benefit local economies, and strengthen the supply chain while accelerating California's clean energy transition [4] - SoCalGas is recognized as a leader in the energy sector, having been named one of Reuters' Top 100 Innovators Leading the Global Energy Transition [7] - The company serves approximately 21 million consumers across 24,000 square miles in Central and Southern California, focusing on delivering affordable and renewable gas services [7]

San Diego, Calif., Sept. 26, 2024 (GLOBE NEWSWIRE) -- California Bank of Commerce, N.A. (the “Bank”), the wholly owned subsidiary of California BanCorp (the “Company”) (Nasdaq: BCAL), announces the promotion of Michele Wirfel to Executive Vice President, Chief Operating Officer of the Company and Bank as of September 20, 2024. Wirfel succeeds Thomas Sa who has stepped down to pursue opportunities outside the organization. Wirfel will report to Chief Executive Officer Steven Shelton and serve out of the Bank ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading symbol(s) Name of each exchange on which registered Common Stock, no par value per share BCAL The Nasdaq Stock Market LLC FORM 10-Q (Mark One) T QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 or £ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES E ...

San Diego, Calif. and Oakland, Calif., July 31, 2024 (GLOBE NEWSWIRE) -- Southern California Bancorp (NASDAQ: BCAL), the holding company for Bank of Southern California, N.A., and California BanCorp, the holding company for California Bank of Commerce, announce the successful closing of their previously announced merger of equals. Effective July 31, 2024, California BanCorp has merged with and into Southern California Bancorp, and California Bank of Commerce has merged with and into Bank of Southern Califor ...

SAN DIEGO and OAKLAND, Calif., July 31, 2024 (GLOBE NEWSWIRE) -- Southern California Bancorp (NASDAQ: BCAL), the holding company for Bank of Southern California, N.A., and California BanCorp, the holding company for California Bank of Commerce, announce the successful closing of their previously announced merger of equals. Effective July 31, 2024, California BanCorp has merged with and into Southern California Bancorp, and California Bank of Commerce has merged with and into Bank of Southern California, N.A ...

Financial Performance - Net income for Q2 2024 was $190 thousand, a significant decrease from $4.9 million in Q1 2024 and $6.7 million in Q2 2023, resulting in diluted earnings per share of $0.01 compared to $0.26 in the prior quarter[1][4] - Net income for the three months ended June 30, 2024, was $190 thousand, significantly lower than $6,718 thousand in the same period last year, a decrease of 97.17%[41] - Adjusted net income (non-GAAP) for the six months ended June 30, 2024, was $6,718,000, compared to $6,084,000 for the same period in 2023[53] Asset and Loan Management - Total assets remained stable at $2.29 billion, with total loans decreasing slightly to $1.88 billion, and total deposits increased by $5.3 million to $1.94 billion[4][20] - Total loans, including loans held for sale, were $1,884,599 thousand as of June 30, 2024, compared to $1,886,085 thousand in the previous quarter and $1,964,791 thousand year-over-year[35] - Total loans held for investment decreased to $1,877,617 thousand from $1,883,282 thousand, a decline of 0.2%[39] Noninterest Income and Expenses - Noninterest income decreased to $1.2 million from $1.4 million in the prior quarter, impacted by the absence of gains from SBA 7A loan sales[14] - Noninterest expense increased to $19,005 thousand for the three months ended June 30, 2024, compared to $14,981 thousand in the previous quarter and $14,607 thousand year-over-year[35] - Total noninterest expense increased to $19,005 thousand for the three months ended June 30, 2024, up from $14,607 thousand in the same period last year, marking a rise of 30.06%[41] Credit Losses and Provisions - The provision for credit losses was $2.9 million, a significant increase from a reversal of $331 thousand in the prior quarter, reflecting concerns over economic conditions in California[13] - Provision for credit losses was $2,893 thousand for the three months ended June 30, 2024, compared to a reversal of $331 thousand in the previous quarter and a reversal of $15 thousand year-over-year[35] - The allowance for credit losses increased to $24.6 million at June 30, 2024, compared to $23.2 million at March 31, 2024, reflecting a $3.0 million provision for credit losses[27] Capital and Equity - Shareholders' equity increased to $293,219 thousand from $292,499 thousand, reflecting a growth of 0.2%[39] - The Bank's leverage capital ratio and total risk-based capital ratio were 12.16% and 14.34%, respectively, at June 30, 2024[29] - Tangible common equity ratio was 11.28% as of June 30, 2024, compared to 10.73% as of June 30, 2023[55] Mergers and Acquisitions - Shareholders approved the merger with California BanCorp, expected to close on July 31, 2024, aiming to create a premier commercial banking franchise in California[3] Interest Income and Margin - The net interest margin increased to 3.94% from 3.80% in the prior quarter, with the yield on total interest-earning assets rising to 5.97% and the yield on average total loans increasing to 6.21%[2][9] - Net interest income for the three months ended June 30, 2024, was $21,007 thousand, an increase from $20,494 thousand in the previous quarter and a decrease from $23,426 thousand year-over-year[35] - Total interest and dividend income for the three months ended June 30, 2024, was $31,849 thousand, an increase from $30,260 thousand in the same period last year, representing a growth of 5.24%[41] Deposits and Funding - Noninterest-bearing demand deposits increased to $666.6 million, representing 34.4% of total deposits, up from 33.8% in the prior quarter[4][20] - The cost of funds rose to 2.21%, an increase of 4 basis points from the prior quarter, driven by higher interest-bearing deposit costs[6][10] - Total deposits reached $1,935,862 thousand, a slight increase from $1,930,544 thousand, indicating a growth of 0.3%[39] Non-Performing Assets - As of June 30, 2024, the Company had total non-performing assets of $4.7 million, representing 0.20% of total assets, a decrease from $19.3 million or 0.84% at March 31, 2024[23] - Total non-performing loans decreased to $4.7 million, or 0.25% of total loans held for investment, down from $6.2 million or 0.33% at March 31, 2024[25] - The decrease in non-performing assets was largely due to the sale of $13.1 million of other real estate owned in the second quarter of 2024[24]

Over the last 50 years, the banking industry in the United States has undergone a significant number of changes that have left it more centralized than ever. It has also left them reliant on big banks in the Federal Reserve for most people’s active financial management. Where once most people went to their regional banking companies to obtain loans for houses or cars, now many are relying on a handful of big banks instead. Part of this is a result of the digitized nature of modern banking, since for most ac ...

San Diego, Calif., July 08, 2024 (GLOBE NEWSWIRE) -- Bank of Southern California, N.A. (“us,” “we,” “our,” or the “Bank”), the wholly owned subsidiary of Southern California Bancorp (Nasdaq: BCAL), announces it has hired a team of three seasoned commercial lenders. The team includes Ayub Kathrada, named Executive Vice President, Regional Manager; Dayana McAlister, named Senior Vice President, Relationship Manager Team Lead; and Ayaz Dadabhoy, named First Vice President, Portfolio Manager. The team will serv ...