California BanCorp (BCAL) Q3 2024 earnings summary

Executive summary

• Completed merger with Southern California Bancorp (CALB) on July 31, 2024, expanding into Northern and Southern California, increasing scale, and creating a $4.36 billion asset bank.

• Net loss of $16.5 million ($(0.59) per diluted share) for Q3 2024, driven by one-time merger and credit loss provisions; adjusted net income (non-GAAP) was $9.1 million ($0.33 per share).

• Five-year asset CAGR of 39.1% and deposit CAGR of 40.0% as of September 30, 2024.

• Seasoned management team with extensive banking experience drives organic and M&A growth.

• Executed a successful core conversion on September 20, 2024, now operating under California BanCorp and California Bank of Commerce, N.A.

Financial highlights

• Total assets reached $4.36 billion and total deposits $3.74 billion at September 30, 2024, nearly doubling from year-end 2023 due to the merger.

• Net interest income for Q3 2024 was $36.9 million, up from $23.3 million in Q3 2023, with net interest margin at 4.43%.

• Provision for credit losses was $23.0 million in Q3 2024, including a $18.5 million one-time provision for acquired loans.

• Noninterest expense surged to $37.7 million in Q3 2024, mainly due to $14.6 million in merger-related costs.

• Allowance for loan losses rose to $57.6 million (1.80% of total loans held for investment), up from $24.6 million (1.31%) in Q2 2024.

Outlook and guidance

• Management expects continued integration of CALB operations, realization of merger synergies, and cost savings, with a focus on prudent growth and enhanced client offerings.

• Emphasis on defending deposit base, managing liquidity, and monitoring credit quality amid economic uncertainty.

• Capital and liquidity positions remain strong, with no specific forward guidance provided.