California BanCorp \ CA

Assets

Total assets at March 31, 2026 were $4.05 billion, an increase of $15.3 million or 0.4% from December 31, 2025. The increase in total assets from the prior quarter was primarily related to an increase in cash and cash equivalents of $11.2 million, and an increase in available-for-sale debt securities of $63.7 million, partially offset by a $62.1 million decrease in loans, including loans held for sale, as compared to the prior quarter.

Loans

Total loans held for investment (“LHFI”) were $2.97 billion at March 31, 2026, a decrease of $61.1 million, compared with December 31, 2025. During the first quarter of 2026, there were new originations of $98.4 million, partially offset by net paydowns of $42.3 million, loan payoffs of $108.6 million, and a loan transferred to other real estate owned (“OREO”) of $8.6 million. Total loans secured by real estate decreased by $34.7 million, of which multifamily loans decreased $51.1 million and 1-4 family residential loans decreased by $13.3 million; commercial and industrial loans decreased by $26.2 million; and other consumer loans decreased by $178 thousand. These decreases were partially offset by an increase in other commercial real estate loans of $28.2 million and construction and land development loans of $1.5 million.

The Company had $24.1 million in loans held for sale at March 31, 2026, consisting of $7.6 million SBA 7(a) loans and $16.5 million consumer solar loans, compared with $25.1 million at December 31, 2025, consisting of $7.8 million of SBA 7(a) loans and $17.3 million consumer solar loans. Loan delinquencies for loans held for sale totaled $719 thousand, including $281 thousand of SBA 7(a) loan and $298 thousand of consumer solar loans that were 30–89 days past due, and $140 thousand of consumer solar loans that were more than 90 days past due and still accruing interest. The Company recorded a $266 thousand valuation allowance related to its consumer solar loans in the first quarter of 2026.

Deposits

Total deposits at March 31, 2026 were $3.39 billion, an increase of $22.9 million from December 31, 2025. The increase was primarily due to an increase in noninterest-bearing demand deposits of $69.1 million, partially offset by decreases in interest-bearing non-maturity deposits of $23.9 million, non-brokered time deposits of $18.6 million, and brokered time deposits of $3.8 million. Noninterest-bearing demand deposits at March 31, 2026, were $1.25 billion, or 36.8% of total deposits, compared with $1.18 billion, or 35.0% of total deposits at December 31, 2025. At March 31, 2026, total interest-bearing deposits were $2.15 billion, compared with $2.19 billion at December 31, 2025. At March 31, 2026, the Company did not have any brokered time deposits. The Company offers the Insured Cash Sweep product and Certificate of Deposit Account Registry Service, each of which provides reciprocal deposit placement services to fully qualified large customer deposits for FDIC insurance among other participating banks. Total reciprocal deposits were $723.7 million, or 21.3% of total deposits at March 31, 2026, compared with $743.6 million, or 22.1% of total deposits at December 31, 2025.

Federal Home Loan Bank (“FHLB”) and Liquidity

At March 31, 2026 and December 31, 2025, the Company had no FHLB or Federal Reserve Discount Window borrowings.

At March 31, 2026, the Company had available borrowing capacity from an FHLB secured line of credit of approximately $756.7 million and available borrowing capacity from the Federal Reserve Discount Window of approximately $318.8 million. The Company also had available borrowing capacity from four unsecured credit lines from correspondent banks of approximately $90.5 million at March 31, 2026, with no outstanding borrowings. Total available borrowing capacity was $1.17 billion at March 31, 2026. Additionally, the Company had unpledged liquid securities at fair value of approximately $197.8 million and cash and cash equivalents of $411.1 million at March 31, 2026.

Asset Quality

Total non-performing assets were $39.2 million, or 0.97% of total assets at March 31, 2026, compared with $16.1 million, or 0.40% of total assets at December 31, 2025. Total non-performing loans were $30.6 million, or 1.03% of total loans held for investment at March 31, 2026, compared with $16.1 million, or 0.53% of total loans held for investment at December 31, 2025.

Total nonperforming loans increased in the first quarter of 2026 primarily due to the addition of two borrower relationships that transitioned from substandard accrual to nonaccrual. The first of these relationships consists of two commercial real estate loans with a combined net carrying value of $17.8 million at March 31, 2026. These loans are secured by a 123-acre property operated as an event venue in the Los Angeles area and were originated in 2022, with a combined 50% loan to value at origination. These two loans are classified as individually evaluated, collateral-dependent loans and no allowance was recorded at March 31, 2026. The Company is aware the borrower is working with a cash buyer to sell the event venue, in which case the loans will be paid off with the sale proceeds. Regardless of the potential sale outcome, the full repayment of these loans is anticipated, and the Company is aggressively pursuing the resolution of this matter.

The other relationship, which was reclassified as substandard nonaccrual, is a commercial real estate loan with a net carrying value at March 31, 2026, of $5.8 million. The collateral for this loan is located in Dana Point Calif.; the loan was originated in 2022 with an original loan to value of 56%. This loan is classified as an individually evaluated, collateral-dependent loan and no allowance was recorded at March 31, 2026, as a full repayment is anticipated.

The Company foreclosed on a property securing a construction loan for a single-family residence and transferred it to OREO, net, with an estimated “As-Is” land fair value of $9.6 million per the February 5, 2026 appraisal. No additional charge-off was required at the time of transfer based on the current “As-Is” collateral value, after accounting for estimated selling cost.

Special mention loans decreased by $18.7 million during the first quarter of 2026 to $53.7 million at March 31, 2026. The decrease in the special mention loans was due mostly to $21.0 million of loans downgraded to substandard, including $17.8 million related to the aforementioned two commercial real estate loans downgraded to substandard nonaccrual, coupled with $7.9 million in payoffs, $963 thousand in upgrades to pass rating and $861 thousand in net paydowns, partially offset by $12.0 million of loans downgraded from a pass rating.

Substandard loans increased by $11.7 million during the first quarter of 2026 to $72.4 million at March 31, 2026. The increase in the substandard loans was due primarily to $21.0 million in downgrades from special mention to substandard, and $5.8 million related to the aforementioned commercial real estate loan downgraded to substandard nonaccrual, partially offset by an $8.6 million construction loan transferred to OREO, $4.2 million in loans upgraded to a pass rating, and $2.3 million in net paydowns.

The Company had no LHFI that were over 90 days past due and still accruing interest at March 31, 2026 and December 31, 2025, respectively.

Loan delinquencies (30-89 days past due, excluding nonaccrual loans) totaled $12.8 million at March 31, 2026, compared with $14.7 million in such loan delinquencies at December 31, 2025. The decrease was primarily due to an $8.0 million multifamily loan that was repaid in full, a $5.8 million commercial real estate loan downgraded to substandard nonaccrual described above, partially offset by $8.7 million of commercial real estate loans, $2.7 million of 1-4 family residential loans with the same guarantor in common related to the OREO construction property discussed above, and $788 thousand of commercial and industrial loans that became delinquent during the first quarter of 2026.

The allowance for credit losses, which is comprised of the ALL and reserve for unfunded loan commitments, totaled $36.1 million at March 31, 2026, compared with $36.5 million at December 31, 2025. The $346 thousand decrease in the allowance for credit losses included a $381 thousand reversal of provision for credit losses for the loan portfolio, and gross recoveries of $35 thousand for the quarter ended March 31, 2026. There were no charge-offs of loans during the first quarter of 2026.

The ALL was $34.0 million, or 1.14% of total loans held for investment at March 31, 2026, compared with $34.3 million, or 1.13% at December 31, 2025.

Capital

Tangible book value per common share (non-GAAP 1) at March 31, 2026 was $13.97, compared with $13.79 at December 31, 2025. In the first quarter of 2026, tangible book value was primarily impacted by net income of $13.8 million for the first quarter, and stock-based compensation activity, partially offset by an increase in net of tax unrealized losses on available-for-sale debt securities, and the Company’s stock repurchase program activity and cash dividends, which reduced the tangible book value per common share by $0.23 and $0.10, respectively. Other comprehensive losses related to net of tax unrealized losses on available-for-sale debt securities increased by $2.1 million to $3.8 million at March 31, 2026, from $1.6 million at December 31, 2025. The increase in the net of tax unrealized losses on available-for-sale debt securities was attributable to non-credit related factors, including a decrease in bond prices at the long end of the yield curve and the general interest rate environment, and growth in the available-for-sale debt securities. Tangible common equity (non-GAAP 1) as a percentage of total tangible assets (non-GAAP 1) at March 31, 2026, increased to 11.46% from 11.45% in the prior quarter, and net of tax unrealized losses on available-for-sale debt securities as a percentage of tangible common equity (non-GAAP 1) at March 31, 2026 increased to 0.8% from 0.4% in the prior quarter.

The Company’s preliminary capital ratios exceed the minimums required to be “well-capitalized” at March 31, 2026.

Stock Repurchase Program

During the first quarter of 2026, the Company repurchased 409,915 shares of its common stock at an average price of $18.08 and a total cost of $7.4 million under the stock repurchase program. The remaining maximum number of shares authorized to be repurchased under this program was 978,157 shares at March 31, 2026.