California Bancorp (CALB) DEFM14AProxy related to merger

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

CALIFORNIA BANCORP

(Name of Registrant as Specified in Its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

JOINT PROXY STATEMENT/PROSPECTUS

PROPOSED MERGER — YOUR VOTE IS VERY IMPORTANT

To the Shareholders of Southern California Bancorp (“SCB”) and California BanCorp (“CBC”):

On behalf of the boards of directors of SCB and CBC, we are pleased to enclose the accompanying joint proxy statement/prospectus relating to the proposed combination of SCB and CBC. We are requesting that you take certain actions as a holder of SCB common stock or as a holder of CBC common stock.

On January 30, 2024, SCB and CBC entered into an Agreement and Plan of Merger and Reorganization (the “merger agreement”), pursuant to which CBC will merge with and into SCB (the “merger”), followed immediately thereafter by the merger of CBC’s wholly owned subsidiary California Bank of Commerce (“CBC Bank”) with and into SCB’s wholly owned subsidiary Bank of Southern California, N.A. (“SCB Bank”), with SCB Bank surviving (the “bank merger” and together with the merger, the “mergers”). Before we can complete the mergers, each of SCB and CBC will hold a special meeting of its shareholders.

SCB will hold its special meeting of shareholders on July 17, 2024, at 8:30 a.m. (local time), at SCB’s headquarters located at 12265 El Camino Real, Suite 210, San Diego, CA 92130. At the special meeting, you will be asked to consider and to vote upon the following proposals:

CBC will hold its special meeting of shareholders on July 17, 2024, at 8:30 a.m. (local time), at CBC’s headquarters located at 1300 Clay Street, Suite 500, Oakland, CA 94612. At the special meeting, CBC shareholders will be asked to consider and to vote upon the following proposals:

If the merger is approved and consummated, holders of CBC common stock will, subject to receiving cash in lieu of fractional shares, be entitled to receive, in exchange for each share of CBC common stock, 1.590 shares of SCB common stock. Based on the closing price of SCB common stock on the Nasdaq Capital Market (“Nasdaq”) on January 29, 2024, the last trading day before the public announcement of the merger, the exchange ratio represented approximately $26.54 in value for each share of CBC common stock. Based on the closing price of SCB common stock on Nasdaq on May 31, 2024, the last practicable trading day before the date of the accompanying joint proxy statement/prospectus, of $13.92, the exchange ratio represented approximately $22.13 in value for each share of CBC common stock.

SCB shareholders will continue to own their existing shares of SCB common stock following the merger.

The value of the SCB common stock at the time of completion of the merger could be greater than, less than or the same as the value of SCB common stock on the date of the accompanying joint proxy statement/prospectus. We urge you to obtain current market quotations of SCB common stock (Nasdaq trading symbol “BCAL”) and CBC common stock (Nasdaq trading symbol “CALB”).

As of May 31, 2024, the record date for the special meetings of shareholders, there were 18,540,104 shares of SCB common stock outstanding and entitled to vote and there were 8,470,724 shares of CBC common stock outstanding and entitled to vote.

Based on the number of shares of CBC common stock outstanding on May 31, 2024, SCB will issue approximately 13,468,451 shares of common stock to holders of CBC common stock before taking into account any fractional shares; provided, however, holders of CBC common stock entitled to receive fractional interests of SCB common stock will be paid cash, without interest, determined by multiplying such fractional interest by the ten (10) day volume weighted average prices of SCB common stock calculated prior to closing of the merger as provided in the merger agreement. Based on the number of shares of CBC common stock outstanding on May 31, 2024, and the number of shares of SCB common stock outstanding on May 31, 2024, we estimate that, following completion of the merger, existing SCB shareholders will own approximately 58% and former CBC shareholders will own approximately 42% of the outstanding common stock of the combined company.

Each of our boards of directors unanimously recommends that holders of common stock vote “FOR” each of the proposals to be considered at the respective meetings. We strongly support this combination of our companies and join our boards in their recommendations.

The accompanying joint proxy statement/prospectus, which serves as a proxy statement for SCB and CBC’s special meetings of shareholders and as a prospectus with respect to the offering and issuance of the SCB common stock to be issued in the merger to the holders of CBC common stock, describes the SCB and CBC special meetings and includes important information about the proposed merger, the companies participating in the merger, and the merger agreement pursuant to which the merger will be consummated, if approved. We encourage you to read the entire accompanying joint proxy statement/prospectus carefully, including the “Risk Factors” section beginning on page 14, for a discussion of the risks related to the proposed merger. You can also obtain information about SCB and CBC from documents that have been filed with the Securities and Exchange Commission that are incorporated into this joint proxy statement/prospectus by reference.

On behalf of SCB and CBC, thank you for your prompt attention to this important matter.

Sincerely,

David I. Rainer		Stephen A. Cortese
Chairman and Chief Executive Officer		Chairman of the Board
Southern California Bancorp		California BanCorp

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued in connection with the merger or determined if this document is accurate or complete. Any representation to the contrary is a criminal offense. Shares of common stock of SCB are not savings accounts, deposits or other obligations of any bank and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.

The date of these materials is June 7, 2024, and they are expected to be first mailed to shareholders on or about June 7, 2024.

SOUTHERN CALIFORNIA BANCORP

12265 El Camino Real, Suite 210

San Diego, CA 92130

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

To be held on July 17, 2024

TO THE SHAREHOLDERS OF SOUTHERN CALIFORNIA BANCORP:

The special meeting of shareholders of Southern California Bancorp (“SCB”) will be held on July 17, 2024, at 8:30 a.m. (local time), at SCB’s headquarters located at 12265 El Camino Real, Suite 210, San Diego, CA 92130, for the following purposes:

No other business may be conducted at the special meeting.

The accompanying joint proxy statement/prospectus describes the proposals listed above in more detail. Please refer to the following materials, including the merger agreement and all other appendices, and any documents incorporated by reference, for further information with respect to the business to be transacted at the special meeting. You are encouraged to read the accompanying joint proxy statement/prospectus carefully before voting. In particular, see the section entitled “Risk Factors” beginning on page 14.

The SCB board of directors has fixed the close of business on May 31, 2024, as the record date for determination of shareholders entitled to notice of, and the right to vote at the special meeting. Therefore, if you were a shareholder of record at the close of business on May 31, 2024, you may vote at the special meeting.

The SCB board of directors unanimously recommends that SCB shareholders vote “FOR” approval of the SCB merger proposal, “FOR” approval of the SCB bylaw amendment proposal, “FOR” approval of the SCB name change proposal, “FOR” approval of the SCB articles amendment proposal, and “FOR” approval of the SCB adjournment proposal.

Holders of SCB common stock are not entitled to appraisal or dissenters’ rights with respect to the proposed merger under the California General Corporation Law (the “CGCL”).

YOUR VOTE IS VERY IMPORTANT. The enclosed proxy card is solicited by the SCB board of directors. Whether or not you plan to attend the special meeting, we urge you to promptly complete, sign and date the enclosed proxy card and return it in the postage-paid envelope provided for that purpose or submit your proxy by telephone or through the Internet. You may revoke your proxy at any time before it is voted at the special meeting by giving written notice of revocation to the Corporate Secretary of SCB, by submitting a properly executed proxy bearing a later date, or by being present at the special meeting and electing to vote in person by advising the Chairman of the special meeting of your election.

Please indicate on the proxy card whether or not you expect to attend the special meeting so that arrangements for adequate accommodations can be made.

If you would like to attend the special meeting and your shares are held by a broker, bank or other nominee, you must bring to the special meeting a recent brokerage statement or a letter from the nominee confirming your beneficial ownership of the shares. You must also bring a form of personal identification. In order to vote your shares at the special meeting, you must also obtain a proxy issued in your name from that nominee.

BY ORDER OF THE BOARD OF DIRECTORS

/s/Manisha K. Merchant

Manisha Merchant

General Counsel and Corporate Secretary

San Diego, California

June 7, 2024

CALIFORNIA BANCORP

1300 Clay Street, Suite 500

Oakland, CA 94612

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

To be held on July 17, 2024

TO THE SHAREHOLDERS OF CALIFORNIA BANCORP:

The special meeting of shareholders of California BanCorp (“CBC”) will be held on July 17, 2024, at 8:30 a.m. (local time), at CBC’s headquarters located at 1300 Clay Street, Suite 500, Oakland, CA 94612, for the following purposes:

No other business may be conducted at the special meeting.

The accompanying joint proxy statement/prospectus describes the proposals listed above in more detail. Please refer to the following materials, including the merger agreement and all other appendices, and any documents incorporated by reference, for further information with respect to the business to be transacted at the special meeting. You are encouraged to read the accompanying joint proxy statement/prospectus carefully before voting. In particular, see the section entitled “Risk Factors” beginning on page 14.

The CBC board of directors has fixed the close of business on May 31, 2024, as the record date for determination of shareholders entitled to notice of, and the right to vote at the special meeting. Therefore, if you were a shareholder of record at the close of business on May 31, 2024, you may vote at the special meeting.

The CBC board of directors unanimously recommends that CBC shareholders vote “FOR” approval of the CBC merger proposal and “FOR” approval of the CBC adjournment proposal.

Holders of CBC common stock are not entitled to appraisal or dissenters’ rights with respect to the proposed merger under the CGCL.

YOUR VOTE IS VERY IMPORTANT. The enclosed proxy card is solicited by the CBC board of directors. Whether or not you plan to attend the special meeting, we urge you to promptly complete, sign and date the enclosed proxy card and return it in the postage-paid envelope provided for that purpose or submit your proxy by telephone or through the Internet. You may revoke your proxy at any time before it is voted at the special meeting by giving written notice of revocation to the Corporate Secretary of CBC, by submitting a properly executed proxy bearing a later date, or by being present at the special meeting and electing to vote in person by advising the Chairman of the special meeting of your election.

Please indicate on the proxy card whether or not you expect to attend the special meeting so that arrangements for adequate accommodations can be made.

If you would like to attend the special meeting and your shares are held by a broker, bank or other nominee, you must bring to the special meeting a recent brokerage statement or a letter from the nominee confirming your beneficial ownership of the shares. You must also bring a form of personal identification. In order to vote your shares at the special meeting, you must also obtain a proxy issued in your name from that nominee.

REFERENCES TO ADDITIONAL INFORMATION

The accompanying joint proxy statement/prospectus incorporates important business and financial information about SCB and CBC from documents that are not included in or delivered with this document. This information is available to you without charge upon your written or oral request. You can obtain the documents incorporated by reference in this document through the Securities and Exchange Commission (the “SEC”) website at http://www.sec.gov or by requesting them in writing, by email or by telephone, at the appropriate address below:

You will not be charged for any of these documents that you request. To obtain timely delivery of these documents, you must request them no later than five business days before the date of the applicable special meeting. This means that holders of SCB common stock requesting documents must do so by July 10, 2024, in order to receive them before the SCB special meeting, and holders of CBC common stock requesting documents must do so by July 10, 2024, in order to receive them before the CBC special meeting.

You should rely only on the information contained or incorporated by reference in this document. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this document. This document is dated June 7, 2024, and you should assume that the information in this document is accurate only as of such date. You should assume that the information incorporated by reference into this document is accurate as of the date of such incorporated document. Neither the mailing of this document to holders of SCB common stock or holders of CBC common stock, nor the issuance by SCB of shares of SCB common stock pursuant to the merger agreement, will create any implication to the contrary.

This document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. Except where the context otherwise indicates, information contained in, or incorporated by reference into, this document regarding SCB has been provided by SCB and information contained in, or incorporated by reference into, this document regarding CBC has been provided by CBC.

See the section entitled “Where You Can Find More Information” beginning on page 93 of the accompanying joint proxy statement/prospectus for further information.

TABLE OF CONTENTS

QUESTIONS AND ANSWERS

ABOUT THE MERGER AND THE SPECIAL MEETINGS

The following are some questions that you may have regarding the merger, the merger agreement and the other matters being considered at the special meetings and the answers to those questions. SCB and CBC urge you to read carefully the remainder of this document because the information in this section does not provide all the information that might be important to you with respect to the merger and the other matters being considered at the special meeting. Additional important information is also contained in the appendices to this joint proxy statement/prospectus and in the documents incorporated herein by reference.

Questions and Answers about the Special Meetings

This document constitutes both a proxy statement of SCB and CBC and a prospectus of SCB. It is a proxy statement because the SCB and CBC boards of directors are soliciting proxies from their shareholders. It is a prospectus of SCB because SCB will use it in connection with the issuance of shares of SCB common stock in exchange for shares of CBC common stock in connection with the merger.

In order to complete the merger, the shareholders of each of SCB and CBC must both vote to approve the principal terms of the merger agreement and the transactions contemplated thereby, including the merger. The enclosed proxy card and voting materials allow you to vote your shares without actually attending the special meetings.

SCB Bylaw Amendment Proposal: The affirmative vote of a majority of the outstanding shares of SCB common stock as of the record date.

SCB Name Change Proposal: The affirmative vote of a majority of the outstanding shares of SCB common stock as of the record date.

SCB Articles Amendment Proposal: The affirmative vote of a majority of the outstanding shares of SCB common stock as of the record date.

SCB Adjournment Proposal: The affirmative vote of at least a majority of the issued and outstanding shares of SCB common stock present in person or represented by proxy and voting at the special meeting at which a quorum is present (which shares voting affirmatively constitute at least a majority of the required quorum).

CBC Adjournment Proposal: The affirmative vote of at least a majority of the issued and outstanding shares of CBC common stock present in person or represented by proxy and voting at the special meeting at which a quorum is present (which shares voting affirmatively constitute at least a majority of the required quorum).

In considering the recommendations of the SCB board of directors, SCB shareholders should be aware that SCB directors and executive officers may have interests in the merger that are different from, or in addition to, the interests of SCB shareholders generally. For a more complete description of these interests, see the information provided in the section entitled “The Merger— Interests of Certain SCB Directors and Executive Officers in the Merger” beginning on page 49.

In considering the recommendations of the CBC board of directors, CBC shareholders should be aware that CBC directors and executive officers may have interests in the merger that are different from, or in addition to, the interests of CBC shareholders generally. For a more complete description of these interests, see the information provided in the section entitled “The Merger—Interests of Certain CBC Directors and Executive Officers in the Merger” beginning on page 49.

If you are a shareholder of record, you may vote in person at the special meeting, or you may vote by proxy using the enclosed proxy card or by phone or internet using the instructions on the proxy card.

Whether or not you plan to attend the special meeting, you are urged to vote by proxy to ensure your vote is counted. You may still attend the special meeting and vote in person if you have already voted by proxy.

To vote using the proxy card, simply complete, sign and date the enclosed proxy card and return it promptly in the envelope provided or follow the instructions to vote via the Internet or by telephone indicated on the proxy card. If you return your signed proxy card before the special meeting or vote as indicated via the Internet or by telephone, your shares will be voted as you direct.

If you do not want to vote by proxy and prefer to vote in person, simply attend the special meeting and you will be given a ballot when you arrive.

A broker non-vote occurs when a bank, broker, trustee or other nominee is not permitted to vote on a “non-routine” matter without instructions from the beneficial owner of the shares and the beneficial owner fails to provide the bank, broker, trustee or other nominee with such instructions. Broker non-votes only count toward a quorum if at least one proposal is presented with respect to which the bank, broker, trustee or other nominee has discretionary authority. It is expected that all proposals to be voted on at the SCB special meeting, except for the SCB bylaw amendment proposal and the SCB name change proposal, and all proposals to be voted on at the CBC special meeting will be “non-routine” matters. If your bank, broker, trustee or other nominee holds your shares of SCB common stock or CBC common stock in “street name,” such entity will vote your shares of SCB common stock or CBC common stock on “non-routine” matters only if you provide instructions on how to vote by complying with the instructions provided to you by your bank, broker, trustee or other nominee with this joint proxy statement/prospectus.

If you are a beneficial owner of SCB common stock and you do not instruct your bank, broker, trustee or other nominee on how to vote your shares of SCB common stock:

If you are a beneficial owner of CBC common stock and you do not instruct your bank, broker, trustee or other nominee on how to vote your shares of CBC common stock:

Your attendance alone at the special meeting will not revoke your proxy. If you wish to revoke your vote by providing written notice, such notice must be sent so that notice is received before the vote is taken at the special meeting and should be addressed as follows:

If you have instructed a broker or other nominee to vote your shares, you must follow directions received from your broker or other nominee in order to change those instructions.

Questions and Answers Specific to the Merger and Merger Agreement

Please read the sections entitled “The Merger — Terms of the Merger” and “The Merger Agreement — The Merger Consideration” beginning on pages 28 and 56, respectively, for additional information.

First, after reading this joint proxy statement/prospectus, you should vote on the proposals. Simply indicate on your proxy card how you want to vote, then sign and mail your proxy card in the enclosed return envelope in time to be represented at the special meeting. Alternatively, you may vote by phone or Internet by following the instructions on your proxy card. If you hold your shares in street name, you should follow your broker’s instructions to vote your shares.

Second, if you are a CBC shareholder and do not hold your shares electronically or own your shares through a brokerage firm which holds your shares in street name, you should immediately locate and make sure you have possession of the certificates evidencing your CBC common stock, if any.

As soon as reasonably practicable after the effective time of the merger, the exchange agent for the merger, Computershare, Inc. (“Computershare”), will mail to each holder of record of a CBC common stock certificate a letter of transmittal and instructions for the surrender of the certificate(s) in exchange for SCB common stock. If you hold your CBC shares in book entry, your CBC shares will be exchanged for SCB common stock without further action on your part.

If you are a CBC shareholder and have any additional questions about the merger or the merger agreement you may direct your questions to CBC Investor Relations, California BanCorp, 1300 Clay Street, Suite 500, Oakland, CA 94612; phone: (510) 457-3737.

RISK FACTORS

In addition to the other information included and incorporated by reference into this joint proxy statement/prospectus, including the matters addressed in the section entitled “Cautionary Statement Concerning Forward-Looking Statements,” you should be aware of and carefully consider the following risks and uncertainties that are applicable to the merger agreement, the merger, SCB and CBC before deciding whether to vote for the approval of the principal terms of the merger agreement and the transactions contemplated thereby, including the merger, and the approval of the other proposals to be submitted at the special meetings. You should also consider the risks relating to the businesses of SCB and CBC and ownership of SCB common stock and CBC common stock under the caption “Risk Factors” appearing in their respective Annual Reports on Form 10-K for the year ended December 31, 2023 that have been filed with the SEC, as well as any subsequent documents filed by SCB and CBC with the SEC. See “Where You Can Find More Information.”

Because the market price of SCB common stock may fluctuate, shareholders cannot be sure of the market value of the SCB common stock that will be issued in the merger.

Under the terms of the merger agreement, the exchange ratio for the merger consideration to be issued by SCB to CBC shareholders is fixed at 1.590 shares of SCB common stock for each share of CBC common stock. While the exchange ratio in the merger is fixed, the value of SCB common stock that will be issued in the merger is not. The closing price of SCB’s common stock as quoted on Nasdaq was $16.69 on January 29, 2024, the trading date immediately preceding the day on which the merger was publicly announced. As of May 31, 2024, the closing price of SCB common stock as reported on Nasdaq was $13.92. The market price of SCB common stock will vary from these prices, and will also vary from the price on the date that this document is mailed to CBC shareholders or on the date of CBC’s special meeting of shareholders. The market price of SCB common stock changes as a result of a variety of factors, including general market and economic conditions, changes in its business, operations and prospects, and regulatory considerations. Many of these factors are beyond the control of SCB. As a result of the fixed 1.590 exchange ratio, the market value of the shares of SCB common stock that CBC shareholders receive in the merger will both increase and decline correspondingly with increases and declines in the market price of SCB common stock. Neither SCB nor CBC is permitted to terminate the merger agreement as a result of any increase or decrease in the market price of SCB common stock or CBC common stock. Because the merger will be completed after the special meetings, at the time of the special meetings you will not know the market value of the SCB common stock that CBC shareholders will receive for shares of CBC common stock upon completion of the merger.

Recent events impacting the financial services industry may adversely affect the business of SCB, CBC and the market price of their respective common stock.

Recent developments and events in the financial services industry, including the large-scale deposit withdrawals over a short period of time at Silicon Valley Bank, First Republic Bank, and more recently Republic First Bank, that resulted in the failure of those institutions have resulted in decreased confidence in banks among depositors, other counterparties and investors, as well as significant disruption, volatility and reduced valuations of equity and other securities of banks in the capital markets. These events have occurred against the backdrop of a rising interest rate environment which, among other things, has resulted in unrealized losses in longer duration securities and loans held by banks, more competition for bank deposits and may increase the risk of a potential recession. These events and developments could materially and adversely impact the business or financial condition of each of SCB and CBC and the combined company following completion of the merger, including through potential liquidity pressures, reduced net interest margins, and potential increased credit losses. These recent events and developments have, and could continue to, adversely impact the market price and volatility of SCB common stock and CBC common stock. These recent events may also result in changes to laws or regulations governing banks and bank holding companies or result in the impositions of restrictions through supervisory or enforcement activities, including higher capital requirements, which could have a material impact on the businesses of each of SCB and CBC and the combined company following completion of the merger. The cost of resolving the recent failures may prompt the FDIC to increase its premiums above the recently increased levels or to issue additional special assessments. SCB and CBC are generally unable to control the amount of premiums or special assessments that their respective banking subsidiaries may be required to pay for FDIC insurance.

Directors and officers of SCB and CBC have interests in the merger that are in addition to or different than the interests of SCB and CBC shareholders.

SCB directors and officers have interests in the merger as individuals that are in addition to, or different from, their interests as shareholders of SCB, which include, but are not limited to:

CBC directors and officers have interests in the merger as individuals that are in addition to, or different from, their interests as shareholders of CBC, which include, but are not limited to:

You should consider these interests in conjunction with the recommendation of the board of directors of SCB and CBC with respect to approval of the merger. For a more detailed discussion of these interests, see the sections entitled The Merger—Interests of Certain SCB Directors and Officers in the Merger” and “The Merger—Interests of Certain CBC Directors and Officers in the Merger.”

In connection with the merger, SCB will assume CBC’s outstanding debt obligations, and the combined company’s level of indebtedness following the completion of the merger could adversely affect the combined company’s ability to raise additional capital and meet its obligations under existing indebtedness.

In connection with the merger, SCB has agreed to assume, or to cause its subsidiary to assume, CBC’s outstanding debt obligations, which aggregated approximately $55.0 million as of March 31, 2024, including the obligations under CBC’s 5.00% fixed-to-floating rate subordinated notes due 2030 and its 3.50% fixed-to-floating rate subordinated notes due 2031 (the “subordinated notes”). In connection with the assumption of the subordinated notes, SCB and CBC will enter into any supplemental indentures or other documents reasonably required by the trustee to make such assumption effective.

SCB’s existing debt, together with any future occurrence of additional indebtedness, and the assumption of CBC’s outstanding indebtedness, could have important consequences for the combined company’s creditors and the combined company’s shareholders. For example, it could limit the combined company’s ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes; restrict the combined company from making strategic acquisitions or cause the combined company to make non-strategic divestitures; restrict the combined company from paying dividends to its shareholders; increase the combined company’s vulnerability to general economic and industry conditions; and require a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on the combined company’s indebtedness, thereby reducing the combined company’s ability to use cash flows to fund its operations, capital expenditures and future business opportunities.

SCB and CBC will be subject to business uncertainties and contractual restrictions while the merger is pending.

Uncertainty about the effect of the merger on employees and customers may have an adverse effect on SCB and CBC. These uncertainties may impair SCB’s or CBC’s ability to attract, retain and motivate key personnel until the merger is completed, and could cause customers and others who deal with SCB or CBC to seek to change existing business relationships with SCB or CBC. Customers, suppliers, business partners and other parties with which SCB and CBC maintain business relationships may experience uncertainty about their respective futures and seek alternative relationships with third parties, seek to alter their business relationships with SCB and CBC, or fail to extend an existing relationship with SCB and CBC. In addition, the merger agreement requires that SCB and CBC conduct their business in the ordinary course of business consistent with past practice and restricts SCB and CBC from taking certain actions prior to the effective time or termination of the merger agreement without SCB’s or CBC’s consent in writing. These restrictions may prevent SCB or CBC from pursuing attractive business opportunities that may arise prior to the completion of the merger. For a more detailed discussion of conduct pending the merger, see the section entitled “The Merger Agreement — Covenants and Agreements.”

The current interest rate environment may adversely impact the fair value adjustments of investments and loans acquired in the merger.

Upon the closing of the merger, the combined company will need to adjust the fair value of CBC’s investment and loan portfolios. An increase in interest rates could have the effect of increasing the magnitude of the purchase accounting marks relating to such fair value adjustments, thereby increasing initial tangible book value dilution, extending the tangible book value earn-back period, and negatively impacting the combined company’s capital ratios, which may result in the combined company taking steps to strengthen its capital position.

The termination fee and the restrictions on solicitation contained in the merger agreement may discourage other companies from trying to acquire CBC or SCB.

Until the closing of the merger, with some limited exceptions, SCB and CBC are prohibited from soliciting, initiating, encouraging or participating in any discussion of, or otherwise considering any inquiries or proposals that may lead to, an acquisition proposal, such as a merger or other business combination transaction, with any person other than CBC or SCB. In addition, each party has agreed to pay a termination fee of $9.3 million to the other party in specified circumstances. See “The Merger Agreement —Termination Fee.” These provisions could discourage other companies from trying to acquire CBC even though those other companies might be willing to offer greater value to CBC shareholders than SCB has offered in the merger. These provisions could also discourage other companies from trying to acquire SCB while the merger is pending. The payment of the termination fee could also have a material adverse effect on SCB’s or CBC’s financial condition.

The combined company may fail to realize the anticipated benefits of the merger.

The success of the merger will depend on, among other things, the ability of SCB, as the combined company, to realize the anticipated revenue enhancements and efficiencies and to combine the businesses of SCB Bank and CBC Bank in a manner that does not materially disrupt the existing customer relationships of either bank or result in decreased revenues resulting from any loss of customers and that permits growth opportunities to occur. If the combined company is not able to successfully achieve these objectives, the anticipated benefits of the merger may not be realized fully or at all or may take longer to realize than expected.

SCB Bank and CBC Bank have operated and, until the completion of the merger, will continue to operate, independently. It is possible that the integration process could result in the loss of key employees, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the ability of SCB Bank, as the combined bank, to maintain relationships with clients, customers, depositors and employees or for the combined bank to achieve the anticipated benefits of the merger. Integration efforts between the SCB Bank and CBC Bank could also divert management attention and resources. These integration matters could have an adverse effect on each of SCB Bank and CBC Bank during the transition period and on the combined company following completion of the merger.

The combined company may be unable to retain SCB and/or CBC personnel after the merger is completed.

The success of the merger will depend in part on the combined company’s ability to retain the talents and dedication of key employees currently employed by SCB and CBC. It is possible that these employees may decide not to remain with SCB or CBC, as applicable, while the merger is pending or with the combined company after the merger is consummated. If SCB and CBC are unable to retain key employees, including management, who are critical to the successful integration and future operations of the companies, SCB and CBC could face disruptions in their operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment costs. In addition, following the merger, if key employees terminate their employment, the combined company’s business activities may be adversely affected, and management’s attention may be diverted from successfully hiring suitable replacements, all of which may cause the combined company’s business to suffer. SCB and CBC also may not be able to locate or retain suitable replacements for any key employees who leave either company.

The unaudited pro forma condensed consolidated combined financial data included in this joint proxy statement/prospectus are presented for illustrative purposes only and may not be indicative of the combined company’s financial condition or results of operations of the combined company following the merger.

The unaudited pro forma condensed combined consolidated financial data contained in this joint proxy statement/prospectus is presented for illustrative purposes only, is based on various adjustments, assumptions and preliminary estimates and may not be an indication of the combined company’s financial condition or results of operations following the merger. The actual financial condition and results of operations of the combined company following the merger may not be consistent with, or evident from, the unaudited pro forma condensed combined consolidated financial data.

In addition, the unaudited pro forma condensed combined consolidated financial information reflects adjustments, which are based upon preliminary estimates, to record CBC’s identifiable assets acquired and liabilities assumed at fair value and the resulting preliminary goodwill recognized. The pro forma adjustments reflected in this joint proxy statement/prospectus are preliminary, and the final pro forma adjustments will be based upon the actual purchase price and the fair value of the assets and liabilities of CBC as of the date of the completion of the merger. Financial markets generally, and the market prices of SCB’s common stock and CBC’s common stock, are experiencing higher than normal volatility and, therefore, the actual purchase price may vary significantly from the purchase price used in preparing the unaudited pro forma combined condensed consolidated financial information in this joint proxy statement/prospectus. Accordingly, the final acquisition accounting adjustments may differ materially from the pro forma adjustments reflected in this joint proxy statement/prospectus. For more information, see the section entitled “Unaudited Pro Forma Combined Condensed Consolidated Financial Data” beginning on page 73. Additionally, any potential decline in the combined company’s financial condition or results of operations may cause significant variations in the stock price of the combined company.

The market price of SCB common stock after the merger may be affected by factors different from those affecting the shares of CBC or SCB currently.

Upon completion of the merger, holders of CBC common stock will become holders of SCB common stock. SCB’s business and geography differs from that of CBC, and, accordingly, the financial condition and results of operations of the combined company and the market price of SCB common stock after the completion of the merger may be affected by factors different from those currently affecting the financial condition and results of operations of SCB or CBC on a standalone basis.

Sales of substantial amounts of SCB’s common stock in the open market by former CBC shareholders could depress SCB’s stock price.

Shares of SCB common stock that are issued to CBC shareholders in the merger will be freely tradable by persons other than affiliates of SCB without restrictions or further registration under the Securities Act. As of the close of business on the record date, SCB had approximately 18,540,104 shares of common stock issued and outstanding and 1,246,001 shares of SCB common stock were reserved for issuance under SCB’s equity incentive plans. Based on the number of CBC common stock currently issued and outstanding and assuming holders of all outstanding CBC stock options do not exercise their options prior to closing but are cashed out as provided in the merger agreement, SCB currently expects to issue approximately 13,468,451 shares of its common stock in connection with the merger.

If the merger is completed, CBC’s former shareholders may sell substantial amounts of SCB common stock in the public market following completion of the merger. Any such sales may cause the market price of SCB common stock to decrease. These sales might also make it more difficult for SCB to sell equity or equity-related securities at a time and price that it otherwise would deem appropriate.

The opinion received by SCB’s board of directors from SCB’s financial advisor, and the opinion received by CBC’s board of directors from CBC’s financial advisor, prior to the signing of the merger agreement will not reflect any changes since the date of such opinions.

Changes in the operations and prospects of SCB or CBC, general market and economic conditions and other factors that may be beyond the control of SCB and CBC, may alter the value of SCB or CBC or the market price for shares of SCB common stock or CBC common stock by the time the merger is completed. The opinions delivered by MJCP to the SCB board of directors, and by KBW to the CBC board of directors, do not speak as of any date other than the date of such opinions, which were both delivered on and dated January 29, 2024. MJCP’s opinion is attached as Appendix B to this joint proxy statement/prospectus and KBW’s opinion is attached as Appendix C to this joint proxy statement/prospectus. For a description of MJCP’s opinion, see “The Merger—Opinion of SCB’s Financial Advisor.” For a description of KBW’s opinion, see “The Merger—Opinion of CBC’s Financial Advisor.” For a description of the other factors considered by the SCB board of directors in determining to approve the merger, see “The Merger—SCB’s Reasons for the Merger; Recommendation of the SCB Board of Directors.” For a description of the other factors considered by the CBC board of directors in determining to approve the merger, see “The Merger—CBC’s Reasons for the Merger; Recommendation of the CBC Board of Directors.”

The merger is subject to the receipt of approvals or waivers from regulatory authorities that may impose conditions that could have an adverse effect on the combined company.

Before the merger can be completed, various approvals or waivers must be obtained from bank regulatory authorities. These authorities may impose conditions on the completion of the merger or require changes to the terms of the merger. Although SCB and CBC do not currently expect that any such conditions or changes will be imposed, there can be no assurance that they will not be, and such conditions or changes could have the effect of delaying completion of the merger, imposing additional costs on, or limiting the revenues of the combined company following the merger or causing SCB or CBC to terminate the merger agreement, which would result in the merger not occurring. See “The Merger — Regulatory Approvals” and “The Merger Agreement—Conditions to Completion of the Merger.”

The merger is subject to certain closing conditions that, if not satisfied or waived, will result in the merger not being completed, which may cause the prices of SCB common stock and CBC common stock to decline.

Consummation of the merger is subject to customary conditions to closing in addition to the receipt of the required regulatory approvals and approvals of the SCB and CBC shareholders of the merger. If any condition to the merger is not satisfied or waived, to the extent permitted by law, the merger will not be completed. In addition, SCB and CBC may terminate the merger agreement under certain circumstances even if the merger agreement is approved by SCB and CBC shareholders, including if the merger has not been completed on or before January 30, 2025. If the merger is not completed, the respective trading prices of SCB and CBC common stock on Nasdaq may decline to the extent that the current prices reflect a market assumption that the merger will be completed. In addition, neither company would realize any of the expected benefits of having completed the merger. Additionally, both SCB and CBC would have incurred significant expenses which could have a significant and material impact on their consolidated financial conditions and consolidated results of operations. For more information on closing conditions to the merger agreement, see “The Merger Agreement—Conditions to Completion of the Merger.”

SCB and CBC have incurred and will incur substantial additional expenses related to the merger.

SCB and CBC have incurred and will continue to incur substantial nonrecurring expenses associated with the merger. These include legal, accounting, financial advisory and other consulting expenses, as well as employee retention, severance and benefits-related expenses, and contract termination fees. Some of these expenses are payable by SCB and CBC regardless of whether the merger is completed. In addition, the combined company will incur substantial expenses in connection with consummation of the merger and integrating the business, operations, networks, systems, technologies, policies and procedures of CBC into that of SCB. Although SCB and CBC have assumed that a certain level of transaction and combination expenses would be incurred, there are a number of factors beyond their control that could affect the total amount or the timing of their combination expenses. While SCB and CBC have assumed that a certain level of costs will be incurred, many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. As a result of these expenses, both SCB and CBC expect to take charges against their earnings before completion of the merger and SCB expects to take charges against its earnings after completion of the merger. The charges taken in connection with the merger are expected to be significant, although the aggregate amount and timing of such charges are uncertain at present.

The merger may distract management of SCB and CBC from their other responsibilities.

The merger could cause the management of SCB and CBC to focus their time and energies on matters related to the merger that otherwise would be directed to their respective businesses and operations. Any such distraction on the part of management, if significant, could affect the ability of SCB and CBC to service existing business and develop new business and may adversely affect their businesses and earnings.

The shares of SCB common stock to be received by CBC shareholders as a result of the merger will have different rights than shares of the CBC’s common stock.

Upon completion of the merger, CBC’s shareholders will become SCB shareholders and their rights as shareholders will be governed by the SCB articles of incorporation and bylaws. The rights associated with CBC common stock are different from the rights associated with SCB common stock. See “Comparison of the Rights of Shareholders” beginning on page 85.”

Holders of SCB and CBC common stock will have reduced ownership and voting interests in the combined company after the merger and will exercise less influence over management.

Holders of SCB common stock currently have the right to vote in the election of the board of directors and on other matters affecting SCB. Holders of CBC common stock currently have the right to vote in the election of the board of directors and on other matters affecting CBC. Upon the completion of the merger, each CBC shareholder who receives shares of SCB common stock will become a shareholder of SCB with a percentage ownership of the combined company that is smaller than the shareholder’s percentage ownership of CBC. Similarly, as a result of SCB’s issuance of shares of SCB common stock in exchange for CBC common stock, upon completion of the merger, each SCB shareholder’s shares of SCB common stock will represent a percentage ownership of the combined company that is smaller than the shareholder’s percentage ownership of SCB immediately prior to the merger. In the aggregate, when the merger is completed, CBC’s current shareholders are expected to own approximately 42% of the issued and outstanding shares of the combine company and SCB’s shareholders are expected to own approximately 58% of the combined company. Because of this, SCB shareholders and CBC shareholders may have less influence on the management and policies of the combined company than they now have on the management and policies of SCB and CBC, as the case may be.

Shareholder litigation could prevent or delay the completion of the merger or otherwise negatively impact the business and operations of SCB and CBC.

SCB shareholders and/or CBC shareholders may file lawsuits against SCB, CBC and/or the directors and officers of either company in connection with the merger. One of the conditions to the closing is that no judgment, decree, injunction or other order issued by any jurisdiction or governmental authority preventing the consummation of the merger, the bank merger or any of the other transactions contemplated by the merger agreement be in effect. If any plaintiff were successful in obtaining an injunction prohibiting SCB or CBC defendants from completing the merger or any of the other transactions contemplated by the merger agreement, then such injunction may delay or prevent the effectiveness of the merger and could result in significant costs to SCB and/or CBC, including any cost associated with the indemnification of directors and officers of each company or the defense or settlement of any shareholder lawsuits filed in connection with the merger. Such litigation could have an adverse effect on the consolidated financial condition and consolidated results of operations of SCB and CBC and could prevent or delay the completion of the merger.

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

This joint proxy statement/prospectus may contain certain forward-looking statements, including but not limited to certain plans, expectations, projections and statements about the benefits of the proposed merger of SCB and CBC, the timing of completion of the merger, and other statements that are not historical facts. Such statements are subject to numerous assumptions, risks, and uncertainties. All statements other than statements of historical fact, including statements about beliefs and expectations, are forward-looking statements. Forward-looking statements may be identified by words such as “expect,” “anticipate,” “believe,” “intend,” “estimate,” “plan,” “target,” “goal,” or similar expressions, or future or conditional verbs such as “will,” “may,” “might,” “should,” “would,” “could,” or similar variations. The forward-looking statements are intended to be subject to the safe harbor provided by the Private Securities Litigation Reform Act of 1995.

Factors that could cause or contribute to results differing from those in or implied in the forward-looking statements include but are not limited to the occurrence of any event, change or other circumstances that could give rise to the right of SCB or CBC to terminate their agreement with respect to the merger; the outcome of any legal proceedings that may be instituted against SCB or CBC; delays in completing the merger; the failure to obtain necessary regulatory approvals (and the risk that such approvals impose conditions that could adversely affect the combined company or the expected benefits of the merger); the failure to obtain shareholder approvals or to satisfy any of the other conditions to the merger on a timely basis or at all; the ability to complete the merger and integration of SCB and CBC successfully; costs being greater than anticipated; cost savings being less than anticipated; changes in economic conditions; the risk that the merger disrupts the business of SCB, CBC or both; difficulties in retaining employees or customers; the impact of bank failures or other adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks; and other factors that may affect the future results of SCB and CBC. Additional factors that could cause results to differ materially from those described above can be found in SCB’s Annual Report on Form 10-K for the year ended December 31, 2023, which is on file with the SEC and is available in the “Investor Relations” section of SCB’s website, www.banksocal.com, in CBC’s Annual Report on Form 10-K for the year ended December 31, 2023, which is on file with the SEC and is available in the “Investor Relations” section of CBC’s website, www.californiabankofcommerce.com, and in other documents that SCB and CBC file with the SEC. Investors may obtain free copies of these documents and other documents filed with the SEC on its website at www.sec.gov.

All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither SCB nor CBC assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.

GENERAL INFORMATION

This document also constitutes a proxy statement for, and is being furnished to all record holders of, SCB in connection with the solicitation of proxies by the board of directors of SCB to be used at a special meeting of shareholders of SCB to be held on July 17, 2024 and any adjournment or postponement of the SCB special meeting. The purposes of the SCB special meeting are to consider and vote upon a proposal to approve the merger and principal terms of the merger agreement, a proposal to approve the SCB bylaw amendment to increase the range of the board of directors, a proposal to approve the SCB name change to change the name of the company to “California BanCorp”, a proposal to approve the SCB articles amendment to remove the board super majority approval requirement for certain stock issuances, and a proposal to adjourn the SCB special meeting to the extent necessary to solicit additional votes on the merger and the merger agreement.

This document constitutes a proxy statement for, and is being furnished to all record holders of, CBC in connection with the solicitation of proxies by the board of directors of CBC to be used at a special meeting of shareholders of CBC to be held on July 17, 2024 and any adjournment or postponement of the CBC special meeting. The purposes of the CBC special meeting are to consider and vote upon a proposal to approve the merger and the principal terms of the merger agreement and a proposal to adjourn the CBC special meeting to the extent necessary to solicit additional votes on the merger and the merger agreement.

This document also constitutes a prospectus of SCB relating to the SCB common stock to be issued upon completion of the merger to holders of CBC common stock as the merger consideration. See “The Merger Agreement —The Merger Consideration” beginning on page 56. Based on 8,470,724 shares of CBC common stock issued and outstanding on May 31, 2024 and an exchange ratio of 1.590, approximately 13,468,451 shares of SCB common stock will be issuable to shareholders of CBC upon completion of the merger.

SCB has supplied all of the information contained or incorporated by reference herein relating to SCB and SCB Bank, and CBC has supplied all of the information contained herein relating to CBC and CBC Bank.

THE SCB SPECIAL MEETING

General

This joint proxy statement/prospectus is being provided to SCB shareholders as part of a solicitation of proxies by the SCB board of directors for use at the SCB special meeting and at any adjournments or postponements of the special meeting. This joint proxy statement/prospectus provides SCB shareholders with important information about the SCB special meeting and should be read carefully in its entirety.

Date, Time and Place of the SCB Special Meeting

The SCB special meeting will be held at SCB’s headquarters located at 12265 El Camino Real, Suite 210, San Diego, CA 92130, on July 17, 2024, at 8:30 a.m. (local time).

Record Date for the SCB Special Meeting; Shares Entitled to Vote

Only holders of record of SCB common stock at the close of business on May 31, 2024 which is the record date for the SCB special meeting, are entitled to receive notice of and to vote at the meeting. On the record date, SCB had 18,540,104 shares of its common stock issued, outstanding and eligible to vote at the special meeting.

Quorum

A majority of the shares of SCB common stock outstanding on the record date must be represented in person or by proxy at the SCB special meeting in order for a quorum to be present for purposes of transacting business. Proxies marked as abstaining (including proxies containing broker non-votes) on any matter to be acted upon by shareholders will be treated as present at the meeting for purposes of determining a quorum but will not be counted as votes cast on such matters. If there is no quorum at the SCB special meeting, the affirmative vote of at least a majority of the votes present in person or represented by proxy and voting at the special meeting may adjourn the special meeting to another date.

Matters to be Considered

At the SCB special meeting, SCB shareholders will be asked to consider and vote on the following proposals:

Recommendation of the SCB Board of Directors

The board of directors of SCB unanimously recommends that the SCB shareholders vote “FOR” the SCB merger proposal, “FOR” the SCB bylaw amendment proposal, “FOR” the SCB name change proposal, “FOR” the SCB articles amendment proposal, and “FOR” the SCB adjournment proposal.

Number of Votes; Voting

Each holder of SCB common stock is entitled to cast one vote, in person or by proxy, for each share held in that shareholder’s name on the books of SCB as of the record date on all matters to be submitted to the vote of the shareholders. You may vote online, by phone, by mail or in person. If you wish to vote by mail, simply cast your vote on the proxy card that you will receive and sign and return it in the accompanying Business Reply Envelope. If you wish to vote in person at the SCB special meeting, simply check the box on the proxy card indicating that you plan to attend the special meeting. To vote online or by phone, you will need your “shareholder control number,” which is located in the bottom right-hand corner of the proxy card and the web address and toll-free phone number, both of which are included on the proxy card. No other personal information will be required in order to vote in this manner.

Broker Non-Votes

A broker non-vote occurs when a bank, broker, trustee or other nominee is not permitted to vote on a “non-routine” matter without instructions from the beneficial owner of the shares and the beneficial owner fails to provide the bank, broker, trustee or other nominee with such instructions. Broker non-votes only count toward a quorum if at least one proposal is presented with respect to which the bank, broker, trustee or other nominee has discretionary authority. It is expected that all proposals to be voted on at the SCB special meeting, except for the SCB bylaw amendment proposal and the SCB name change proposal, will be “non-routine” matters. If your bank, broker, trustee or other nominee holds your shares of SCB common stock in “street name,” such entity will vote your shares of SCB common stock on “non-routine” matters only if you provide instructions on how to vote by complying with the instructions provided to you by your bank, broker, trustee or other nominee with this joint proxy statement/prospectus.

Votes Required; Treatment of Abstentions, Broker Non-Votes and Failure to Vote

SCB Merger Proposal

The affirmative vote of a majority of the outstanding shares of common stock as of the record date is required to approve the SCB merger proposal. If you are present at the SCB special meeting and abstain from voting, or respond by proxy with an “ABSTAIN,” it will have the same effect as a vote cast “AGAINST” such proposal. If you are not present at the SCB special meeting and do not respond by proxy or do not provide your bank, broker, trustee or other nominee with instructions, as applicable, it will have the same effect as a vote cast “AGAINST” such proposal.

SCB Bylaw Amendment Proposal

The affirmative vote of a majority of the outstanding shares of common stock as of the record date is required to approve the SCB bylaw amendment proposal. If you are present at the SCB special meeting and abstain from voting, or respond by proxy with an “ABSTAIN,” it will have the same effect as a vote cast “AGAINST” such proposal. It is expected that the SCB bylaw amendment proposal will be deemed a “routine” matter, as a result your bank, broker, trustee or other nominee may vote on such proposal without instructions from you.

SCB Name Change Proposal

The affirmative vote of a majority of the outstanding shares of common stock as of the record date is required to approve the SCB name change proposal. If you are present at the SCB special meeting and abstain from voting, or respond by proxy with an “ABSTAIN,” it will have the same effect as a vote cast “AGAINST” such proposal. It is expected that the SCB name change proposal will be deemed a “routine” matter, as a result your bank, broker, trustee or other nominee may vote on such proposal without instructions from you.

SCB Articles Amendment Proposal

The affirmative vote of a majority of the outstanding shares of common stock as of the record date is required to approve the SCB articles amendment proposal. If you are present at the SCB special meeting and abstain from voting, or respond by proxy with an “ABSTAIN,” it will have the same effect as a vote cast “AGAINST” such proposal. If you are not present at the SCB special meeting and do not respond by proxy or do not provide your bank, broker, trustee or other nominee with instructions, as applicable, it will have the same effect as a vote cast “AGAINST” such proposal.

SCB Adjournment Proposal

The affirmative vote of at least a majority of the outstanding shares of common stock present in person or represented by proxy and voting at the SCB special meeting at which a quorum is present (which shares voting affirmatively constitute at least a majority of the required quorum) is required to approve the SCB adjournment proposal. If you are present at the SCB special meeting and abstain from voting, or respond by proxy with an “ABSTAIN,” it will have no effect on the outcome of the SCB adjournment proposal (unless the votes “FOR” such proposal do not constitute at least a majority of the required quorum). If you are not present at the SCB special meeting and do not respond by proxy or do not provide your bank, broker, trustee or other nominee with instructions, as applicable, it will have no effect on the outcome of such proposal (unless the votes “FOR” such proposal do not constitute at least a majority of the required quorum).

Shares of SCB Common Stock Subject to Voting Agreements

Each member of the SCB board of directors, who own in the aggregate approximately 5.4% of the outstanding shares of SCB common stock as of the record date, has entered into a voting agreement with CBC pursuant to which such director has agreed to vote all shares of SCB common stock that such director owns and has the power to vote in favor of the SCB merger proposal, the SCB bylaw amendment proposal and any other matter that is required to be approved by the shareholders of SCB to facilitate the transactions contemplated by the merger agreement. The voting agreements signed by the SCB directors are substantially in the form attached as Exhibit B to the merger agreement, which is attached as Appendix A to this joint proxy statement/prospectus. See “The Merger Agreement—Voting Agreements” beginning on page 67.

Voting of Proxies

Submitting Proxies

Whether or not you plan to attend the SCB special meeting, we urge you to complete, sign and date the enclosed proxy card and to return it promptly in the envelope provided. Returning the proxy card will not affect your right to attend the special meeting and vote. Instructions for all voting can be found on the proxy card included with this joint proxy statement/prospectus.

SCB shareholders who hold their shares in “street name” (that is, through a broker or other nominee) must vote their shares through the broker or other nominee. You should receive a form from your broker or other nominee asking how you want to vote your shares. Follow the instructions on that form to give voting instructions to your broker or other nominee. You may also vote over the Internet or by telephone if your shares are held in street name and your broker or other nominee has made provisions for such voting.

If you properly fill in your proxy card and send it to us in time to vote, your “proxy holders” (the individuals named on your proxy card) will vote your shares as you have directed. If you sign the proxy card but do not make specific choices, your proxy holders will vote your shares as recommended by the SCB board of directors as follows:

“FOR” the SCB merger proposal;

“FOR” the SCB bylaw amendment proposal;

“FOR” the SCB name change proposal;

“FOR” the SCB articles amendment proposal; and

“FOR” the SCB adjournment proposal.

Revoking Proxies

SCB shareholders who hold their shares in certificate form may revoke their proxies at any time before the time their proxies are voted at the SCB special meeting by: (i) filing with the Corporate Secretary of SCB an instrument revoking it or a duly executed proxy bearing a later date; or (ii) appearing and voting in person at the special meeting. Subject to such revocation, shares represented by a properly executed proxy received in time for the SCB special meeting will be voted by the proxy holders in accordance with the instructions on the proxy. IF NO INSTRUCTION IS SPECIFIED WITH RESPECT TO A MATTER TO BE ACTED UPON, THE SHARES REPRESENTED BY THE PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS LISTED ON THE PROXY. IF ANY OTHER BUSINESS IS PROPERLY PRESENTED AT THE SCB SPECIAL MEETING, THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF SCB’S BOARD OF DIRECTORS.

Written notices of proxy revocations must be sent so that they will be received before the taking of the vote at the special meeting as follows:

Southern California Bancorp

12265 El Camino Real, Suite 210

San Diego, CA 92130

Attention: Manisha K. Merchant, Corporate Secretary

A shareholder who has instructed a broker or other nominee to vote his or her shares must follow directions received from his or her broker or other nominee in order to change those instructions.

Other Matters

Under California law, no other business may be conducted at the SCB special meeting.

Dissenters’ Rights

In connection with the merger, under the CGCL, SCB shareholders are not entitled to exercise dissenters’ rights.

Solicitation of Proxies

The SCB board of directors is soliciting the proxies for the special meeting. SCB will pay for the cost of solicitation of proxies. In addition to solicitation by mail, SCB’s directors, officers and employees may also solicit proxies from shareholders by telephone, email, facsimile, or in person. SCB will not pay any additional compensation to these directors, officers or employees for these activities, but may reimburse them for reasonable out-of-pocket expenses.

Arrangements will also be made with brokerage houses and other custodians, nominees and fiduciaries to send the proxy materials to beneficial owners. SCB will, upon request, reimburse those brokerage houses and custodians for their reasonable expenses in so doing.

SCB PROPOSALS

Proposal 1: SCB Merger Proposal

SCB is asking holders of SCB common stock to approve the principal terms of the merger agreement and the transactions contemplated thereby, including the merger and the issuance of SCB common stock pursuant to the merger agreement. Holders of SCB common stock should read this joint proxy statement/prospectus carefully and in its entirety, including the appendixes, for more detailed information concerning the merger agreement and the merger. A copy of the merger agreement is attached to this joint proxy statement/prospectus as Appendix A.

After careful consideration, the SCB board of directors, by a unanimous vote of all directors, determined that the merger agreement and the transactions contemplated by the merger agreement are advisable and fair to and in the best interests of SCB and its shareholders, and unanimously adopted and approved the merger agreement, the merger and the other transactions contemplated by the merger agreement. See the section entitled “The Merger — SCB’s Reasons for the Merger; Recommendation of the SCB Board of Directors” for a more detailed discussion of the SCB board of directors’ recommendation.

The SCB board of directors unanimously recommends a vote “FOR” the SCB merger proposal.

Proposal 2: SCB Bylaw Amendment Proposal

As required by the merger agreement, SCB is asking SCB shareholders to approve the SCB bylaw amendment proposal.

The SCB bylaws currently authorize a range of six to 11 directors, with the exact number of directors within such range to be fixed by vote of the SCB board of directors or SCB’s shareholders. The merger agreement provides that at the effective time of the merger, the SCB board of directors will be comprised of 12 directors, including six continuing directors from SCB and six directors from the CBC board of directors. Because the SCB bylaws currently authorize a maximum of only 11 directors, in the merger agreement, SCB and CBC agreed that SCB would present this proposal to SCB shareholders at the SCB special meeting.

The SCB board of directors strongly believes that a larger board will provide greater diversity of ideas and the additional support needed to oversee a publicly traded company, which is particularly important in maintaining a highly functional board. In addition, the SCB board desires to amend the range of directors in order to accommodate changes to the number of directors required by the merger agreement, and to provide flexibility in the event of future additions to the board.

The SCB board of directors has approved an amendment to the SCB bylaws that would increase the range of the size of the board of directors from six to 11 directors to seven to 13 directors. The change would be made to Article III, Section 2 of the bylaws.

The amendment to the bylaws reads as follows:

“Section 2. Number of Directors. The authorized number of directors shall not be less than seven (7) nor more than thirteen (13). The exact number of authorized directors shall be fixed, within the limits specified above, by a resolution amending such exact number, duly adopted by the board of directors or by the shareholders. No reduction of the authorized number of directors shall have the effect of removing any director before that director’s term of office expires.”

If approved by the SCB shareholders, the SCB bylaw amendment will become effective immediately and regardless of whether the merger is ever completed.

The approval of the SCB bylaw amendment proposal by holders of SCB common stock is necessary to satisfy the conditions to the completion of the merger.

The SCB board of directors unanimously recommends a vote “FOR” the SCB bylaw amendment proposal.

Proposal 3: SCB Name Change Proposal

As contemplated by the merger agreement, SCB is asking SCB shareholder to approve an amendment to SCB’s articles of incorporation to change SCB’s corporate name to “California BanCorp.”

In the merger agreement, SCB and CBC agreed to select a new name for SCB as the combined company. SCB and CBC have agreed to change SCB’s name to “California BanCorp.” The name change is intended to more closely align the name of the company with its broader geographic market following completion of the merger. In addition, the SCB board of directors believes this change will simplify corporate communications while still maintaining the merged company’s core branding.

SCB will effect the name change by amending its articles of incorporation, which requires the approval of SCB’s shareholders. On May 7, 2024, the SCB board of directors unanimously approved an amendment to SCB’s articles of incorporation to change the corporate name from “Southern California Bancorp” to “California BanCorp.” SCB is asking SCB shareholders to approve the name change at the SCB special meeting.

The SCB board of directors has adopted resolutions setting forth the proposed name change in the form of an amendment to Article One and recommends that the shareholders approve such amendment. The resolutions also provide that the amendment be submitted to the shareholders entitled to vote on it for consideration at the SCB special meeting in accordance with the California Corporations Code. The following is the text of the proposed amendment to Article One of SCB’s articles of incorporation:

“The name of this Corporation is: California BanCorp”

If approved by the SCB shareholders, the SCB name change will become effective immediately upon completion of the merger. SCB will not implement the SCB name change proposal unless the merger is completed.

If the SCB name change becomes effective, the rights of shareholders holding certificated shares and the number of shares represented by those certificates will remain unchanged. The name change will not affect the validity or transferability of any currently outstanding stock certificates nor will it be necessary for shareholders with certificated shares to surrender or exchange any stock certificates they currently hold as a result of the name change. Any new stock certificates that are issued after the name change becomes effective will bear the name “California BanCorp”.

The approval of the SCB name change proposal by holders of SCB common stock is not a condition to the completion of the merger.

The SCB board of directors unanimously recommends a vote “FOR” the SCB name change proposal.

Proposal 4: SCB Articles Amendment Proposal

Article Eight of SCB’s articles of incorporation is proposed to be deleted because it is no longer necessary given the current ownership of SCB. Previously, SCB was majority owned by a single family and the super-majority board approval requirement for certain equity issuances was intended as a protection for minority shareholders. Over time, that majority ownership position has been significantly reduced, and will be so even more through the merger. Moreover, a representative of that family is no longer on the board. Accordingly, the SCB board of directors believes Article Eight is no longer necessary.

The SCB board of directors has adopted resolutions setting forth the proposed amendment in the form of the deletion of Article Eight of SCB’s articles of incorporation and recommends that the shareholders approve such amendment. The resolutions also provide that the amendment be submitted to the shareholders entitled to vote on it for consideration at the SCB special meeting in accordance with the California Corporations Code. The following is the text of the proposed amendment to Article Eight which is proposed to be deleted:

“ARTICLE EIGHT. SUPER MAJORITY VOTING: Any issuances of the Corporation’s authorized stock, other than pursuant to grants of stock options or awards of restricted shares pursuant to a board-approved equity compensation plan and other than pursuant to stock dividends or stock splits, shall require the affirmative vote of at least two-thirds (2/3) of the authorized number of directors. Any action by the board of directions to amend or repeal this ARTICLE EIGHT must be adopted by the affirmative vote of at least two-thirds (2/3) of the authorized number of directors.”

If approved by the SCB shareholders, the SCB articles amendment will become effective immediately upon completion of the merger, however its effectiveness is not conditioned on the merger and will be implemented even if the merger does not close.

If the SCB articles amendment becomes effective, the rights of shareholders holding certificated shares and the number of shares represented by those certificates will remain unchanged.

The approval of the SCB articles amendment proposal by holders of SCB common stock is not a condition to the completion of the merger.

The SCB board of directors unanimously recommends a vote “FOR” the SCB articles amendment proposal.

Proposal 5: SCB Adjournment Proposal

The SCB special meeting may be adjourned to another time or place, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the SCB special meeting to approve the SCB merger proposal, the SCB bylaw amendment proposal, the SCB name change proposal or the SCB articles amendment proposal, or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to holders of SCB common stock.

If, at the SCB special meeting, the number of shares of SCB common stock represented and voting in favor of the SCB merger proposal, the SCB bylaw amendment proposal, the SCB name change proposal or the SCB articles amendment proposal is insufficient to approve the SCB merger proposal, the SCB bylaw amendment proposal, the SCB name change proposal or the SCB articles amendment proposal, as the case may be, SCB intends to move to adjourn the SCB special meeting in order to enable the SCB board of directors to solicit additional proxies for approval of the SCB merger proposal, the SCB bylaw amendment proposal, the SCB name change proposal and the SCB articles amendment proposal. In that event, SCB will ask holders of SCB common stock to vote upon the SCB adjournment proposal, but not the SCB merger proposal, the SCB bylaw amendment proposal, the SCB name change proposal or the SCB articles amendment proposal.

In this proposal, SCB is asking holders of SCB common stock to authorize the holder of any proxy solicited by the SCB board of directors, on a discretionary basis, to vote in favor of adjourning the SCB special meeting to another time and place for the purpose of soliciting additional proxies, including the solicitation of proxies from holders of SCB common stock who have previously voted. Pursuant to the SCB bylaws, if the adjournment is for more than forty-five (45) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting must be given to each shareholder entitled to vote at the meeting.

The approval of the SCB adjournment proposal by holders of SCB common stock is not a condition to the completion of the merger.

The SCB board of directors unanimously recommends a vote “FOR” the SCB adjournment proposal.

THE CBC SPECIAL MEETING

General

This joint proxy statement/prospectus is being provided to CBC shareholders as part of a solicitation of proxies by the board of directors for use at the CBC special meeting and at any adjournments or postponements of the special meeting. This joint proxy statement/prospectus provides CBC shareholders with important information about the CBC special meeting and should be read carefully in its entirety.

Date, Time and Place of the CBC Special Meeting

The CBC special meeting will be held at 1300 Clay Street, Suite 500, Oakland, CA 94612, on July 17, 2024, at 8:30 a.m. (local time).

Record Date for the CBC Special Meeting; Shares Entitled to Vote

Only holders of record of CBC common stock at the close of business on May 31, 2024 which is the record date for the CBC special meeting, are entitled to receive notice of and to vote at the meeting. On the record date, CBC had 8,470,724 shares of its common stock issued, outstanding and eligible to vote at the CBC special meeting.

Quorum

A majority of the shares of CBC common stock outstanding on the record date must be represented in person or by proxy at the special meeting in order for a quorum to be present for purposes of transacting business. Proxies marked as abstaining (including proxies containing broker non-votes) on any matter to be acted upon by shareholders will be treated as present at the CBC special meeting for purposes of determining a quorum but will not be counted as votes cast on such matters. If there is no quorum at the special meeting, the affirmative vote of at least a majority of the votes present in person or represented by proxy and voting at the special meeting may adjourn the CBC special meeting to another date.

Matters to Be Considered

At the CBC special meeting, CBC shareholders will be asked to consider and vote on the following proposals:

Recommendation of the CBC Board of Directors

The board of directors of CBC unanimously recommends that the CBC shareholders vote “FOR” the CBC merger proposal and “FOR” the CBC adjournment proposal.

Number of Votes; Voting

Each holder of CBC common stock is entitled to cast one vote, in person or by proxy, for each share held in that shareholder’s name on the books of CBC as of the record date on all matters to be submitted to the vote of the shareholders. You may vote online, by phone, by mail or in person. If you wish to vote by mail, simply cast your vote on the proxy card that you will receive and sign and return it in the accompanying Business Reply Envelope. If you wish to vote in person at the special meeting, simply check the box on the proxy card indicating that you plan to attend the CBC special meeting. To vote online or by phone, you will need your “shareholder control number,” which is located in the bottom right-hand corner of the proxy card and the web address and toll-free phone number, both of which are included on the proxy card. No other personal information will be required in order to vote in this manner.

Broker Non-Votes

A broker non-vote occurs when a bank, broker, trustee or other nominee is not permitted to vote on a “non-routine” matter without instructions from the beneficial owner of the shares and the beneficial owner fails to provide the bank, broker, trustee or other nominee with such instructions. Broker non-votes only count toward a quorum if at least one proposal is presented with respect to which the bank, broker, trustee or other nominee has discretionary authority. It is expected that all proposals to be voted on at the CBC special meeting will be “non-routine” matters, and, as such, broker non-votes, if any, will not be counted as present and entitled to vote for purposes of determining a quorum at the CBC special meeting. If your bank, broker, trustee or other nominee holds your shares of CBC common stock in “street name,” such entity will vote your shares of CBC common stock only if you provide instructions on how to vote by complying with the instructions provided to you by your bank, broker, trustee or other nominee with this joint proxy statement/prospectus.

Votes Required; Treatment of Abstentions, Broker Non-Votes and Failure to Vote

CBC Merger Proposal

The affirmative vote of a majority of the outstanding shares of common stock as of the record date is required to approve the CBC Merger Proposal. If you are present at the CBC special meeting and abstain from voting, or respond by proxy with an “ABSTAIN,” it will have the same effect as a vote cast “AGAINST” such proposal. If you are not present at the CBC special meeting and do not respond by proxy or do not provide your bank, broker, trustee or other nominee with instructions, as applicable, it will have the same effect as a vote cast “AGAINST” such proposal.

CBC Adjournment Proposal

The affirmative vote of at least a majority of the outstanding shares of common stock present in person or represented by proxy and voting at the special meeting at which a quorum is present (which shares voting affirmatively constitute at least a majority of the required quorum) is required to approve the CBC adjournment proposal. If you are present at the CBC special meeting and abstain from voting, or respond by proxy with an “ABSTAIN,” it will have no effect on the outcome of the CBC adjournment proposal (unless the votes “FOR” such proposal do not constitute at least a majority of the required quorum). If you are not present at the CBC special meeting and do not respond by proxy or do not provide your bank, broker, trustee or other nominee with instructions, as applicable, it will have no effect on the outcome of such proposal (unless the votes “FOR” such proposal do not constitute at least a majority of the required quorum).

Shares of CBC Common Stock Subject to Voting Agreements

Each member of the CBC board of directors, who own in the aggregate approximately 8.96% of the outstanding shares of CBC common stock as of the record date, has entered into a voting agreement with SCB pursuant to which such shareholder has agreed to vote all shares of CBC common stock that such shareholder owns and has the power to vote in favor of the CBC merger proposal and any other matter that is required to be approved by the shareholders of CBC to facilitate the transactions contemplated by the merger agreement. The voting agreements signed by the CBC directors are substantially in the form attached as Exhibit A to the merger agreement, which is attached as Appendix A to this joint proxy statement/prospectus. See “The Merger Agreement—Voting Agreements” beginning on page 67.

Voting of Proxies

Submitting Proxies

Whether or not you plan to attend the CBC special meeting, we urge you to complete, sign and date the enclosed proxy card and to return it promptly in the envelope provided. Returning the proxy card will not affect your right to attend the special meeting and vote. Instructions for all voting can be found on the proxy card included with this joint proxy statement/prospectus.

CBC shareholders who hold their shares in “street name” (that is, through a broker or other nominee) must vote their shares through the broker or other nominee. You should receive a form from your broker or other nominee asking how you want to vote your shares. Follow the instructions on that form to give voting instructions to your broker or other nominee. You may also vote over the Internet or by telephone if your shares are held in street name and your broker or other nominee has made provisions for such voting.

If you properly fill in your proxy card and send it to us in time to vote, your “proxy holders” (the individuals named on your proxy card) will vote your shares as you have directed. If you sign the proxy card but do not make specific choices, your proxy holders will vote your shares as recommended by the board of directors as follows:

“FOR” the CBC merger proposal; and

“FOR” the CBC adjournment proposal.

Revoking Proxies

CBC shareholders who hold their shares in certificate form may revoke their proxies at any time before the time their proxies are voted at the CBC special meeting by: (i) filing with the Corporate Secretary of CBC an instrument revoking it or a duly executed proxy bearing a later date; or (ii) appearing and voting in person at the special meeting. Subject to such revocation, shares represented by a properly executed proxy received in time for the special meeting will be voted by the proxy holders in accordance with the instructions on the proxy. IF NO INSTRUCTION IS SPECIFIED WITH RESPECT TO A MATTER TO BE ACTED UPON, THE SHARES REPRESENTED BY THE PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS LISTED ON THE PROXY. IF ANY OTHER BUSINESS IS PROPERLY PRESENTED AT THE CBC SPECIAL MEETING, THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF CBC’S BOARD OF DIRECTORS.

Written notices of proxy revocations must be sent so that they will be received before the taking of the vote at the special meeting as follows:

California BanCorp

1300 Clay Street, Suite 500

Oakland, CA 94612

Attention: Tommiette Rey, Corporate Secretary

A shareholder who has instructed a broker or other nominee to vote his or her shares must follow directions received from his or her broker or other nominee in order to change those instructions.

Other Matters

Under California law, no other business may be conducted at the CBC special meeting.

Dissenters’ Rights

In connection with the merger, under the CGCL, CBC shareholders are not entitled to exercise dissenters’ rights.

Solicitation of Proxies

The CBC board of directors is soliciting the proxies for the special meeting. CBC will pay for the cost of solicitation of proxies. In addition to solicitation by mail, CBC’s directors, officers and employees may also solicit proxies from shareholders by telephone, email, facsimile, or in person. CBC will not pay any additional compensation to these directors, officers or employees for these activities, but may reimburse them for reasonable out-of-pocket expenses.

Arrangements will also be made with brokerage houses and other custodians, nominees and fiduciaries to send the proxy materials to beneficial owners. CBC will, upon request, reimburse those brokerage houses and custodians for their reasonable expenses in so doing.

CBC PROPOSALS

Proposal 1: CBC Merger Proposal

CBC is asking holders of CBC common stock to approve the principal terms of the merger agreement and the transactions contemplated thereby, including the merger. Holders of CBC common stock should read this joint proxy statement/prospectus carefully and in its entirety, including the appendixes, for more detailed information concerning the merger agreement and the merger. A copy of the merger agreement is attached to this joint proxy statement/prospectus as Appendix A.

After careful consideration, the CBC board of directors, by a unanimous vote of all directors, determined that the merger agreement and the transactions contemplated by the merger agreement are advisable and fair to and in the best interests of CBC and its shareholders, and unanimously adopted and approved the merger agreement, the merger and the other transactions contemplated by the merger agreement. See the section entitled “The Merger — CBC’s Reasons for the Merger; Recommendation of the SCB Board of Directors” for a more detailed discussion of the CBC board of directors’ recommendation.

The CBC board of directors unanimously recommends a vote “FOR” the CBC merger proposal.

Proposal 2: CBC Adjournment Proposal

The CBC special meeting may be adjourned to another time or place, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the CBC special meeting to approve the CBC merger proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to holders of CBC common stock.

If, at the CBC special meeting, the number of shares of CBC common stock represented and voting in favor of the SCB merger proposal is insufficient to approve the CBC merger proposal, CBC intends to move to adjourn the CBC special meeting in order to enable the CBC board of directors to solicit additional proxies for approval of the CBC merger proposal. In that event, CBC will ask holders of CBC common stock to vote upon the CBC adjournment proposal, but not the CBC merger proposal.

In this proposal, CBC is asking holders of CBC common stock to authorize the holder of any proxy solicited by the CBC board of directors, on a discretionary basis, to vote in favor of adjourning the CBC special meeting to another time and place for the purpose of soliciting additional proxies, including the solicitation of proxies from holders of CBC common stock who have previously voted. Pursuant to the CBC bylaws, if the adjournment is for more than forty-five (45) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting must be given to each shareholder entitled to vote at the meeting.

The approval of the CBC adjournment proposal by holders of CBC common stock is not a condition to the completion of the merger.

The CBC board of directors unanimously recommends a vote “FOR” the CBC adjournment proposal.

THE MERGER

This section of the joint proxy statement/prospectus describes material aspects of the merger. This summary may not contain all of the information that is important to you. You should carefully read this entire joint proxy statement/prospectus and the other documents we refer you to for a more complete understanding of the merger. In addition, we incorporate important business and financial information about each of SCB and CBC into this document by reference. You may obtain the information incorporated by reference into this document without charge by following the instructions in the section entitled “Where You Can Find More Information” beginning on page 93.

Terms of the Merger

Each of the SCB board of directors and CBC board of directors has unanimously adopted and approved the merger agreement and the transactions contemplated thereby, including the merger. The merger agreement provides that CBC will merge with and into SCB, with SCB being the surviving company in the merger. Immediately following the merger, CBC’s wholly-owned bank subsidiary, CBC Bank, will merge with and into SCB’s wholly-owned bank subsidiary, SCB Bank, with SCB Bank being the surviving bank in the bank merger. We expect to complete the merger and the bank merger in the third quarter of 2024.

Subject to the terms and conditions of the merger agreement, at the effective time of the merger, each share of CBC common stock issued and outstanding immediately prior to the effective time (other than certain shares held by CBC as treasury stock or owned by SCB or CBC, subject to certain exceptions set forth in the merger agreement), will be converted into the right to receive 1.590 shares of SCB common stock. CBC shareholders who would otherwise be entitled to a fraction of a share of SCB common stock in the merger will instead receive, in lieu of the fraction of a share, an amount in cash (rounded to the nearest cent), without interest, determined by multiplying such fractional interest by the 10-day volume weighted average price of SCB common stock calculated prior to closing of the merger.

SCB shareholders are being asked to approve the SCB merger proposal and CBC shareholders are being asked to approve the CBC merger proposal. See the section entitled “The Merger Agreement” beginning on page 56 for additional and more detailed information regarding the legal documents that govern the merger, including information about the conditions to the completion of the merger and the provisions for terminating or amending the merger agreement.

Background of the Merger

Each of the SCB and CBC boards of directors and management teams frequently review their companies’ respective business strategies and objectives, including strategic opportunities and challenges, and have considered various strategic options potentially available to SCB and CBC, in each case with the goal of enhancing value for their respective shareholders and delivering the best possible services to their respective customers and communities. These strategic reviews have focused on, among other things, the business and regulatory environments facing financial institutions generally, and SCB and CBC in particular, as well as conditions and trends in the banking industry.

Throughout 2023, Mr. Steven E. Shelton, Chief Executive Officer of CBC, and Mr. Thomas A. Sa, President, Chief Operating Officer and Chief Financial Officer of CBC, met with other California bank executive management teams to become familiar with their organizations in the event that the board of CBC decided to explore strategic opportunities. On January 12, 2023, one of those meetings was with Mr. David I. Rainer, Chairman and Chief Executive Officer of SCB, Mr. Richard Hernandez, President of SCB, and Mr. Thomas Dolan, Chief Financial Officer of SCB. At that meeting, they discussed their respective histories, markets, strategic directions and organizations. Mr. Shelton, Mr. Sa, Mr. Rainer, Mr. Hernandez and Mr. Dolan subsequently met during the following investor conferences in 2023 and 2024 where they continued general discussions about their respective companies and conditions in the banking industry:

Throughout 2023, representatives of different investment banking firms presented current economic environment and strategic options for growth to the board of directors of SCB. In each of these presentations, the investment bank representatives presented acquisition and merger of partners, of which CBC was included.

On July 26, 2023 the SCB strategic planning committee held a meeting whereby members of SCB management were present. At the meeting, Mr. Rainer discussed various strategic growth opportunities including a potential merger with CBC. On July 26, 2023 the strategic planning committee of SCB’s board of directors held a meeting at which members of SCB management were present. At the meeting, Mr. Rainer discussed various strategic growth opportunities including a potential merger with CBC.

On September 5, 2023, the CBC strategic planning committee held a meeting at which members of CBC’s management and representatives of KBW, financial advisor to CBC, were present. At the meeting, members of the committee and CBC’s management and representatives of KBW discussed current industry trends and the mergers and acquisitions environment generally. Members of the committee and CBC’s management and representatives of KBW also discussed a number of potential strategic opportunities and alternatives that could potentially enhance value for CBC’s shareholders. These opportunities included a potential business combination transaction with SCB, which was identified as a strong strategic fit and a compelling financial opportunity based on, among other things, the possibility of creating a premier California business bank, complementary business lines and geographic footprint, and cultural compatibility of the two companies.

On September 13, 2023, the SCB board of directors held a meeting at which members of SCB management were present. At the meeting, Mr. Rainer provided updates on the SCB’s growth strategy, merger and acquisition activity, and updates on various growth opportunities, including an opportunity with CBC.

On September 20, 2023, the CBC strategic planning committee held a meeting at which members of CBC’s management and representatives of KBW were present. At the meeting, members of the committee and CBC’s management and representatives of KBW continued their discussion regarding a potential business combination transaction with SCB, including the technical aspects of merger accounting for such a transaction.

On October 11, 2023, SCB and CBC signed a mutual non-disclosure agreement and began to exchange confidential information to facilitate both companies’ evaluation of a potential business combination between SCB and CBC. Beginning October 11, 2023 and continuing through January 30, 2024, representatives of SCB and CBC met in person and communicated by phone and other electronic means to review business, financial and other information regarding each company. During these meetings, members of management of each of the companies engaged in a series of discussions and asked and answered questions regarding each company’s respective businesses. Representatives of the companies’ respective financial and legal advisors were also present at these meetings.

On October 16, 2023, the CBC board of directors held its annual board retreat session at which members of the CBC board and representatives of KBW were present. At the meeting, members of the board and representatives of KBW discussed the strategic and financial considerations of a potential business combination with SCB, including a review of the potential financial terms and financial impact of the merger, and how those metrics compared to recent mergers in the banking industry.

On October 17, 2023, the CBC board of directors held a meeting at which members of CBC’s management and representatives of KBW were present. At the meeting, members of the CBC board and CBC’s management and representatives of KBW discussed the matters and information reviewed by KBW with the strategic planning committee on September 5, 2023. The matters and information included current industry and merger and acquisition trends, CBC’s franchise overview in relation to selected banks, preliminary valuation matters, and potential strategic opportunities and alternatives that could potentially enhance value for CBC’s shareholders. These opportunities included the potential business combination transaction with SCB. Also at this meeting, the CBC board of directors formed a transaction committee comprised entirely of independent directors to review and assess a potential business combination with SCB and to make recommendations to the full board. The CBC transaction committee was composed of directors Cortese, Armanino and Klein.

On October 19, 2023, the SCB strategic planning committee held a meeting. At that meeting, Mr. Rainer presented an overview of a number of strategic opportunities to the committee, including an opportunity with CBC. Among other items, he discussed the synergies and relationships between SCB and CBC. He further reviewed the financial highlights of CBC with the strategic planning committee and led a discussion about the strengths and challenges that would exist if such a transaction were consummated. The strategic planning committee asked questions related to the financial metrics and social aspects of CBC to which Mr. Rainer responded. Mr. Rainer further shared that SCB executed a Non-Disclosure Agreement with CBC in order to facilitate the exchange of additional information.

On October 26, 2023, Mr. Shelton, Mr. Sa, Mr. Cortese and Mr. Rainer met in person in Berkeley, California. This was an introductory meeting between Mr. Cortese and Mr.Rainer. The discussions during this meeting did not involve any specific pricing or governance terms.

On November 1, 2023, Mr. Rainer and SCB director David Volk met in person with the members of the CBC transaction committee in Berkeley, California. The parties discussed the potential benefits to shareholders of a possible business combination transaction, given SCB’s and CBC’s complementary market areas and cultures and the anticipation that the combined institution would be better able to compete for and serve customers than either institution on its own. During this meeting, the parties discussed various issues and agreed there would be an equal number of legacy CBC directors and legacy SCB directors serving on the combined holding company and combined bank boards, Mr. Rainer would serve as Executive Chairman of the combined holding company and combined bank boards, Mr. Shelton would serve as the Chief Executive Officer of the combined holding company and combined bank, and other executive roles would be filled by incumbents from both SCB and CBC. The parties also agreed that the combined holding company and combined bank would be headquartered in San Diego, California.

On November 9, 2023, the CBC transaction committee held a meeting at which members of CBC’s management and representatives of KBW were present. At the meeting, members of the committee and CBC’s management and representatives of KBW discussed the potential terms and financial assumptions related to the potential business transaction with SCB. At the conclusion of the meeting, the committee authorized members of CBC’s management and representatives of KBW to continue negotiations with members of SCB’s management and representatives of MJCP, SCB’s financial advisor, regarding a potential business combination between CBC and SCB.

On November 14, 2023, SCB and CBC mutually agreed to open a secure electronic data room and provide and grant access to preliminary due diligence items from both companies. Over the next few weeks, preliminary due diligence items were uploaded and reviewed by both companies, respectively.

On November 15, 2023, Mr. Shelton updated Mr. Cortese, Chairman of the CBC board of directors and a member of the CBC transaction committee, regarding the ongoing work being undertaken by CBC’s management and KBW.

On November 15, 2023, the SCB strategic planning committee held a meeting during which, among other items, previous discussions regarding a potential business transaction with CBC were discussed, including the advantages of such a transaction if SCB were to move forward. Mr. Rainer provided an update on recent activities including, among other items, the engagement of MJCP, as financial advisor to SCB; a proposed timeline; key milestones, to include agreement on exchange ratio, market value, and payment of premiums; and initial due diligence requests. The committee asked questions related to the key milestones, among other items. Mr. Rainer further discussed the overall strategy and risks related to retention of key management, personnel, and employees, as well as a discussion of the composition of board, which would be comprised of an equal number of legacy CBC directors and legacy SCB directors serving on the combined holding company and combined bank boards, Mr. Rainer would serve as Executive Chairman of the combined holding company and combined bank boards, Mr. Shelton would serve as the Chief Executive Officer of the combined holding company and combined bank, and other executive roles would be filled by incumbents from both SCB and CBC. The parties also agreed that the combined holding company and combined bank would be headquartered in San Diego, California. Additional discussion ensued regarding the potential business transaction with CBC, including the proposed board composition and management structure.

On November 22, 2024, the SCB board of directors and the strategic planning committee held a special meeting at which members of SCB management were present. At the meeting, Mr. Rainer discussed the potential business transaction with CBC and provided an update on the ongoing work being undertaken by MJCP. MJCP presented an overview of CBC, its ownership, board members, financials, geographic footprint, and composition of its loans and deposits. MJCP then reviewed the project’s financial model, which included the contribution and sensitivity analysis leading to the calculated exchange ratio if a transaction were to be consummated. MJCP then reviewed a proposed timeline and responsibilities associated with strategic opportunity with CBC. Mr. Rainer then noted he had received an engagement letter from MJCP and requested the SCB board’s approval to grant authority to the strategic planning committee to review the letter and proceed with the engagement if the committee deemed it appropriate.

On November 27, 2023, the CBC transaction committee held a special meeting at which members of CBC’s management and representatives of KBW and Sheppard, Mullin, Richter & Hampton, LLP (“Sheppard Mullin”), CBC’s outside counsel, were present. At the meeting, the CBC transaction committee reviewed updated financial information regarding the potential business transaction between CBC and SCB.

Following this meeting, Mr. Shelton updated Mr. Cortese, Chairman of the CBC board of directors and a member of the CBC transaction committee, regarding the ongoing work being undertaken by CBC’s management and KBW.

On December 4, 2023, the CBC transaction committee held a meeting at which members of CBC’s management and representatives of KBW and Sheppard Mullin were present. At the meeting, representatives of KBW reviewed with the committee the latest updated financial information for the potential business transaction between CBC and SCB.

On December 5, 2023, the CBC board of directors held a meeting at which members of CBC’s management and representatives of KBW and Sheppard Mullin were present. At the meeting, the CBC transaction committee and members of CBC’s management briefed the directors on the discussions that had taken place between representatives of SCB and CBC since the prior meeting of the CBC board of directors and described the status of continued negotiations between the parties, including the latest proposed corporate governance terms for the potential transaction. Members of the CBC transaction committee and CBC’s management discussed the strategic and financial rationale for a possible combination with SCB and the potential governance of the combined company. Representatives of KBW reviewed with the board the latest updated financial information for the potential business transaction between SCB and CBC. In addition, a representative of Sheppard Mullin reviewed the directors’ fiduciary duties in connection with the CBC board of directors’ evaluation of the potential transaction. At the conclusion of the meeting, the CBC board of directors authorized negotiation of an exchange ratio in the range of between 1.575 and 1.650 shares of SCB common stock per share of CBC common stock and directed KBW to contact MJCP in order to relay CBC’s views on the exchange ratio.

On December 5, 2023, the SCB board of directors and strategic planning committee held a special meeting whereby Mr. Rainer shared updates with SCB on the potential business transaction between SCB and CBC. MJCP presented and reviewed revised modeling projections for the potential merger including details regarding an updated exchange ratio, earn-back period, cost save amounts and earnings-per-share calculations. Mr. Rainer further discussed an internal projection model for comparison with the MJCP model, stating the projections were substantially similar. Management provided an update on the draft indication of interest letter and timing related to the same. The SCB board of directors delegated the authority to review and negotiate the letter of interest to the strategic planning committee. Additionally, the law firm of Stuart | Moore | Staub (“Stuart Moore”) was engaged to represent SCB in the transaction.

On December 7, 2023, the CBC transaction committee held a meeting at which members of CBC’s management and representatives of KBW and Sheppard Mullin were present. At the meeting, representatives of KBW updated the CBC transaction committee on KBW’s discussions with MJCP.

On December 8, 2023, the SCB board of directors and the strategic planning committee held a joint meeting where MJCP reviewed the updated model for a potential business transaction between SCB and CBC. MJCP presented details regarding a proposed exchange ratio of 1.625 shares of SCB common stock for each share of CBC stock . MJCP then reviewed other key metric calculations, including book value dilution, purchase accounting marks, and expected investor reception to the deal, among other topics, as well as an anticipated timeline for the deal to commence and close. The strategic planning committee reviewed an updated non-binding letter of intent, which included an all-stock transaction that set forth, among other things, the proposed exchange ratio of 1.625 shares of SCB common stock for each share of CBC stock subject to a full due diligence review and a 90-day exclusivity covenant from CBC. The non-binding indication of interest proposed an equal number of legacy CBC directors and legacy SCB directors serving on the combined holding company and combined bank boards, Mr. Rainer serving as Executive Chairman of the combined holding company and combined bank boards, Mr. Shelton serving as the Chief Executive Officer of the combined holding company and combined bank, Mr. Thomas Dolan serving as Chief Financial Officer of the combined holding company, Mr. Hernandez serving as President of the combined holding company and combined bank, and Mr. Sa serving as Executive Vice President of the combined holding company and combined bank. The strategic planning committee approved the indication of interest letter and delegated to management authority to negotiate and execute the same.

On December 9, 2023, SCB submitted to CBC an initial non-binding indication of interest letter for the merger of CBC into SCB in an all-stock transaction that set forth, among other things, a proposed exchange ratio of 1.625 shares of SCB common stock for each share of CBC stock subject to a full due diligence review and a 90-day exclusivity covenant from CBC. The non-binding indication of interest proposed an equal number of legacy CBC directors and legacy SCB directors serving on the combined holding company and combined bank boards, Mr. Rainer serving as Executive Chairman of the combined holding company and combined bank boards, Mr. Shelton serving as the Chief Executive Officer of the combined holding company and combined bank, Mr. Thomas Dolan serving as Chief Financial Officer of the combined holding company, Mr. Hernandez serving as President of the combined holding company and combined bank, and Mr. Sa serving as Executive Vice President of the combined holding company and combined bank.

The CBC transaction committee, CBC’s management, representatives of KBW and representative of Sheppard Mullin reviewed and discussed the contents of SCB’s initial non-binding indication of interest on December 9, 2023 and December 10, 2023. On December 10, 2023, the CBC transaction committee held a meeting to review proposed revisions to the non-binding indication of interest, including those relating to the inclusion of CBC stock options and restricted stock units in the calculation of the aggregate consideration, indemnification and insurance for officers and directors of CBC, and revising the exclusivity covenant to bind it on both parties including SCB. At the direction of the CBC transaction committee, Sheppard Mullin communicated these changes to SCB on December 11, 2023. Later in the day on December 11, 2023, SCB delivered to CBC a signed non-binding indication of interest letter that incorporated the above-described changes requested by CBC. Other than those changes, the material transaction terms set forth in the revised non-binding indication of interest letter remained unchanged from the initial non-binding indication of interest letter submitted by SCB on December 9, 2023.

On December 12, 2023, the CBC board of directors held a special meeting to review and approve the revised non-binding indication of interest and directed that CBC move forward to the diligence phase and prepare an initial draft of a merger agreement.

On December 12, 2023, the SCB strategic planning committee held a meeting at which SCB management and representatives from Stuart Moore were present. Mr. Rainer noted an executed version of the indication of interest letter had been submitted to CBC team and was expected to be countersigned and returned later in the day. Extensive discussion then ensued regarding the anticipated due diligence process and the responsibilities of each of strategic planning committee and board of director responsibilities to SCB shareholders if the potential business transaction with CBC commences and throughout the transaction process.

On December 15, 2023, SCB and CBC set up a secure electronic data room to facilitate the sharing of documents for the broader mutual diligence process. From December 15, 2023 to January 19, 2024, SCB and CBC management teams met with each other in various due diligence sessions to discuss their companies’ operations and strategies and to review documents that were uploaded to the electronic data room.

On December 15, 2023, Sheppard Mullin provided an initial draft of a proposed merger agreement to Stuart Moore, SCB’s legal counsel. Thereafter and continuing until the merger agreement was executed, the parties and their respective counsel exchanged several drafts of the merger agreement and related transaction documents to be entered into in connection with the potential transaction, and negotiated the terms of the merger agreement and related documents, reflecting ongoing discussions between the parties regarding transaction terms, including with respect to the corporate governance framework for the combined company.

On December 19, 2023, the CBC transaction committee held a special meeting at which members of CBC’s management and representatives of KBW and Sheppard Mullin were present. In the meeting, members of the committee reviewed the proposed governance structure and management of the combined holding company and combined bank and the treatment of CBC executives currently employed pursuant to written employment agreements. A representative of Sheppard Mullin reviewed with the CBC transaction committee the current draft of the proposed merger agreement.

On December 21, 2023, Mr. Rainer and Mr. Cortese met in person in Berkeley, California to discuss proposed compensation and employment arrangements for management of the combined holding company and combined bank. Mr. Rainer indicated that Mr. Shelton would be offered a written employment agreement, while other CBC executives would be asked to terminate their existing employment agreements with CBC at the closing of the merger in exchange for offers of employment and new change in control agreements with SCB. Mr. Rainer and other executives of SCB would be asked to modify their existing employment arrangements with SCB to accommodate the proposed management structure. Mr. Rainer and Mr. Cortese continued to discuss terms of employment over the phone on multiple occasions during the following three weeks.

On January 15, 2024, Stuart Moore provided an initial draft of the offer letters for CBC executives that would be asked to terminate their existing employment agreements in exchange for offers of employment and new change in control agreements with SCB. An initial draft of the proposed employment agreements for Mr. Rainer and Mr. Shelton were provided by Stuart Moore on January 22, 2024.

On January 19, 2024, SCB and CBC management conducted a management due diligence session to discuss recent fourth quarter financial results and to cover any outstanding due diligence items from both companies. Representatives of the companies’ respective legal and financial advisors were also present. In addition to due diligence discussions between SCB and CBC, the participants in the meeting also discussed a timeline for entering into and announcing a definitive merger agreement, including timing of the announcement, employee and customer communication plans.

Later in the day on January 19, 2024, the CBC transaction committee held a special meeting at which members of CBC’s management and representatives of KBW and Sheppard Mullin were present. In the meeting, members of the committee and management and representatives of KBW and Sheppard Mullin discussed SCB’s and CBC’s recent due diligence findings and the potential reduction of the initial exchange ratio as presented in the agreed upon indication of interest. Members of the committee posed questions to representatives of KBW regarding the financial impact and related deal metrics related to a potential change in the exchange ratio. After thorough discussion, the CBC transaction committee directed Mr. Cortese to reach out directly to Mr. Rainer to discuss the exchange ratio. Mr. Cortese contacted Mr. Rainer after the meeting and they both agreed that representatives of KBW and MJCP should discuss the latest financial information regarding SCB and CBC so the parties could reconvene on Monday, January 22, 2024.

Throughout the weekend of January 20, 2024 and January 21, 2024, representatives of KBW and MJCP discussed the latest financial information regarding SCB and CBC, including updated assumptions regarding interest rates and credit marks. Through MJCP, SCB communicated that, based on the latest financial information regarding SCB and CBC, there would need to be an adjustment to the exchange ratio to bring the deal metrics back in line with what they had expected at the time they received the non-binding indication of interest.

On January 22, 2024, the CBC transaction committee held a special meeting at which members of CBC’s management and representatives of KBW and Sheppard Mullin were present. In the meeting, representatives of KBW discussed their weekend discussions with representatives of MJCP and informed the committee that MJCP had relayed that SCB was prepared to move forward with an exchange ratio of 1.580. After thorough discussion, the CBC transaction committee decided that Mr. Cortese should reach out directly to Mr. Rainer to discuss the exchange ratio. Mr. Cortese contacted Mr. Rainer after the meeting and they both agreed upon recommending a 1.590 exchange ratio to their respective boards. In addition, a representative of Sheppard Mullin reviewed the current draft of the proposed merger agreement and changes proposed by SCB and its counsel, Stuart Moore.

On January 22, 2024, the CBC board of directors held a special meeting at which members of CBC’s management and representatives of KBW and Sheppard Mullin were present. In the meeting, members of the CBC board and management and representatives of KBW and Sheppard Mullin discussed SCB’s and CBC’s recent due diligence findings and the proposed new exchange ratio, including associated financial impact and related deal metrics. A representative of Sheppard Mullin reviewed the current draft of the proposed merger agreement and changes proposed by SCB and its counsel, Stuart Moore. After thorough discussion, the CBC board of directors directed management and representatives of Sheppard Mullin to finalize the merger agreement with SCB under the new proposed exchange ratio of 1.590 shares of SCB common stock for each share of CBC stock.

On January 23, 2024, the SCB strategic planning committee met with Mr. Shelton whereby he shared his experience and background, and history of CBC and CBC Bank. He further discussed the synergies between the two management teams, the culture, and the overlap between investors/shareholders.

On January 24, 2024, the SCB compensation, nominations, and governance committee met to review and discuss the proposed employment agreement for Mr. Shelton and Mr. Rainer as well as offers of employment and new CIC agreements with SCB for CBC executives that were continuing forward post-merger. At the meeting, an overview of the compensation framework and factors that should be considered in the analysis provided by Stuart Moore was reviewed and discussed. The CBC executives, with the exception of Mr. Shelton, would enter into Termination and Waiver Agreements, previously distributed to the committee members, and would have a change-in-control provision similar to executives at SCB. The committee asked questions related to the compensation, process, and proposed agreements related to the impacted CBC executives, to which management responded. The committee approved the Termination and Waiver Agreements and the committee further delegated authority to Mr. Rainer to negotiate and execute the agreements as appropriate.

In addition, Mr. Rainer presented a summary of proposed equity and cash compensation increases to certain executives of SCB for the purpose of retention, success fees related to the merger, and to ensure pay equity with executives. The committee asked questions related to the awards, including timing and in connection with upcoming merit increases, and a discussion ensued.

Finally, the committee reviewed a draft of each of the proposed employment agreements of Mr. Rainer and Mr. Shelton, that were previously circulated to committee members. Management reviewed the material terms of the agreements including term, compensation, change-in-control, and termination provisions. Extensive discussion ensued related to the terms of the employment agreements including timing and acceleration of certain equity awards and executive compensation related to termination without cause.The committee subsequently approved the employment agreements of Mr. Rainer and Mr. Shelton.

On January 24, 2024, the SCB board of directors held a meeting where representative from Stuart Moore reviewed the proposed merger agreement and related agreements, highlighting recent revisions made based on due diligence completed by SCB, including a reduction in the exchange ratio and the addition of a material adverse effect clause. Stuart Moore provided a summary of the provisions relating to governance of the combined company and the provisions relating to employee matters as well as a proposed transaction timeline, including the approval by the SCB board; documents requiring signatures; the transaction announcement; discussions with staff, clients, and outside investors; regulatory and shareholder approval; and SEC filings. In addition, the representative from Stuart Moore conducted board training on the topic of fiduciary duties in the context of a merger transaction. Stuart Moore proceeded to review in-depth the requirements for all board members involved in a merger transaction in California, along with consequences for disregarding said requirements and factors to be considered when determining whether to proceed with such a transaction.

At the meeting, MJCP reviewed an updated presentation on the financial aspects of the merger, along with an estimated transaction value based on a closing price for each company as of January 22, 2024, clarifying the final opinion would include values based on the companies’ closing prices on the day the transaction is approved and signed. MJCP reviewed pro forma performance information and market presence, highlighting expected strategic, operational and cultural synergies from the potential business transaction and reviewed the fairness analysis for the potential business transaction with CBC, noting the impact of market trends and challenges on franchise values for small and mid-sized institutions, several risks and corresponding mitigants identified as part of the due diligence process, and key points in favor of proceeding with the transaction, among other items.

On January 25, 2024, the CBC board of directors held a regularly scheduled board meeting at which members of CBC’s management and representatives of KBW and Sheppard Mullin were present. During the meeting, Sheppard Mullin reviewed the latest draft version of the merger agreement and related transaction documents, including matters relating to the post-closing corporate governance of the combined entity, the proposed employment arrangements with Mr. Rainer, Mr. Shelton, and other continuing executives of CBC that would be in effect upon closing of the transaction, and alternatives and considerations relating to employee retention following announcement of the transaction. Also at the meeting, representatives of KBW reviewed the financial aspects of the proposed merger on a preliminary basis and also discussed on a preliminary basis the opinion expected to be delivered by KBW with respect to the fairness, from a financial point of view, of the exchange ratio in the merger. Representatives of Sheppard Mullin and KBW responded to questions from the board of directors regarding the proposed merger and the draft merger agreement and related documents and the financial aspects of the merger.

Over the next several days, the parties, with the assistance of their respective advisors, proceeded to finalize negotiation of the merger agreement and the other related transaction documents.

On January 29, 2024, the CBC board of directors held a special board meeting to consider the terms of the merger and merger agreement. Before such meeting, the CBC board of directors was provided with copies of the latest versions of the merger agreement and related transaction documents, a summary of the CBC executives’ proposed post-merger employment arrangements and the financial presentation materials prepared by KBW. At the meeting, members of CBC management provided an update on the results of the negotiations since the prior board meeting, and reviewed the proposed terms of the potential transaction. Representatives of Sheppard Mullin then reviewed with the CBC board of directors its fiduciary duties in the context of the merger and reviewed the key terms of the merger agreement and related agreements, as described elsewhere in the proxy statement/prospectus, including a summary of the provisions relating to governance of the combined company and the provisions relating to employee matters. Also at the meeting, representatives of KBW reviewed the financial aspects of the merger and rendered to the CBC board of directors an opinion (which was initially rendered verbally and then confirmed in a written opinion, dated January 29, 2024, a copy of which is attached to this proxy statement/prospectus in Appendix C) to the effect that, as of such date and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW as set forth in its opinion, the exchange ratio in the merger was fair, from a financial point of view, to the holders of CBC common stock. CBC’s board members posed questions to members of CBC management, representatives of Sheppard Mullin and representatives of KBW regarding the merger and the merger agreement, and such members and representatives responded to the inquiries. After considering the proposed terms of the merger agreement and other related documents, the CBC board of directors determined that the merger agreement, including the merger and the other transactions contemplated thereby, were consistent with CBC’s business objectives, advisable and in the best interest of CBC and CBC’s shareholders and the CBC board of directors voted to unanimously approve and adopt the merger agreement, and approve the merger and other transactions contemplated by the merger agreement.

On January 29, 2024, the SCB board of directors and compensation, nominations, and governance committee, held a special meeting whereby SCB’s management team and representatives of MJCP and Stuart Moore were present to consider the terms of the merger and merger agreement. Before such meeting, the SCB board of directors and compensation, nominations, and governance committee was provided with copies of the latest versions of the merger agreement and related transaction documents, a summary of Mr. Rainer and Mr. Shelton’s proposed post-merger employment arrangements. MJCP further provided its opinion (which was initially rendered verbally and then confirmed in a written opinion, dated January 29, 2024, a copy of which is attached to this proxy statement/prospectus in Appendix B to the effect that, as of such date and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by MJCP as set forth in its opinion, the exchange ratio in the merger was fair, from a financial point of view, to the holders of SCB common stock. SCB’s board members presented questions to members of SCB management, representatives of Stuart Moore and representatives of MJCP regarding the merger and the merger agreement, and such members and representatives responded to the inquiries.

Following the board meetings of SCB and CBC on January 29, 2024, SCB and CBC executed the merger agreement as of January 30, 2024. On the morning of January 30, 2024, SCB and CBC issued a joint press release announcing the execution of the merger agreement.

SCB’s Reasons for the Merger; Recommendation of the SCB Board of Directors

In reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, the SCB board of directors evaluated the merger agreement in consultation with SCB senior management, as well as SCB’s legal counsel and financial advisor, and considered a number of factors, including the following:

The SCB board of directors also considered the potential adverse consequences of, and risks associated with, the proposed merger, including:

The foregoing discussion of the information and factors considered by the SCB board of directors is not intended to be exhaustive, but includes the material factors considered by the SCB board of directors. In reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, the SCB board of directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The SCB board of directors considered all these factors as a whole, including through discussions with, and questioning of, SCB’s senior management and SCB’s advisors, and overall considered the factors to be favorable to, and to support its determination to approve entering into the merger agreement.

This explanation of SCB’s reasons for the merger and other information presented in this section is forward-looking in nature and should be read in light of the section entitled “Cautionary Statement Regarding Forward-Looking Statements.”

SCB’s board of directors realized that there can be no assurance about future results, including results expected or considered in the factors listed above, such as assumptions regarding enhanced business prospects, anticipated cost savings and earnings accretion/dilution. The SCB board of directors concluded, however, that the potential positive factors outweighed the potential risks of completing the transaction.

For the reasons set forth above, the SCB board of directors determined that the merger, the merger agreement and the transaction contemplated thereby are advisable and fair to and in the best interests of SCB and its shareholders, and has approved the merger. The SCB board of directors recommends that SCB shareholders vote “FOR” the SCB merger proposal, “FOR” the SCB bylaw amendment proposal, “FOR” the SCB name change proposal, “FOR” the SCB articles amendment proposal, and “FOR” the SCB adjournment proposal.

CBC’s Reasons for the Merger; Recommendation of the CBC Board of Directors

In reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, the CBC board of directors evaluated the merger agreement in consultation with CBC senior management, as well as CBC’s legal counsel and financial advisor, and considered a number of factors, including the following:

The CBC board of directors also considered the potential adverse consequences of, and risks associated with, the proposed merger, including:

The foregoing discussion of the information and factors considered by the CBC board of directors is not intended to be exhaustive, but includes the material factors considered by the CBC board of directors. In reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, the CBC board of directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The CBC board of directors considered all these factors as a whole, including through its discussions with, and questioning of, CBC’s senior management and CBC’s advisors, and overall considered the factors to be favorable to, and to support its determination to approve entering into the merger agreement.

This explanation of CBC’s reasons for the merger and other information presented in this section is forward-looking in nature and should be read in light of the section entitled “Cautionary Statement Regarding Forward-Looking Statements.”

The CBC board of directors realized that there can be no assurance about future results, including results expected or considered in the factors listed above, such as assumptions regarding enhanced business prospects, anticipated cost savings and earnings accretion/dilution. The CBC board of directors concluded, however, that the potential positive factors outweighed the potential risks of completing the transaction.

For the reasons set forth above, the CBC board of directors determined that the merger, the merger agreement and the transaction contemplated thereby are advisable and fair to and in the best interests of CBC and its shareholders, and has approved the merger. The CBC board of directors recommends that CBC shareholders vote “FOR” the CBC merger proposal and “FOR” the CBC adjournment proposal.

Opinion of SCB’s Financial Advisor

SCB’s board of directors engaged MJC Partners, LLC to act as its financial advisor and to provide an opinion of the fairness, from a financial point of view to holders of Southern California Bancorp common stock of consideration to be paid to CBC in the proposed merger.

SCB’s board of directors selected MJCP based upon its reputation, its knowledge of financial institutions and its experience as a financial advisor in mergers and acquisitions of financial institutions and transactions similar to the proposed merger transaction referred herein. SCB imposed no limitations on MJCP’s investigations or the procedures it followed to render its opinion.

MJCP acted as an independent financial advisor to the SCB board of directors in connection with the proposed merger and participated in certain of the negotiations leading to the execution of the merger agreement. At the January 24, 2024 meeting at which SCB’s board of directors considered the merger and the merger agreement, MJCP delivered to the board of directors its oral opinion, which was subsequently confirmed in writing on January 29, 2024, to the effect that, as of such date, the merger consideration to be paid to CBC pursuant to the merger agreement is fair, from a financial point of view, to the holders of SCB common stock. This proxy statement/prospectus summary of the MJCP opinion is qualified in its entirety by reference to the full text of the opinion. The full text of the opinion of MJCP, dated January 29, 2024, which describes the procedures followed, assumptions made, matters considered and limitations on the review undertaken, is attached hereto as Appendix B. SCB shareholders should read this opinion in its entirety.

MJCP’s opinion is directed only to the fairness, from a financial point of view, of the consideration to be paid to CBC in the proposed merger, and, as such, does not constitute a recommendation to any SCB shareholder as to how the shareholder should vote at the SCB special meeting. The summary of the opinion of MJCP set forth in this proxy statement/prospectus is qualified in its entirety by reference to the full text of the opinion.

The following summary of the analyses performed by MJCP is not a complete description of the analyses performed by MJCP to render its fairness opinion and is not a complete description of the presentation made by MJCP to the SCB board of directors. MJCP did not attribute any particular weight to any analysis and factor considered by it, but rather made qualitative judgments about the significance and relevance of each analysis and factor. MJCP believes that its analyses and the following summary must be considered as a whole, and that selecting portions of the analyses without considering all factors could create an incomplete account of its analyses and its fairness opinion.

To carry out its analyses and to render its opinion concerning the fairness of the per share merger consideration, MJCP, among other things:

MJCP also took into account its assessment of general economic, market and financial conditions and its experience in other transactions as well as its knowledge of the banking industry and its general experience in securities valuations.

Without independent verification, MJCP assumed the accuracy and completeness of the financial and other information and representations contained in the materials provided by SCB and in discussions with SCB. MJCP assumed that financial forecasts, including, without limitation, the projections regarding under-performing and nonperforming assets and net charge-offs were reasonably prepared on a basis reflecting best currently available information and judgments of SCB, and that the forecasts will be realized in the amounts and at the times contemplated thereby. MJCP did not evaluate the loan and lease portfolio to assess the adequacy of the allowances for losses, did not conduct a physical inspection of any properties or facilities, did not review individual credit files, and did not make an independent evaluation or appraisal of any properties, assets, or liabilities of SCB or CBC, or any of their respective subsidiaries and MJCP was not furnished with any such evaluations or appraisals.

MJCP assumed that the merger will be consummated substantially in accordance with the terms set forth in the merger agreement. MJCP further assumed that the merger will be accounted for as a purchase under generally accepted accounting principles. MJCP assumed that the merger is, and will be, in compliance with all laws and regulations that are applicable to SCB and CBC.

MJCP reviewed the financial terms of the proposed merger. Pursuant to the terms of the merger agreement, at the effective time of the merger each share of CBC common stock issued and outstanding immediately prior to the effective time of the transaction, except for certain shares as set forth in the merger agreement, shall be converted into the right to receive, without interest, 1.590 shares of SCB common stock. MJCP calculated an aggregate implied transaction value of approximately $233.6 million and an implied purchase price per share of $26.54 consisting of the implied value of 13,775,322 shares of SCB common stock based on the closing price of SCB’s common stock price as of January 29, 2024. Based upon financial information for CBC as of or for the last twelve months (“LTM”) ended December 31, 2023 and the closing price of CBC’s common stock on January 29, 2024, MJCP calculated the following implied transaction metrics:

Present Value.

Using CBC’s projected earnings and tangible book value for years ending December 31, 2023 through December 31, 2028, based on CBC guidance, MJCP estimated the terminal value of CBC’s common stock as a multiple of tangible book value (“TBV”) and as a multiple of earnings per share (“EPS”). MJCP discounted the terminal values back to present value using a range of discount rates. For terminal values at the end of the fifth year, MJCP performed two analyses, one assuming a trading multiple range from 1.72x to 1.92x times projected tangible book value per share (“TBVPS”), and the other assuming a trading multiple range from 13.7x to 15.7x times projected earnings per share. MJCP calculated the present value of these terminal amounts based on discount rates ranging from 10.7% to 12.7%. These rates and values were chosen to reflect different assumptions regarding the required rates of return of holders or prospective buyers of CBC’s common stock. The number of basic shares and average fully diluted shares of CBC common stock outstanding remained constant in the projections of 8,402,478 basic common shares and 8,468,257 average fully diluted shares beginning in 2024E.

Terminal Value as a Multiple of Tangible Book Value per Share, Discounted to Present Value ($)

Terminal Value as a Multiple of Tangible Book Value per Share, Discounted to Present Value ($)

Based on the present value analysis for CBC’s projected earnings per share and tangible book value per share on a standalone basis; MJCP arrived at a range of present values as summarized in the table below:

Comparable Company Analysis.

MJCP used publicly available information to compare selected financial information for CBC with a group of publicly-traded financial institutions. The peer group included banks and thrifts, headquartered in the Western Region of the United States (defined as Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, Oregon, Washington, and Wyoming) with total assets between $1.5 billion and $4 billion, listed on a publicly traded major exchange (defined as NASDAQCM, NASDAQGM, NASDAQGS, NYSE, and NYSEAM), and excluding targets of an announced merger or acquisition transaction. (the “CBC Peer Group”). The CBC Peer Group consisted of the following financial institutions:

Coastal Financial Corporation

Five Star Bancorp

Sierra Bancorp

Southern California Bancorp

PCB Bancorp

BayCom Corp

Central Valley Community Bancorp

Plumas Bancorp

Oak Valley Bancorp

First Western Financial, Inc.

OP Bancorp

First Northwest Bancorp

Riverview Bancorp, Inc.

Eagle Bancorp Montana, Inc.

Territorial Bancorp Inc.

MJCP compared publicly available information for CBC with the CBC Peer Group as of or for the most recent quarter available as of December 31, 2023 and market pricing as of January 29, 2024. The table below outlines the information available for CBC compared to the 25^th percentile, median, and 75^th percentile of the CBC Peer Group:

MJCP calculated the 25th percentile, median, and 75th percentile in terms of price as a multiple of tangible book value per share; price as a multiple of last-twelve-months earnings per share, and price as a multiple of next-twelve-months earnings per share. MJCP applied these results to produce a range of implied values for CBC common stock shares as of December 31, 2023; applying a 50% weighting on price to tangible book value per share and 25% weighting to price as a multiple of last-twelve-months earnings per share and price as a multiple of next-twelve-months earnings per share to establish a range of value from the 25th percentile, median, and 75th percentile of the CBC Peer Group. MJCP utilized the 25th percentile, median, and 75th percentile multiples of the CBC Peer Group to determine a comparable price of CBC’s common stock shares. Based on this analysis of the CBC Peer Group’s pricing multiples, the implied price of CBC common stock shares, using the weighted average of the three multiples, ranged from $22.61 to $35.21 as summarized in the table below:

Comparable Transactions.

MJCP reviewed a group of comparable merger and acquisition transactions selected by MJCP consisting of whole commercial bank, savings bank, and thrift acquisition transactions throughout the United States announced on or after January 1, 2022 with publicly available pricing data and in which the target’s total assets were between $1.5 billion and $4 billion at announcement of the transaction, resulting in 14 transactions satisfying the criteria outlined below (“Comparable Transactions”):

MJCP compared publicly available information for CBC available as of or for the most recent quarter ending December 31, 2023 with the Comparable Transactions. The table below outlines the information available for CBC compared to the 25^th percentile, median, and 75^th percentile of the CBC Peer Group:

MJCP calculated the 25th percentile, median, and 75th percentile in terms of deal value as a multiple of tangible book value per share; deal value as a multiple of last-twelve-months earnings per share, and deal value minus tangible book value as a percent of core deposits. MJCP applied these results to produce a range of implied values for CBC common stock based on last-twelve-months earnings per share, tangible book value, and core deposits as of December 31, 2023; taking the average of deal value as a percent of last-twelve-months earnings per share, deal value as a percent of tangible book value, and deal value minus tangible book value as a percent of core deposits to establish a range of value from the 25th percentile, median, and 75th percentile. MJCP utilized the 25th percentile, median, and 75th percentile multiples to determine an implied value of CBC’s common stock. Based on this analysis of the selected transactions, the implied value of CBC common stock shares, using the average of the three multiples, ranged from $28.52 to $38.83 when all transactions were considered as summarized in the table immediately following.

Proforma Merger Analysis.

MJCP analyzed certain potential pro forma effects of the merger, based on the assumptions that (i) the merger is completed in the third calendar quarter of 2024 and (ii) each share of outstanding CBC common stock will be converted into the right to receive 1.59 shares of SCB common stock. MJCP also incorporated the following assumptions: (i) financial projections for SCB for the years ending December 31, 2023 through December 31, 2028 based on SCB management guidance; (ii) financial projections for CBC for the years ending December 31, 2023 through December 31, 2028 based on CBC management guidance; (iii) CBC purchase accounting adjustments consisting of (a) a credit mark on loans, (b) interest rate mark on loans, (c) core deposit intangibles, (d) held-to-maturity securities mark, and (e) borrowings mark; (iv) estimated annual cost savings based on estimates provided by SCB and CBC management; and (v) estimated, pre-tax, one-time transaction costs based on estimates provided by SCB and CBC management. The analysis indicated that the merger could be accretive to SCB’s estimated earnings per share in 2025 and immediately dilutive to estimated tangible book value. In connection with these analyses, MJCP considered and discussed with SCB’s board of directors how the analysis would be affected by changes in the underlying assumptions, including the impact of final purchase accounting adjustments determined at the closing of the merger, and noted that the actual results achieved by the combined company may vary from projected results and the variations may be material.

Based on these analyses and other investigations and assumptions set forth in its opinion, MJCP determined that as of January 29, 2024, the consideration to be paid to CBC was fair, from a financial point of view to holders of SCB common stock.

MJCP’s Relationship.

MJCP is acting as SCB’s financial advisor in connection with the merger. MJCP received a fee of $200,000 for rendering its written opinion to the SCB board of directors concerning the fairness to holders of SCB common stock of the consideration to be paid to CBC in the merger. This fee is creditable against a transaction success fee in an amount equal to 1.2% of the aggregate consideration paid to CBC which MJCP will be entitled to receive if the merger is completed. In addition, SCB has agreed to indemnify MJCP against certain claims or liabilities arising out of MJCP’s engagement. In the two years prior the issuance of this opinion, MJCP has not had a material relationship with SCB for which MJCP received compensation.

Opinion of CBC’s Financial Advisor

CBC engaged KBW to render financial advisory and investment banking services to CBC, including an opinion to the CBC board of directors as to the fairness, from a financial point of view, to the common shareholders of CBC of the exchange ratio in the proposed merger. CBC selected KBW because KBW is a nationally recognized investment banking firm with substantial experience in transactions similar to the merger. As part of its investment banking business, KBW is continually engaged in the valuation of financial services businesses and their securities in connection with mergers and acquisitions.

As part of its engagement, representatives of KBW attended the meeting of the CBC board of directors held on January 29, 2024, at which the CBC board of directors evaluated the proposed merger. At this meeting, KBW reviewed the financial aspects of the proposed merger and rendered to the CBC board an opinion to the effect that, as of such date and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW as set forth in its opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to the holders of CBC common stock. The CBC board of directors approved the merger agreement at this meeting.

The description of the opinion set forth herein is qualified in its entirety by reference to the full text of the opinion, which is attached as Appendix C to this document and is incorporated herein by reference, and describes the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW in preparing the opinion.

KBW’s opinion speaks only as of the date of the opinion. The opinion was for the information of, and was directed to, the CBC board of directors (in its capacity as such) in connection with its consideration of the financial terms of the merger. The opinion addressed only the fairness, from a financial point of view, of the exchange ratio in the merger to the holders of CBC common stock. It did not address the underlying business decision of CBC to engage in the merger or enter into the merger agreement or constitute a recommendation to the CBC board of directors in connection with the merger, and it does not constitute a recommendation to any holder of CBC common stock or any shareholder of any other entity as to how to vote in connection with the merger or any other matter, nor does it constitute a recommendation regarding whether or not any such shareholder should enter into a voting, shareholders’ or affiliates’ agreement with respect to the merger or exercise any dissenters’ or appraisal rights that may be available to such shareholder.

KBW’s opinion was reviewed and approved by KBW’s Fairness Opinion Committee in conformity with its policies and procedures established under the requirements of Rule 5150 of the Financial Industry Regulatory Authority.

In connection with the opinion, KBW reviewed, analyzed and relied upon material bearing upon the financial and operating condition of CBC and SCB and bearing upon the merger, including, among other things:

KBW’s consideration of financial information and other factors that it deemed appropriate under the circumstances or relevant to its analyses included, among others, the following:

KBW also performed such other studies and analyses as it considered appropriate and took into account its assessment of general economic, market and financial conditions and its experience in other transactions, as well as its experience in securities valuation and knowledge of the banking industry generally. KBW also participated in discussions held by the managements of CBC and SCB regarding the past and current business operations, regulatory relations, financial condition and future prospects of their respective companies and such other matters as KBW deemed relevant to its inquiry. KBW was not requested to assist, and did not assist, CBC with soliciting indications of interest from third parties regarding a potential transaction with CBC.

In conducting its review and arriving at its opinion, KBW relied upon and assumed the accuracy and completeness of all of the financial and other information that was provided to or discussed with it or that was publicly available and KBW did not independently verify the accuracy or completeness of any such information or assume any responsibility or liability for such verification, accuracy or completeness. KBW relied upon the management of CBC as to the reasonableness and achievability of the financial and operating forecasts and projections of CBC referred to above (and the assumptions and bases therefor), and KBW assumed that such forecasts and projections were reasonably prepared and represented the best currently available estimates and judgments of such management and that such forecasts and projections would be realized in the amounts and in the time periods estimated by such management. KBW further relied, with the consent of CBC, upon SCB management as to the reasonableness and achievability of the financial and operating forecasts and projections of SCB and the estimates regarding certain pro forma financial effects of the merger on SCB (including, without limitation, the cost savings expected to result or be derived from the merger), all as referred to above (and the assumptions and bases for all such information), and KBW assumed that such information was reasonably prepared and represented the best currently available estimates and judgments of such management and that the forecasts, projections and estimates reflected in such information would be realized in the amounts and in the time periods estimated by such management.

It is understood that the foregoing financial information of CBC and SCB that was provided to KBW was not prepared with the expectation of public disclosure and that all of the foregoing financial information was based on numerous variables and assumptions that are inherently uncertain (including, without limitation, factors related to general economic and competitive conditions and, in particular, the widespread disruption, extraordinary uncertainty and unusual volatility arising from global tensions and political unrest, economic uncertainty, inflation, rising interest rates, the COVID-19 pandemic and, in the case of the banking industry, recent actual or threatened regional bank failures, including the effect of evolving governmental interventions and non-interventions) and, accordingly, actual results could vary significantly from those set forth in such information. KBW assumed, based on discussions with the respective managements of CBC and SCB and with the consent of the CBC board of directors, that all such information provided a reasonable basis upon which KBW could form its opinion and KBW expressed no view as to any such information or the assumptions or bases therefor. KBW relied on all such information without independent verification or analysis and did not in any respect assume any responsibility or liability for the accuracy or completeness thereof.

KBW also assumed that there were no material changes in the assets, liabilities, financial condition, results of operations, business or prospects of either CBC or SCB since the date of the last financial statements of each such entity that were made available to KBW. KBW is not an expert in the independent verification of the adequacy of allowances for loan and lease losses and KBW assumed, without independent verification and with CBC’s consent, that the aggregate allowances for loan and lease losses for each of CBC and SCB are adequate to cover such losses. In rendering its opinion, KBW did not make or obtain any evaluations or appraisals or physical inspection of the property, assets or liabilities (contingent or otherwise) of CBC or SCB, the collateral securing any of such assets or liabilities, or the collectability of any such assets, nor did KBW examine any individual loan or credit files, nor did it evaluate the solvency, financial capability or fair value of CBC or SCB under any state or federal laws, including those relating to bankruptcy, insolvency or other matters. KBW made note of the classification by each of CBC and SCB of its loans and owned securities as either held to maturity or held for investment, on the one hand, or available for sale or held for sale, on the other hand, and also reviewed reported fair value marks-to-market and other reported valuation information, if any, relating to such loans or owned securities contained in the respective financial statements of CBC and SCB, but KBW expressed no view as to any such matters. Estimates of values of companies and assets do not purport to be appraisals or necessarily reflect the prices at which companies or assets may actually be sold. Such estimates are inherently subject to uncertainty and should not be taken as KBW’s view of the actual value of any companies or assets.

KBW assumed, in all respects material to its analyses, the following:

KBW assumed that the merger would be consummated in a manner that complies with the applicable provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all other applicable federal and state statutes, rules and regulations. KBW was further advised by representatives of CBC that CBC relied upon advice from its advisors (other than KBW) or other appropriate sources as to all legal, financial reporting, tax, accounting and regulatory matters with respect to CBC, SCB, the merger and any related transaction, and the merger agreement. KBW did not provide advice with respect to any such matters.

KBW’s opinion addressed only the fairness, from a financial point of view, as of the date of the opinion, of the exchange ratio in the merger to the holders of CBC common stock. KBW expressed no view or opinion as to any other terms or aspects of the merger or any term or aspect of any related transaction (including the bank merger), including without limitation, the form or structure of the merger or any such related transaction, any consequences of the merger or any such related transaction to CBC, its shareholders, creditors or otherwise, or any terms, aspects, merits or implications of any employment, consulting, voting, support, shareholder or other agreements, arrangements or understandings contemplated or entered into in connection with the merger or otherwise. KBW’s opinion was necessarily based upon conditions as they existed and could be evaluated on the date of such opinion and the information made available to KBW through such date. There is currently significant volatility in the stock and other financial markets arising from global tensions and political unrest, economic uncertainty, inflation, rising interest rates, the COVID-19 pandemic and, in the case of the banking industry, recent actual or threatened regional bank failures, including the effect of evolving governmental interventions and non-interventions. Developments subsequent to the date of KBW’s opinion may have affected, and may affect, the conclusion reached in KBW’s opinion and KBW did not and does not have an obligation to update, revise or reaffirm its opinion. KBW’s opinion did not address, and KBW expressed no view or opinion with respect to:

In performing its analyses, KBW made numerous assumptions with respect to industry performance, general business, economic, market and financial conditions and other matters, which are beyond the control of KBW, CBC and SCB. Any estimates contained in the analyses performed by KBW are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by these analyses. Additionally, estimates of the value of businesses or securities do not purport to be appraisals or to reflect the prices at which such businesses or securities might actually be sold. Accordingly, these analyses and estimates are inherently subject to substantial uncertainty. In addition, KBW’s opinion was among several factors taken into consideration by the CBC board of directors in making its determination to approve the merger agreement and the merger. Consequently, the analyses described below should not be viewed as determinative of the decision of the CBC board of directors with respect to the fairness of the exchange ratio. The type and amount of consideration payable in the merger were determined through negotiation between CBC and SCB and the decision of CBC to enter into the merger agreement was solely that of the CBC board of directors.

The following is a summary of the material financial analyses presented by KBW to the CBC board of directors in connection with its opinion. The summary is not a complete description of the financial analyses underlying the opinion or the presentation made by KBW to the CBC board of directors, but summarizes the material analyses performed and presented in connection with such opinion. The financial analyses summarized below include information presented in tabular format. The tables alone do not constitute a complete description of the financial analyses. The preparation of a fairness opinion is a complex analytic process involving various determinations as to appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. Therefore, a fairness opinion is not readily susceptible to partial analysis or summary description. In arriving at its opinion, KBW did not attribute any particular weight to any analysis or factor that it considered, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, KBW believes that its analyses and the summary of its analyses must be considered as a whole and that selecting portions of its analyses and factors or focusing on the information presented below in tabular format, without considering all analyses and factors or the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the process underlying its analyses and opinion.

For purposes of the financial analyses described below, KBW utilized an implied transaction value for the merger of $26.39 per outstanding share of CBC common stock, or approximately $232.3 million in the aggregate (inclusive of the implied value of unvested CBC restricted stock units and in-the-money options to purchase shares of CBC common stock), based on the 1.59x exchange ratio in the proposed merger and the closing price of SCB common stock on January 26, 2024. In addition to the financial analyses described below, KBW reviewed with the CBC board of directors for informational purposes, among other things, the implied transaction multiple for the proposed merger (based on the indicative transaction value for the merger of $26.39 per outstanding share of CBC common stock) of 10.2 x CBC’s estimated calendar year 2025 earnings per share (“EPS”), using financial and operating forecasts and projections of CBC provided by CBC management.

CBC and SCB Selected Companies Analysis. Using publicly available information, KBW compared the financial performance, financial condition and market performance of CBC and SCB to 20 selected major exchange-traded banks headquartered in the Western region of the United States (comprised of Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, New Mexico, Nevada, Oregon, Utah, Washington and Wyoming) with total assets between $1.0 billion and $5.0 billion. Merger targets and ethnic group-focused banks were excluded from the selected companies.

The selected companies were as follows (shown in descending order of total assets by column):

To perform this analysis, KBW used profitability and other financial information for the most recent completed fiscal quarter (“MRQ”) or latest 12 months (“LTM”) available (which, in the case of CBC and SCB, were the periods ended December 31, 2023) or as of the end of such periods and market price information as of January 26, 2024. In addition, KBW used 2024 and 2025 EPS estimates taken from publicly available consensus “street estimates” for CBC, SCB and the selected companies to the extent publicly available (2024 consensus “street” estimates were not publicly available for five of the selected companies and 2025 consensus “street” estimates were not publicly available for seven of the selected companies). KBW also used 2024 and 2025 EPS estimates taken from forecasts and projections of CBC provided by CBC management and forecasts and projections of SCB provided by SCB management. Where consolidated holding company level financial data for CBC, SCB and the selected companies was unreported, subsidiary bank level data was utilized to calculate ratios (subsidiary bank level data necessary to calculate Tier 1 Capital Ratio and Total Capital Ratio was also not then publicly available for seven of the selected companies). Certain financial data presented in the tables below may not correspond to the data presented in CBC and SCB’s historical financial statements, or the data presented under the section “The Merger — Opinion of SCB’s Financial Advisor,” as a result of the different periods, assumptions and methods used to compute the financial data presented.

KBW’s analysis showed the following concerning the financial performance of CBC, SCB, and the selected companies:

KBW’s analysis also showed the following concerning the financial condition of CBC, SCB and, to the extent publicly available, the selected companies:

In addition, KBW’s analysis showed the following concerning the market performance of CBC, SCB and, to the extent publicly available, the selected companies (excluding the impact of the 2024 EPS multiple of one of the selected companies, which multiple was considered not meaningful because it was greater than 30.0x):

No company used as a comparison in the above selected companies analysis is identical to CBC or SCB. Accordingly, an analysis of these results is not mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies involved.

Selected Transactions Analysis. KBW reviewed publicly available information related to eight selected U.S. whole bank transactions announced since January 1, 2020 with target pro forma ownership greater than 40% and total announced transaction value between $100 million and $1 billion.

The selected transactions were as follows:

For each selected transaction, KBW derived the following implied transaction statistics, in each case based on the transaction consideration value paid for the acquired company and using financial data based on the acquired company’s then latest publicly available financial statements prior to the announcement of the respective transaction and, to the extent publicly available, the one-year forward EPS consensus “street estimates” for the acquired company at the announcement of the respective transaction:

KBW also reviewed the price per common share paid for the acquired company for the selected transactions as a premium/(discount) to the closing price of the acquired company one day prior to the announcement of the acquisition (expressed as a percentage and referred to as the one-day market premium). The resulting transaction statistics for the selected transactions were compared with the corresponding transaction statistics for the proposed merger based on the implied transaction value for the merger of $26.39 per outstanding share of CBC common stock and using historical financial information for CBC as of or for the 12-month period ended December 31, 2023 provided by CBC, the 2024 EPS estimate for CBC taken from financial forecasts and projections of CBC provided by CBC management and the closing price of CBC common stock on January 26, 2024.

The results of the analysis are set forth in the following table:

No company or transaction used as a comparison in the above selected transaction analysis is identical to CBC or the proposed merger. Accordingly, an analysis of these results is not mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies involved.

Relative Contribution Analysis. KBW analyzed the relative standalone contribution of SCB and CBC to various pro forma balance sheet and income statement items and the combined market capitalization of the combined entity. This analysis did not include purchase accounting adjustments or cost savings. To perform this analysis, KBW used (i) balance sheet data for SCB and CBC as of December 31, 2023 (except in the case of Adjusted Tangible Common Equity, which was as of September 30, 2023) provided by SCB and CBC, respectively, (ii) financial forecasts and projections of SCB provided by SCB management, (iii) financial forecasts and projections of CBC provided by CBC management, and (iv) market price information as of January 26, 2024. The results of KBW’s analysis are set forth in the following table, which also compares the results of KBW’s analysis with the implied pro forma ownership percentages of SCB and CBC shareholders in the combined company based on the 1.59x exchange ratio provided for in the merger agreement:

Financial Impact Analysis. KBW performed a pro forma financial impact analysis that combined projected income statement and balance sheet information of SCB and CBC. Using (i) closing balance sheet estimates assumed as of September 30, 2024 for SCB and CBC extrapolated from financial forecasts and projections of SCB provided by SCB management and financial forecasts and projections of CBC provided by CBC management, respectively, (ii) financial forecasts and projections relating to the earnings of SCB provided by SCB management, (iii) financial forecasts and projections relating to the earnings of CBC provided by CBC management, and (iv) pro forma assumptions (including, without limitation, the cost savings expected to result from the merger as well as certain purchase accounting adjustments and other merger-related adjustments and restructuring charges assumed with respect thereto) provided by SCB management, KBW analyzed the potential financial impact of the merger on certain projected financial results of SCB. This analysis indicated the merger could be accretive to SCB’s estimated 2024 EPS and estimated 2025 EPS and could be dilutive to SCB’s estimated tangible book value per share at closing assumed as of September 30, 2024. Furthermore, the analysis indicated that, pro forma for the merger, each of SCB’s tangible common equity to tangible assets ratio, Tier 1 Leverage Ratio, Common Equity Tier 1 Ratio, Tier 1 Capital Ratio and Total Risk-based Capital Ratio at closing assumed as of September 30, 2024 could be lower. For all of the above analysis, the actual results achieved by SCB following the merger may vary from the projected results, and the variations may be material.

CBC Dividend Discount Model Analysis. KBW performed a dividend discount model analysis of CBC to estimate a range for the implied equity value of CBC. In this analysis, KBW used financial forecasts and projections relating to the earnings and assets of CBC provided by CBC management, and KBW assumed discount rates ranging from 10.5% to 12.5%. The range of values was derived by adding (i) the present value of the implied future excess capital available for dividends that CBC could generate over the period from December 31, 2023 through December 31, 2027 as a standalone company, and (ii) the present value of CBC’s implied terminal value at the end of such period. KBW assumed that CBC would maintain a tangible common equity to tangible assets ratio of 8.00% and would retain sufficient earnings to maintain that level. In calculating the terminal value of CBC, KBW applied a range of 7.0x to 11.0x CBC’s estimated 2028 earnings. This dividend discount model analysis resulted in a range of implied values per share of CBC common stock of $21.06 to $30.21.

The dividend discount model analysis is a widely used valuation methodology, but the results of such methodology are highly dependent on the assumptions that must be made, including asset and earnings growth rates, terminal values, and discount rates. The foregoing dividend discount model analysis did not purport to be indicative of the actual values or expected values of CBC.

SCB Dividend Discount Model Analysis. KBW performed a dividend discount model analysis of SCB to estimate a range for the implied equity value of SCB. In this analysis, KBW used financial forecasts and projections relating to the earnings and assets of SCB provided by SCB management, and KBW assumed discount rates ranging from 10.0% to 12.0%. The range of values was derived by adding (i) the present value of the implied future excess capital available for dividends that SCB could generate over the period from December 31, 2023 through December 31, 2027 as a standalone company, and (ii) the present value of SCB’s implied terminal value at the end of such period. KBW assumed that SCB would maintain a tangible common equity to tangible assets ratio of 8.00% and would retain sufficient earnings to maintain that level. In calculating the terminal value of SCB, KBW applied a range of 7.0x to 11.0x SCB’s estimated 2028 earnings. This dividend discount model analysis resulted in a range of implied values per share of SCB common stock of $14.04 to $19.40.

The dividend discount model analysis is a widely used valuation methodology, but the results of such methodology are highly dependent on the assumptions that must be made, including asset and earnings growth rates, terminal values, and discount rates. The foregoing dividend discount model analysis did not purport to be indicative of the actual values or expected values of SCB or the pro forma combined entity.

Illustrative Pro Forma Combined Dividend Discount Model Analysis. KBW performed an illustrative dividend discount model analysis of the pro forma combined entity. In this analysis, KBW used financial forecasts and projections relating to the earnings and assets of SCB provided by SCB management, financial forecasts and projections relating to the earnings and assets of CBC provided by CBC management, and pro forma assumptions (including, without limitation, the cost savings expected to result from the merger as well as certain purchase accounting adjustments and other merger-related adjustments and restructuring charges assumed with respect thereto) provided by SCB management, and KBW assumed discount rates ranging from 9.0% to 11.0%. An illustrative range for the implied equity value of the pro forma combined entity was derived by adding (i) the present value of the implied future excess capital available for dividends that the pro forma combined entity could generate over the period from September 30, 2024 through December 31, 2028, and (ii) the present value of the pro forma combined entity’s implied terminal value at the end of such period, in each case applying the pro forma assumptions. KBW assumed that the pro forma combined entity would maintain a tangible common equity to tangible assets ratio of 8.00% and would retain sufficient earnings to maintain that level. In calculating implied terminal values of the pro forma combined entity, KBW applied a range of 7.0x to 11.0x the pro forma combined entity’s estimated 2029 earnings. This dividend discount model analysis resulted in an illustrative range of implied values for the 1.59 shares of SCB common stock to be received in the proposed merger for each share of CBC common stock of $27.79 to $39.55.

The dividend discount model analysis is a widely used valuation methodology, but the results of such methodology are highly dependent on the assumptions that must be made, including asset and earnings growth rates, terminal values, and discount rates. The foregoing dividend discount model analysis did not purport to be indicative of the actual values or expected values of SCB or the pro forma combined entity.

Miscellaneous. KBW acted as financial advisor to CBC in connection with the proposed merger and did not act as an advisor to or agent of any other person. As part of its investment banking business, KBW is continually engaged in the valuation of bank and bank holding company securities in connection with acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for various other purposes. As specialists in the securities of banking companies, KBW has experience in, and knowledge of, the valuation of banking enterprises. KBW and its affiliates, in the ordinary course of its and their broker-dealer businesses, may from time to time purchase securities from, and sell securities to, CBC and SCB. In addition, as market makers in securities, KBW and its affiliates may from time to time have a long or short position in, and buy or sell, debt or equity securities of CBC or SCB for its and their own respective accounts and for the accounts of its and their respective customers and clients.

Pursuant to the KBW engagement agreement, CBC agreed to pay KBW a cash fee equal to 1.20% of the aggregate merger consideration, $250,000 of which became payable to KBW with the rendering of KBW’s opinion and the balance of which is contingent upon the closing of the merger. CBC also agreed to reimburse KBW for reasonable out-of-pocket expenses and disbursements incurred in connection with its retention and to indemnify KBW against certain liabilities relating to or arising out of KBW’s engagement or KBW’s role in connection therewith. Other than in connection with the present engagement, during the two years preceding the date of its opinion, KBW did not provide investment banking or financial advisory services to CBC. During the two years preceding the date of its opinion, KBW did not provide investment banking or financial advisory services to SCB. KBW may in the future provide investment banking and financial advisory services to CBC or SCB and receive compensation for such services.

Interests of Certain SCB Directors and Executive Officers in the Merger

Employment Agreements

New Position and Employment Arrangement

A certain SCB executive has entered into an employment arrangement with SCB, which will become effective at and subject to the effective time of the merger. In the event that the merger agreement is terminated prior to closing in accordance with its terms, the executive’s employment arrangement with SCB will automatically terminate and be void ab initio, and their existing employment agreements with SCB (or SCB Bank) will remain in full force and effect.

Mr. Rainer. On January 30, 2024, in connection with the SCB and CBC’s entry into the merger agreement, SCB and SCB Bank entered into a new employment agreement with David I. Rainer, which will become effective of the effective time of the merger, pursuant to which Mr. Rainer will serve as Executive Chairman of SCB and SCB Bank. Mr. Rainer’s post-merger employment agreement provides for a term of employment for four years in the role of Executive Chairman with an annual base salary of $660,000, subject to review and adjustment, but not reduction, at the discretion of the Company’s board of directors, and Mr. Rainer’s participation in SCB’s management incentive plan, with Mr. Rainer’s specific acknowledgement that he is subject to SCB’s incentive compensation clawback policy. After the initial four years, Mr. Rainer’s employment will continue for one additional year as an Executive Director with an annual base salary of the greater of $100,000 per year or the then current fees for SCB and SCB Bank board members, and Mr. Rainer will remain a director of SCB and SCB Bank. Upon the post-merger employment agreement becoming effective, Mr. Rainer will be granted a restricted share unit award equivalent to $750,000 of SCB’s common stock, subject to vesting ratably over five years.

Mr. Rainer will participate in SCB Bank’s vacation and time off policy and will be eligible to participate in all group medical and life insurance benefits in accordance with SCB Bank’s employee benefits policy. An automobile allowance of $1,500 will be provided to Mr. Rainer, and he will also be entitled to SCB Bank’s general benefit plans.

The post-merger employment agreement provides that Mr. Rainer will be entitled to certain severance benefits in the event of certain terminations of his employment or his resignation for “good reason” as defined in the post-merger employment agreement. Generally, if Mr. Rainer is terminated without cause or he resigns for good reason he will be entitled to 12 months’ then current base salary and health insurance premiums for 12 months for himself and his dependents. In the context of a change in control transaction during his employment term, if Mr. Rainer is terminated or resigns for good reason while serving as Executive Chairman, or if a change in control is announced while he serves as an Executive Director and the change in control consummates, he will be entitled to 36 months’ of his then current base salary (or during his tenure as an Executive Director, his final salary as Executive Chairman), plus three times the average of his aggregate annual bonus paid or payable in the three prior calendar years (or during his tenure as an Executive Director, the final three years as Executive Chairman), plus six months’ health insurance premiums for himself and his dependents.

Treatment of SCB Equity Awards

Treatment of CBC Restricted Stock Units

Generally, the parties have agreed that at the effective time of the merger, SCB restricted stock units held by SCB directors who will not serve on the board of directors of the combined company will vest.

Interests of Certain CBC Directors and Executive Officers in the Merger

Certain of CBC’s directors and executive officers may have interests in the merger that are different from, or in addition to, the interests of CBC’s shareholders generally. The CBC board of directors was aware of these interests and considered them, among other matters, in evaluating and negotiating the merger agreement and the merger, in approving the merger agreement and the merger and in recommending to CBC shareholders that they vote to approve the CBC merger proposal and the CBC adjournment proposal. For more information, see the sections titled “The Merger — CBC’s Reasons for the Merger and Recommendation of the CBC Board of Directors” beginning on page” beginning on page 35 and these interests are described in more detail below, and certain of them are quantified in the narrative and in the section entitled “The Merger – Background of the Merger” beginning on page 28.

For purposes of this disclosure, the “named executive officers” of CBC are Steven E. Shelton, Thomas A. Sa and Scott Myers.

The amounts shown below are estimates based on multiple assumptions that may or may not actually occur or be accurate on the relevant date, and do not reflect certain compensation actions that may be taken or that may occur before completion of the merger.

Treatment of CBC Equity Awards

Treatment of CBC Stock Options

At the effective time of the merger, as provided in the merger agreement, each CBC option that is outstanding and unexercised immediately prior to the effective time, whether vested or unvested, will be canceled in exchange for the right to receive a lump sum cash payment equal to the product of (i) the number of shares of CBC common stock subject to such CBC option and (ii) the excess, if any, of (A) the SCB average share price (which is the volume-weighted average closing price per share of SCB common stock, as reported on NASDAQ, for the 10 trading days ending on the fifth trading day prior to the closing date of the merger) multiplied by the 1.590 exchange ratio, over (B) the exercise price per share of such CBC option, less any applicable taxes required to be withheld with respect to such payment. If an option has an exercise price greater than the SCB average share price times the exchange ratio, such out-of-the-money option will be cancelled for no consideration. For CBC options that are exercised before the closing, the underlying shares of CBC common stock received upon exercise will be exchanged for the merger consideration in accordance with the exchange ratio in the same manner as all other outstanding shares of CBC common stock as of the closing date.

In addition, under certain of CBC’s employment agreements with its executive officers, described in more detail below, in the event that the executive officers are terminated without cause, or resign for good reason (as each term is defined in their respective employment agreements) proximate to the closing of the merger, any outstanding but unvested stock options will fully vest.

Treatment of CBC Restricted Stock Units

Generally, at the effective time of the merger, CBC restricted stock units held by CBC officers and directors will be assumed by SCB and converted into a restricted stock unit in respect of SCB common stock with the same vesting schedule, terms and conditions as were applicable under such CBC restricted stock unit immediately prior to the effective time of the merger. The number of shares of SCB common stock subject to each assumed CBC restricted stock unit will be equal to the product (rounded to the nearest whole share) of (x) the number of shares of CBC common stock subject to each such CBC restricted stock unit multiplied by (y) the 1.590 exchange ratio, with any fractional shares rounded down to the nearest whole shares of SCB common stock.

However, at the effective time of the merger, CBC restricted stock units held by CBC directors who will not serve on the board of directors of the combined company will fully vest and be cancelled and be converted into the right to receive SCB share (without interest) that number of shares of SCB Common Stock (rounded down to the nearest whole share) equal to the product of (A) the total number of shares of CBC Common Stock subject to such CBC RSU immediately prior to the Effective Time, multiplied by (B) the Exchange Ratio of 1.590.

In addition, under certain of CBC’s employment agreements with its executive officers described in more detail below, in the event that the executive officers are terminated without cause, or resign for good reason (as each term is defined in their respective employment agreements) proximate to the closing of the merger, any outstanding but unvested restricted stock unit awards, will fully vest.

Employment Agreements

Existing CBC Agreements

CBC Bank is party to existing employment agreements with each of CBC’s named executive officers that provide for payments in connection with a termination of employment in connection with a change in control. The merger will be a change in control for this purpose.

CBC Bank’s employment agreements with Messrs. Shelton, Sa and Myers provide that if the executive officer’s employment with CBC Bank is terminated without cause or by the executive for good reason (each, a “qualifying termination”) within one year of a change in control of CBC Bank, the named executive officer would receive the following severance payments and benefits, in each case subject to execution and non-revocation of a release of claims in favor of CBC: (1) a lump sum payment equal to two times his annual base salary and the average of the three most recent annual bonuses in the case of Mr. Shelton and Mr. Sa or one times his annual base salary and the average of the three most recent annual bonuses in the case of Mr. Myers, (2) monthly payments in amounts equal to the cost of his COBRA premiums for 18 months in the case of Mr. Shelton or for 12 months in the case of Mr. Sa and Mr. Myers, and (3) accelerated vesting of the restricted stock and stock options previously awarded to him.

CBC Supplemental Executive Retirement Plans (“SERP”)

In accordance with his current employment agreement with CBC Bank, on May 7, 2018, Mr. Shelton and CBC Bank also entered into an Executive Supplemental Compensation Agreement providing for a projected value of approximately $2.3 million when fully vested after 10 years with monthly payments generally commencing upon his retirement. This benefit is subject to a ten year vesting period beginning on the original dates of such agreement with full accelerated vesting if he is terminated or quits for good reason (as defined in the agreement) in connection with a change of control. CBC Bank and Mr. Shelton have also entered into a split-dollar joint beneficiary agreement that shares the proceeds of bank owned life insurance previously purchased on his life such that if he should die while employed, his named beneficiaries would receive a specified sum or the net amount at risk, whichever is smaller. As of December 31, 2023, this benefit was valued at $1,350,000. A description of how the proposed merger will impact Mr. Shelton’s Executive Supplemental Compensation Agreement is described below in the “New Agreements with SCB” below.

In accordance with the current Mr. Sa agreement, on January 31, 2020, CBC Bank implemented a supplemental executive retirement plan for Mr. Sa providing for an aggregate defined contribution amount of up to $835,000, with monthly payments generally commencing upon his retirement, or in the event of his termination following a change in control. In addition, CBC Bank agreed to obtain a bank owned split-dollar life insurance policy and enter into a related joint beneficiary agreement that will provide a shared death benefit in the event Mr. Sa’s employment with CBC is terminated due to his death before he is fully vested in the supplemental executive retirement plan. A description of how the proposed merger will impact Mr. Sa’s Executive Supplemental Compensation Agreement is described below in the “New Agreements with SCB” below.

On December 15, 2020, CBC Bank and Mr. Myers entered into an Executive Supplemental Compensation Agreement providing for an annual projected target benefit of $60,000, payable monthly for a period of ten years, generally commencing upon separation from service, provided that he remain employed through the service period (as defined in such agreement). This benefit is subject to vesting based on continued service, with full vesting if he is involuntarily terminated or quits for good reason (as defined in the agreement) in connection with a change of control of CBC Bank. CBC Bank and Mr. Myers have also entered into a split-dollar agreement that shares the proceeds of bank owned life insurance previously purchased on his life such that if he should he die while employed, his named beneficiaries would receive a specified sum or the net amount at risk, whichever is smaller.

New Positions and Employment Agreements with SCB

Certain of CBC’s executive officers have entered into employment agreement with SCB, which will become effective at and subject to the effective time of the merger. In the event that a CBC executive officer is not employed by CBC immediately prior to the closing or the merger agreement is terminated prior to closing in accordance with its terms, the CBC executive officers’ employment arrangements with SCB will automatically terminate and be void ab initio, and their existing employment agreements with CBC (or CBC Bank) will remain in full force and effect.

Mr. Shelton. On January 30, 2024, in connection with the SCB and CBC’s merger agreement, SCB and SCB Bank entered into a new employment agreement with Steven Shelton, which will become effective at the effective time of the merger, pursuant to which Mr. Shelton will serve as chief executive officer of SCB and SCB Bank. Mr. Shelton’s employment agreement with SCB and SCB Bank provides for a term of employment for four years and automatically renews for a single one-year term absent notice of termination given by either Mr. Shelton or SCB or SCB Bank; an annual base salary of $610,000, subject to review and adjustment, but not reduction, at the discretion of SCB and SCB Bank’s board of directors; Mr. Shelton’s participation in SCB’s management incentive plan; and the grant of a SCB restricted share unit award equivalent to $500,000 of SCB common stock, subject to vesting ratably over four years. Mr. Shelton will participate in SCB Bank’s vacation and time off policy, will be eligible to participate in all group medical and life insurance benefits in accordance with SCB Bank’s employee benefits policy, will also be entitled to SCB Bank’s general benefit plans and will receive a monthly automobile allowance of $1,500.

Mr. Shelton’s employment agreement with SCB and SCB Bank provides that SCB and SCB Bank will assume his SERP, but the maximum “targeted benefit amount” (as defined is such current agreement) will be increased to 30%, and if he is terminated without “cause” (as defined in such current agreement) he will become immediately and fully vested in the SERP.

Under his employment agreement with SCB and SCB Bank, Mr. Shelton will be entitled to certain severance benefits in the event of certain terminations of his employment or his resignation for “good reason” (as defined in his employment agreement with SCB). Generally, if Mr. Shelton is terminated without cause within the first three years of his employment with SCB and SCB Bank, he will instead be entitled to the change in control benefit under his current employment agreement with CBC. See “Existing CBC Agreements” above. After the third anniversary of the close of the merger, Mr. Shelton’s severance benefits are modified as follows. If Mr. Shelton is terminated without cause or he resigns for good reason, he will be entitled to 12 months of his then-current base salary and COBRA premiums for twelve months for himself and his dependents. However, in the context of a change in control transaction, if Mr. Shelton is terminated or resigns for good reason, or if the initial term of the Shelton Employment Agreement expires as a result of non-renewal by SCB or SCB Bank, he will be entitled to 24 months’ of his then current base salary, plus two times the average of his aggregate annual bonus paid or payable in the three prior calendar years, plus six months’ COBRA premiums for himself and his dependents.

Mr. Sa. On January 30, 2024, SCB and SCB Bank entered into a Termination and Waiver Agreement with Mr. Sa, which terminates his existing employment agreement with CBC and CBC Bank effective as of the effective time of the merger, waives certain rights to severance compensation Mr. Sa has under his current employment agreement with CBC Bank in the event of a change in control, includes an offer letter providing terms of employment with SCB and SCB Bank after the effective time of the merger, and includes a change in control agreement for Mr. Sa based on SCB’s general form of change in control agreement. Mr. Sa’s SCB offer letter provides that he will serve as SCB and SCB Bank’s EVP Chief Operating Officer at an annual base salary of $425,000; will participate in SCB’s management incentive plan; and, upon the effective time, that he will be granted a SCB restricted share unit award equivalent to $300,000 of SCB common stock, subject to vesting ratably over three years. Mr. Sa will participate in SCB Bank’s vacation and time off policy, will be eligible to participate in all group medical and life insurance benefits in accordance with SCB Bank’s employee benefits policy and he will also be entitled to SCB Bank’s general benefit plans. He will receive a monthly automobile allowance of $900.

Under his employment arrangement with SCB and SCB Bank, Mr. Sa will be entitled to certain severance benefits in the event of certain terminations of his employment or his resignation for “good reason” (as defined in his change in control agreement with SCB). If Mr. Sa is terminated without cause during the first two years of his employment with SCB and SCB Bank, he will be entitled to the change in control benefits under his current employment agreement with CBC Bank. See “Existing CBC Agreements” above. In the event that Mr. Sa is terminated without cause after the second anniversary of the closing of the merger, he will be entitled to the benefits described in his SCB change in control agreement and not his CBC employment agreement. Under the SCB change in control agreement, in the context of a change in control transaction, if Mr. Sa is terminated or resigns for good reason, he will be entitled to two times his then current annual base salary, plus two times the average of his aggregate annual bonus paid or payable in the three prior calendar years.

Mr. Myers. Mr. Myers has not entered into a new employment agreement or offer letter with SCB and the parties are not discussing any such future arrangements, which they may enter into from time to time.

Director Positions Following the Merger

The merger agreement provides that at the effective time six members of the CBC board of directors designated by CBC, including Mr. Shelton, will be appointed to the boards of directors of SCB and SCB Bank.

As directors of SCB and SCB Bank, the former members of the CBC board of directors that are so designated will be entitled to receive the same compensation as the current non-employee directors of SCB and SCB Bank. During 2023, non-employee directors of SCB received cash annual retainer fees in the amount of $48,000 ($72,000 for the lead director, the chair and each chair of a committee) and a restricted stock grant valued at $36,000.

Indemnification and Insurance

From and after the effective time, SCB will indemnify and hold harmless each present or former director, officer and employee of CBC against claims arising out of matters existing or occurring at or prior to the effective time of the merger to the fullest extent under applicable law, the CBC’s and CBC Bank’s charter documents and any agreement to which such person is a party that has been disclosed to SCB. In addition, SCB will advance expenses to each such person in connection with any such claim.

Prior to the closing of the merger, CBC (and if it is unable, SCB) will obtain and fully pay for a period of six years from the effective time of the merger, directors’ and officers’ “tail” liability insurance covering CBC’s officers and directors, among others. See “The Merger Agreement — Covenants and Agreements — Director and Officer Indemnification and Insurance” on page 62.

Stock Ownership of CBC Officers and Directors

The directors and executive officers of CBC, as a group, beneficially owned and had the power to vote as of the CBC record date, a total of 988,156 shares of CBC common stock, representing approximately 11.36% of the issued and outstanding shares of CBC common stock as of that date. All of the shares of CBC common stock beneficially owned by the directors and executive officers of CBC are expected to be voted in favor of the CBC merger proposal, and all of the directors of CBC entered into voting agreements with CBC and SCB agreeing to vote their shares in favor of the CBC merger proposal. See “The Merger Agreement – Voting Agreements” beginning on page 67. Each of these persons will receive the same merger consideration for their shares of CBC common stock as the other CBC shareholders.

Potential Payments and Benefits to CBC’s Named Executive Officers in Connection with the Merger

This section sets forth the information regarding the compensation for each named executive officer of CBC that is based on or otherwise relates to the merger and that will or may become payable to each such named executive officer at the effective time or on a qualifying termination of employment in connection with the merger.

The estimated potential payments in the table below are based on the following assumptions:

Depending on when the merger occurs, certain equity awards that are unvested as of the record date and included in the table below may vest pursuant to the terms of the equity awards based on the completion of continued service with CBC, independent of the merger. The amounts indicated below are estimates based on multiple assumptions that may or may not actually occur, including assumptions described in this statement, and do not reflect certain compensation actions that may occur before completion of the merger. As a result, the actual amounts, if any, to be received by a named executive officer may materially differ from the amounts set forth below. All dollar amounts have been rounded to the nearest whole dollar.

For purposes of this disclosure, “single trigger” refers to payments and benefits that arise solely as a result of the completion of the mergers and “double trigger” refers to payments and benefits that are only payable when two required conditions occur, which are the completion of the mergers and the named executive officer experiences a qualifying termination of employment subsequent to the merger closing date. As described above, Mr. Shelton and Mr. Sa have entered into employment arrangements with SCB and, therefore, as of the date of this document, SCB and CBC do not expect that either of Mr. Shelton or Mr. Sa will experience a “qualifying termination.”

The following table reflects the number of stock options held by each named executive officer of CBC as of May 31, 2024 (all of which, if not previously exercised will be cashed out at the immediately prior to the effective time of the merger (“single-trigger”) and the estimated value of the stock options is based on $24.57, the average closing market price of CBC common stock over the first five business days following the first public announcement of the transaction on January 30, 2024, less the applicable per-share exercise price for the stock options.