Executive Summary

CALB’s Q1 2024 delivered stable margin but softer earnings: net income $3.8M ($0.45 diluted EPS) vs $5.3M ($0.63) in Q4 2023 and $5.5M ($0.64) in Q1 2023, driven by lower average earning assets and higher deposit costs; adjusted EPS excluding merger expenses was $0.57 .
Net interest margin held at 3.89% (up 1 bp q/q; down 13 bps y/y) as deposit cost inflation offset asset yield gains; total revenue was $19.4M, modestly below Q4 2023 ($19.9M) and flat y/y ($19.9M) .
Asset quality improved: NPAs/Assets fell to 0.08% (from 0.19% in Q4), nonperforming loans declined, and all FHLB borrowings were repaid; ACL/Gross Loans rose to 1.05% (from 1.03%) .
Deposit mix weakened (NIB 38.6% vs 40.4% in Q4 and 43.1% y/y) due to seasonal outflows; loans declined 2% q/q on conservative underwriting; book value per share increased to $23.79 and TBVPS to $22.91 .
Management highlighted integration planning for the merger-of-equals with Southern California Bancorp, anticipating a Q3 2024 close; near‑term catalyst is synergy realization and balance-sheet optimization post-close .

What Went Well and What Went Wrong

What Went Well
- Margin resilience and capital: NIM 3.89% (+1 bp q/q) and higher capital ratios (total risk-based 13.93%; Tier 1 leverage 10.17%); TBVPS up 2% q/q to $22.91 .
- Credit improvement and liquidity: NPAs/Assets improved to 0.08% (from 0.19% in Q4); company fully repaid $75M FHLB borrowing early in the quarter .
- Management execution and tone: “We delivered another quarter of strong financial performance…adjusted ROAA remained above 1% ex-merger expenses” – CEO Steven Shelton; “In the past year we achieved 11.9% TBV growth…used strong liquidity to pay off all FHLB borrowings” – CFO Thomas Sa .
What Went Wrong
- Earnings pressure from funding costs: Net income fell to $3.8M and EPS to $0.45 as higher deposit costs and a less favorable earning asset mix cut NII (down 6% y/y); overall cost of average deposits rose to 2.24% vs 1.42% y/y .
- Mix headwinds: Noninterest-bearing deposits declined to 38.6% of total (from 40.4% in Q4 and 43.1% y/y), raising funding costs and pressuring margin trajectory vs prior year .
- Expense optics: Efficiency ratio deteriorated to 70.57% from 61.36% in Q4, largely due to $1.0M merger-related expenses; adjusted efficiency ratio was 65.29% .

Financial Results

Metric	Q1 2023	Q4 2023	Q1 2024
Total Revenue ($M)	$19.86	$19.91	$19.42
Net Interest Income ($M)	$18.76	$18.57	$17.72
Non-Interest Income ($M)	$1.11	$1.34	$1.71
Net Income ($M)	$5.45	$5.34	$3.82
Diluted EPS ($)	$0.64	$0.63	$0.45
NIM (%)	4.02%	3.88%	3.89%
Efficiency Ratio (%)	59.62%	61.36%	70.57%

S&P Global consensus estimates for Q1 2024 EPS and revenue were unavailable due to a data mapping limitation; therefore, estimate comparisons are not provided.

Revenue composition (NII vs. non-interest income):

Revenue Mix ($M)	Q1 2023	Q4 2023	Q1 2024
Net Interest Income	$18.76	$18.57	$17.72
Non-Interest Income	$1.11	$1.34	$1.71
Total Revenue	$19.86	$19.91	$19.42

Key balance sheet and credit KPIs:

KPI	Q1 2023	Q4 2023	Q1 2024
Gross Loans ($M)	$1,617.26	$1,559.53	$1,520.89
Total Deposits ($M)	$1,717.61	$1,625.24	$1,639.52
Loan/Deposit Ratio (%)	94.16%	95.96%	92.76%
NIB Deposits / Total (%)	43.12%	40.44%	38.64%
NPAs / Assets (%)	0.01%	0.19%	0.08%
ACL / Gross Loans (%)	0.95%	1.03%	1.05%
Net Charge-offs / Gross Loans (Quarterly)	0.02%	0.00%	0.02%
Book Value per Share ($)	$21.37	$23.38	$23.79
Tangible BVPS ($)	$20.48	$22.50	$22.91

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Merger close timing (with Southern California Bancorp)	2024	Expected close in 2H 2024	Management continues to expect close in Q3 2024	Maintained timeline
Financial/operational guidance (revenue, EPS, margins, OpEx, tax, dividends)	2024	None provided	None provided	N/A (no formal guidance)

Earnings Call Themes & Trends

Note: A public Q1 2024 earnings call transcript was not available; themes are drawn from the Q1 press release, 10‑Q, and prior quarter releases.

Topic	Previous Mentions (Q4 2023 and Q3 2023)	Current Period (Q1 2024)	Trend
Net interest margin and deposit costs	Q4 2023: Stable NIM and growing deposit pipeline; 2023 record earnings despite industry headwinds . Q3 2023: EPS ~$0.64 with stable core trends .	NIM 3.89% (+1 bp q/q), but deposit costs higher y/y; revenue down modestly q/q .	Stable q/q, still below prior year due to funding mix.
Loan growth and underwriting	Q4 2023: Conservative posture; deposit-led growth focus .	Loans -2% q/q; conservative underwriting and lower demand/payoffs cited .	Consciously restrained production.
Asset quality	Q4 2023: Low NPAs; strong reserves .	NPAs/Assets 0.08% (down from 0.19% in Q4); resolutions with minimal loss .	Improving.
Capital and liquidity	Q4 2023: Strong capital; building liquidity .	All FHLB borrowings repaid; capital ratios higher; TBVPS up .	Strengthening.
Merger integration/synergies	Q4 2023: Announced merger-of-equals with SCB (MoE) .	Integration planning advancing; expected close Q3 2024 .	On track.

Management Commentary

Strategic focus and tone (CEO): “We delivered another quarter of strong financial performance…positive trends in many key areas including good stability in our net interest margin…disciplined expense management (ex‑merger costs)…and improvement in our asset quality” (Steven Shelton). He emphasized integration planning, balance sheet optimization, and continued new relationship wins ahead of the SCB merger, targeting a Q3 2024 close .
Capital and liquidity (CFO): “In the past year we achieved 11.9% growth in tangible book value…used our strong liquidity to pay off all of our FHLB borrowings…capital ratios increased in the quarter” (Thomas A. Sa) .
Operating posture: Management reiterated conservative production/underwriting, seasonal NIB outflows, and an emphasis on fee‑generative treasury management to underpin relationship growth .

Q&A Highlights

A public Q1 2024 earnings call transcript was not located; the company’s 8‑K furnished the press release and investor presentation but no transcript, so Q&A specifics and analyst follow‑ups are unavailable for this quarter .

Estimates Context

S&P Global (Capital IQ) consensus estimates for Q1 2024 EPS and revenue were unavailable due to a ticker-to-company mapping limitation in the SPGI dataset at the time of retrieval. As a result, we cannot assess beats/misses versus S&P Global consensus for this quarter.

Key Takeaways for Investors

Margin resilience amid funding pressure: NIM held at 3.89% despite higher deposit costs; sustaining margin while NIB mix declines will be key to near‑term earnings durability .
Funding mix watch: NIB/Deposits fell to 38.6% (from 43.1% y/y), a headwind to cost of funds; focus on treasury management and relationship growth is critical to reverse mix erosion .
Credit a bright spot: NPAs/Assets improved to 0.08% and ACL/Gross Loans rose to 1.05%; low net charge‑offs underscore conservative credit posture .
Expense optics skewed by merger costs: GAAP efficiency ratio rose to 70.6%, but adjusted efficiency at 65.3% shows underlying discipline; merger close should unlock synergy potential .
Capital/liquidity strength: Full repayment of FHLB borrowings and higher capital ratios provide flexibility to support post‑merger optimization and growth .
Near-term catalyst: Merger-of-equals with Southern California Bancorp (expected Q3 2024) and subsequent synergy capture; integration execution and deposit mix stabilization are likely stock drivers .
Positioning: With adjusted ROAA ~1.0% and stable NIM, upside hinges on improving NIB mix, managing deposit costs, and delivering merger synergies while maintaining credit quality .

References: Q1 2024 8‑K (press release and investor presentation) ; Q1 2024 10‑Q –; Q4 2023 press release (context) ; Merger announcement (Jan 30, 2024) .

California BanCorp (CALB)·Q1 2024 Earnings Summary