California BanCorp reported third-quarter net income of $14.0 million, down from both the prior quarter and a year earlier, as its net interest margin narrowed and its provision for credit losses rose. The bank also reported continued loan and deposit growth and expanded its Northern California commercial-banking presence with a new loan production office in San Francisco.
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Earnings eased: Net income was $14.0 million, or $0.43 per diluted share, compared with $14.3 million, or $0.44 per share, in the second quarter and $15.7 million, or $0.48 per share, in the third quarter of 2025.
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Margin narrowed: Net interest margin was 4.61%, down from 4.71% in the prior quarter.
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Credit-loss provision increased: The provision was $3.2 million, compared with $714,000 in the second quarter. Nonperforming loans totaled $9.3 million, up $407,000, or 4.6%, from June 30.
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Loan balances grew: Total loans, including loans held for sale, reached $3.16 billion at Sept. 30, an increase of $53.3 million, or 1.7%, from the end of June.
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Reserve ratios declined: The allowance for credit losses was 1.13% of loans held for investment, versus 1.18% at June 30. The allowance for loan losses was 1.07%, down from 1.13%.
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Returns were lower than in the prior quarter: Return on average assets was 1.35%, compared with 1.43%; return on average common equity was 9.45%, versus 9.84%. Return on average tangible common equity was 12.07%, down from 12.62%.
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The bank highlighted deposit growth: Management described deposit growth as strong and attributed it to deeper existing-client relationships and new-client additions, but the announcement provided no deposit balance or growth rate.
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San Francisco expansion: California Bank of Commerce opened a loan production office in downtown San Francisco on Oct. 1. Management said the move is intended to expand its commercial-banking presence in Northern California and cited a solid pipeline of new business opportunities.
The quarter combined growth in lending and deposits with softer reported earnings, a narrower margin and a larger credit-loss provision. The bank also reported a modest increase in nonperforming loans and lower reserve ratios than at the end of the prior quarter.