California BanCorp (BCAL) Q1 2024 earnings summary

Executive summary

• Q1’24 adjusted net income was $4.8 million and adjusted diluted EPS was $0.57; NIM edged up to 3.89%.

• Conservative underwriting and balance-sheet management accompanied improved asset quality, higher capital ratios, and a 1.8% QoQ increase in tangible book value per share.

Financial highlights

• Adjusted ROA was 1.02%, adjusted ROE 9.71%, and adjusted ROTCE 10.08%, excluding merger-related expense.

• Expenses were relatively flat QoQ excluding merger-related expense; total assets declined slightly as the balance sheet was managed conservatively.

• At 3/31/24, assets were $1.923 billion, loans $1.521 billion, and deposits $1.640 billion; loans/deposits were 93%.

Outlook and guidance

• 2024 priorities include adding full-banking relationships, growing lower-cost deposits and fee income through treasury management, and tightly managing expenses.

• Relatively neutral interest-rate sensitivity is expected to support a fairly stable NIM as rates change during 2024.

• Strong client additions and the franchise’s capital, liquidity, and reserves are expected to support strong 2024 performance and longer-term franchise value.