Merger and Expansion - California BanCorp completed an all-stock merger with CALB on July 31, 2024, resulting in CALB's total loans of $1.43 billion, total assets of $1.91 billion, and total deposits of $1.64 billion[217]. - The merger expanded California BanCorp's footprint into Northern California, adding one full-service bank branch and four loan production offices, increasing the total to 14 branches[217]. - The merger with CALB, completed on July 31, 2024, significantly impacted financial results, contributing to higher average interest-earning assets[249]. Financial Performance - Net income for Q3 2025 was $15.7 million, or $0.48 per diluted share, compared to $14.1 million, or $0.43 per diluted share in Q2 2025, reflecting a $2.4 million increase in pre-tax, pre-provision income[250]. - For Q3 2025 compared to Q3 2024, net income increased by $32.1 million, primarily due to a $5.6 million rise in net interest income and a $23.0 million decrease in the provision for credit losses[251]. - For the nine months ended September 30, 2025, net income was $46.6 million, or $1.42 per diluted share, compared to a net loss of $11.3 million, marking a $58.0 million increase in net income year-over-year[252]. - The company reported a net income of $15,684,000 for the three months ended September 30, 2025, compared to a net loss of $16,464,000 in the same period of 2024[236]. - The efficiency ratio improved to 51.7% for the three months ended September 30, 2025, compared to 98.9% in the same period of 2024[236]. - Adjusted net income (non-GAAP) for Q3 2025 was $15.7 million, compared to $9.1 million for the same period in 2024[251]. Asset and Loan Management - Total loans, including loans held for sale, were $2,996,984,000 as of September 30, 2025, down from $3,156,345,000 as of December 31, 2024[237]. - The total loans held for investment decreased to $2.99 billion at September 30, 2025, a decline of $148.9 million from $3.14 billion at December 31, 2024, representing 72.9% of total assets[330]. - Loan originations for the nine months ended September 30, 2025, totaled $334.1 million, offset by net paydowns of $79.2 million and charge-offs of $7.6 million[330]. - The total balance of commercial real estate loans was $1,759.7 million, with the largest segments being industrial (29.2%) and retail (15.7%)[334]. - The weighted average loan-to-value (LTV) ratio for the total CRE portfolio was 48% as of September 30, 2025[335]. - Delinquent loans amounted to $3.2 million, representing 0.11% of total loans held for investment, a decrease from 0.39% at December 31, 2024[339]. Credit Quality and Risk Management - California BanCorp's credit risk in the total loan portfolio has improved, reflected in the reversal of provision for loan losses over three consecutive quarters[228]. - Nonperforming loans decreased to $15,600,000 as of September 30, 2025, from $26,536,000 as of December 31, 2024[237]. - The allowance for loan losses decreased to $41,292,000 as of September 30, 2025, from $50,540,000 as of December 31, 2024[237]. - The allowance for loan losses (ACL) was $43.57 million at the end of the period, reflecting a decrease from $53.64 million at the beginning of the nine months ended September 30, 2025[354]. - The company had no consumer solar loans over 90 days past due as of September 30, 2025, compared to $150 thousand as of December 31, 2024[339]. - Special mention loans increased by $29.1 million to $98.4 million as of September 30, 2025, primarily due to $63.0 million in downgrades from pass rated loans[341]. Deposits and Funding - Total deposits increased to $3.46 billion at September 30, 2025, from $3.40 billion at December 31, 2024, with a weighted average interest rate of 1.5%[367]. - Noninterest-bearing demand deposits accounted for 35.8% of total deposits at September 30, 2025, compared to 37.0% at December 31, 2024[367]. - Average total deposits for the three months ended September 30, 2025, were $3.39 billion with a weighted average rate of 1.59%, compared to $3.07 billion and 2.09% for the same period in 2024[374]. - Total interest-bearing liabilities for the three months ended September 30, 2025, were $2,261,376 thousand, with total interest expense of $14,673 thousand[253]. - The cost of deposits was 1.59% for the three months ended September 30, 2025, with total deposits of $3,391,737 thousand[253]. Capital and Liquidity - Total shareholders' equity rose to $564.7 million at September 30, 2025, an increase of $52.9 million from $511.8 million at December 31, 2024, primarily due to net income of $46.6 million[379]. - The tangible book value per common share increased to $13.39 at September 30, 2025, compared to $11.71 at December 31, 2024[381]. - The total liquidity ratio was 21.7% at September 30, 2025, significantly higher than 15.7% at December 31, 2024[384]. - The company had total available borrowing capacity of $1.19 billion at September 30, 2025[390]. - The leverage capital ratio and total risk-based capital ratio were 11.17% and 14.74%, respectively, at September 30, 2025[383]. Income and Expense - Total noninterest income for the nine months ended September 30, 2025 was $8.1 million, an increase of 113% compared to $3.8 million for the same period in 2024[290]. - Total noninterest expense for Q3 2025 was $23.4 million, a decrease of $1.5 million from $24.8 million in Q2 2025[293]. - Total noninterest expense for Q3 2025 decreased by $14.3 million compared to $37.7 million in Q3 2024, mainly due to the absence of $14.6 million in merger-related costs[295]. - Income tax expense for Q3 2025 was $6.1 million, with an effective rate of 28.1%, compared to an income tax benefit of $6.1 million in Q3 2024[307]. - The company repurchased 89,500 shares at a weighted average market price of $15.22, totaling $1.4 million during the three and nine months ended September 30, 2025[381].
Southern California Bancorp(BCAL) - 2025 Q3 - Quarterly Report