California BanCorp : Q3 2023 Investor Presentation

INVESTOR PRESENTATION

Q3 2023

Steven E. Shelton

Thomas A. Sa

CEO	President, CFO & COO

FORWARD-LOOKING STATEMENTS

During the course of the presentation and any transcript that may result, written or otherwise, California BanCorp (the "Company") may make projections or other forward-looking statements regarding a variety of items. Such forward-looking statements are based upon current expectations and involve risks and uncertainties. Actual results may differ materially from those stated in any forward-looking statement based on a number of important factors and risks.

Although the Company may indicate and believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect and therefore, there can be no assurance that the results contemplated in the forward-looking statements will be realized.

The Company undertakes no obligation to release publicly the results of any revisions to the forward-looking statements included herein to reflect events or circumstances after today, or to reflect the occurrence of unanticipated events. The Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

2

OVERVIEW OF CALIFORNIA BANCORP

FOCUSED REGIONAL OFFICE FOOTPRINT		COMPANY OVERVIEW

Walnut Creek

• Headquarters/Regional Office in Oakland
• Regional Offices in San Jose, Walnut Creek and Sacramento
• Branch services in Walnut Creek

(1) Based on CALB's stock price of $20.10 as of 9/29/2023

• Established in 2007 as a relationship focused commercial business bank serving Northern California with $1.98 billion in assets and a market capitalization of ~$169 million(1)
• Majority of executive management joined the bank at inception
• Significant commercial core deposit base
• Primary relationship managers with average banking experience of over 25 years and average loan books of $45 million
• Positioned to leverage recent investments to enhance our platform and extend our markets

FINANCIAL SNAPSHOT - 9/30/23

Balance Sheet	($mm)	Q3 2023 Profitability	(%)
Assets	1,984	ROAA	1.08
Loans	1,573	ROATCE	11.81
Deposits	1,707		Net Interest Margin	3.86
Tangible Equity	183		Efficiency Ratio	59.64
Loans/ Deposits (%)	92%	Cost of Deposits	2.07

Loan Composition	(%)	Deposit Composition	(%)
C&I Loans / Gross Loans	40.3	DDA/ Total Deposits	40.2
CRE Loans / Gross Loans	54.6	Core Deposits/ Total Deposits	81.3
Capital Ratios
(Consolidated)	(%)	Credit Metrics	(%)
TCE / TA	9.24	NPAs / Loans & OREO	0.08
Leverage Ratio	9.27	NPAs / Assets	0.06
Tier 1 Ratio	9.34	Reserves / Gross Loans	1.01
TRBC Ratio	13.00	NCOs / Avg. Loans	0.00

3

INVESTMENT HIGHLIGHTS

Branch light, commercial focused business bank with strong middle market relationships throughout Northern California

Quality core deposit

franchise and commercial

relationship strategy

Experienced management
team and seasoned C&I		Proven organic and
relationship teams with strong		acquisitive growth story
ties to the local markets

Disciplined underwriting		Strong earnings outlook as
standards with best-in-class		efficiencies from investments
asset quality metrics		are realized

3

4

3rd QUARTER 2023 HIGHLIGHTS

Continued Strong

Financial Performance

Stable Deposit Base

Conservative Approach to

New Loan Production

Increases in Capital Ratios and

Tangible Book Value

Continued Strong

Asset Quality

• Net income of $5.4 million
• Diluted EPS of $0.64
• ROA of 1.08%, ROE of 11.35% and NIM of 3.86%
• Total deposits decreased slightly from end of prior quarter
• Noninterest-bearingdeposits remain above 40% of total deposits
• Decline in noninterest-bearing deposits largely related to period-end fluctuations
• Total loans declined slightly from end of prior quarter as conservative underwriting criteria and pricing discipline result in lower loan production
• Decline in construction portfolio as projects were completed and paid off, partially offset by increase in commercial loans resulting from new full banking relationships
• Strong financial performance and prudent balance sheet management drives increases in all capital ratios from end of prior quarter
• Minimal AOCI impact
• TBV/share increased 3.2% during 3Q23
• Non-performingassets to total assets remain low at 0.06%
• Net recoveries in the quarter
• Allowance to NPLs of 1,288%

5

BRANCH LIGHT, COMMERCIAL FOCUSED BUSINESS BANK

BUSINESS MODEL OVERVIEW

• Middle market commercial banking focus
• • Privately owned companies with $30 million - $300 million in annual revenue
  • Clients with minimum lending relationships of $2 million or $1 million in deposits
• Portfolio managed over the long term to ~39% C&I loans and ~43% noninterest-bearing deposits
• Investing in other asset generating business lines
• • Asset-BasedLending division established in July 2011
  • Practice Acquisition division established in March 2011
  • Construction division established December 2015
  • Sponsor Finance division established in February 2020
• Strong core commercial deposit generation strategy
• • Utilize technology with minimal branches
  • Provide commercial cash management services to middle market clients
  • Dedicated treasury management sales team and platform

IMPRESSIVE LOAN GROWTH

$2,000		2015 - Q3'23 CAGR
$1,500		Total gross loans = 15.4%						$2
	Gross loans (ex. PPP) = 15.4%		$306	$73
$1,000
											$1,591	$1,573
$500		$518	$628	$733	$847	$950	$1,063	$1,304
$0
	2015	2016	2017	2018	2019	2020	2021	2022	Q3-2023
						Gross Loans (ex. PPP)			PPP Loans
	STRONG DEPOSIT GROWTH
$2,000		2015 - Q3'23
$1,800
$1,600		CAGR = 16.0%						$1,680	$1,792	$1,707
$1,400								$1,532
$1,200
$1,000							$988
$800				$760	$874
$600
		$650
$400		$542
$200
$0
2015	2016	2017	2018	2019	2020	2021	2022	Q3-2023

Dollars in millions	6
Data as of 12/31 for each respective year

TAKING SHARE FROM NATIONAL/REGIONAL BANKS

PRODUCT AND SERVICE DIFFERENTIATION

Combine Capabilities of a Big Bank with the High Service Levels of a Community Bank

• Attract top talent with deep market experience to compete against and win business from large banks
• Professional team with a consultative delivery process
• Invest in systems, tools, and technology for success in niche markets
• Offer clients access to key decision makers
• Ability to execute quickly, with market leading responsiveness

OUR "TYPICAL CLIENT"

~$75 M	$8 M		$3 M
	revolving line
in annual			equipment
	with $3 M average
revenue			term loan
	outstanding

$5 M		$3 M		$5 M
commercial real		demand deposit		money market
		accounts to hold
estate loan		operating account
		surplus deposits

Fee income driven by commercial portfolio account analysis

and treasury management services

INDUSTRY & SPECIALTY LENDING FOCUS Commercial Banking Focused on Four Core Industries

Manufacturing
and		Professional		Contractor			Investor CRE
Distribution
Specialty Lending Groups
Practice		Asset Based		Sponsor			Construction
Acquisition		Lending		Finance

7

EXPERIENCED MANAGEMENT TEAM

						► Previously served as an Executive Vice President of the Bank primarily responsible for managing
Steven E. Shelton,	Years at CALB: 16		production since the Bank's founding in 2007
				CEO	Years in Industry: 37	►	Served for thirteen years in various executive management positions including President of
							CivicBank of Commerce
Thomas A. Sa,	Joined 2019	► More than 30 years' experience in executive finance and risk management roles, most recently
	serving as Chief Risk Officer for Western Alliance Bank.
President, CFO & COO	Years in Industry: 33	►	Previously served in various executive and director roles at Bridge Bank and its holding company
							Bridge Capital Holdings (BBNK), including Chief Financial Officer and Chief Strategy Officer.
Vivian Mui,		► Previously served as Deputy Chief Credit Officer and part of senior management from 2007
Years at CALB: 16		to 2018
SEVP & CCO	Years in Industry: 20	►	17 years of experience in various positions including lending and credit administration at
							Mechanics Bank
Scott Myers	Joined 2019	►	Veteran banker with more than 15 years banking experience in the Sacramento area
SEVP & CLO	Years in Industry: 25	►	Previously served as Wells Fargo Senior Vice President and Sacramento Region Manager
Michele Wirfel,	Years at CALB: 16	►	Previously served as the Bank's Executive Vice President & East Bay Market President
SEVP & CBO	Years in Industry: 30	► Has worked in financial management and commercial banking since 1991 in various executive
	management positions including regional manager for CivicBank of Commerce
Tom M. Dorrance,	Years at CALB: 16	► Previously served as a Senior Vice President and Chief Information Officer for North Bay Bancorp
►	Has worked in financial management and commercial banking since 1992 including I.T.
SEVP Technology & Operations	Years in Industry: 29
	Manager at CivicBank of Commerce

John Lindstedt,	Years at CALB: 16
Years in Industry: 53
SEVP & CCO Emeritus

• Served as Executive Vice President and CCO from 2007 through 2017
• Previously served in various executive management positions including Executive Vice President and Senior Lending Officer for Wells Fargo's corporate bank and President & CCO of CivicBank of Commerce

8

DEMONSTRATED GROWTH TRACK RECORD

SUCCESSFUL EXPANSION THROUGHOUT NORTHERN CALIFORNIA

Bank founded in

$4 million private placement offering at $12.86 per share to payoff SBLF in May 2016

Completed acquisition of Pan Pacific Bank ($131 million in assets) in December 2015

$16 million common stock

offering at $9.90 per share to

fund growth in June 2014

Holding Company formed

in June 2017

Walnut Creek LPO opened

in July 2017

Completed $25.0

million private

offering of

common stockin

August 2018

Completed

expansion into

the

Sacramento

Region

Launched Sponsor

Finance in February

2020

Listed on the

NASDAQ stock

market in March

2020

Completed $20 million sub-debt offering in September 2020

2015 -

Q3'23 Asset

CAGR of

15.4%

Completed

$35 million

sub-debt offering in August 2021

March 2007 with

$27.5 million in

capital

Practice Acquisition

Division opened in

March 2011

San Jose ABL Division opened in July 2011

													$21.76
										$19.78
					$15.	77	$17.33	$2,042
					$2,015
$15.16	$1,906	$1,984
$14.20

$8.58

$8.21

$8.90

$9.61 $10.48 $10.19 $11.16 $12.01

$1,152

							$7.94
	$7.04
	$6.70
$53	$137	$194	$240	$299	$350

$653 $765 $866

$365 $446

$1,006

2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022 Q3-2023
		Dollars in millions					Assets ($mm)				TBVPS
		Tangible book value per share and capital offering price adjusted for historical stock splits						9
		Data as of 12/31 for each respective year

STRONG AND GROWING CORE DEPOSIT BASE

DEPOSIT COMPOSITION		HISTORICAL DEPOSIT COMPOSITION

Time deposits

19%Demand deposits

40%

2015 -Q3'23 CAGR

DDA: 15.5%

Total Deposits: 16.0%

$1,680	$1,792	$1,707	$1,800
$1,532			$1,600
			$1,400

Money market
& savings	Interest bearing
deposits
demand deposits
39%
2%

DEPOSIT PORTFOLIO HIGHLIGHTS-9/30/23

• Deposits decreased slightly during 3Q23 primarily due to fluctuations in period end balances of noninterest-bearing deposits
• Resilient core deposit base driven by commercial clients

							$1,200
				$988			$1,000
			$874		$771	$812
		$761		$687
			$673	46%	45%	$800
	$650
$542			44%	40% $600
	$285	$315	$352	$387			$400
$225	40%	39%
41%
44%				$200
42%
								$0
2015 2016 2017	2018	2019 2020 2021	2022	Q3-2023

• • 95%+ of commercial relationships hold deposits at the bank
  • Core deposits comprise 81% of total deposits
• Utilize remote deposit capture and commercial cash management to generate and retain deposits

Cost of

Deposits

Core

Deposit Mix

							Total Deposits				NIB Deposits
0.23%		0.24%		0.35%		0.55%		0.81%		0.48%		0.27%		0.47%		2.07%

94%

93%

94%

91%

88%

87%

91%

85%

81%

• Treasury management division established in Q4-2019

Dollars in millions
Core deposits defined as total deposits less time deposits and brokered deposits.	10
Data as of 12/31 for each respective year