California BanCorp Reports Financial Results for the Fourth Quarter and Twelve Months Ended December 31, 2022

OAKLAND, Calif., Jan. 26, 2023 (GLOBE NEWSWIRE) -- California BanCorp (NASDAQ: CALB), whose subsidiary is California Bank of Commerce, announced today its financial results for the fourth quarter and twelve months ended December 31, 2022.

The Company reported net income of $7.7 million for the fourth quarter of 2022, representing an increase of $2.2 million, or 39%, compared to $5.5 million for the third quarter of 2022 and an increase of $4.5 million, or 141%, compared to $3.2 million in the fourth quarter of 2021. For the twelve months ended December 31, 2022, net income was $21.1 million, representing an increase of $7.7 million, or 58%, compared to $13.4 million for the same period in 2021.

Diluted earnings per share of $0.91 for the fourth quarter of 2022 compared to $0.66 for the third quarter of 2022 and $0.38 for the fourth quarter of 2021.   For the twelve months ended December 31, 2022, diluted earnings per share of $2.51 compared to $1.61 for the same period in 2021.

“Our fourth quarter performance completed another strong year of continuing the growth of our client roster, realizing more operating leverage, and increasing our level of profitability,” said Steven Shelton, Chief Executive Officer of California BanCorp. “Given the potential for an economic slowdown in 2023, we have become more selective with our loan production; however, we continue to develop new relationships with high quality commercial clients. As a result, during the fourth quarter we experienced significant growth in both noninterest-bearing deposits and total deposits. At year-end, noninterest-bearing deposits represented 45% of our total deposits which allowed us to maintain a lower cost of funds and create additional expansion in our net interest margin, as well as contribute to our increasing level of profitability.   As we further execute our strategy of building a franchise based upon a stable low-cost deposit base and a conservatively underwritten and well-diversified loan portfolio, we believe the Company is positioned to continue generating strong financial performance for our shareholders.   Over the longer term, and as economic conditions improve, our strong commercial banking team’s ability to generate attractive lending opportunities will further result in higher levels of revenue, more operating leverage, and profitable growth for our franchise.”

Financial Highlights:

Profitability - three months ended December 31, 2022 compared to September 30, 2022

• Net income of $7.7 million and $0.91 per diluted share, compared to $5.5 million and $0.66 per share, respectively.
• Revenue of $23.8 million increased $4.0 million, or 20%, compared to $19.8 million for the third quarter of 2022.
• Net interest income of $21.9 million benefited from higher earning assets during the fourth quarter of 2022 combined with the rising rate environment and the acceleration of an unamortized discount totaling $1.4 million related to the repayment of previously purchased loans.
• Provision for loan losses of $1.1 million increased $300,000, or 38%, primarily as a result of continued adjustments in the qualitative reserve assessment in response to general macroeconomic changes, combined with growth in the real estate other loan portfolio.
• Non-interest income of $2.0 million increased $478,000, or 32%, primarily due to loan related fees.
• Non-interest expense, excluding capitalized loan origination costs, of $12.7 million increased $354,000, or 3%, compared to $12.3 million for the third quarter of 2022 primarily as a result of increased salary and benefit expense related to the continued growth of the business, combined with increases in item processing and business development expenses.

Profitability - twelve months ended December 31, 2022 compared to December 31, 2021

• Net income of $21.1 million and $2.51 per diluted share, compared to $13.4 million and $1.61 per diluted share, respectively.
• Revenue of $78.3 million increased $19.4 million, or 33%, compared to $58.9 million in the prior year.
• Net interest income of $71.0 million benefited from a more favorable mix of earning assets combined with the rising rate environment, partially offset by the recognition of net fees from Paycheck Protection Program (“PPP”) loans declining by $3.8 million from the prior year.
• Provision for loan losses increased $3.8 million primarily due to growth in the loan portfolio combined with a release of reserves in 2021 as a result of the continued assessment of qualitative reserves regarding the general macroeconomic changes related to COVID-19 as it pertained to our overall loan portfolio.
• Non-interest income of $7.4 million increased $3.2 million, or 77%, primarily due to a gain recognized on the sale of a portion of our solar loan portfolio during the first quarter of 2022 combined with an increase in service charges and other fees resulting from growth in the Company’s client base.
• Non-interest expense, excluding capitalized loan origination costs, of $48.8 million compared to $46.0 million for the same period in the prior year, reflecting the Company’s investment in infrastructure to support the continued growth of the Company.

Financial Position – December 31, 2022 compared to September 30, 2022

• Total assets decreased by $6.3 million to $2.04 billion; average total assets increased by $158.0 million to $2.09 billion.
• Gross loans increased by $5.5 million to $1.59 billion; average gross loans increased by $97.9 million to $1.62 billion.
• Deposits increased by $82.7 million to $1.79 billion; average deposits increased by $193.6 million to $1.79 billion.
• Other borrowings of $100.0 million were repaid during the fourth quarter of 2022 and no outstanding balance remained at December 31, 2022.
• Tangible book value per share of $19.78 increased by $0.98, or 5%.
  

Net Interest Income and Margin:

Net interest income for the quarter ended December 31, 2022 was $21.9 million, an increase of $3.5 million, or 19%, from $18.4 million for the three months ended September 30, 2022, and an increase of $7.9 million, or 57%, from $14.0 million for the quarter ended December 31, 2021. The increase in net interest income compared to the third quarter of 2022 was primarily attributable to growth of the loan portfolio and an increase in net interest margin related to the rising interest rate environment. Additionally, during the fourth quarter of 2022 commercial loans totaling $57.9 million that were previously purchased at a discount were paid off, resulting in the remaining unamortized discount of $1.4 million being accelerated into interest income. Compared to the fourth quarter of 2021, the increase in net interest income resulted from a more favorable mix of earning assets which benefited from the rising rate environment and the accelerated recognition of the discount related to the repayment of previously purchased loans, partially offset by a $684,000 reduction in the amortization of net fees received on PPP loans.

Net interest income for the twelve months ended December 31, 2022 was $71.0 million, an increase of $16.3 million, or 30%, over $54.7 million for the twelve months ended December 31, 2021. The increase in net interest income was primarily attributable to an increase in interest income as the result of a more favorable mix of earning assets combined with higher yields on those assets and the accelerated recognition of the discount related to the repayment of previously purchased loans, partially offset by a $3.8 million reduction in the amortization of net fees received on PPP loans.

The Company’s net interest margin for the fourth quarter of 2022 was 4.32%, compared to 3.94% for the third quarter of 2022 and 2.81% for the same period in 2021. The increase in margin compared to the prior quarter and the fourth quarter of 2021 was primarily due to growth in the loan portfolio and increased yields on earning assets, partially offset by an increase in the cost of deposits and other borrowings.

The Company’s net interest margin for the twelve months ended December 31, 2022 was 3.79%, compared to 2.89% for the same period in 2021.   The increase in margin compared to prior year was primarily due to a more favorable mix of higher yielding earning assets, partially offset by an increase in the cost of deposits and other borrowings and a reduction in the amortization of net fees received on PPP loans.

Non-Interest Income:

The Company’s non-interest income for the quarters ended December 31, 2022, September 30, 2022, and December 31, 2021 was $2.0 million, $1.5 million, and $994,000, respectively. The increase in non-interest income from the prior periods was primarily due to an increase in service charges and loan related fees.

For the twelve months ended December 31, 2022, non-interest income of $7.4 million compared to $4.2 million for the same period of 2021. The increase in non-interest income from prior year was the result of an increase in service charges and loan related fees, as well as a gain of $1.4 million recognized on the sale of a portion of our solar loan portfolio.

Net interest income and non-interest income comprised total revenue of $23.8 million, $19.8 million, and $15.0 million for the quarters ended December 31, 2022, September 30, 2022, and December 31, 2021, respectively. Total revenue for the twelve months ended December 31, 2022 and 2021 was $78.3 million and $58.9 million, respectively.

Non-Interest Expense:

The Company’s non-interest expense for the quarters ended December 31, 2022, September 30, 2022, and December 31, 2021 was $11.7 million, $11.2 million, and $10.0 million, respectively. The increase in non-interest expense from the prior periods was primarily due to an increase in salaries and benefits related to investments to support the continued growth of the business, combined with increases in item processing and business development expenses. Excluding capitalized loan origination costs, non-interest expense for the fourth quarter of 2022, the third quarter of 2022 and the fourth quarter of 2021 was $12.7 million, $12.3 million, and $11.6 million, respectively.

Non-interest expense of $44.7 million for the twelve months ended December 31, 2022 compared to $40.4 million for the same period of 2021. Excluding capitalized loan origination costs, non-interest expense was $48.8 million for the twelve months ended December 31, 2022 and $46.0 million for the same period in 2021 which reflects the Company’s investment in infrastructure to support the continued growth of the Company.

The Company’s efficiency ratio, the ratio of non-interest expense to revenues, was 49.17%, 56.52%, and 66.90% for the quarters ended December 31, 2022, September 30, 2022, and December 31, 2021, respectively. For the twelve months ended December 31, 2022 and 2021, the Company’s efficiency ratio was 57.01% and 68.65%, respectively.

Balance Sheet:

Total assets of $2.04 billion as of December 31, 2022, represented a decrease of $6.3 million compared to $2.05 billion at September 30, 2022, and increased $27.2 million compared to total assets of $2.0 billion at December 31, 2021. The decrease in total assets from the prior quarter was primarily due to decreased liquidity related to the payoff of other borrowings, combined with modest growth of the loan portfolio. Compared to the same period in the prior year, the Company had strong loan growth in the commercial and real estate other portfolios, which was partially offset by decreased liquidity resulting from the outflow of deposits related to forgiveness of PPP loans and the payoff of other borrowings.  

Total gross loans were $1.59 billion at December 31, 2022 and September 20, 2022, compared to $1.38 billion at December 31, 2021. During the fourth quarter of 2022, real estate other loans increased by $23.4 million, or 3%, due to organic growth, partially offset by decreases in commercial, real estate construction and land, and SBA loans related to the ordinary course of business. Year-over-year, commercial and real estate other loans increased by $160.3 million, or 34%, and $151.0 million, or 22%, respectively, due to organic growth. These increases were partially offset by a decrease in SBA loans of $74.2 million, or 91%, primarily due to PPP loan forgiveness, and a decrease in other loans of $40.9 million, or 51%, due to the sale of a portion of the solar loan portfolio.

Total deposits increased by $82.7 million, or 5%, to $1.79 billion at December 31, 2022 from $1.71 billion at September 30, 2022, and increased by $111.6 million, or 7%, from $1.68 billion at December 31, 2021. The increase in total deposits from the end of the third quarter of 2022 was primarily due to an increase in non-interest bearing demand deposits of $53.0 million and money market and savings deposits of $73.8 million, partially offset by a decrease in time deposits of $46.7 million as a result of reduced reliance on brokered certificates of deposits. Compared to the same period last year, the increase in total deposits was primarily concentrated in non-interest bearing demand deposits and time deposits, partially offset by a reduction in money market and savings deposits as a result of outflows related to forgiveness of PPP loans. Non-interest bearing deposits, primarily commercial business operating accounts, represented 45.3% of total deposits at December 31, 2022, compared to 44.4% at September 30, 2022 and 45.9% at December 31, 2021.

As of December 31, 2022, the Company had no outstanding borrowings, excluding junior subordinated debt securities, compared to $100.0 million and $106.4 million of outstanding borrowings as of September 30, 2022 and December 31, 2021, respectively.

Asset Quality:

The provision for credit losses increased to $1.1 million for the fourth quarter of 2022 compared to $800,000 for the third quarter of 2022 and $504,000 for the fourth quarter of 2021. The Company had net loan charge-offs of $650,000, or 0.04% of gross loans, during the fourth quarter of 2022 and $202,000, or 0.01% of gross loans, during the third quarter of 2022.   The Company had net loan recoveries of $6,000, or 0.00% of gross loans, during the fourth quarter of 2021.

Non-performing assets (“NPAs”) to total assets were 0.06% at December 31, 2022, compared to 0.02% at September 30, 2022 and 0.01% at December 31, 2021, with non-performing loans of $1.3 million, $343,000 and $232,000, respectively, on those dates.

The allowance for loan losses was $17.0 million, or 1.07% of total loans, at December 31, 2022, compared to $16.6 million, or 1.04% of total loans, at September 30, 2022 and $14.1 million, or 1.02% of total loans, at December 31, 2021.   

Capital Adequacy:

At December 31, 2022, shareholders’ equity totaled $172.3 million compared to $164.1 million at September 30, 2022 and $150.8 million one year ago. Additionally, at December 31, 2022, the Company’s total risk-based capital ratio, tier one capital ratio, and leverage ratio were 11.78%, 8.23%, and 7.98%, respectively; all of which were above the regulatory standards of 10.00%, 8.00%, and 5.00%, respectively, for “well-capitalized” institutions.

“Our strong financial performance and effective balance sheet management resulted in further growth of our tangible book value per share to $19.78, representing an increase of 5.2% from the prior quarter,” said Thomas A. Sa, President, Chief Financial Officer and Chief Operating Officer of California BanCorp   “During the fourth quarter, we successfully completed financing transactions in support of sponsor-backed clients’ evolving needs which resulted in nonrecurring fees of $1.4 million contributing to net interest income. Further, our ability to lead these transactions opportunistically enabled us to enhance capital accretion and reduce overall credit exposure.  These transactions combined with our strong core financial performance throughout 2022 resulted in a total equity to total assets ratio of 8.43% at year-end, representing an increase of 95 basis points from the prior year. We believe that our strong capital ratios position us well to effectively manage through potential economic uncertainty during 2023 while continuing to support the growth of our franchise over the longer term.”

About California BanCorp:

California BanCorp, the parent company for California Bank of Commerce, offers a broad range of commercial banking services to closely held businesses and professionals located throughout Northern California. The Company’s common stock trades on the Nasdaq Global Select marketplace under the symbol CALB. For more information on California BanCorp, call us at (510) 457-3751, or visit us at www.californiabankofcommerce.com.

Contacts:

Steven E. Shelton, (510) 457-3751                        
Chief Executive Officer                        
seshelton@bankcbc.com                                                                                                 
Thomas A. Sa, (510) 457-3775
President, Chief Financial Officer and Chief Operating Officer

tsa@bankcbc.com

Use of Non-GAAP Financial Information:

This press release contains both financial measures based on GAAP and non-GAAP. Non-GAAP financial measures are used where management believes them to be helpful in understanding the Company’s results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Forward-Looking Information:

Statements in this news release regarding expectations and beliefs about future financial performance and financial condition, as well as trends in the Company’s business and markets are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," "outlook," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." The forward-looking statements in this news release are based on current information and on assumptions that the Company makes about future events and circumstances that are subject to a number of risks and uncertainties that are often difficult to predict and beyond the Company’s control. As a result of those risks and uncertainties, the Company’s actual financial results in the future could differ, possibly materially, from those expressed in or implied by the forward-looking statements contained in this news release and could cause the Company to make changes to future plans. Those risks and uncertainties include, but are not limited to, the risk of incurring loan losses, which is an inherent risk of the banking business; the risk that the Company will not be able to continue its internal growth rate; uncertainties related to the coronavirus pandemic; the impact of higher inflation rates; the risk that the United States economy will experience slowed growth or recession or will be adversely affected by domestic or international economic conditions and risks associated with the Federal Reserve Board taking actions with respect to interest rates, any of which could adversely affect, among other things, the values of real estate collateral supporting many of the Company’s loans, loan demand, interest income and interest rate margins and, therefore, the Company’s future operating results; risks associated with changes in income tax laws and regulations; and risks associated with seeking new client relationships and maintaining existing client relationships. Readers of this news release are encouraged to review the additional information regarding these and other risks and uncertainties to which our business is subject that are contained in our Annual Report on Form 10-K for the year ended December 31, 2021 which is on file with the Securities and Exchange Commission (the “SEC”). Additional information will be set forth in our Annual Report on Form 10-K for the year ended December 31, 2022, which we expect to file with the SEC during the first quarter of 2023, and readers of this release are urged to review the additional information that will be contained in that report.

Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this news release, which speak only as of today's date, or to make predictions based solely on historical financial performance. The Company disclaims any obligation to update forward-looking statements contained in this news release, whether as a result of new information, future events or otherwise, except as may be required by law.

FINANCIAL TABLES FOLLOW

CALIFORNIA BANCORP AND SUBSIDIARY
SELECTED FINANCIAL INFORMATION (UNAUDITED) - PROFITABILITY
(Dollars in Thousands, Except Per Share Data)
										Change											Change
QUARTERLY HIGHLIGHTS:		Q4 2022				Q3 2022				$			%				Q4 2021				$			%
Interest income		$	27,480			$	21,168			$	6,312		30	%			$	15,543			$	11,937		77	%
Interest expense			5,620				2,805				2,815		100	%				1,576				4,044		257	%
Net interest income			21,860				18,363				3,497		19	%				13,967				7,893		57	%
Provision for loan losses			1,100				800				300		38	%				504				596		118	%
Net interest income after
provision for loan losses			20,760				17,563				3,197		18	%				13,463				7,297		54	%
Non-interest income			1,962				1,484				478		32	%				994				968		97	%
Non-interest expense			11,713				11,217				496		4	%				10,009				1,704		17	%
Income before income taxes			11,009				7,830				3,179		41	%				4,448				6,561		148	%
Income tax expense			3,340				2,308				1,032		45	%				1,267				2,073		164	%
Net income		$	7,669			$	5,522			$	2,147		39	%			$	3,181			$	4,488		141	%
Diluted earnings per share		$	0.91			$	0.66			$	0.25		38	%			$	0.38			$	0.53		139	%
Net interest margin			4.32	%			3.94	%		+38 Basis Points								2.81	%		+151 Basis Points
Efficiency ratio			49.17	%			56.52	%		-735 Basis Points								66.90	%		-1773 Basis Points
										Change
YEAR-TO-DATE HIGHLIGHTS:			2022				2021			$			%
Interest income		$	82,278			$	61,293			$	20,985		34	%
Interest expense			11,306				6,563				4,743		72	%
Net interest income			70,972				54,730				16,242		30	%
Provision for loan losses			3,775				4				3,771		94275	%
Net interest income after
provision for loan losses			67,197				54,726				12,471		23	%
Non-interest income			7,374				4,173				3,201		77	%
Non-interest expense			44,665				40,437				4,228		10	%
Income before income taxes			29,906				18,462				11,444		62	%
Income tax expense			8,798				5,094				3,704		73	%
Net income		$	21,108			$	13,368			$	7,740		58	%
Diluted earnings per share		$	2.51			$	1.61			$	0.90		56	%
Net interest margin			3.79	%			2.89	%		+90 Basis Points
Efficiency ratio			57.01	%			68.65	%		-1164 Basis Points

CALIFORNIA BANCORP AND SUBSIDIARY
SELECTED FINANCIAL INFORMATION (UNAUDITED) - FINANCIAL POSITION
(Dollars in Thousands, Except Per Share Data)
										Change												Change
PERIOD-END HIGHLIGHTS:		Q4 2022				Q3 2022				$				%				Q4 2021				$			%
Total assets		$	2,042,215			$	2,048,501			$	(6,286	)		0	%			$	2,014,996			$	27,219		1	%
Gross loans			1,593,421				1,587,901				5,520			0	%				1,376,649				216,772		16	%
Deposits			1,791,740				1,709,078				82,662			5	%				1,680,138				111,602		7	%
Tangible equity			164,782				156,575				8,207			5	%				143,241				21,541		15	%
Tangible book value per share		$	19.78			$	18.80			$	0.98			5	%			$	17.33			$	2.45		14	%
Tangible equity / total assets			8.07	%			7.64	%		+43 Basis Points									7.11	%		+96 Basis Points
Gross loans / total deposits			88.93	%			92.91	%		-398 Basis Points									81.94	%		+699 Basis Points
Noninterest-bearing deposits /
total deposits			45.30	%			44.39	%		+91 Basis Points									45.90	%		-60 Basis Points
QUARTERLY AVERAGE										Change												Change
HIGHLIGHTS:		Q4 2022				Q3 2022				$				%				Q4 2021				$			%
Total assets		$	2,088,206			$	1,930,227			$	157,979			8	%			$	2,054,490			$	33,716		2	%
Total earning assets			2,007,243				1,849,242				158,001			9	%				1,971,558				35,685		2	%
Gross loans			1,621,322				1,523,442				97,880			6	%				1,330,044				291,278		22	%
Deposits			1,785,693				1,592,096				193,597			12	%				1,759,592				26,101		1	%
Tangible equity			161,919				155,448				6,471			4	%				142,118				19,801		14	%
Tangible equity / total assets			7.75	%			8.05	%		-30 Basis Points									6.92	%		+83 Basis Points
Gross loans / total deposits			90.80	%			95.69	%		-489 Basis Points									75.59	%		+1521 Basis Points
Noninterest-bearing deposits /
total deposits			44.47	%			46.41	%		-194 Basis Points									45.24	%		-77 Basis Points
YEAR-TO-DATE AVERAGE										Change
HIGHLIGHTS:			2022				2021			$				%
Total assets		$	1,953,168			$	1,968,884			$	(15,716	)		-1	%
Total earning assets			1,871,813				1,891,234				(19,421	)		-1	%
Gross loans			1,495,981				1,368,960				127,021			9	%
Deposits			1,649,512				1,664,352				(14,840	)		-1	%
Tangible equity			153,443				136,623				16,820			12	%
Tangible equity / total assets			7.86	%			6.94	%		+92 Basis Points
Gross loans / total deposits			90.69	%			82.25	%		+844 Basis Points
Noninterest-bearing deposits /
total deposits			45.61	%			44.93	%		+68 Basis Points

CALIFORNIA BANCORP AND SUBSIDIARY
SELECTED INTERIM FINANCIAL INFORMATION (UNAUDITED) - ASSET QUALITY
(Dollars in Thousands)
ALLOWANCE FOR LOAN LOSSES:		12/31/22				09/30/22				06/30/22				03/31/22				12/31/21
Balance, beginning of period		$	16,555			$	15,957			$	15,032			$	14,081			$	13,571
Provision for loan losses, quarterly			1,100				800				925				950				504
Charge-offs, quarterly			(650	)			(202	)			-				-				-
Recoveries, quarterly			-				-				-				1				6
Balance, end of period		$	17,005			$	16,555			$	15,957			$	15,032			$	14,081
NONPERFORMING ASSETS:		12/31/22				09/30/22				06/30/22				03/31/22				12/31/21
Loans accounted for on a non-accrual basis		$	1,250			$	182			$	549			$	549			$	232
Loans with principal or interest contractually
past due 90 days or more and still accruing
interest			-				161				-				-				-
Nonperforming loans		$	1,250			$	343			$	549			$	549			$	232
Other real estate owned			-				-				-				-				-
Nonperforming assets		$	1,250			$	343			$	549			$	549			$	232
Loans restructured and in compliance with
modified terms			-				-				-				-				-
Nonperforming assets and restructured loans		$	1,250			$	343			$	549			$	549			$	232
Nonperforming loans by asset type:
Commercial		$	1,028			$	161			$	-			$	-			$	-
Real estate other			-				-				-				-				-
Real estate construction and land			-				-				-				-				-
SBA			222				182				549				549				232
Other			-				-				-				-				-
Nonperforming loans		$	1,250			$	343			$	549			$	549			$	232
ASSET QUALITY:		12/31/22				09/30/22				06/30/22				03/31/22				12/31/21
Allowance for loan losses / gross loans			1.07	%			1.04	%			1.06	%			1.07	%			1.02	%
Allowance for loan losses / nonperforming loans			1360.40	%			4826.53	%			2906.56	%			2738.07	%			6069.40	%
Nonperforming assets / total assets			0.06	%			0.02	%			0.03	%			0.03	%			0.01	%
Nonperforming loans / gross loans			0.08	%			0.02	%			0.04	%			0.04	%			0.02	%
Net quarterly charge-offs / gross loans			0.04	%			0.01	%			0.00	%			0.00	%			0.00	%

CALIFORNIA BANCORP AND SUBSIDIARY
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
		Three months ended												Twelve months ended
		12/31/22				09/30/22				12/31/21				12/31/22				12/31/21
INTEREST INCOME
Loans		$	23,972			$	19,084			$	14,520			$	74,240			$	58,677
Federal funds sold			2,236				867				216				3,519				587
Investment securities			1,272				1,217				807				4,519				2,029
Total interest income			27,480				21,168				15,543				82,278				61,293
INTEREST EXPENSE
Deposits			4,536				1,672				937				7,810				4,418
Other			1,084				1,133				639				3,496				2,145
Total interest expense			5,620				2,805				1,576				11,306				6,563
Net interest income			21,860				18,363				13,967				70,972				54,730
Provision for loan losses			1,100				800				504				3,775				4
Net interest income after provision
for loan losses			20,760				17,563				13,463				67,197				54,726
NON-INTEREST INCOME
Service charges and other fees			1,653				1,237				1,038				4,913				3,222
Gain on sale of loans			-				-				-				1,393				-
Other non-interest income			309				247				(44	)			1,068				951
Total non-interest income			1,962				1,484				994				7,374				4,173
NON-INTEREST EXPENSE
Salaries and benefits			7,443				7,415				6,370				29,097				26,031
Premises and equipment			1,249				1,275				1,320				5,093				5,098
Other			3,021				2,527				2,319				10,475				9,308
Total non-interest expense			11,713				11,217				10,009				44,665				40,437
Income before income taxes			11,009				7,830				4,448				29,906				18,462
Income taxes			3,340				2,308				1,267				8,798				5,094
NET INCOME		$	7,669			$	5,522			$	3,181			$	21,108			$	13,368
EARNINGS PER SHARE
Basic earnings per share		$	0.92			$	0.66			$	0.39			$	2.54			$	1.63
Diluted earnings per share		$	0.91			$	0.66			$	0.38			$	2.51			$	1.61
Average common shares outstanding			8,330,145				8,322,529				8,255,340				8,306,282				8,222,749
Average common and equivalent
shares outstanding			8,463,738				8,405,669				8,342,032				8,404,317				8,292,942
PERFORMANCE MEASURES
Return on average assets			1.46	%			1.13	%			0.61	%			1.08	%			0.68	%
Return on average equity			17.96	%			13.45	%			8.43	%			13.12	%			9.27	%
Return on average tangible equity			18.79	%			14.09	%			8.88	%			13.76	%			9.78	%
Efficiency ratio			49.17	%			56.52	%			66.90	%			57.01	%			68.65	%

CALIFORNIA BANCORP AND SUBSIDIARY
INTERIM CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in Thousands)
		12/31/22				09/30/22				06/30/22				03/31/22				12/31/21
ASSETS
Cash and due from banks		$	16,686			$	24,709			$	20,378			$	18,228			$	4,539
Federal funds sold			200,126				216,345				138,057				206,305				465,917
Investment securities			155,878				157,531				165,309				171,764				103,278
Loans:
Commercial			634,535				643,131				589,562				522,808				474,281
Real estate other			848,241				824,867				794,504				741,651				697,212
Real estate construction and land			63,730				71,523				63,189				51,204				43,194
SBA			7,220				8,565				13,310				44,040				81,403
Other			39,695				39,815				39,814				40,771				80,559
Loans, gross			1,593,421				1,587,901				1,500,379				1,400,474				1,376,649
Unamortized net deferred loan costs (fees)			2,040				1,902				2,570				2,434				1,688
Allowance for loan losses			(17,005	)			(16,555	)			(15,957	)			(15,032	)			(14,081	)
Loans, net			1,578,456				1,573,248				1,486,992				1,387,876				1,364,256
Premises and equipment, net			3,072				3,382				3,736				4,047				4,405
Bank owned life insurance			25,127				24,955				24,788				24,614				24,412
Goodwill and core deposit intangible			7,472				7,483				7,493				7,503				7,513
Accrued interest receivable and other assets			55,398				40,848				38,599				39,258				40,676
Total assets		$	2,042,215			$	2,048,501			$	1,885,352			$	1,859,595			$	2,014,996
LIABILITIES
Deposits:
Demand noninterest-bearing		$	811,671			$	758,716			$	715,432			$	746,673			$	771,205
Demand interest-bearing			37,815				35,183				45,511				36,419				37,250
Money market and savings			671,016				597,244				626,156				686,781				717,480
Time			271,238				317,935				165,040				130,649				154,203
Total deposits			1,791,740				1,709,078				1,552,139				1,600,522				1,680,138
Junior subordinated debt securities			54,152				54,117				54,097				54,063				54,028
Other borrowings			-				100,000				100,000				32,166				106,387
Accrued interest payable and other liabilities			24,069				21,248				20,372				18,273				23,689
Total liabilities			1,869,961				1,884,443				1,726,608				1,705,024				1,864,242
SHAREHOLDERS' EQUITY
Common stock			111,257				110,786				110,289				109,815				109,473
Retained earnings			62,297				54,628				49,106				44,862				41,189
Accumulated other comprehensive (loss)			(1,300	)			(1,356	)			(651	)			(106	)			92
Total shareholders' equity			172,254				164,058				158,744				154,571				150,754
Total liabilities and shareholders' equity		$	2,042,215			$	2,048,501			$	1,885,352			$	1,859,595			$	2,014,996
CAPITAL ADEQUACY
Tier I leverage ratio			7.98	%			8.21	%			8.27	%			7.84	%			7.23	%
Tier I risk-based capital ratio			8.23	%			7.98	%			8.09	%			8.49	%			8.62	%
Total risk-based capital ratio			11.78	%			11.57	%			11.84	%			12.49	%			12.75	%
Total equity/ total assets			8.43	%			8.01	%			8.42	%			8.31	%			7.48	%
Book value per share		$	20.67			$	19.70			$	19.09			$	18.69			$	18.24
Common shares outstanding			8,332,479				8,327,781				8,317,161				8,270,901				8,264,300

CALIFORNIA BANCORP AND SUBSIDIARY
INTERIM CONSOLIDATED AVERAGE BALANCE SHEET AND YIELD DATA (UNAUDITED)
(Dollars in Thousands)
		Three months ended December 31,									Three months ended September 30,
		2022									2022
					Yields			Interest						Yields			Interest
		Average			or			Income/			Average			or			Income/
		Balance			Rates			Expense			Balance			Rates			Expense
ASSETS
Interest earning assets:
Loans (1)		$	1,621,322		5.87	%		$	23,972		$	1,523,442		4.97	%		$	19,084
Federal funds sold			229,209		3.87	%			2,236			162,314		2.12	%			867
Investment securities			156,712		3.22	%			1,272			163,486		2.95	%			1,217
Total interest earning assets			2,007,243		5.43	%			27,480			1,849,242		4.54	%			21,168
Noninterest-earning assets:
Cash and due from banks			20,692									20,153
All other assets (2)			60,271									60,832
TOTAL		$	2,088,206								$	1,930,227
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Deposits:
Demand		$	39,582		0.06	%		$	6		$	40,044		0.08	%		$	8
Money market and savings			647,213		1.45	%			2,359			600,100		0.62	%			938
Time			304,784		2.83	%			2,171			213,001		1.35	%			726
Other			110,650		3.89	%			1,084			154,101		2.92	%			1,133
Total interest-bearing liabilities			1,102,229		2.02	%			5,620			1,007,246		1.10	%			2,805
Noninterest-bearing liabilities:
Demand deposits			794,114									738,951
Accrued expenses and
other liabilities			22,467									21,094
Shareholders' equity			169,396									162,936
TOTAL		$	2,088,206								$	1,930,227
Net interest income and margin (3)					4.32	%		$	21,860					3.94	%		$	18,363
(1) Nonperforming loans are included in average loan balances. No adjustment has been made for these loans in the calculation of yields. Interest income on loans includes amortization of net deferred loan fees of $1.0 million and $100,000, respectively.
(2) Other noninterest-earning assets includes the allowance for loan losses of $16.5 million and $16.0 million, respectively.
(3) Net interest margin is net interest income divided by total interest-earning assets.

CALIFORNIA BANCORP AND SUBSIDIARY
INTERIM CONSOLIDATED AVERAGE BALANCE SHEET AND YIELD DATA (UNAUDITED)
(Dollars in Thousands)
		Three months ended December 31,
		2022									2021
					Yields			Interest						Yields			Interest
		Average			or			Income/			Average			or			Income/
		Balance			Rates			Expense			Balance			Rates			Expense
ASSETS
Interest earning assets:
Loans (1)		$	1,621,322		5.87	%		$	23,972		$	1,330,044		4.33	%		$	14,520
Federal funds sold			229,209		3.87	%			2,236			536,503		0.16	%			216
Investment securities			156,712		3.22	%			1,272			105,011		3.05	%			807
Total interest earning assets			2,007,243		5.43	%			27,480			1,971,558		3.13	%			15,543
Noninterest-earning assets:
Cash and due from banks			20,692									18,886
All other assets (2)			60,271									64,046
TOTAL		$	2,088,206								$	2,054,490
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Deposits:
Demand		$	39,582		0.06	%		$	6		$	37,379		0.10	%		$	9
Money market and savings			647,213		1.45	%			2,359			766,826		0.40	%			769
Time			304,784		2.83	%			2,171			159,420		0.40	%			159
Other			110,650		3.89	%			1,084			122,722		2.07	%			639
Total interest-bearing liabilities			1,102,229		2.02	%			5,620			1,086,347		0.58	%			1,576
Noninterest-bearing liabilities:
Demand deposits			794,114									795,967
Accrued expenses and
other liabilities			22,467									22,539
Shareholders' equity			169,396									149,637
TOTAL		$	2,088,206								$	2,054,490
Net interest income and margin (3)					4.32	%		$	21,860					2.81	%		$	13,967
(1) Nonperforming loans are included in average loan balances. No adjustment has been made for these loans in the calculation of yields. Interest income on loans includes amortization of net deferred loan fees of $1.0 million and $125,000, respectively.
(2) Other noninterest-earning assets includes the allowance for loan losses of $16.5 million and $13.6 million, respectively.
(3) Net interest margin is net interest income divided by total interest-earning assets.

CALIFORNIA BANCORP AND SUBSIDIARY
INTERIM CONSOLIDATED AVERAGE BALANCE SHEET AND YIELD DATA (UNAUDITED)
(Dollars in Thousands)
		Twelve months ended December 31,
		2022									2021
					Yields			Interest						Yields			Interest
		Average			or			Income/			Average			or			Income/
		Balance			Rates			Expense			Balance			Rates			Expense
ASSETS
Interest earning assets:
Loans (1)		$	1,495,981		4.96	%		$	74,240		$	1,368,960		4.29	%		$	58,677
Federal funds sold			220,084		1.60	%			3,519			450,898		0.13	%			587
Investment securities			155,748		2.90	%			4,519			71,376		2.84	%			2,029
Total interest earning assets			1,871,813		4.40	%			82,278			1,891,234		3.24	%			61,293
Noninterest-earning assets:
Cash and due from banks			19,838									17,642
All other assets (2)			61,517									60,008
TOTAL		$	1,953,168								$	1,968,884
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Deposits:
Demand		$	40,054		0.08	%			31		$	35,623		0.11	%		$	38
Money market and savings			651,429		0.70	%			4,544			705,621		0.51	%			3,627
Time			205,681		1.57	%			3,235			175,240		0.43	%			753
Other			121,464		2.88	%			3,496			139,011		1.54	%			2,145
Total interest-bearing liabilities			1,018,628		1.11	%			11,306			1,055,495		0.62	%			6,563
Noninterest-bearing liabilities:
Demand deposits			752,348									747,868
Accrued expenses and
other liabilities			21,256									21,363
Shareholders' equity			160,936									144,158
TOTAL		$	1,953,168								$	1,968,884
Net interest income and margin (3)					3.79	%		$	70,972					2.89	%		$	54,730
(1) Nonperforming loans are included in average loan balances. No adjustment has been made for these loans in the calculation of yields. Interest income on loans includes amortization of net deferred loan fees of $1.5 million and $3.4 million, respectively.
(2) Other noninterest-earning assets includes the allowance for loan losses of $15.4 million and $13.9 million, respectively.
(3) Net interest margin is net interest income divided by total interest-earning assets.

CALIFORNIA BANCORP AND SUBSIDIARY
INTERIM CONSOLIDATED NON GAAP DATA (UNAUDITED)
(Dollars in Thousands)
REVENUE:		Three months ended									Twelve months ended
		12/31/22			09/30/22			12/31/21			12/31/22			12/31/21
Net interest income		$	21,860		$	18,363		$	13,967		$	70,972		$	54,730
Non-interest income			1,962			1,484			994			7,374			4,173
Total revenue		$	23,822		$	19,847		$	14,961		$	78,346		$	58,903
NET PPP FEES INCLUDED IN
INTEREST INCOME:		Three months ended									Twelve months ended
		12/31/22			09/30/22			12/31/21			12/31/22			12/31/21
PPP fees		$	27		$	293		$	817		$	2,103		$	7,133
PPP capitalized loan origination costs			3			15			109			343			1,604
Net PPP fees		$	24		$	278		$	708		$	1,760		$	5,529
NON-INTEREST EXPENSE:		Three months ended									Twelve months ended
		12/31/22			09/30/22			12/31/21			12/31/22			12/31/21
Total non-interest expense		$	11,713		$	11,217		$	10,009		$	44,665		$	40,437
Total capitalized loan origination costs			960			1,102			1,601			4,119			5,528
Total operating expenses, before capitalization
of loan origination costs		$	12,673		$	12,319		$	11,610		$	48,784		$	45,965