California Bancorp Reports $16.5M Loss

By Bobby Samwell • Tuesday, October 29 15:30 • Permanent Link

California Bancorp has reported a net loss of $16.5 million for the third quarter of 2024, compared to a net income of $190 thousand in the second quarter of 2024 and $6.6 million in the third quarter of 2023. The company's net interest margin increased to 4.43% in the third quarter from 3.94% in the prior quarter, and its average total loan yield rose to 6.79% from 6.21% in the prior quarter.

The total aggregate consideration paid for the merger was approximately $216.6 million, resulting in preliminary goodwill of $74.7 million. The net loss for the third quarter of 2024 includes an after-tax one-time initial provision for credit losses of $15.0 million related to non-purchased credit deteriorated loans and unfunded loan commitments, as well as merger-related expenses of $10.6 million. Adjusted net income for the third quarter, excluding the one-time provision for credit losses and merger-related expenses, was $9.1 million.

The company's tangible book value per common share decreased to $11.28 at September 30, 2024, from $13.71 at June 30, 2024, and its total assets increased to $4.36 billion at September 30, 2024, from $2.29 billion at June 30, 2024.

Total loans, including loans held for sale, increased to $3.23 billion at September 30, 2024, from $1.88 billion at June 30, 2024, mainly due to the merger, with the fair value of the acquired loans totaling $1.36 billion.

Nonperforming assets to total assets ratio rose to 0.68% at September 30, 2024, from 0.20% at June 30, 2024, including the fair value of $13.9 million in nonaccrual PCD loans in connection with the merger.

The company's total deposits increased to $3.74 billion at September 30, 2024, from $1.94 billion at June 30, 2024, largely due to the $1.64 billion of deposits acquired in the merger. Noninterest-bearing demand deposits increased to $1.37 billion at September 30, 2024, from $666.6 million at June 30, 2024, representing 36.6% of total deposits.

Following these announcements, the company's shares moved 1.3%, and are now trading at a price of $14.45. If you want to know more, read the company's complete 8-K report here.

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