Executive Summary

Q4 2024 delivered a clean rebound: net income $16.8M and diluted EPS $0.51, with NIM expanding to 4.61% and an efficiency ratio improving to 57.4%; adjusted net income was $17.2M ($0.53) as merger costs rolled off .
Balance sheet derisking progressed: brokered time deposits fell to $121.1M, cost of deposits declined 22 bps quarter-over-quarter, and tangible book value per share rose to $11.71 (+$0.43 QoQ) .
Credit normalized: a $3.8M provision reversal drove results; ACL was 1.71% of loans while NPA/Assets ticked up modestly to 0.76% as substandard loans increased, reflecting merger-acquired PCD credits and category downgrades .
Liquidity and capital strong: $1.16B total available borrowing capacity and well-capitalized status; management expects accretion/amortization and integration to continue supporting earn-back of key capital ratios .
Stock reaction catalysts: NIM resilience from deposit repricing and lower brokered reliance versus watch-items (deposit outflows, substandard loan migration, eventual fade of purchase accounting accretion) .

What Went Well and What Went Wrong

What Went Well

“Strong fourth quarter earnings” with $16.8M net income and $0.51 diluted EPS; management emphasized progress reducing Sponsor Finance exposure and building TBV ($11.71) .
Net interest margin rose to 4.61% on lower cost of funds (1.99%); deposit costs fell 22 bps QoQ, aided by repricing and payoff of high-cost brokered/time deposits .
Efficiency ratio improved sharply to 57.4% (55.9% ex-merger costs), reflecting integration benefits and lower merger expense ($0.6M vs $14.6M in Q3) .

What Went Wrong

Total deposits fell $342.2M (-9.1%) QoQ as noninterest-bearing demand declined $111.3M and time deposits fell $157.0M; deposit outflows will be closely watched post-merger .
Substandard loans increased $13.6M QoQ to $117.9M, and special mention loans, while lower QoQ, still stood at $69.3M; NPAs/Assets rose to 0.76% .
Noninterest income remained modest ($1.0M) and included a $1.1M loss on sale of certain Sponsor Finance loans, signaling near-term earnings drag from de-risking .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Total net interest income + noninterest income ($USD ‘000)	$22,457	$38,116	$45,545
Net interest income ($USD ‘000)	$22,559	$36,942	$44,541
Noninterest income ($USD ‘000)	$(102)	$1,174	$1,004
Net income ($USD ‘000)	$4,412	$(16,464)	$16,772
Diluted EPS ($)	$0.24	$(0.59)	$0.51
Net interest margin (%)	4.05%	4.43%	4.61%
Yield on total loans (%)	6.08%	6.79%	6.84%
Cost of deposits (%)	1.81%	2.09%	1.87%
Cost of funds (%)	1.95%	2.19%	1.99%
Return on avg assets (%)	0.75%	(1.82)%	1.60%
Return on avg equity (%)	6.21%	(15.28)%	13.21%
Efficiency ratio (non-GAAP) (%)	68.30%	98.86%	57.36%

Segment breakdown – Loans held for investment (end of period):

Category ($USD ‘000)	Dec 31, 2023	Sep 30, 2024	Dec 31, 2024
Construction & land development	$243,521	$247,934	$227,325
1-4 family residential	$143,903	$152,540	$164,401
Multifamily	$221,247	$252,134	$243,993
Other commercial real estate	$1,024,243	$1,755,908	$1,767,727
Commercial & industrial	$320,142	$765,472	$710,970
Other consumer	$4,386	$25,726	$24,749
Total loans HFI	$1,957,442	$3,199,714	$3,139,165

Key KPIs and Balance Sheet:

Metric	Q4 2023	Q3 2024	Q4 2024
Total assets ($USD ‘000)	$2,360,252	$4,362,767	$4,031,654
Deposits ($USD ‘000)	$1,943,556	$3,740,915	$3,398,760
Loans-to-deposits (%)	101.1%	86.4%	92.9%
Noninterest-bearing demand ($USD ‘000)	$675,098	$1,368,303	$1,257,007
Noninterest-bearing % of deposits	34.7%	36.6%	37.0%
Brokered time deposits ($USD ‘000)	—	$222,600	$121,100
Reciprocal deposits ($USD ‘000)	—	$839,700	$754,400
TBV per share ($)	$13.56	$11.28	$11.71
ACL / loans (%)	1.20%	1.80%	1.71%
NPA / assets (%)	0.55%	0.68%	0.76%
Available FHLB capacity ($USD ‘000)	—	—	$753,900
Available Fed DW capacity ($USD ‘000)	—	—	$318,500
Other unsecured lines ($USD ‘000)	—	—	$90,500
Total available borrowing capacity ($USD ‘000)	—	—	$1,160,000

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net interest margin	Forward (post-Q4)	None formal	Management executing deposit repricing and paydown of high-cost brokered/time deposits to support NIM; Q4 cost of deposits down 22 bps QoQ	Directional improvement focus
Capital ratios	Near-term	Well-capitalized	“Expected to continue driving the positive trend for the earn-back on key capital ratios” via integration and accretion/amortization of marks	Directional improvement focus
Sponsor Finance exposure	Near-term	Not guided	Active derisking with loan sales/payoffs; $1.1M loss on sale in Q4 tied to this effort	Ongoing reduction
Brokered deposits	Near-term	Not guided	Rapid reduction of brokered deposits (to $121.1M at 12/31/24)	Lowered
Dividends	—	—	No mention of dividends in Q4 materials	N/A

Earnings Call Themes & Trends

Note: No Q4 2024 earnings call transcript was available; themes based on press releases and investor slides.

Topic	Previous Mentions (Q2 and Q3)	Current Period (Q4)	Trend
Deposit pricing/mix	Q2: Cost of deposits +7 bps QoQ; NIBD ~34% . Q3: Cost of deposits 2.09%; NIBD 36.6% .	Cost of deposits 1.87%; NIBD 37.0% .	Improving cost, stable/strong NIBD mix
Brokered deposits	Q3: $222.6M after merger; strategy to pay off high-cost brokered deposits .	Reduced to $121.1M .	Lower brokered reliance
Net interest margin drivers	Q2: NIM +14 bps QoQ to 3.94% . Q3: NIM 4.43%, purchase accounting accretion boosted margin .	NIM 4.61%; cost-of-funds down 20 bps; accretion contributed 58 bps .	Continued NIM strength, accretion tailwind
Asset quality	Q2: NPA fell to 0.20% after OREO sale . Q3: NPA 0.68% with PCD/nonaccrual additions .	NPA 0.76%; substandard loans up; ACL 1.71% .	Mixed: normalization with cautious tone
Liquidity	Q3: Total capacity $1.23B; cash $614.4M .	Capacity $1.16B; cash $388.2M .	Still robust; lower cash as funding optimized
Efficiency/OpEx	Q2: Efficiency 85.7% (64.1% ex-OREO loss) . Q3: 98.9% (60.5% ex-merger) .	57.4% (55.9% ex-merger) .	Strong improvement post-merger costs
Macro commentary	Q3: Impact of rates; CECL day-one provision tied to merger .	CA economy assumptions embedded; vigilance on rates/inflation; wildfires impact minimal .	Cautious but stable operations

Management Commentary

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… focused on building tangible book value, which increased to $11.71 in the fourth quarter” .
Steven Shelton (CEO): “Except for the one-day closure of one branch… there were no other disruptions to our operations… fires are expected to have a minimal impact on our loan portfolio” .
Strategic focus highlighted in slides: maintaining strong liquidity, relationship-based business model, prudent underwriting, and “expected to continue driving the positive trend for the earn-back on key capital ratios” .

Q&A Highlights

No Q4 2024 earnings call transcript was available in our document search; Q&A themes and clarifications were not accessible [functions.ListDocuments returned none for earnings-call-transcript].

Estimates Context

Attempted to retrieve Wall Street consensus (EPS and revenue) via S&P Global for Q4 2024; data was unavailable due to a retrieval limit error. As a result, a formal “vs. consensus” comparison cannot be provided at this time [functions.GetEstimates error].
Values retrieved from S&P Global would normally be used here; since unavailable, investors should assume limited sell-side coverage typical for smaller community banks and focus on trajectory vs. prior quarters.

Key Takeaways for Investors

NIM resilience: 4.61% in Q4 (up from 4.43% in Q3) driven by 20 bps lower cost of funds and deposit repricing; watch the eventual fade of purchase accounting accretion (58 bps NIM tailwind in Q4) .
Deposit dynamics: Deposits down 9.1% QoQ with declines in NIBD and time deposits; sustained retention and growth of core deposits will be critical to fund earning assets and maintain NIM .
Credit normalization post-merger: $3.8M provision reversal in Q4 with ACL at 1.71%; monitor substandard migration and NPAs/Assets (0.76%) as sponsor finance exposure is reduced .
Efficiency and earnings power: Efficiency ratio improved to 57.4% (55.9% ex-merger), signaling integration benefits; pre-tax pre-provision income rose to $19.4M versus $0.4M in Q3 .
Capital and liquidity: Well-capitalized with $1.16B available borrowing capacity and $388.2M cash at year-end; this underpins flexibility while deposit mix is optimized .
TBV accretion: TBV/share increased to $11.71 (+$0.43 QoQ), providing tangible shareholder value creation; continued improvement is a medium-term thesis pillar .
Trading setup: Near term, positive narrative from NIM/efficiency improvement and TBV growth versus risks from deposit outflows and credit migration; absence of consensus estimates suggests price moves will hinge on internal trend metrics and any new disclosures on credit and deposit traction .

Sources: Q4 2024 8-K and press release, investor slides, and prior-quarter releases.

California BanCorp \ CA (BCAL)·Q4 2024 Earnings Summary