California Bancorp reported first-quarter net income of $13.8 million, down from $16.4 million in the fourth quarter of 2025 and $16.9 million in the first quarter of 2025. Diluted earnings per share fell to $0.42 from $0.50 in the prior quarter and $0.52 a year earlier.
Revenue pressure showed up in several lines. Net interest income slipped to $42.1 million from $42.9 million in the fourth quarter, while net interest margin widened slightly to 4.47% from 4.44%. The cost of funds improved to 1.36% from 1.50%, and the cost of deposits declined to 1.29% from 1.43%.
Credit loss provisioning moved sharply lower in dollar terms, with the company recording a reversal of $381,000 in the quarter versus a $4.4 million reversal in the fourth quarter. Noninterest income fell to $2.1 million from $3.0 million, while noninterest expense dropped to $25.5 million from $27.9 million. The efficiency ratio improved to 57.69% from 60.80%.
Profitability ratios also softened. Return on average assets fell to 1.36% from 1.58%, return on average common equity declined to 9.62% from 11.43%, and return on average tangible common equity moved down to 12.37% from 14.80%.
On the balance sheet, total assets rose to $4.05 billion from $4.03 billion at year-end, an increase of $15.3 million. Cash and cash equivalents increased by $11.2 million, and available-for-sale debt securities rose by $63.7 million, while loans including loans held for sale fell by $62.1 million.
Loans held for investment declined to $2.97 billion from $3.03 billion, down $61.1 million. New originations totaled $98.4 million, but that was more than offset by $42.3 million of net paydowns, $108.6 million of loan payoffs, and an $8.6 million transfer to other real estate owned.
Deposits increased to $3.39 billion from $3.37 billion. Noninterest-bearing demand deposits climbed to $1.25 billion from $1.18 billion and accounted for 36.8% of total deposits, up from 35.0%. Interest-bearing deposits fell to $2.15 billion from $2.19 billion.
The company repurchased 409,915 shares for $7.4 million at an average price of $18.08 and declared a $0.10 per share dividend, totaling $3.3 million. Tangible book value per common share rose to $13.97 from $13.79. Today the company's shares have moved -0.22% to a price of $18.47. For more information, read the company's full 8-K submission here.
