California BanCorp Reports $14.1 Million Net Income in Q2 2025, Driven by Merger with CALB

California BanCorp reported significant financial performance improvements in its latest quarterly filing, with net income for the second quarter of 2025 reaching $14.1 million, or $0.43 per diluted share, compared to just $190,000, or $0.01 per diluted share, in the same period last year. This marks a substantial increase in net income of $13.9 million year-over-year, driven primarily by a $20.4 million rise in net interest income, attributed to higher average interest-earning assets following the merger with California Bank of Commerce (CALB) in July 2024. For the first half of 2025, net income totaled $31 million, up from $5.1 million in the prior year.

The company’s total assets decreased to $3.95 billion as of June 30, 2025, down from $4.03 billion at the end of 2024, largely due to a reduction in loans held for investment, which fell to $2.99 billion from $3.14 billion. This decline was influenced by the company's strategy to reduce exposure to criticized loans and a decrease in wholesale funding sources. Total liabilities also decreased to $3.41 billion, primarily due to a drop in total deposits, which fell to $3.31 billion from $3.40 billion.

In terms of operational metrics, California BanCorp's efficiency ratio improved to 56.1% in the second quarter of 2025, down from 85.7% a year earlier, reflecting enhanced operational efficiency post-merger. The company reported a decrease in nonperforming loans to $18.4 million, or 0.61% of total loans, compared to $26.4 million, or 0.84%, at the end of 2024. The allowance for loan losses also decreased to $41.1 million from $50.5 million, indicating improved credit quality.

Strategically, the merger with CALB has expanded California BanCorp's footprint into Northern California, adding one full-service branch and four loan production offices to its existing network. The merger has allowed the company to build scale and increase market share, with total loans secured by commercial real estate representing 59.4% of the loan portfolio as of June 30, 2025. The company continues to focus on maintaining a strong capital position, with a tangible equity ratio of 10.89% and a total capital ratio of 14.75%, both exceeding regulatory requirements.

Looking ahead, California BanCorp remains cautious about potential economic challenges, including slower loan growth and credit quality deterioration. The company is actively monitoring macroeconomic variables and adjusting its strategies to mitigate risks associated with interest rate fluctuations and economic downturns. Management anticipates that while the current environment presents challenges, the bank's diversified portfolio and strong capital position will support its ongoing operations and growth initiatives.