CALIFORNIA BANCORP REPORTS NET INCOME OF $14.1 MILLION FOR THE SECOND QUARTER OF 2025

CALIFORNIA BANCORP REPORTS NET INCOME OF $14.1 MILLION FOR THE SECOND QUARTER OF 2025 San Diego, Calif., July 28, 2025 (GLOBE NEWSWIRE) -- California BanCorp (“us,” “we,” “our,” or the “Company”) (NASDAQ: BCAL), the holding company for California Bank of Commerce, N.A. (the “Bank”) announces its consolidated financial results for the second quarter of 2025. The Company reported net income of $14.1 million, or $0.43 per diluted share, for the second quarter of 2025, compared to $16.9 million, or $0.52 per diluted share for the first quarter of 2025, and net income of $190 thousand, or $0.01 per diluted share for the second quarter of 2024. “We are pleased to report strong second quarter earnings of $14.1 million, the third consecutive strong quarter of combined financial results since the close of our merger last July,” said David Rainer, Executive Chairman of the Company and Bank. “Earlier this year we announced a strategy to derisk our consolidated balance sheet by decreasing our exposure in the Sponsor Finance portfolio, reducing our reliance on brokered deposits and improving overall credit quality. I am pleased to report that the Sponsor Finance portfolio continued to decline in the second quarter and we expect the remainder will likely run off by year end. The reduction in credit risk in our total loan portfolio is reflected in a significant decrease in our non-performing assets to total assets ratio to 0.46% from 0.68%, as well as a significant decrease in special mention and substandard loans from the prior quarter. “During the second quarter we successfully completed the winding down of our brokered deposits. Going forward, we are focused on organic loan and deposit growth through our relationship-based business banking franchise and our footprint covering the biggest markets for small to medium-sized businesses in the state of California.” “Our strong second quarter results are further evidence of our successful integration and the value of our combined operations,” said Steven Shelton, CEO of the Company and Bank. “We continue to monitor the effect of tariffs and trade negotiations on our clients and can report we do not expect to see an impact on client operations from those events. We have minimal exposure to international trade, although some of our clients do source materials from outside the country. However, we have observed that some clients have expressed hesitancy in initiating projects due to the uncertain economic environment. Regardless, we continue to develop new relationships across the state of California, providing all our clients with the outstanding high-touch, relationship-based service associated with California Bank of Commerce.” Second Quarter 2025 Highlights Net income of $14.1 million or $0.43 diluted earnings per share for the second quarter.Net interest margin of 4.61%, compared with 4.65% in the prior quarter; average total loan yield of 6.58% compared with 6.61% in the prior quarter.Reversal of credit losses of $634 thousand for the second quarter, compared with $3.8 million for the prior quarter.Return on average assets of 1.45%, compared with 1.71% in the prior quarter.Return on average common equity of 10.50%, compared with 13.18% in the prior quarter.Efficiency ratio (non-GAAP1) of 56.1% compared with 55.6% in the prior quarter.Redemption of subordinated notes at par value aggregating $18.0 million.Tangible book value per common share (non-GAAP1) of $12.82 at June 30, 2025, up $0.53 from $12.29 at March 31, 2025.Total assets of $3.95 billion at June 30, 2025, compared with $3.98 billion at March 31, 2025.Total loans, including loans held for sale of $3.00 billion at June 30, 2025, compared with $3.07 billion at March 31, 2025.Nonperforming assets to total assets ratio of 0.46% at June 30, 2025, compared with 0.68% at March 31, 2025.Allowance for credit losses (“ACL”) was 1.46% of total loans held for investment at June 30, 2025; allowance for loan losses ("ALL") was 1.37% of total loans held for investment at June 30, 2025.Total deposits of $3.31 billion at June 30, 2025, decreased $30.2 million or 0.9% compared with $3.34 billion at March 31, 2025.Noninterest-bearing demand deposits of $1.22 billion at June 30, 2025, a decrease of $74.6 million or 5.8% from March 31, 2025; noninterest bearing deposits represented 36.8% of total deposits, compared with $1.29 billion, or 38.7% of total deposits at March 31, 2025.Cost of deposits was 1.59%, consistent with 1.59% in the prior quarter.Cost of funds was 1.73%, compared with 1.72% in the prior quarter.The Company’s preliminary capital ratios at June 30, 2025 exceed the minimums required to be “well-capitalized,” the highest regulatory capital category. Second Quarter Operating Results Net Income Net income for the second quarter of 2025 was $14.1 million, or $0.43 per diluted share, compared to $16.9 million, or $0.52 per diluted share in the first quarter of 2025. Pre-tax, pre-provision income (non-GAAP1) for the second quarter was $19.4 million, a decrease of $461 thousand from the prior quarter. The net income and diluted earnings per share decreases were largely driven by lower net interest income after reversal of credit losses, partially offset by higher noninterest income. Net Interest Income and Net Interest Margin Net interest income for the second quarter of 2025 was $41.4 million, compared with $42.3 million in the prior quarter. The decrease in net interest income was primarily due to a $1.0 million decrease in total interest and dividend income, partially offset by a $201 thousand decrease in total interest expense in the second quarter of 2025, as compared to the prior quarter. During the second quarter of 2025, loan interest income decreased by $1.6 million, including a decrease of $496 thousand of accretion income from the net purchase accounting discounts on acquired loans, partially offset by increases of $226 thousand in total debt securities income and $341 thousand in interest and dividend income from other financial institutions. The decrease in interest income was mainly due to decreases in average total loan balances. Average total interest-earning assets decreased $78.2 million in the second quarter of 2025, the result of a $117.4 million decrease in average total loans and a $21.0 million decrease in average deposits in other financial institutions, partially offset by a $25.0 million increase in average total debt securities and a $35.2 million increase in average Fed funds sold/resale agreements. The decrease in interest expense for the second quarter of 2025 was primarily due to a $239 thousand decrease in interest expense on interest-bearing deposits, the result of a $26.4 million decrease in average interest-bearing deposits and a 4 basis point decrease in average interest-bearing deposit costs in the second quarter of 2025. Net interest margin for the second quarter of 2025 was 4.61%, compared with 4.65% in the prior quarter. The decrease was primarily related to a 5 basis point decrease in the total interest-earning assets yield, coupled with a 1 basis point increase in the cost of funds. The yield on total average interest-earning assets in the second quarter of 2025 was 6.21%, compared with 6.26% in the prior quarter. The yield on average total loans in the second quarter of 2025 was 6.58%, a decrease of 3 basis points from 6.61% in the prior quarter. Accretion income from the net purchase accounting discounts on acquired loans was $5.2 million, increasing the yield on average total loans by 69 basis points; the net amortization expense from the purchase accounting discounts on acquired subordinated debt and acquired time deposits premium increased the interest expense by $555 thousand, the combination of which increased the net interest margin by 51 basis points in the second quarter of 2025. In the prior quarter, accretion income from the net purchase accounting discounts on acquired loans was $5.7 million, increasing the yield on average total loans by 74 basis points; the net amortization expense from the purchase accounting discounts on acquired subordinated debt and acquired time deposits premium increased the interest expense by $526 thousand, the combination of which increased the net interest margin by 57 basis points. Cost of funds for the second quarter of 2025 was 1.73%, a slight increase of 1 basis point from 1.72% in the prior quarter. The increase was primarily driven by an increase of 47 basis points in the cost of total borrowings, which was driven mostly by the decrease in average total borrowings of $2.9 million from the redemption of the $18 million subordinated notes in June, coupled with higher borrowing expense related to those subordinated notes converting to a floating-rate during the second quarter of 2025 and up to redemption, partially offset by a 4 basis point decrease in the cost of average interest-bearing deposits. The amortization expense of $560 thousand from the purchase accounting discounts on acquired subordinated debt contributed 7 basis points to the cost on total borrowings. Average noninterest-bearing demand deposits decreased $76.1 million to $1.18 billion and represented 36.2% of total average deposits for the second quarter of 2025, compared with $1.26 billion and 37.4%, respectively, in the prior quarter; average interest-bearing deposits decreased $26.4 million to $2.08 billion during the second quarter of 2025. The total cost of deposits in the second quarter of 2025 was maintained at 1.59%,the same as the prior quarter. The cost of total interest-bearing deposits decreased 4 basis points primarily due to the Company’s ongoing strategy to pay off high cost brokered deposits and listing money market deposits in the second quarter of 2025. Average total borrowings decreased $2.9 million to $67.2 million in the second quarter of 2025, primarily due to the redemption of the $18 million subordinated notes in June 2025. The average cost of total borrowings was 8.53% for the second quarter of 2025, up from 8.06% in the prior quarter. Reversal of Credit Losses The Company recorded a reversal of credit losses of $634 thousand for the second quarter of 2025, compared to $3.8 million in the prior quarter. Total net charge-offs were $4.1 million in the second quarter of 2025, which consisted of $4.2 million of gross charge-offs, offset by $181 thousand of gross recoveries. The net charge-offs resulted from the Company’s continuing strategy to derisk the consolidated balance sheet by reducing our exposure to criticized loans. The reversal of credit losses in the second quarter of 2025 included a $29 thousand provision for credit losses for unfunded loan commitments related to the increase in unfunded loan commitments during the second quarter of 2025, partially offset by a decrease in average funding rates used to estimate the allowance for credit losses on unfunded commitments. Total unfunded loan commitments increased $9.1 million to $901.2 million at June 30, 2025, compared to $892.1 million in unfunded loan commitments at March 31, 2025. The reversal of credit losses for loans held for investment in the second quarter of 2025 was $663 thousand, a decrease of $2.5 million from a reversal of credit losses of $3.2 million in the prior quarter. The decrease was driven primarily by the decrease in the balance of loans held for investment, changes in the composition of the loans held for investment portfolio, and changes in qualitative factors, partially offset by the net charge-offs and changes in the reasonable and supportable forecast, primarily related to the economic outlook for California. The Company’s management continues to monitor macroeconomic variables related to changes in interest rates and the concerns of an economic downturn, and believes it has appropriately provisioned for the current environment. Noninterest Income The Company recorded noninterest income of $2.9 million in the second quarter of 2025, an increase of $290 thousand compared to $2.6 million in the first quarter of 2025. Other charges and fees increased $874 thousand in the second quarter due primarily to higher income from equity investments. There was no gain on sale of SBA 7A loans in the second quarter of 2025, compared to a gain on sale of loans from SBA 7A loan sales of $577 thousand in the prior quarter. Noninterest Expense Total noninterest expense for the second quarter of 2025 was $24.8 million, a slight decrease of $87 thousand from total noninterest expense of $24.9 million in the prior quarter. Salaries and employee benefits decreased $571 thousand during the second quarter of 2025 to $15.3 million. The decrease in salaries and employee benefits was primarily related to the decrease in payroll taxes, coupled with the increase in loan origination costs with increased loan origination activity. Regulatory assessments of $545 thousand decreased $177 thousand due to a decrease in the FDIC assessment rates in the second quarter of 2025. During the second quarter of 2025, the Company sold other real estate owned (“OREO”) and recognized a $862 thousand loss. There was no comparable transaction in the prior quarter. Efficiency ratio (non-GAAP1) for the second quarter of 2025 was 56.1%, compared to 55.6% in the prior quarter. The $862 thousand loss on sale of other real estate owned negatively impacted the efficiency ratio by 1.9% during the second quarter of 2025. Income Tax In the second quarter of 2025, the Company’s income tax expense was $6.0 million, compared with $6.8 million for the first quarter of 2025. The effective rate was 29.8% for the second quarter of 2025 and 28.8% for the first quarter of 2025. The increase in the effective tax rate for the second quarter of 2025 was primarily attributable to the vesting and exercise of equity awards combined with changes in the Company's stock price over time. Balance Sheet Assets Total assets at June 30, 2025 were $3.95 billion, a decrease of $29.4 million or 0.7% from March 31, 2025. The decrease in total assets from the prior quarter was primarily related to a decrease in loans, including loans held for sale, of $75.8 million, a decrease in cash and cash equivalents of $9.1 million and a decrease in OREO of $4.1 million, partially offset by an increase in available-for-sale debt securities of $56.6 million and a decrease in the allowance for credit losses on loans of $4.7 million, as compared to the prior quarter. Loans Total loans held for investment were $2.99 billion at June 30, 2025, a decrease of $77.2 million, compared to March 31, 2025. During the second quarter of 2025, there were new originations of $106.4 million, partially offset by net paydowns of $45.8 million, loan payoffs of $133.7 million, and charge-offs of loans in the amount of $4.2 million. Total loans secured by real estate decreased by $11.8 million, of which construction and land development loans decreased by $36.7 million and 1-4 family residential loans decreased by $17.6 million, partially offset by increases in other commercial real estate loans of $22.0 million and multifamily loans of $20.5 million. Commercial and industrial loans decreased by $64.6 million, and other consumer loans decreased by $779 thousand. The Company had $6.1 million in loans held for sale at June 30, 2025, compared to $4.6 million at March 31, 2025. Deposits Total deposits at June 30, 2025 were $3.31 billion, a decrease of $30.2 million from March 31, 2025. The decrease primarily consisted of decreases of $10.0 million of brokered time deposits and $74.6 million of noninterest-bearing demand deposits, partially offset by increases of $62.5 million in interest-bearing non-maturity deposits and $8.1 million of non-brokered time deposits. Noninterest-bearing demand deposits at June 30, 2025, were $1.22 billion, or 36.8% of total deposits, compared with $1.29 billion, or 38.7% of total deposits at March 31, 2025. At June 30, 2025, total interest-bearing deposits were $2.09 billion, compared to $2.05 billion at March 31, 2025. At June 30, 2025, total brokered time deposits were $3.8 million, compared to $13.8 million at March 31, 2025. The Company offers the Insured Cash Sweep (ICS) product, Certificate of Deposit Account Registry Service (CDARS), and Reich & Tang Deposit Solutions (R&T) network, all of which provide reciprocal deposit placement services to fully qualified large customer deposits for FDIC insurance among other participating banks. Total reciprocal deposits were $730.6 million, or 22.1% of total deposits at June 30, 2025, compared to $763.6 million, or 22.8% of total deposits at March 31, 2025. Federal Home Loan Bank ("FHLB") and Liquidity At June 30, 2025 and March 31, 2025, the Company had no FHLB borrowings. There were no outstanding Federal Reserve Discount Window borrowings at June 30, 2025 or March 31, 2025. At June 30, 2025, the Company had available borrowing capacity from an FHLB secured line of credit of approximately $682.6 million and available borrowing capacity from the Federal Reserve Discount Window of approximately $320.4 million. The Company also had available borrowing capacity from four unsecured credit lines from correspondent banks of approximately $90.5 million at June 30, 2025, with no outstanding borrowings. Total available borrowing capacity was $1.09 billion at June 30, 2025. Additionally, the Company had unpledged liquid securities at fair value of approximately $169.9 million and cash and cash equivalents of $430.1 million at June 30, 2025. Total borrowings decreased $17.4 million to $52.9 million June 30, 2025. During the second quarter of 2025, the Company redeemed all $18.0 million of its 5.50% fixed-to-floating rate subordinated notes due in 2030 at par value. Asset Quality Total non-performing assets decreased to $18.4 million, or 0.46% of total assets at June 30, 2025, compared with $26.9 million, or 0.68% of total assets at March 31, 2025. Total non-performing loans decreased to $18.4 million, or 0.61% of total loans held for investment at June 30, 2025, compared with $22.8 million, or 0.74% of total loans held for investment at March 31, 2025. There were two loans repayments at discount totaling $4.4 million, which included a $635 thousand charge-off. No loans were downgraded to nonaccrual during the second quarter of 2025. At March 31, 2025, non-performing assets included OREO, net of $4.1 million which was sold in the second quarter of 2025, resulting in an $862 thousand loss. Special mention loans decreased by $9.2 million during the second quarter of 2025 to $65.3 million at June 30, 2025. The decrease in the special mention loans was due mostly to $10.1 million in loans upgraded to a pass rating and $5.1 million in payoffs and $256 thousand in net paydowns, partially offset by $6.3 million in loans downgraded from a pass rating. Substandard loans decreased by $30.3 million during the second quarter of 2025 to $81.5 million at June 30, 2025. The decrease in the substandard loans was due primarily to $26.9 million in payoffs, $4.4 million in charge-offs and $698 thousand in loans upgraded to a pass rating, partially offset by $1.6 million in net advances and $115 thousand in loans downgraded from a pass rating. The Company had no loans that were over 90 days past due and still accruing interest at June 30, 2025, compared to $45 thousand in such delinquencies at March 31, 2025. There were $546 thousand in loan delinquencies (30-89 days past due, excluding nonaccrual loans) at June 30, 2025, compared to $5.1 million in such loan delinquencies at March 31, 2025. The decrease was due primarily to a commercial real estate loan of $4.2 million that was paid off in the second quarter of 2025. The allowance for credit losses, which is comprised of the allowance for loan losses ("ALL") and reserve for unfunded loan commitments, totaled $43.6 million at June 30, 2025, compared to $48.3 million at March 31, 2025. The decrease in the allowance for credit losses included a $663 thousand reversal of provision for credit losses for the loan portfolio and net charge-offs of $4.1 million, partially offset by a $29 thousand provision for credit losses for unfunded loan commitments for the quarter ended June 30, 2025. The ALL was $41.1 million, or 1.37% of total loans held for investment at June 30, 2025, compared with $45.8 million, or 1.49% at March 31, 2025. Capital Tangible book value per common share (non-GAAP1) at June 30, 2025, was $12.82, compared with $12.29 at March 31, 2025. In the second quarter of 2025, tangible book value was primarily impacted by net income of $14.1 million for the second quarter, stock-based compensation activity, coupled with a decrease in net of tax unrealized losses on available-for-sale debt securities. Other comprehensive losses related to unrealized losses, net of taxes, on available-for-sale debt securities decreased by $679 thousand to $3.7 million at June 30, 2025, from $4.4 million at March 31, 2025. The decrease in the net of tax unrealized losses on available-for-sale debt securities was attributable to non-credit related factors, including an increase in bond prices at the long end of the yield curve and the general interest rate environment. Tangible common equity (non-GAAP1) as a percentage of total tangible assets (non-GAAP1) at June 30, 2025, increased to 10.89% from 10.34% in the prior quarter, and unrealized losses, net of taxes, on available-for-sale debt securities as a percentage of tangible common equity (non-GAAP1) at June 30, 2025 decreased to 0.9% from 1.1% in the prior quarter. The Company’s preliminary capital ratios exceed the minimums required to be “well-capitalized” at June 30, 2025. ABOUT CALIFORNIA BANCORP California BanCorp (NASDAQ: BCAL) is a registered bank holding company headquartered in San Diego, California. California Bank of Commerce, N.A., a national banking association chartered under the laws of the United States (the “Bank”) and regulated by the Office of Comptroller of the Currency, is a wholly owned subsidiary of California BanCorp. Established in 2001 and headquartered in San Diego, California, the Bank offers a range of financial products and services to individuals, professionals, and small to medium-sized businesses through its 14 branch offices and four loan production offices serving Northern and Southern California. The Bank’s solutions-driven, relationship-based approach to banking provides accessibility to decision makers and enhances value through strong partnerships with its clients. Additional information is available at www.bankcbc.com. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS In addition to historical information, this release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and other matters that are not historical facts. Examples of forward-looking statements include, among others, statements regarding expectations, plans or objectives for future operations, products or services, loan recoveries, projections, and expectations regarding the adequacy of reserves for credit losses, as well as forecasts relating to financial and operating results or other measures of economic performance. Forward-looking statements reflect management’s current view about future events and involve risks and uncertainties that may cause actual results to differ from those expressed in the forward-looking statement or historical results. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and often include the words or phrases such as “aim,” “can,” “may,” “could,” “predict,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “hope,” “intend,” “plan,” “potential,” “project,” “will likely result,” “continue,” “seek,” “shall,” “possible,” “projection,” “optimistic,” and “outlook,” and variations of these words and similar expressions. Factors that could cause or contribute to results differing from those in or implied in the forward-looking statements include but are not limited to the impact of bank failures or other adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks, changes in real estate markets and valuations; the impact on financial markets from geopolitical conflicts; inflation, interest rate, market and monetary fluctuations and general economic conditions, either nationally or locally in the areas in which the Company conducts business; increases in competitive pressures among financial institutions and businesses offering similar products and services; general credit risks related to lending, including changes in the value of real estate or other collateral, the financial condition of borrowers, the effectiveness of our underwriting practices and the risk of fraud; higher than anticipated defaults in the Company’s loan portfolio; changes in management’s estimate of the adequacy of the allowance for credit losses or the factors the Company uses to determine the allowance for credit losses; changes in demand for loans and other products and services offered by the Company; the costs and outcomes of litigation; legislative or regulatory changes or changes in accounting principles, policies or guidelines and other risk factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (“SEC”) and other documents the Company may file with the SEC from time to time. Additional information regarding these and other risks and uncertainties to which our business and future financial performance are subject is contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, and other documents the Company files with the SEC from time to time. Any forward-looking statement made in this release is based only on information currently available to management and speaks only as of the date on which it is made. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements or to conform such forward-looking statements to actual results or to changes in its opinions or expectations, except as required by law. California BanCorp and Subsidiary Financial Highlights (Unaudited) At or for the Three Months Ended At or for the Six Months Ended June 30, 2025 March 31, 2025 June 30, 2024 June 30, 2025 June 30, 2024 EARNINGS ($ in thousands except share and per share data) Net interest income $41,417 $42,255 $21,007 $83,672 $41,501 Reversal of credit losses $(634) $(3,776) $2,893 $(4,410) $2,562 Noninterest income $2,856 $2,566 $1,169 $5,422 $2,582 Noninterest expense $24,833 $24,920 $19,005 $49,753 $33,986 Income tax expense $5,975 $6,824 $88 $12,799 $2,410 Net income $14,099 $16,853 $190 $30,952 $5,125 Pre-tax pre-provision income(1) $19,440 $19,901 $3,171 $39,341 $10,097 Adjusted pre-tax pre-provision income(1) $19,440 $19,901 $3,662 $39,341 $11,137 Diluted earnings per share $0.43 $0.52 $0.01 $0.95 $0.27 Shares outstanding at period end 32,463,311 32,402,140 18,547,352 32,463,311 18,547,352 PERFORMANCE RATIOS Return on average assets 1.45% 1.71% 0.03% 1.58% 0.45%Adjusted return on average assets(1) 1.45% 1.71% 0.11% 1.58% 0.53%Return on average common equity 10.50% 13.18% 0.26% 11.81% 3.53%Adjusted return on average common equity(1) 10.50% 13.18% 0.82% 11.81% 4.19%Yield on total loans 6.58% 6.61% 6.21% 6.59% 6.11%Yield on interest earning assets 6.21% 6.26% 5.97% 6.24% 5.88%Cost of deposits 1.59% 1.59% 2.12% 1.59% 2.08%Cost of funds 1.73% 1.72% 2.21% 1.73% 2.19%Net interest margin 4.61% 4.65% 3.94% 4.63% 3.87%Efficiency ratio(1) 56.09% 55.60% 85.70% 55.84% 77.10%Adjusted efficiency ratio(1) 56.09% 55.60% 83.49% 55.84% 74.74% As of June 30, 2025 March 31, 2025 December 31, 2024 CAPITAL ($ in thousands except share and per share data) Tangible equity to tangible assets(1) 10.89% 10.34% 9.69%Book value (BV) per common share $16.87 $ 16.40 $15.86 Tangible BV per common share(1) $12.82 $ 12.29 $11.71 ASSET QUALITY Allowance for loan losses (ALL) $41,110 $ 45,839 $50,540 Reserve for unfunded loan commitments $2,514 $ 2,485 $3,103 Allowance for credit losses (ACL) $43,624 $ 48,324 $53,643 Allowance for loan losses to nonperforming loans 2.24x 2.01x 1.90xALL to total loans held for investment 1.37% 1.49% 1.61%ACL to total loans held for investment 1.46% 1.57% 1.71%30-89 days past due, excluding nonaccrual loans $546 $ 5,103 $12,082 Over 90 days past due, excluding nonaccrual loans $— $ 45 $150 Special mention loans $65,264 $ 74,421 $69,339 Special mention loans to total loans held for investment 2.18% 2.43% 2.21%Substandard loans $81,456 $ 111,786 $117,598 Substandard loans to total loans held for investment 2.72% 3.64% 3.75%Nonperforming loans $18,354 $ 22,825 $26,536 Nonperforming loans to total loans held for investment 0.61% 0.74% 0.85%Other real estate owned, net $— $ 4,083 $4,083 Nonperforming assets $18,354 $ 26,908 $30,619 Nonperforming assets to total assets 0.46% 0.68% 0.76% END OF PERIOD BALANCES Total loans, including loans held for sale $2,997,648 $ 3,073,399 $ 3,156,345 Total assets $3,953,717 $ 3,983,090 $ 4,031,654 Deposits $3,312,278 $ 3,342,503 $ 3,398,760 Loans to deposits 90.5% 91.9% $ 92.9%Shareholders' equity $547,593 $ 531,384 $511,836 (1) Non-GAAP measure. See – GAAP to Non-GAAP reconciliation. At or for the Three Months Ended At or for the Six Months Ended ALLOWANCE for CREDIT LOSSES June 30, 2025 March 31, 2025 June 30, 2024 June 30, 2025 June 30, 2024 ($ in thousands) Allowance for loan losses Balance at beginning of period $45,839 $50,540 $22,254 $50,540 $22,569 (Reversal of) provision for credit losses (663) (3,158) 2,990 (3,821) 2,676 Charge-offs (4,247) (3,159) (1,456) (7,406) (1,457)Recoveries 181 1,616 — 1,797 — Net charge-offs (4,066) (1,543) (1,456) (5,609) (1,457)Balance, end of period $41,110 $45,839 $23,788 $41,110 $23,788 Reserve for unfunded loan commitments (1) Balance, beginning of period $2,485 $3,103 $916 $3,103 $933 Provision for (reversal of) credit losses 29 (618) (97) (589) (114)Balance, end of period 2,514 2,485 819 2,514 819 Allowance for credit losses $43,624 $48,324 $24,607 $43,624 $24,607 ALL to total loans held for investment 1.37% 1.49% 1.27% 1.37% 1.27%ACL to total loans held for investment 1.46% 1.57% 1.31% 1.46% 1.31%Net charge-offs to average total loans (0.54)% (0.20)% (0.31)% (0.37)% (0.15)%  (1) Included in "Accrued interest and other liabilities" on the consolidated balance sheets. California BanCorp and Subsidiary Balance Sheets (Unaudited) June 30, 2025 March 31, 2025 December 31, 2024 ASSETS ($ in thousands) Cash and due from banks $84,017 $80,441 $60,471 Federal funds sold & other interest-bearing balances 346,120 358,800 327,691 Total cash and cash equivalents 430,137 439,241 388,162 Debt securities available-for-sale, at fair value (amortized cost of $193,465, $137,855 and $151,429 at June 30, 2025, March 31, 2025 and December 31, 2024) 188,167 131,593 142,001 Debt securities held-to-maturity, at cost (fair value of $47,538 $47,329 and $47,823 at June 30, 2025, March 31, 2025 and December 31, 2024) 53,108 53,194 53,280 Loans held for sale 6,088 4,625 17,180 Loans held for investment: Construction & land development 184,744 221,437 227,325 1-4 family residential 139,855 157,442 164,401 Multifamily 258,395 237,896 243,993 Other commercial real estate 1,777,940 1,755,962 1,767,727 Commercial & industrial 607,836 672,468 710,970 Other consumer 22,790 23,569 24,749 Total loans held for investment 2,991,560 3,068,774 3,139,165 Allowance for credit losses - loans (41,110) (45,839) (50,540)Total loans held for investment, net 2,950,450 3,022,935 3,088,625 Restricted stock at cost 30,858 30,845 30,829 Premises and equipment 12,728 13,154 13,595 Right of use asset 13,095 13,384 14,350 Other real estate owned, net — 4,083 4,083 Goodwill 110,934 111,780 111,787 Intangible assets 20,375 21,323 22,271 Bank owned life insurance 66,397 66,867 66,636 Deferred taxes, net 33,454 36,473 43,127 Accrued interest and other assets 37,926 33,593 35,728 Total assets $3,953,717 $3,983,090 $4,031,654 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Noninterest-bearing demand $1,218,072 $1,292,689 $1,257,007 Interest-bearing NOW accounts 783,410 674,460 673,589 Money market and savings accounts 1,146,548 1,192,960 1,182,927 Time deposits 164,248 182,394 285,237 Total deposits 3,312,278 3,342,503 3,398,760 Borrowings 52,883 70,308 69,725 Operating lease liability 16,715 17,142 18,310 Accrued interest and other liabilities 24,248 21,753 33,023 Total liabilities 3,406,124 3,451,706 3,519,818 Shareholders' Equity: Common stock - 50,000,000 shares authorized, no par value; issued and outstanding 32,463,311, 32,402,140 and 32,265,935 at June 30, 2025, March 31, 2025 and December 31, 2024 444,365 442,934 442,469 Retained earnings 106,960 92,861 76,008 Accumulated other comprehensive loss - net of taxes (3,732) (4,411) (6,641)Total shareholders' equity 547,593 531,384 511,836 Total liabilities and shareholders' equity $3,953,717 $3,983,090 $4,031,654 California BanCorp and Subsidiary Income Statements - Quarterly and Year-to-Date (Unaudited) Three Months Ended Six Months Ended June 30, 2025 March 31, 2025 June 30, 2024 June 30, 2025 June 30, 2024 ($ in thousands except share and per share data) INTEREST AND DIVIDEND INCOME Interest and fees on loans $49,080 $50,686 $29,057 $99,766 $57,641 Interest on debt securities 1,751 1,524 1,229 3,275 2,442 Interest on tax-exempted debt securities 304 305 306 609 612 Interest and dividends from other institutions 4,651 4,310 1,257 8,961 2,418 Total interest and dividend income 55,786 56,825 31,849 112,611 63,113 INTEREST EXPENSE Interest on NOW, savings, and money market accounts 11,390 11,116 7,039 22,506 13,809 Interest on time deposits 1,550 2,063 3,145 3,613 6,166 Interest on borrowings 1,429 1,391 658 2,820 1,637 Total interest expense 14,369 14,570 10,842 28,939 21,612 Net interest income 41,417 42,255 21,007 83,672 41,501 (Reversal of) provision for credit losses(1) (634) (3,776) 2,893 (4,410) 2,562 Net interest income after (reversal of) provision for credit losses 42,051 46,031 18,114 88,082 38,939 NONINTEREST INCOME Service charges and fees on deposit accounts 1,178 1,186 568 2,364 1,093 Gain on sale of loans — 577 — 577 415 Bank owned life insurance income 503 463 266 966 527 Servicing and related income (expense) on loans 102 142 (5) 244 68 Loss on sale of building and related fixed assets — (1) (19) (1) (19)Other charges and fees 1,073 199 359 1,272 498 Total noninterest income 2,856 2,566 1,169 5,422 2,582 NONINTEREST EXPENSE Salaries and employee benefits 15,293 15,864 8,776 31,157 18,386 Occupancy and equipment expenses 2,094 2,152 1,445 4,246 2,897 Data processing 1,831 1,935 1,186 3,766 2,336 Legal, audit and professional 972 859 557 1,831 1,073 Regulatory assessments 545 722 347 1,267 734 Director and shareholder expenses 395 404 229 799 432 Merger and related expenses — — 491 — 1,040 Intangible assets amortization 948 948 65 1,896 130 Other real estate owned expense 862 68 4,935 930 5,023 Other expense 1,893 1,968 974 3,861 1,935 Total noninterest expense 24,833 24,920 19,005 49,753 33,986 Income before income taxes 20,074 23,677 278 43,751 7,535 Income tax expense 5,975 6,824 88 12,799 2,410 Net income $14,099 $16,853 $190 $30,952 $5,125 Net income per share - basic $0.43 $0.52 $0.01 $0.96 $0.28 Net income per share - diluted $0.43 $0.52 $0.01 $0.95 $0.27 Weighted average common shares-diluted 32,685,132 32,698,227 18,799,513 32,691,643 18,800,614 Pre-tax, pre-provision income(2) $19,440 $19,901 $3,171 $39,341 $10,097 (1) Included provision for (reversal of) credit losses on unfunded loan commitments of $29 thousand, $(618) thousand and $(97) thousand for the three months ended June 30, 2025, March 31, 2025, and June 30, 2024, respectively; and $(589) thousand and $(114) thousand for the six months ended June 30, 2025 and June 30, 2024, respectively. (2) Non-GAAP measure. See — GAAP to Non-GAAP reconciliation. California BanCorp and Subsidiary Average Balance Sheets and Yield Analysis (Unaudited) Three Months Ended June 30, 2025 March 31, 2025 June 30, 2024 Average Balance Income/ Expense Yield/ Cost Average Balance Income/ Expense Yield/ Cost Average Balance Income/ Expense Yield/ Cost Assets ($ in thousands) Interest-earning assets: Total loans $2,992,299 $49,080 6.58 % $3,109,722 $50,686 6.61 % $1,882,845 $29,057 6.21%Taxable debt securities 164,558 1,751 4.27 % 139,481 1,524 4.43 % 123,906 1,229 3.99%Tax-exempt debt securities(1) 53,438 304 2.89 % 53,522 305 2.93 % 53,754 306 2.90%Deposits in other financial institutions 295,602 3,270 4.44 % 316,582 3,468 4.44 % 47,417 638 5.41%Fed funds sold/resale agreements 65,568 730 4.47 % 30,413 335 4.47 % 19,062 261 5.51%Restricted stock investments and other bank stock 31,672 651 8.24 % 31,657 507 6.50 % 17,091 358 8.42%Total interest-earning assets 3,603,137 55,786 6.21 % 3,681,377 56,825 6.26 % 2,144,075 31,849 5.97%Total noninterest-earning assets 302,142 318,132 150,603 Total Assets $3,905,279 $3,999,509 $2,294,678 Liabilities and Shareholders' Equity Interest-bearing liabilities: Interest-bearing NOW accounts $763,987 $3,666 1.92 % $735,209 $3,366 1.86 % $361,244 $2,134 2.38%Money market and savings accounts 1,149,286 7,724 2.70 % 1,161,960 7,750 2.70 % 653,244 4,905 3.02%Time deposits 165,049 1,550 3.77 % 207,519 2,063 4.03 % 259,722 3,145 4.87%Total interest-bearing deposits 2,078,322 12,940 2.50 % 2,104,688 13,179 2.54 % 1,274,210 10,184 3.21%Borrowings: FHLB advances — — — % — — — % 27,391 387 5.68%Subordinated debt 67,159 1,429 8.53 % 70,027 1,391 8.06 % 17,901 271 6.09%Total borrowings 67,159 1,429 8.53 % 70,027 1,391 8.06 % 45,292 658 5.84%Total interest-bearing liabilities 2,145,481 14,369 2.69 % 2,174,715 14,570 2.72 % 1,319,502 10,842 3.30% Noninterest-bearing liabilities: Noninterest-bearing deposits(2) 1,179,791 1,255,883 658,001 Other liabilities 41,629 50,368 23,054 Shareholders' equity 538,378 518,543 294,121 Total Liabilities and Shareholders' Equity $3,905,279 $3,999,509 $2,294,678 Net interest spread 3.52 % 3.54 % 2.67%Net interest income and margin $41,417 4.61 % $42,255 4.65 % $21,007 3.94%Cost of deposits $3,258,113 $12,940 1.59 % $3,360,571 $13,179 1.59 % $1,932,211 $10,184 2.12%Cost of funds $3,325,272 $14,369 1.73 % $3,430,598 $14,570 1.72 % $1,977,503 $10,842 2.21% (1) Tax-exempt debt securities yields are presented on a tax equivalent basis using a 21% tax rate. (2) Average noninterest-bearing deposits represent 36.21%, 37.37% and 34.05% of average total deposits for the three months ended June 30, 2025, March 31, 2025 and June 30, 2024, respectively. California BanCorp and Subsidiary Average Balance Sheets and Yield Analysis (Unaudited) Six Months Ended June 30, 2025 June 30, 2024 Average Balance Income/ Expense Yield/ Cost Average Balance Income/ Expense Yield/ Cost Assets ($ in thousands) Interest-earning assets: Total loans $3,050,686 $99,766 6.59 % $1,896,058 $57,641 6.11%Taxable debt securities 152,089 3,275 4.34 % 125,355 2,442 3.92%Tax-exempt debt securities(1) 53,480 609 2.91 % 53,798 612 2.90%Deposits in other financial institutions 306,034 6,738 4.44 % 50,737 1,354 5.37%Fed funds sold/resale agreements 48,088 1,065 4.47 % 14,417 395 5.51%Restricted stock investments and other bank stock 31,665 1,158 7.37 % 16,752 669 8.03%Total interest-earning assets 3,642,042 112,611 6.24 % 2,157,117 63,113 5.88%Total noninterest-earning assets 310,092 145,135 Total Assets $3,952,134 $2,302,252 Liabilities and Shareholders' Equity Interest-bearing liabilities: Interest-bearing NOW accounts $749,677 $7,032 1.89 % $360,514 $4,179 2.33%Money market and savings accounts 1,155,588 15,474 2.70 % 650,942 9,630 2.98%Time deposits 186,167 3,613 3.91 % 257,598 6,166 4.81%Total interest-bearing deposits 2,091,432 26,119 2.52 % 1,269,054 19,975 3.17%Borrowings: FHLB advances — — — % 38,992 1,095 5.65%Subordinated debt 68,585 2,820 8.29 % 17,890 542 6.09%Total borrowings 68,585 2,820 8.29 % 56,882 1,637 5.79%Total interest-bearing liabilities 2,160,017 28,939 2.70 % 1,325,936 21,612 3.28% Noninterest-bearing liabilities: Noninterest-bearing deposits(2) 1,217,627 659,633 Other liabilities 45,974 24,741 Shareholders' equity 528,516 291,942 Total Liabilities and Shareholders' Equity $3,952,134 $2,302,252 Net interest spread 3.54 % 2.60%Net interest income and margin $83,672 4.63 % $41,501 3.87%Cost of deposits $3,309,059 $26,119 1.59 % $1,928,687 $19,975 2.08%Cost of funds $3,377,644 $28,939 1.73 % $1,985,569 $21,612 2.19% (1) Tax-exempt debt securities yields are presented on a tax equivalent basis using a 21% tax rate. (2) Average noninterest-bearing deposits represent 36.80%, and 34.20% of average total deposits for the six months ended June 30, 2025 and June 30, 2024, respectively. California BanCorp and Subsidiary GAAP to Non-GAAP Reconciliation (Unaudited) The following tables present a reconciliation of non-GAAP financial measures to GAAP measures for: (1) adjusted net income (loss), (2) efficiency ratio, (3) adjusted efficiency ratio, (4) pre-tax pre-provision income, (5) adjusted pre-tax pre-provision income, (6) average tangible common equity, (7) adjusted return on average assets, (8) adjusted return on average equity, (9) return on average tangible common equity, (10) adjusted return on average tangible common equity, (11) tangible common equity, (12) tangible assets, (13) tangible common equity to tangible asset ratio, and (14) tangible book value per common share. We believe the presentation of certain non-GAAP financial measures provides useful information to assess our consolidated financial condition and consolidated results of operations and to assist investors in evaluating our financial results relative to our peers. These non-GAAP financial measures complement our GAAP reporting and are presented below to provide investors and others with information that we use to manage the business each period. Because not all companies use identical calculations, the presentation of these non-GAAP financial measures may not be comparable to other similarly titled measures used by other companies. These non-GAAP measures should be taken together with the corresponding GAAP measures and should not be considered a substitute of the GAAP measures. Three Months Ended Six Months Ended June 30, 2025 March 31, 2025 June 30, 2024 June 30, 2025 June 30, 2024 ($ in thousands) Adjusted net income Net income $14,099 $16,853 $190 $30,952 $5,125 Add: After-tax merger and related expenses(1) — — 412 — 959 Adjusted net income (non-GAAP) $14,099 $16,853 $602 $30,952 $6,084 Efficiency Ratio Noninterest expense $24,833 $24,920 $19,005 $49,753 $33,986 Deduct: Merger and related expenses — — 491 — 1,040 Adjusted noninterest expense 24,833 24,920 18,514 49,753 32,946 Net interest income 41,417 42,255 21,007 83,672 41,501 Noninterest income 2,856 2,566 1,169 5,422 2,582 Total net interest income and noninterest income $44,273 $44,821 $22,176 $89,094 $44,083 Efficiency ratio (non-GAAP) 56.1% 55.6% 85.7% 55.8% 77.1%Adjusted efficiency ratio (non-GAAP) 56.1% 55.6% 83.5% 55.8% 74.7% Pre-tax pre-provision income Net interest income $41,417 $42,255 $21,007 $83,672 $41,501 Noninterest income 2,856 2,566 1,169 5,422 2,582 Total net interest income and noninterest income 44,273 44,821 22,176 89,094 44,083 Less: Noninterest expense 24,833 24,920 19,005 49,753 33,986 Pre-tax pre-provision income (non-GAAP) 19,440 19,901 3,171 39,341 10,097 Add: Merger and related expenses — — 491 — 1,040 Adjusted pre-tax pre-provision income (non-GAAP) $19,440 $19,901 $3,662 $39,341 $11,137 (1) After-tax merger and related expenses are presented using a 29.56% tax rate. Three Months Ended Six Months Ended June 30, 2025 March 31, 2025 June 30, 2024 June 30, 2025 June 30, 2024 ($ in thousands)Return on Average Assets, Equity, and Tangible Equity Net income $14,099 $16,853 $190 $30,952 $5,125 Adjusted net income (non-GAAP) $14,099 $16,853 $602 $30,952 $6,084 Average assets $3,905,279 $3,999,509 $2,294,678 $3,952,134 $2,302,252 Average shareholders' equity 538,378 518,543 294,121 528,516 291,942 Less: Average intangible assets 132,600 133,567 38,900 133,081 38,932 Average tangible common equity (non-GAAP) $405,778 $384,976 $255,221 $395,435 $253,010 Return on average assets 1.45% 1.71% 0.03% 1.58% 0.45%Adjusted return on average assets (non-GAAP) 1.45% 1.71% 0.11% 1.58% 0.53%Return on average equity 10.50% 13.18% 0.26% 11.81% 3.53%Adjusted return on average equity (non-GAAP) 10.50% 13.18% 0.82% 11.81% 4.19%Return on average tangible common equity (non-GAAP) 13.94% 17.75% 0.30% 15.78% 4.07%Adjusted return on average tangible common equity (non-GAAP) 13.94% 17.75% 0.95% 15.78% 4.84% June 30, 2025 March 31, 2025 December 31, 2024 ($ in thousands except share and per share data) Tangible Common Equity Ratio/Tangible Book Value Per Share Shareholders' equity $547,593 $531,384 $511,836 Less: Intangible assets 131,309 133,103 134,058 Tangible common equity (non-GAAP) $416,284 $398,281 $377,778 Total assets $3,953,717 $3,983,090 $4,031,654 Less: Intangible assets 131,309 133,103 134,058 Tangible assets (non-GAAP) $3,822,408 $3,849,987 $3,897,596 Equity to asset ratio 13.85% 13.34% 12.70%Tangible common equity to tangible asset ratio (non-GAAP) 10.89% 10.34% 9.69%Book value per share $16.87 $16.40 $15.86 Tangible book value per share (non-GAAP) $12.82 $12.29 $11.71 Shares outstanding 32,463,311 32,402,140 32,265,935 INVESTOR RELATIONS CONTACT Kevin Mc Cabe California Bank of Commerce, N.A. [email protected] 818.637.7065 1 Reconciliations of non–U.S. generally accepted accounting principles (“GAAP”) measures are set forth at the end of this press release. Source: California BanCorp