BayCom Corp (“BayCom” or the “Company”) (NASDAQ: BCML), the
holding company for United Business Bank (the “Bank” or “UBB”),
announced earnings of $6.1 million, or $0.55 per diluted common
share, for the fourth quarter of 2024, compared to earnings of $6.0
million, or $0.54 per diluted common share, for the third quarter
of 2024 and $6.4 million, or $0.55 per diluted common share, for
the fourth quarter of 2023.
Net income for the fourth quarter of 2024 compared to the third
quarter of 2024 increased $103,000, or 1.7%, primarily as a result
of a $1.6 million decrease in provision for credit losses, $709,000
increase in net interest income, $306,000 decrease in provision for
income taxes and $98,000 decrease in noninterest expense, partially
offset by a $2.7 million decrease in noninterest income. Net income
for the fourth quarter of 2024 compared to the fourth quarter of
2023 decreased $278,000, or 4.3%, primarily as a result of a $2.6
million decrease in noninterest income and a $902,000 increase in
noninterest expense, partially offset by a $2.7 million decrease in
provision for credit losses, a $439,000 decrease in provision for
income taxes and a $47,000 increase in net interest income.
Net income for the year ended December 31, 2024 compared to the
year ended December 31, 2023 decreased $3.8 million, or 13.9%,
primarily as a result of a $6.7 million decrease in net interest
income and $600,000 decrease in noninterest income, partially
offset by a $750,000 decrease in provision for credit losses, a
$545,000 decrease in noninterest expense, and a $2.2 million
decrease in provision for income taxes. Net income for the year
ended December 31, 2024 was $23.6 million, or $2.10 per diluted
share common share, compared to net income for the year ended
December 31, 2023 of $27.4 million, or $2.27 per diluted common
share.
George Guarini, President and Chief Executive Officer,
commented, “Our financial results for the fourth quarter and full
year 2024 reflect a continuing trend of new lending activities and
improvement in our net interest margin. Improving credit quality
and economic factors are evident in the reversal of our provision
for credit losses. Overall, our financial condition remains strong,
and our earnings remain steady.”
Guarini concluded, “We are optimistic that 2025 will see a
continuing demand for lending and improving bank valuations. We
remain committed to enhancing shareholder value through share
repurchases and cash dividends, while continuing to provide
exceptional value to our clients and shareholders alike.”
Fourth Quarter Performance Highlights:
- Annualized net interest margin was 3.80% for the current
quarter, compared to 3.73% for the preceding quarter and 3.86% for
the same quarter a year ago.
- Annualized return on average assets was 0.94% for both the
current quarter and the preceding quarter, and was 1.00% for the
same quarter a year ago.
- Assets totaled $2.7 billion at December 31, 2024, compared to
$2.6 billion at both September 30, 2024 and December 31, 2023.
- Loans, net of deferred fees, totaled $2.0 billion at December
31, 2024, compared to $1.9 billion at both September 30, 2024, and
December 31, 2023.
- Nonperforming loans totaled $9.5 million or 0.48% of total
loans, at December 31, 2024, compared to $9.7 million or 0.51% of
total loans, at September 30, 2024, and $13.0 million, or 0.67% of
total loans, at December 31, 2023.
- The allowance for credit losses for loans totaled $17.9
million, or 0.92% of total loans outstanding, at December 31, 2024,
compared to $18.3 million, or 0.96% of total loans outstanding, at
September 30, 2024, and $22.0 million, or 1.14% of total loans
outstanding, at December 31, 2023.
- A $403,000 reversal of provision for credit losses was recorded
during the current quarter, compared to a $1.2 million provision
for credit losses in the prior quarter and a $2.3 million provision
for credit losses in the same quarter a year ago.
- Deposits totaled $2.2 billion at December 31, 2024, compared to
$2.1 billion at both September 30, 2024 and December 31, 2023. At
December 31, 2024, noninterest-bearing deposits totaled $689.0
million, or 30.8% of total deposits, compared to $618.3 million, or
28.9% of total deposits, at September 30, 2024, and $646.3 million,
or 30.3% of total deposits, at December 31, 2023.
- The Company repurchased 1,500 shares of common stock at an
average cost of $24.28 per share during the fourth quarter of 2024,
compared to 51,240 shares of common stock repurchased at an average
cost of $21.15 per share during the third quarter of 2024, and
122,559 shares of common stock repurchased at an average cost of
$19.91 per share during the fourth quarter of 2023.
- On November 20, 2024, the Company announced the declaration of
a cash dividend on the Company’s common stock of $0.15 per share,
which was paid on January 10, 2025 to shareholders of record as of
December 12, 2024.
- The Bank remained a “well-capitalized” institution for
regulatory capital purposes at December 31, 2024.
Earnings
Net interest income increased $709,000, or 3.1%, to $23.6
million for the fourth quarter of 2024 from $22.9 million for the
prior quarter, and increased $47,000, or 0.2%, from $23.5 million
for the same quarter a year ago. The increase from the prior
quarter was primarily driven by an increase in interest income on
loans and, to a lesser extent, an increase in interest income on
investment securities. These increases were partially offset by a
decrease in interest income on fed funds sold and interest-bearing
balances in banks, while interest expense remained relatively
unchanged. The increase in net interest income from the same
quarter in 2023 primarily reflects increases in interest income on
loans, investment securities, and federal funds sold and
interest-bearing balances in banks, partially offset by an increase
in interest expense on deposits. Average interest-earning assets
increased $30.0 million, or 1.2%, and increased $52.4 million, or
2.1%, for the fourth quarter of 2024 compared to the third quarter
of 2024 and the fourth quarter of 2023, respectively.
The Federal Open Market Committee (“FOMC”) of the Federal
Reserve System hiked interest rates a total of 11 times starting in
March 2022, bringing target interest rates to a range of
5.25–5.50%. However, on September 18, 2024, the FOMC lowered the
target range for the federal funds rate by 50 basis points,
followed by 25 basis-point decreases on November 7, 2024 and
December 18, 2024. As a result, the Federal Reserve target range
stood at 4.25% to 4.50% at December 31, 2024.
The average yield earned (annualized) on interest earning assets
for the fourth quarter of 2024 was 5.50%, up from 5.45% for the
third quarter of 2024 and 5.29% for the fourth quarter of 2023.
This increase reflects the repricing of adjustable-rate loans and
securities to higher rates, as well as the origination of new loans
at higher rates. Meanwhile, the average rate paid (annualized) on
interest-bearing liabilities decreased to 2.58% for the fourth
quarter of 2024, compared to 2.62% for the prior quarter, but
increased from 2.21% for the fourth quarter of 2023. The sequential
decrease in liability costs was due to a slightly lower cost of
interest-bearing deposits and borrowings during the quarter. As
interest-bearing liabilities tend to have shorter durations, they
generally reprice or reset faster than assets, which contributed to
the decrease.
Interest income on loans, including fees, increased $1.3
million, or 5.1%, to $27.6 million for the three months ended
December 31, 2024 from $26.2 million for the prior quarter, due to
a $42.2 million increase in the average balance of loans and a 16
basis point increase in the average loan yield. Interest income on
loans, including fees, increased $1.4 million, or 5.3%, for the
three months ended December 31, 2024 from $26.2 million for three
months ended December 31, 2023, due to a 16 basis point increase in
the average loan yield, partially offset by a $17.8 million
decrease in the average balance of loans. The average balance of
loans was $1.9 billion for the fourth quarter of 2024, third
quarter of 2024, and fourth quarter of 2023. The average yield on
loans was 5.69% for the fourth quarter of 2024, compared to 5.53%
for the third quarter of 2024 and 5.33% for the fourth quarter of
2023. The increase in the average yield on loans during the current
quarter, compared to the third quarter of 2024 and the fourth
quarter of 2023 was due to the impact of increased rates on
variable rate loans, as well as new loans being originated at
higher market interest rates.
Interest income on loans included $51,000 in accretion of the
net discount on acquired loans for the three months ended December
31, 2024, compared to $114,000 in amortization, and $29,000 in
accretion of the net discount on acquired loans for the three
months ended September 30, 2024 and December 31, 2023,
respectively. Accretion of the net discount had minimal to no
impact on the average yield on loans during the fourth quarter of
2024, the third quarter of 2024 and the fourth quarter of 2023. The
balance of the net discounts on these acquired loans totaled
$325,000, $449,000, and $354,000 at December 31, 2024, September
30, 2024, and December 31, 2023, respectively. Interest income
included fees related to prepayment penalties of $264,000 for the
three months ended December 31, 2024, compared to $12,000 and
$27,000 for the three months ended September 30, 2024 and December
31, 2023, respectively.
Interest income on investment securities increased $57,000, or
2.4%, to $2.5 million for the three months ended December 31, 2024,
compared to $2.4 million for the three months ended September 30,
2024, and increased $494,000, or 25.2%, from $1.9 million for the
three months ended December 31, 2023. The average yield on
investment securities increased seven basis points to 4.67% for the
three months ended December 31, 2024, compared to 4.60% for the
three months ended September 30, 2024, and increased 38 basis
points from 4.29% for the three months ended December 31, 2023. The
increases in average yield were due to higher market interest rates
on newly purchased securities and rate resets on variable rate
investment securities. The average balance of investment securities
totaled $208.9 million for the three months ended December 31,
2024, compared to $207.0 million and $181.0 million for the three
months ended September 30, 2024 and December 31, 2023,
respectively. In addition, during the fourth quarter of 2024, we
received $394,000 in cash dividends on our FRB and FHLB stock, up
slightly from $393,000 in the third quarter of 2024 and $390,000 in
the fourth quarter of 2023.
Interest income on federal funds sold and interest-bearing
balances in banks decreased $683,000, or 15.5%, to $3.7 million for
the three months ended December 31, 2024, compared to $4.4 million
for the three months ended September 30, 2024, and increased
$51,000, or 1.4%, from $3.7 million for the three months ended
December 31, 2023, as a result of changes in the average yield and
average balance. The average yield on federal funds sold and
interest-bearing balances in banks decreased 64 basis point to
4.79% for the three months ended December 31, 2024, compared to
5.43% for the three months ended September 30, 2024, and decreased
67 basis points from 5.46% for the three months ended December 31,
2023. The decrease in the average yield was due to lowering of the
Federal Reserve rate during the fourth quarter of 2024. The average
balance of federal funds sold and interest-bearing balance in banks
totaled $309.6 million for the three months ended December 31,
2024, compared to $323.6 million and $267.3 million for the three
months ended September 30, 2024 and December 31, 2023,
respectively. The decrease in average balance during the current
quarter compared to the prior quarter was due to paydowns and
amortization on loans outpacing new fundings earlier in the
quarter, offset by larger new loan fundings in December 2024. The
increase in average balance during the current quarter compared to
the same quarter one year ago was due to higher retained cash
balances as a result of lower new loan production during 2023 and
the first half of 2024.
Interest expense for both the three months ended December 31,
2024 and September 30, 2024 was $10.6 million, and increased $1.9
million, or 25.3%, compared to $8.7 million for the three months
ended December 31, 2023, reflecting higher funding costs primarily
related to increased rates of interest on our deposits due to
higher market rates. The average balance of deposits totaled $2.2
billion for the fourth quarter of 2024, compared to $2.1 billion
for both the third quarter of 2024 and fourth quarter of 2023. The
average cost of funds for the fourth quarter of 2024 was 2.58%,
compared to 2.62% for the third quarter of 2024 and 2.21% for the
fourth quarter of 2023. The decrease in the average cost of funds
during the current quarter compared to the prior quarter of 2024
was due to lower interest rates paid on money market and time
deposits due to lowering of the Federal Reserve target rate during
the current quarter. The increase in the average cost of funds
during the fourth quarter of 2024 compared to the same quarter of
2023 was due to higher interest rates paid on money market and time
deposits due to increased competition and pricing pressures and a
change in deposit mix due to a shift of deposits from
noninterest-bearing accounts to higher costing money market and
time deposits. The average cost of deposits for the three months
ended December 31, 2024 was 1.73%, compared to 1.75% for the three
months ended September 30, 2024, and 1.40% for the three months
ended December 31, 2023. The average balance of noninterest-bearing
deposits increased $3.4 million, or 0.6%, to $619.3 million for the
three months ended December 31, 2024, compared to $615.8 million
for the three months ended September 30, 2024 and decreased $36.8
million, or 5.6%, compared to $656.0 million for the three months
ended December 31, 2023.
Annualized net interest margin was 3.80% for the fourth quarter
of 2024, compared to 3.73% for the third quarter of 2024 and 3.86%
for the fourth quarter of 2024. The average yield on interest
earning assets for the fourth quarter of 2024 increased five basis
points and 21 basis points over the average yields for the third
quarter of 2024 and the fourth quarter of 2023, respectively, while
the average rate paid on interest-bearing liabilities for fourth
quarter of 2024 decreased four basis points and increased 37 basis
points over the average rates paid for the third quarter of 2024
and the fourth quarter of 2023, respectively. Net interest margin
in the fourth quarter of 2024 as compared to the third quarter of
2024 was positively impacted by the average yield on interest
earning assets, and as compared to the fourth quarter of 2023 was
negatively impacted by increasing funding costs, which outpaced, on
a percentage basis, increasing yields on loans and investment
securities. Accretion of the net discount had minimal to no impact
on the average yield on loans during the fourth quarter of 2024,
the third quarter of 2024 and the fourth quarter of 2023.
The Company recorded a $403,000 reversal of provision for credit
losses for the fourth quarter of 2024, compared to provision for
credit losses of $1.2 million, and $2.3 million for the third
quarter of 2024 and the fourth quarter of 2023, respectively. The
reversal of provision for credit losses in the fourth quarter of
2024 was mainly driven by decreasing quantitative loss rates due to
favorable changes in forecasted economic conditions, partially
offset by provision for new loan fundings and minimal increase in
provision for credit losses for unfunded commitments. Net
recoveries totaled $1,000 for the fourth quarter of 2024 which
reflected minimal activity, compared to net charge-offs of $1.5
million during the third quarter of 2024, which included a $1.0
million complete charge-off on a commercial non-accrual loan, which
was fully reserved for at June 30, 2024, a $480,000 complete
charge-off of a non-accrual commercial real estate loan, which was
sold during the third quarter of 2024, and a complete write-down of
one non-accrual farmland loan for $88,000, partially offset by two
recoveries totaling $50,000. The quantitative reserve was impacted
by improvements in forecasted economic conditions for national
gross domestic product and increasing forecasted national
unemployment, both of which are key indicators utilized to estimate
credit losses.
Noninterest income for the fourth quarter of 2024 decreased $2.7
million, or 96.8%, to $87,000 compared to $2.7 million for the
prior quarter of 2024, and decreased $2.6 million, or 96.8%,
compared to $2.7 million for the fourth quarter of 2023. The
decrease in noninterest income for the current quarter compared to
the prior quarter of 2024 was primarily due to a $2.7 million
decrease in gain on equity securities as a result of negative fair
value adjustments on these securities due to changes in market
conditions, a $17,000 decrease in service charges and other fees a
$35,000 decrease in income on investment in a Small Business
Investment Company (“SBIC”) fund due to losses in the underlying
fund, and a $46,000 decrease in other income and fees, partially
offset by a $69,000 increase in loan servicing fees and other fees
due to increased loan production and increased late fees due to
timing of borrower payments.
The decrease in noninterest income for the current quarter
compared to the same quarter in 2023 was primarily due to a $2.2
million decrease in gain on equity securities, a $446,000 decrease
in income on an investment in SBIC fund, and a $52,000 decrease in
loan servicing fees due to lower servicing fee income, partially
offset by a $51,000 increase in service charges and other fees
primarily due to fewer customer deposits placed in Certificate of
Deposit Account Registry Service (“CDARS”) and Insured Cash Sweep
(“ICS”) money market product services via the IntraFi Network, and
a $12,000 increase in other income and fees.
Noninterest expense for the fourth quarter of 2024 decreased
$98,000, or 0.6%, to $16.0 million compared to $16.1 million for
the prior quarter of 2024, and increased $902,000, or 6.0%,
compared to $15.1 million for the fourth quarter of 2023. The
decrease in noninterest expense for current quarter compared to the
prior quarter of 2024 was primarily due to a $83,000 decrease in
other expense due to lower legal and other professional costs, a
$75,000 decrease in data processing expense due to lower vendor
data processing charges, and a $30,000 decrease in occupancy and
equipment expense, partially offset by a $90,000 increase in
salaries and employee benefits as a result of year-end incentive
accrual adjustments. The increase in noninterest expense for fourth
quarter of 2024, compared to the fourth quarter of 2023, was
primarily due to a $723,000 increase in salaries and employee
benefits due to adjustments made in response to inflation and
incentive accruals with improved loan production, a $155,000
increase in occupancy and equipment expense due to higher
depreciation and property maintenance expense, and a $131,000
increase in data processing expense due to newly implemented
services in the current year, partially offset by a $107,000
decrease in other expense due to reduction in legal and other
professional costs.
The provision for income taxes decreased $306,000, or 13.5%, to
$1.9 million for the fourth quarter of 2024 compared to $2.3
million for the prior quarter of 2024 and decreased $439,000, or
18.2%, from $2.4 million for the fourth quarter of 2023. The
effective tax rate for the fourth quarter of 2024 was 24.3%,
compared to 27.4% for the prior quarter of 2024 and 27.3% for the
fourth quarter of 2023. The reduction in the effective tax rate
compared to both the prior quarter of 2024 and the same quarter of
2023 was primarily due to true-up adjustments for low-income
housing tax credits and losses along with other year-end
adjustments.
Loans and Credit Quality
Loans, net of deferred fees, increased $40.8 million from
September 30, 2024, and increased $25.1 million from December 31,
2023, and totaled $2.0 billion at December 31, 2024, compared to
$1.9 billion at September 30, 2024 and December 31, 2023. The
increase in loans at December 31, 2024 compared to September 30,
2024 was primarily due to $118.4 million of new loan originations
and $21.6 million of loan purchases, partially offset by $99.5
million of loan repayments during the current quarter.
Nonperforming loans, consisting solely of non-accrual loans,
totaled $9.5 million, or 0.48% of total loans, at December 31,
2024, compared to $9.7 million, or 0.51% of total loans, at
September 30, 2024, and $13.0 million, or 0.67% of total loans, at
December 31, 2023. The decrease in nonperforming loans from the
prior quarter-end was primarily due to pay-off of one non-accrual
loan of $283,000, partially offset by two new loans totaling
$35,000 being placed on non-accrual during the current quarter.
The portion of nonaccrual loans guaranteed by government
agencies totaled $2.0 million at both December 31, 2024, and
September 30, 2024, compared to $740,000 at December 31, 2023.
There were two loans totaling $220,000, 90 days or more past due
and still accruing and in the process of collection at December 31,
2024, compared to no loans 90 days or more past due and still
accruing and in the process of collection at both September 30,
2024, and December 31, 2023. Accruing loans past due between 30 and
89 days at December 31, 2024, totaled $6.7 million, compared to
$4.5 million at September 30, 2024 and $4.8 million at December 31,
2023. The $2.2 million increase in accruing loans past due between
30-89 days at December 31, 2024 compared to September 30, 2024, was
primarily due to two commercial real estate loans totaling $2.7
million, which were less than 30 days past due at December 31,
2024, partially offset by pay-off of one commercial real estate
loan for $1.7 million during the current quarter, which was more
than 30 days past due at September 30, 2024.
At December 31, 2024, the Company’s allowance for credit losses
for loans was $17.9 million, or 0.92% of total loans, compared to
$18.3 million, or 0.96% of total loans, at September 30, 2024 and
$22.0 million, or 1.14% of total loans, at December 31, 2023. We
recorded net recoveries of $3,000 for the fourth quarter of 2024,
compared to net charge-offs of $1.5 million in the prior quarter of
2024 and net charge-offs of $150,000 in the fourth quarter of
2023.
As of December 31, 2024, acquired loans net of their discount
totaled $163.5 million with a remaining net discount on these loans
of $326,000, compared to $176.7 million of acquired loans with a
remaining net discount of $449,000 at September 30, 2024, and
$215.2 million of acquired loans with a remaining net discount of
$354,000 at December 31, 2023. The change in the net discount from
September 30, 2024, was due to payoff activity during the current
quarter. The net discount includes a credit discount based on
estimated losses on the acquired loans, partially offset by a
premium, if any, based on market interest rates on the date of
acquisition.
Deposits and Borrowings
Deposits totaled $2.2 billion at December 31, 2024, compared to
$2.1 billion at both September 30, 2024 and December 31, 2023.
During 2024 the overall deposit mix shifted, in part, due to
interest rate sensitive clients moving a portion of their
non-operating deposit balances from lower costing deposits,
including noninterest-bearing deposits, into higher costing money
market and time deposits. At December 31, 2024, noninterest-bearing
deposits totaled $689.0 million, or 30.8% of total deposits,
compared to $618.3 million, or 28.9% of total deposits, at
September 30, 2024, and $646.3 million, or 30.3% of total deposits,
at December 31, 2023. This increase from the prior quarter was
primarily attributed to timing, as $79.0 million in incoming wires
were received near year-end, and were disbursed in early January
2025.
We consider our deposit base to be seasoned, stable and
well-diversified, and we do not have any significant industry
concentrations among our non-insured deposits. We also offer an ICS
product that allows customers to insure deposits above FDIC
insurance limits. At December 31, 2024 and September 30, 2024, our
average deposit account size (excluding public funds), calculated
by dividing period-end deposits by the population of accounts with
balances, was approximately $62,000 and $60,000, respectively.
The Bank has an approved secured borrowing facility with the
FHLB of San Francisco for up to 25% of total assets for a term not
to exceed five years under a blanket lien of certain types of
loans, with no FHLB advances outstanding at December 31, 2024,
September 30, 2024 or December 31, 2023. The Bank has Federal Funds
lines with four corresponding banks with an aggregate available
commitment on these lines of $65.0 million at December 31, 2024.
There were no amounts outstanding under these lines at December 31,
2024, September 30, 2024 or December 31, 2023. During the first
quarter of 2024, the Bank was approved for discount window advances
with the FRB of San Francisco secured by certain loan types. At
both December 31, 2024 and September 30, 2024, the Bank had no FRB
of San Francisco advances outstanding.
At December 31, 2024, September 30, 2024 and December 31, 2023,
the Company had outstanding junior subordinated deferrable interest
debentures, net of fair value adjustments, assumed in connection
with its previous acquisitions totaling $8.6 million. At December
31, 2024 and September 30, 2024, the Company had outstanding
subordinated debt, net of costs to issue, totaling $63.7 million,
compared to $63.9 million at December 31, 2023.
At December 31, 2024, September 30, 2024 and December 31, 2023,
the Company had no other borrowings outstanding.
Shareholders’ Equity
Shareholders’ equity totaled $324.4 million at December 31,
2024, compared to $321.7 million at September 30, 2024, and $312.9
million at December 31, 2023. The increase at December 31, 2024,
compared to September 30, 2024, reflects $6.1 million of net income
during the current quarter, partially offset by a $1.8 million
increase in accumulated other comprehensive loss, net of taxes,
common stock repurchases of $36,000 and $1.7 million of accrued
cash dividends payable. At December 31, 2024, 464,098 shares
remained available for future repurchases under the Company’s
current stock repurchase plan.
The increase to shareholders’ equity at December 31, 2024, as
compared to December 31, 2023, primarily was due to $23.6 million
of net income during the current year and a $1.6 million decrease
in accumulated other comprehensive loss, net of taxes, partially
offset by $9.3 million of common stock repurchases, $3.4 million of
dividends paid during the year, and $1.7 million of accrued cash
dividends payable.
About BayCom Corp
The Company, through its wholly owned operating subsidiary,
United Business Bank, offers a full range of loans, including SBA,
CalCAP, FSA and USDA guaranteed loans, and deposit products and
services to businesses and their affiliates in California,
Washington, New Mexico, Colorado and Nevada. The Bank is an Equal
Housing Lender and a member of FDIC. The Company’s common stock is
listed on the NASDAQ Global Select Market under the symbol “BCML”.
For more information, go to www.unitedbusinessbank.com.
Forward-Looking Statements
This release, as well as other public or shareholder
communications by the Company, may contain forward-looking
statements, including, but not limited to, (i) statements regarding
the financial condition, results of operations and business of the
Company, (ii) statements about the Company’s plans, objectives,
expectations and intentions and other statements that are not
historical facts and (iii) other statements identified by the words
or phrases “will likely result,” “are expected to,” “will
continue,” “is anticipated,” “estimate,” “project,” “intends” or
similar expressions that are intended to identify “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are not historical
facts but instead are based on current beliefs and expectations of
the Company’s management and are inherently subject to significant
business, economic and competitive uncertainties and contingencies,
many of which are beyond the Company’s control. In addition, these
forward-looking statements are subject to assumptions with respect
to future business strategies and decisions that are subject to
change.
There are a number of factors that could cause future results to
differ materially from historical performance and these
forward-looking statements. Factors which could cause actual
results to differ materially from the results anticipated or
implied by our forward-looking statements include, but are not
limited to: adverse impacts to economic conditions in our local
market areas, other markets where the Company has lending
relationships, or other aspects of the Company’s business
operations or financial markets, including, without limitation, as
a result of employment levels, labor shortages and the effects of
inflation, a recession or slowed economic growth; changes in the
interest rate environment, including the increases and decreases in
the Federal Reserve benchmark rate and the duration at which such
interest rate levels are maintained, which could adversely affect
our revenues and expenses, the values of our assets and
obligations, and the availability and cost of capital and
liquidity; the impact of inflation and the current and future
monetary policies of the Federal Reserve in response thereto; the
effects of any federal government shutdown; the impact of bank
failures or adverse developments at other banks and related
negative press about the banking industry in general on investor
and depositor sentiment; review of the Company’s accounting,
accounting policies and internal control over financial reporting;
future acquisitions by the Company of other depository institutions
or lines of business; the risks of lending and investing
activities, including changes in the level and direction of loan
delinquencies and write-offs and changes in estimates of the
adequacy of the allowance for credit losses; the Company's ability
to access cost-effective funding; fluctuations in real estate
values and both residential and commercial real estate market
conditions; increased competitive pressures, including repricing
and competitors’ pricing initiatives, and their impact on our
market position, loan, and deposit products;; changes in
management’s business strategies, including expectations regarding
key growth initiatives and strategic priorities; disruptions,
security breaches, or other adverse events, failures or
interruptions in, or attacks on, our information technology systems
or on the third-party vendors who perform critical processing
functions for us; environmental, social and governance goals; the
potential imposition of new tariffs or changes to existing trade
policies that could affect economic activity or specific industry
sectors; the effects of climate change, severe weather events,
natural disasters, pandemics, epidemics and other public health
crises, acts of war or terrorism, civil unrest and other external
events on our business; and other factors described in the
Company’s latest Annual Report on Form 10-K and Quarterly Reports
on Form 10-Q and other reports filed with or furnished to the
Securities and Exchange Commission (“SEC”), which are available on
our website at www.unitedbusinessbank.com and on the SEC's website
at www.sec.gov.
The factors listed above could materially affect the Company’s
financial performance and could cause the Company’s actual results
for future periods to differ materially from any opinions or
statements expressed with respect to future periods in any current
statements.
The Company does not undertake - and specifically declines any
obligation - to publicly release the result of any revisions that
may be made to any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events, whether as a
result of new information, future events or otherwise, except as
may be required by law or NASDAQ rules. When considering
forward-looking statements, you should keep in mind these risks and
uncertainties. You should not place undue reliance on any
forward-looking statement, which speaks only as of the date
made.
BAYCOM CORP STATEMENTS OF
COMPREHENSIVE INCOME (UNAUDITED) (Dollars in thousands, except
per share data)
Three months ended
Year ended
December 31,
September 30,
December 31,
December 31,
December 31,
2024
2024
2023
2024
2023
Interest income
Loans, including fees
$
27,559
$
26,232
$
26,166
$
104,062
$
106,316
Investment securities
2,450
2,393
1,956
8,980
6,993
Fed funds sold and interest-bearing
balances in banks
3,731
4,414
3,680
17,079
11,589
FHLB dividends
249
243
245
1,011
862
FRB dividends
145
144
145
578
577
Total interest and dividend income
34,134
33,426
32,192
131,710
126,337
Interest expense
Deposits
9,462
9,448
7,551
36,139
24,040
Subordinated debt
891
892
896
3,567
3,582
Junior subordinated debt
207
221
218
863
841
Total interest expense
10,560
10,561
8,665
40,569
28,463
Net interest income
23,574
22,865
23,527
91,141
97,874
(Reversal of) provision for credit
losses
(403
)
1,245
2,325
1,265
2,015
Net interest income after (reversal of)
provision for credit losses
23,977
21,620
21,202
89,876
95,859
Noninterest income
Gain on sale of loans
—
—
—
287
508
(Loss) gain on equity securities
(1,209
)
1,420
946
463
(1,141
)
Service charges and other fees
881
898
830
3,352
3,570
Loan servicing fees and other fees
393
324
445
1,550
1,879
(Loss) income on investment in SBIC
fund
(288
)
(253
)
158
(500
)
1,097
Other income and fees
310
356
298
1,225
1,064
Total noninterest income
87
2,745
2,677
6,377
6,977
Noninterest expense
Salaries and employee benefits
9,659
9,569
8,936
38,906
41,001
Occupancy and equipment
2,179
2,209
2,024
8,675
8,158
Data processing
1,898
1,973
1,767
7,274
6,622
Other expense
2,240
2,323
2,347
9,278
8,897
Total noninterest expense
15,976
16,074
15,074
64,133
64,678
Income before provision for income
taxes
8,088
8,291
8,805
32,120
38,158
Provision for income taxes
1,968
2,274
2,407
8,506
10,733
Net income
$
6,120
$
6,017
$
6,398
$
23,614
$
27,425
Net income per common share:
Basic
$
0.55
$
0.54
$
0.55
$
2.10
$
2.27
Diluted
0.55
0.54
0.55
2.10
2.27
Weighted average shares used to compute
net income per common share:
Basic
11,123,944
11,148,482
11,571,796
11,262,409
12,074,198
Diluted
11,123,944
11,148,482
11,571,796
11,262,409
12,074,198
Comprehensive income
Net income
$
6,120
$
6,017
$
6,398
$
23,614
$
27,425
Other comprehensive (loss) income:
Change in unrealized (loss) gain on
available-for-sale securities
(2,517
)
3,414
3,746
2,303
(4,255
)
Deferred tax benefit (expense)
679
(980
)
(1,078
)
(717
)
1,224
Other comprehensive (loss) income, net of
tax
(1,838
)
2,434
2,668
1,586
(3,031
)
Comprehensive income
$
4,282
$
8,451
$
9,066
$
25,200
$
24,394
BAYCOM CORP STATEMENTS OF
CONDITION (UNAUDITED) (Dollars in thousands)
December 31,
September 30,
December 31,
2024
2024
2023
Assets
Cash and due from banks
$
23,138
$
25,666
$
17,901
Federal funds sold and interest-bearing
balances in banks
340,894
275,618
289,638
Cash and cash equivalents
364,032
301,284
307,539
Time deposits in banks
249
498
1,245
Investment securities available-for-sale
("AFS"), at fair value
193,328
193,762
163,152
Equity securities, at fair value
13,120
14,329
12,585
Federal Home Loan Bank ("FHLB") stock, at
par
11,313
11,313
11,313
Federal Reserve Bank ("FRB") stock, at
par
9,645
9,640
9,626
Loans held for sale
2,216
2,252
—
Loans, net of deferred fees
1,952,896
1,912,105
1,927,829
Allowance for credit losses for loans
(17,900
)
(18,310
)
(22,000
)
Premises and equipment, net
13,386
13,777
13,734
Core deposit intangible
2,693
2,999
3,915
Cash surrender value of bank owned life
insurance policies, net
23,591
23,409
22,867
Right-of-use assets
13,383
12,709
13,939
Goodwill
38,838
38,838
38,838
Interest receivable and other assets
43,718
43,735
47,378
Total Assets
$
2,664,508
$
2,562,340
$
2,551,960
Liabilities and Shareholders’ Equity
Noninterest-bearing deposits
$
688,996
$
618,296
$
646,278
Interest-bearing deposits
Transaction accounts and savings
655,986
690,810
745,712
Premium money market
332,624
337,500
263,516
Time deposits
556,403
489,835
477,244
Total deposits
2,234,009
2,136,441
2,132,750
Junior subordinated deferrable interest
debentures, net
8,645
8,625
8,565
Subordinated debt, net
63,736
63,694
63,881
Salary continuation plans
4,737
4,697
4,552
Lease liabilities
14,383
13,660
14,752
Interest payable and other liabilities
14,632
13,542
14,591
Total Liabilities
2,340,142
2,240,659
2,239,091
Shareholders’ Equity
Common stock, no par value
172,541
172,470
181,200
Accumulated other comprehensive loss, net
of tax
(13,006
)
(11,168
)
(14,592
)
Retained earnings
164,831
160,379
146,261
Total Shareholders’ Equity
324,366
321,681
312,869
Total Liabilities and Shareholders’
Equity
$
2,664,508
$
2,562,340
$
2,551,960
BAYCOM CORP FINANCIAL
HIGHLIGHTS (UNAUDITED) (Dollars in thousands, except per share
data)
At and for the three months
ended
At and for the year ended
December 31,
September 30,
December 31,
December 31,
December 31,
Selected Financial Ratios and Other
Data:
2024
2024
2023
2024
2023
Performance Ratios:
Return on average assets (1)
0.94
%
0.94
%
1.00
%
0.92
%
1.07
%
Return on average equity (1)
7.55
7.54
8.26
9.88
8.76
Yield earned on average interest-earning
assets (1)
5.50
5.45
5.29
5.40
5.23
Rate paid on average interest-bearing
liabilities (1)
2.58
2.62
2.21
2.54
1.87
Interest rate spread - average during the
period (1)
2.92
2.83
3.08
2.86
3.36
Net interest margin (1)
3.80
3.73
3.86
3.74
4.05
Loan to deposit ratio
87.42
89.50
90.39
87.42
90.39
Efficiency ratio (2)
67.52
62.76
57.53
65.76
61.69
(Recoveries)/Charge-offs, net
$
(3
)
$
1,545
$
150
$
4,990
$
550
Per Share Data:
Shares outstanding at end of period
11,121,475
11,130,372
11,551,271
11,121,475
11,551,271
Average diluted shares outstanding
11,123,944
11,148,482
11,571,796
11,262,409
12,074,198
Diluted earnings per share
$
0.55
$
0.54
$
0.55
$
2.10
$
2.27
Book value per share
29.17
28.90
27.09
29.17
27.09
Tangible book value per share (3)
25.43
25.14
23.38
25.43
23.38
Asset Quality Data:
Nonperforming assets to total assets
(4)
0.36
%
0.38
%
0.51
%
Nonperforming loans to total loans (5)
0.48
%
0.51
%
0.67
%
Allowance for credit losses on loans to
nonperforming loans (5)
189.08
%
188.64
%
169.53
%
Allowance for credit losses on loans to
total loans
0.92
%
0.96
%
1.14
%
Classified assets (graded substandard and
doubtful)
$
32,716
$
31,010
$
30,801
Total accruing loans 30‑89 days past
due
6,654
4,491
4,773
Total loans 90 days past due and still
accruing
220
—
—
Capital Ratios:
Tier 1 leverage ratio — Bank (6)
13.42
%
13.23
%
13.08
%
Common equity tier 1 capital ratio — Bank
(6)
16.94
%
16.81
%
16.94
%
Tier 1 capital ratio — Bank (6)
16.94
%
16.81
%
16.94
%
Total capital ratio — Bank (6)
17.86
%
17.76
%
18.08
%
Equity to total assets — end of period
12.17
%
12.55
%
12.26
%
Tangible equity to tangible assets — end
of period (3)
10.78
%
11.10
%
10.76
%
Loans:
Real estate
$
1,767,148
$
1,725,309
$
1,752,626
Non-real estate
176,026
176,456
161,816
Nonaccrual loans
9,247
9,707
12,977
Mark to fair value at acquisition
326
449
354
Total Loans
1,952,747
1,911,921
1,927,773
Net deferred fees on loans
149
184
56
Loans, net of deferred fees
$
1,952,896
$
1,912,105
$
1,927,829
Other Data:
Number of full-service offices
35
35
35
Number of full-time equivalent
employees
324
336
358
(1)
Annualized.
(2)
Total noninterest expense as a percentage
of net interest income and total noninterest income.
(3)
Represents a non-GAAP financial measure.
See “Non-GAAP Financial Measures” below.
(4)
Nonperforming assets consist of nonaccrual
loans, accruing loans that are 90 days or more past due, and other
real estate owned.
(5)
Nonperforming loans consist of nonaccrual
loans and accruing loans that are 90 days or more past due.
(6)
Regulatory capital ratios are for United
Business Bank only.
Non-GAAP Financial Measures:
In addition to results presented in accordance with generally
accepted accounting principles utilized in the United States
(“GAAP”), this earnings release contains tangible book value per
share and tangible equity to tangible assets, both of which are
non-GAAP financial measures. Tangible book value per share is
calculated by dividing tangible common shareholders’ equity by the
number of common shares outstanding at the end of the period.
Tangible equity and tangible common shareholders’ equity exclude
intangible assets from shareholders’ equity, and tangible assets
exclude intangible assets from total assets. For these financial
measures, the Company’s intangible assets are goodwill and core
deposit intangibles. The Company believes that these measures are
consistent with the capital treatment by our bank regulatory
agencies, which excludes intangible assets from the calculation of
risk-based capital ratios and presents these measures to facilitate
comparison of the quality and composition of the Company’s capital
over time in comparison to its peers. Non-GAAP financial measures
have inherent limitations, are not required to be uniformly
applied, and are not audited. Further, these non-GAAP financial
measures should not be considered in isolation or as a substitute
for the comparable financial measures determined in accordance with
GAAP and may not be comparable to similarly titled measures
reported by other companies.
Reconciliation of the GAAP and non-GAAP financial measures is
presented below:
Non-GAAP Measures
(Dollars in thousands, except per
share data)
December 31,
September 30,
December 31,
2024
2024
2023
Tangible Book Value:
Total equity and common shareholders’
equity (GAAP)
$
324,366
$
321,681
$
312,869
less: Goodwill and other intangibles
41,531
41,837
42,753
Tangible equity and common shareholders’
equity (Non-GAAP)
$
282,835
$
279,844
$
270,116
Total assets (GAAP)
$
2,664,508
$
2,562,340
$
2,551,960
less: Goodwill and other intangibles
41,531
41,837
42,753
Total tangible assets (Non-GAAP)
$
2,622,977
$
2,520,503
$
2,509,207
Equity to total assets (GAAP)
12.17
%
12.55
%
12.26
%
Tangible equity to tangible assets
(Non-GAAP)
10.78
%
11.10
%
10.76
%
Book value per share (GAAP)
$
29.17
$
28.90
$
27.09
Tangible book value per share
(Non-GAAP)
$
25.43
$
25.14
$
23.38
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250123855391/en/
BayCom Corp Keary Colwell, 925-476-1800 kcolwell@ubb-us.com
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