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California BanCorp \ CA (BCAL)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered net income of $16.9M and diluted EPS of $0.52, with net interest margin rising to 4.65% and efficiency ratio improving to 55.6% .
  • Results exceeded Wall Street consensus: EPS $0.52 vs $0.40*; “Revenue” $48.6M* vs $44.9M*, reflecting a solid beat on both headline metrics (see Estimates Context) [Values retrieved from S&P Global].
  • Credit costs were a tailwind: reversal of credit losses totaled $3.8M, and ACL/loans declined to 1.49% (ALL) as nonperforming assets fell sequentially .
  • Liquidity and capital are robust (total available liquidity ~$1.69B; CET1 13.3%), and the Board increased the share repurchase authorization to 1.6M shares while the Company elected to redeem $18M 5.50% subordinated notes, both potential catalysts for the stock .
  • Note: A Q1 2025 8‑K 2.02 press release and an earnings call transcript were not available in the document catalog; primary sources used were the Q1 2025 10‑Q, Q1 2025 earnings slides, and other press releases .

What Went Well and What Went Wrong

What Went Well

  • Margin and operating efficiency improved: NIM rose to 4.65% (from 4.61% in Q4), and the efficiency ratio improved to 55.6% as integration benefits and fair value accretion supported earnings .
  • Strong capital return signals: “The increase in our share repurchase program demonstrates the conviction of our Board of Directors and management team…” and the Company elected to redeem $18M of 5.50% fixed‑to‑floating subordinated notes .
  • Management continues to de‑risk: “We continue to derisk our consolidated balance sheet and are making significant headway in reducing our exposure in the Sponsor Finance portfolio” .

What Went Wrong

  • Asset quality still elevated versus pre‑merger levels: nonaccrual loans were $22.8M in Q1 (down from $26.4M in Q4) and special mention/substandard balances remain sizable post‑merger .
  • Deposits declined $56.3M q/q, and reciprocal deposits remain high at $763.6M (~22.8% of total), contributing to non-core funding dependence .
  • CRE exposure and downgrades remain a focus area; construction nonaccruals increased to $14.7M, underscoring ongoing credit monitoring needs .

Financial Results

Headline Metrics vs Prior Periods and Estimates

MetricQ3 2024Q4 2024Q1 2025
Total Revenue ($USD Millions)$38.116 $45.545 $44.821
Diluted EPS ($)$(0.59) $0.51 $0.52
Net Interest Margin (%)4.43% 4.61% 4.65%
Efficiency Ratio (%)98.9% 57.4% 55.6%
Net Income ($USD Millions)$(16.5) $16.8 $16.9
ROAA (%)(1.82)% 1.60% 1.71%
Nonperforming Assets / Total Assets (%)0.68% 0.76% 0.68%
ACL / Total Loans (%)1.80% 1.71% 1.57%

Consensus vs Actual (S&P Global)

MetricQ1 2025 ActualQ1 2025 ConsensusSurprise
EPS ($)0.520.40*+0.12*
Revenue ($USD)48.6M*44.9M*+3.7M*

Values retrieved from S&P Global.
Note: Company-reported “Total Revenue” (net interest income + noninterest income) = $44.8M; S&P Global’s “Revenue” definition may differ from company presentation .

KPIs

KPIQ3 2024Q4 2024Q1 2025
Cost of Deposits (%)2.09% 1.87% 1.59%
Cost of Funds (%)2.19% 1.99% 1.72%
Total Deposits ($USD Billions)$3.74 $3.40 $3.34
Liquidity (Total Available, $USD Billions)N/AN/A~$1.69
CET1 Ratio (%)11.4% 12.4% 13.3%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Share Repurchase AuthorizationOngoing550,000 shares1,600,000 sharesRaised
Subordinated Notes (5.50% Due 2030)2025Not previously statedElected to redeem $18MNew action
Financial Guidance (Revenue/EPS/Margins/OpEx/Tax)Q2/QFYNot providedNot providedMaintained (no explicit guidance)
DividendsOngoingNot providedNot providedMaintained (no explicit guidance)

Earnings Call Themes & Trends

TopicQ3 2024 (Prior Mentions)Q4 2024 (Prior Quarter)Q1 2025 (Current)Trend
Post-merger integrationCore conversion completed; scale across CA Full quarter combined ops; accretion benefits Continued integration; fair value accretion supports capital earn-back Improving
Derisking/Sponsor FinanceElevated charge-offs and downgrades “Reducing exposure in Sponsor Finance” Ongoing risk management; lower NPAs sequentially Improving but still a watch
Deposit strategy/costsPaying down high-cost brokered deposits Brokered deposits down to $121.1M; deposit cost -22 bps q/q Deposit cost further down to 1.59% Improving
Liquidity/capitalAmple borrowing capacity Strong cash and capacity Total available liquidity ~$1.69B; CET1 13.3% Strong
Macro/creditCECL “day one” hit in Q3 Credit reversal; still elevated substandard Credit reversal; nonaccruals down q/q Moderating risk

Management Commentary

  • “The increase in our share repurchase program demonstrates the conviction of our Board of Directors and management team to our relationship-based banking strategy, and our commitment to building long-term shareholder value.” — David Rainer, Executive Chairman .
  • “We continue to derisk our consolidated balance sheet and are making significant headway in reducing our exposure in the Sponsor Finance portfolio.” — David Rainer .
  • “We are focused on building tangible book value…” — David Rainer (TBV rose to $11.71 in Q4 2024) .

Q&A Highlights

Not available: an earnings call transcript for Q1 2025 was not found in the document catalog . No Q&A themes to report.

Estimates Context

  • EPS beat: $0.52 actual vs $0.40 consensus (+$0.12*) for Q1 2025, reflecting stronger NIM and lower credit costs [Values retrieved from S&P Global].
  • Revenue beat: $48.6M* actual vs $44.9M* consensus (+$3.7M*). Note: Company-reported total revenue is $44.8M; S&P’s revenue definition for banks may differ from company presentation [Values retrieved from S&P Global].
  • Coverage: 3 estimates for both EPS and revenue, indicating limited but present Street coverage in the quarter [Values retrieved from S&P Global].

Key Takeaways for Investors

  • Operational momentum: NIM expanded to 4.65% and efficiency ratio improved to 55.6%, signaling ongoing integration benefits and disciplined pricing .
  • Credit normalization: $3.8M reversal of credit losses and sequential decline in NPAs to 0.68% support earnings durability as credit stabilizes .
  • Capital and liquidity optionality: CET1 at 13.3% and ~$1.69B total available liquidity provide flexibility for buybacks and debt redemption .
  • Shareholder returns: authorization increased to 1.6M shares and expected redemption of $18M 5.50% notes present near-term return catalysts .
  • Funding mix watch: reciprocal deposits ~22.8% of total highlight non-core funding dependence that management is addressing as deposit costs fall .
  • De-risking continues: Sponsor Finance exposure trending lower and nonaccruals improving, but CRE/construction remain areas to monitor .
  • Estimate trajectory: EPS and revenue beats suggest potential upward revisions if margin and credit trends persist, despite limited Street coverage [Values retrieved from S&P Global].