BayCom Corp (“BayCom” or the “Company”) (NASDAQ: BCML), the
holding company for United Business Bank (the “Bank” or “UBB”),
announced earnings of $8.1 million, or $0.62 per diluted common
share, for the fourth quarter of 2022, compared to earnings of $7.2
million, or $0.54 per diluted common share, for the third quarter
of 2022 and $5.4 million, or $0.51 per diluted common share, for
the fourth quarter of 2021. For the year ended December 31, 2022,
the Company announced earnings of $27.0 million, or $2.06 per
diluted common share, compared to $20.7 million, or $1.90 per
diluted common share, for the year ended December 31, 2021.
Net income for the fourth quarter of 2022 compared to the prior
quarter increased $824,000, or 11.4%, primarily as a result of a
$1.7 million increase in net interest income and a $577,000
decrease in provision for loan losses, partially offset by a $1.2
million decrease in noninterest income and a $212,000 increase in
noninterest expense. Net income for the fourth quarter of 2022
compared to the fourth quarter of 2021 increased $2.6 million, or
48.1%, primarily as a result of a $7.3 million increase in net
interest income, partially offset by a $121,000 increase in
provision for loan losses, a $1.1 million decrease in noninterest
income, a $2.6 million increase in noninterest expense and a
$920,000 increase in provision for income taxes.
Net income increased $6.3 million, or 30.5%, to $27.0 million
for the year ended December 31, 2022 compared to $20.7 million in
2021, primarily as a result of a $23.9 million increase in net
interest income, partially offset by a $4.0 million increase in
provision for loan losses, a $589,000 decrease in noninterest
income, a $10.8 million increase in noninterest expense and a $2.2
million increase in provision for income taxes. Included in
noninterest income for the year ended December 31, 2022 was $1.6
million in bargain purchase gain related to our acquisition of
Pacific Enterprise Bancorp (“PEB”) and its wholly owned operating
subsidiary, Pacific Enterprise Bank, during the first quarter of
2022, that was not present during the prior year.
George Guarini, President and Chief Executive Officer,
commented, “We are pleased that our financial results for the
fourth quarter and full year 2022 are in line with our
expectations. Despite the developing rate pressure on deposits, our
return on average assets and our net interest margin improved
during the year as a result of our loan growth and overall asset
sensitivity. The Federal Reserve has indicated that it expects to
continue to increase interest rates in 2023, which should continue
to contribute to future earnings. In addition, we are seeing lower
marketplace premiums on SBA Loans which gives us the opportunity to
hold these loans on the balance sheet supplementing loan
growth.”
Guarini concluded, “While market conditions may not be very
conducive for merger and acquisition activity, we continue to look
for selective merger partners. In addition to focusing on achieving
our financial metrics, we are continuing to repurchase our shares
and pay cash dividends to our shareholders. Our goal continues to
be to consistently add value for our clients and shareholders.”
Fourth Quarter Performance Highlights:
- Annualized net interest margin was 4.40% for the current
quarter, compared to 3.99% in the preceding quarter and 3.41% in
the same quarter a year ago.
- Annualized return on average assets was 1.28% for the current
quarter, compared to 1.11% in the preceding quarter and 0.92% in
the same quarter a year ago.
- Assets totaled $2.5 billion at both December 31, 2022 and
September 30, 2022, compared to $2.4 billion at December 31,
2021.
- Loans, net of deferred fees, totaled $2.0 billion at both
December 31, 2022 and September 30, 2022, and totaled $1.7 billion
at December 31, 2021.
- Nonperforming loans totaled $15.2 million or 0.75 % of total
loans at December 31, 2022, compared to $19.7 million or 0.99% of
total loans at September 30, 2022, and $6.9 million or 0.41% of
total loans at December 31, 2021.
- The allowance for loan losses totaled $18.9 million, or 0.94%
of total loans outstanding, at December 31, 2022, compared to $18.1
million, or 0.90% of total loans outstanding, at September 30,
2022, and $17.7 million, or 1.06% of total loans outstanding, at
December 31, 2021. A $617,000 provision for loan losses was
recorded during the current quarter compared to a $1.2 million
provision for loan losses in the prior quarter, and a $496,000
provision for loan losses in the same quarter a year ago.
- Deposits totaled $2.1 billion at both December 31, 2022, and
September 30, 2022, compared to $2.0 billion at December 31, 2021.
At December 31, 2022, noninterest bearing deposits totaled $773.3
million, or 37.1% of total deposits, compared to $813.5 million, or
38.5% of total deposits at September 30, 2022, and $710.1 million,
or 35.8% of total deposits at December 31, 2021.
- The Company repurchased 236,985 shares of common stock at an
average cost of $18.60 per share during the fourth quarter of 2022,
compared to 406,534 shares repurchased at an average cost of $19.14
per share during the third quarter of 2022, and 5,125 shares
repurchased at an average cost of $18.31 per share during the
fourth quarter of 2021.
- On November 16, 2022, the Company announced the declaration of
a cash dividend on the Company’s common stock of $0.05 per share,
paid on January 13, 2023 to stockholders of record as of December
16, 2022.
- The Bank remained “well-capitalized” institution for regulatory
capital purposes at December 31, 2022.
Earnings
Net interest income increased $1.7 million or 7.1%, to $26.5
million for the fourth quarter of 2022 from $24.7 million in the
prior quarter and increased $7.3 million, or 37.9%, from $19.2
million in the same quarter a year ago. The increase in net
interest income between the periods reflects increases in interest
income on loans, cash and cash equivalents and, to a lesser extent,
investment securities, including dividend on FRB and FHLB stock,
partially offset by higher funding costs related to increased
market rates of interest on our deposits and junior subordinated
debt. Average interest-earning assets decreased $73.2 million, or
3.0%, and increased $150.7 million, or 6.7% for the three months
ended December 31, 2022 compared to the third quarter of 2022 and
the fourth quarter of 2021, respectively. Average yield on interest
earning assets for the fourth quarter of 2022 was 4.91%, compared
to 4.38% for the third quarter of 2022 and 3.79% the fourth quarter
of 2021. The increase in average yields on interest-earning assets
during the current quarter reflects increases in market interest
rates due to recent increases in the target range for federal
funds, including a 125 basis points increase during the fourth
quarter of 2022, to a range of 4.25% to 4.50%. The average rate
paid on interest bearing liabilities for fourth quarter of 2022 was
0.89%, compared to 0.66% for the third quarter of 2022, and 0.64%
for the fourth quarter of 2021.
Interest income on loans, including fees, increased $1.8
million, or 7.5%, to $25.8 million for the fourth quarter of 2022
compared to the prior quarter primarily due to a 39 basis point
increase in the average loan yield. Interest income on loans,
including fees, increased $6.1 million, or 30.6%, during the fourth
quarter of 2022 compared to the fourth quarter of 2021 primarily
due to a $352.7 million increase in the average loan balance and a
37 basis point increase in the average loan yield. The average loan
balance totaled $2.0 billion for both the fourth quarter of 2022
and third quarter of 2022, compared to $1.6 billion for the same
quarter a year ago. The average yield on loans was 5.12%, compared
to 4.73% for the third quarter of 2022 and 4.75% for the fourth
quarter of 2021. The increase in the average yield on loans from
the prior quarter was due to the impact of increased rates on
variable rate loans as well as new loans being originated at higher
interest rates and by a $155,000 increase in accretion of the net
discount on acquired loans, partially offset by a $28,000 decrease
in PPP loan fees recognized when compared to the prior quarter.
Interest income on loans included $218,000, $63,000, and
$409,000 in accretion of the net discount on acquired loans and
revenue from purchase credit impaired loans in excess of discounts
for the quarters ended December 31, 2022, September 30, 2022, and
December 31, 2021, respectively. The balance of the net discounts
on these acquired loans totaled $522,000, $480,000, and $2.1
million at December 31, 2022, September 30, 2022, and December 31,
2021, respectively. Interest income included $133,000 in fees
earned related to PPP loans in the quarter ended December 31, 2022,
compared to $161,000 in the prior quarter 2022 and $1.9 million in
the same quarter 2021. Interest income also included fees related
to prepayment penalties of $335,000 in the quarter ended December
31, 2022, compared to $195,000 in the prior quarter 2022, and
$439,000 in the same quarter in 2021. As of December 31, 2022,
total unrecognized fees on PPP loans were $94,000.
Interest income on investment securities available-for-sale
increased $57,000 to $1.6 million for the three months ended
December 31, 2022, compared to the three months ended September 30,
2022, and increased $424,000, or 36.0%, from $1.2 million for the
three months ended December 31, 2021. The increase in the current
quarter compared to the same quarter in 2021 was due to the
increase in market interest rates which resulted in a 32 basis
point increase in the average yield on investment securities
available-for-sale to 3.39% for the three months ended December 31,
2022 from 3.07% for the three months ended December 31, 2021. The
average balance on investments securities available-for-sale
totaled $187.5 million for the three months ended December 31,
2022, compared to $188.7 million and $152.3 million for the three
months ended September 30, 2022 and December 31, 2021,
respectively.
Interest income on federal funds sold and interest-bearing
balances in banks increased $435,000, or 33.8%, to $1.7 million for
the three months ended December 31, 2022, compared to $1.3 million
for the three months ended September 30, 2022, and increased $1.5
million, or 820.8%, from $186,000 for the three months ended
December 31, 2021 as a result of an increase in the average yield.
The average yield on federal funds sold and interest-bearing
balances in banks increased 167 basis point to 3.85% for the three
months ended December 31, 2022, compared to 2.18% for the three
months ended September 30, 2022, and increased 367 basis point from
0.18% for the three months ended December 31, 2021. The average
balance of federal funds sold and interest-bearing balance in banks
totaled $177.4 million for the three months ended December 31,
2022, compared to $234.6 million and $418.8 million for the three
months ended September 30, 2022 and December 31, 2021,
respectively. In addition, during the fourth quarter of 2022, we
received $379,000 in cash dividends on our FRB and FHLB stock, up
32.5% from $286,000 in the prior quarter and up 43.0% from $265,000
in the fourth quarter in 2021.
Interest expense increased $623,000, or 25.8%, to $3.0 million
for the three months ended December 31, 2022, compared to $2.4
million for the three months ended September 30, 2022, and
increased $854,000, or 39.2%, compared to $2.2 million for the same
quarter in 2021, primarily as a result of an increase in the
average cost of deposits. Average balance of deposits totaled $2.1
billion for the fourth quarter of 2022, compared to $2.2 billion
for the third quarter of 2022 and $2.0 billion for the same quarter
in 2021. The average cost of funds for the fourth quarter of 2022
was 0.89% compared to 0.66% for third quarter of 2022 and 0.64% for
the same quarter in 2021. The increase in the average cost of funds
during the current quarter compared to the prior quarter was due to
higher interest rates paid on money market and time deposits due to
increased competition and pricing pressures resulting from higher
market interest rates generally. The average cost of total deposits
for the three months ended December 31, 2022 was 0.37%, compared to
0.25% for the three months ended September 30, 2022, and 0.24% for
the three months ended December 31, 2021. The average balance of
noninterest bearing deposits increased $7.4 million, or 0.91%, to
$809.2 million for the three months ended December 31, 2022,
compared to $801.9 million for the three months ended September 30,
2022 and $738.6 million for the three months ended December 31,
2021. In addition, interest expense on junior subordinated debt
increased $92,000, or 110.0%, to $176,000 for the three months
ended December 31, 2022, compared to $84,000 for the same quarter
in 2021 as a result of higher market rates.
Annualized net interest margin was 4.40% for the fourth quarter
of 2022, compared to 3.99% for the preceding quarter and 3.41% for
fourth quarter of 2021 as a result of our asset sensitive balance
sheet. The average yield on interest earning assets for the fourth
quarter of 2022 increased 53 basis point and 112 basis point over
the average yields for the third quarter of 2022 and the fourth
quarter of 2021, while the average rate paid on interest bearing
liabilities for fourth quarter of 2022 increase 23 basis points and
25 basis points over the average rates paid for the third quarter
of 2022 and the fourth quarter of 2021, respectively. Net interest
margin was positively impacted by rising interest rates during the
quarter which produced higher yields on loans, investment
securities and fed funds sold and interest bearing-balances in
banks.
The average yield on PPP loans including the recognition of
deferred PPP loan fees was 2.30%, resulting in a positive impact to
the net interest margin of three basis points during the fourth
quarter of 2022, compared to an average yield of 2.28% with a
positive impact to the net interest margin of three basis points
during the prior quarter 2022, and compared to an average yield of
8.95% with a positive impact to the net interest margin of 23 basis
points during the same quarter in 2021. The accretion of the net
discount on acquired loans increased the average yield on loans by
11 basis points during the fourth quarter of 2022, compared to one
basis point during the prior quarter 2022, and 15 basis points
during the same quarter in 2021. The incremental accretion and the
impact on loan yield will change during any period based on the
volume of prepayments, but is expected to decrease over time as the
balance of the net discount declines.
Based on our review of the allowance for loan losses at December
31, 2022, the Company recorded a $617,000 provision for loan losses
for the fourth quarter of 2022, compared to a $1.2 million
provision for loan losses and a $496,000 provision for loan losses
in the prior quarter 2022 and the same quarter in 2021,
respectively. The provision for loan losses in the fourth quarter
of 2022 was primarily due to new loan production and, to a lesser
extent, a deterioration in forecasted economic conditions and
indicators utilized to estimate loan losses, partially offset by
$233,000 in net recoveries during the fourth quarter of 2022.
Noninterest income for the fourth quarter of 2022 decreased $1.2
million, or 45.0%, to $1.5 million compared to $2.7 million in the
prior quarter 2022 and decreased $1.1 million, or 41.3%, compared
to $2.6 million for the same quarter in 2021. The decrease in
noninterest income for the current quarter compared to the prior
quarter 2022 was due to a $1.2 million decrease in gain on sale of
SBA loans (guaranteed portion), primarily due to a decrease in the
volume of these loans sold during the current quarter, and a
$162,000 decrease in income from our investment in a Small Business
Investment Company (“SBIC”) fund, partially offset by a $125,000
increase in servicing charges and other fees. The decrease in
noninterest income for the current quarter compared to the same
quarter in 2021 was primarily due to a $1.1 million decrease in
gain on sale of loans due to a decrease in the volume and premiums
observed on SBA loans (guaranteed portion) sold and a $478,000
decrease in SBIC income, partially offset by a $358,000 increase in
servicing charges and other fees.
Noninterest expense for the fourth quarter of 2022 increased
$212,000, or 1.3%, to $16.3 million compared to $16.1 million for
the prior quarter 2022 and increased $2.6 million, or 18.6%,
compared to $13.8 million for the same quarter in 2021. The
increase in noninterest expense for the current quarter compared to
the prior quarter 2022 was primarily due to a $565,000 increase in
salaries and employee benefits as a result of increases in salaries
and wages in 2022 due to upward market pressure on wages in 2022
and year-end accrual adjustments related to other employee
benefits. The increase was partially offset by a $47,000 decrease
in occupancy and equipment expenses, a $95,000 decrease in data
processing fees and a $211,000 decrease in other noninterest
expense. Noninterest expenses for the fourth quarter of 2022
increased compared to the same quarter in 2021 primarily due to
$2.1 million increase in salaries and employee benefits as a result
of an increase in the number of full-time equivalent employees,
reflecting our acquisition of Pacific Enterprise Bancorp (“PEB”)
and its bank subsidiary, Pacific Enterprise Bank, in February,
2022, coupled with retention incentives and salary adjustments due
to upward market pressure on wages in 2022. The increase was also a
result of increases in occupancy and equipment expense of $222,000,
data processing fees of $137,000 and other noninterest expenses of
$68,000.
The provision for income taxes was $3.0 million for both the
fourth quarter 2022 and third quarter of 2022 and increased
$920,000 compared to $2.1 million for the fourth quarter of 2021
primarily due to increased pre-tax income. The effective tax rate
for the fourth quarter of 2022 was 27.1%, compared to 29.0% for the
prior quarter 2022, and 27.7% for the same quarter in 2021. The
effective tax rate was lower for the fourth quarter of 2022
compared to the prior quarter 2022 due to year-end true-up
adjustments related to non-taxable interest income on tax exempt
municipal securities.
Loans and Credit Quality
Loans, net of deferred fees, increased $26.2 million to $2.0
billion at December 31, 2022, compared to September 30, 2022, and
increased $356.2 million compared to $1.7 billion at December 31,
2021. The increase in loans at December 31, 2022 compared to
September 30, 2022 primarily was due to $127.3 million of new loan
originations, partially offset by $101.3 million of loan
repayments, including $24.3 million in PPP loan repayments. At
December 31, 2022, there was a total of 51 PPP loans outstanding
totaling $11.1 million, compared to 138 loans totaling $35.4
million at September 30, 2022.
Nonperforming loans, consisting of non-accrual loans and
accruing loans that are 90 days or more past due, totaled $15.2
million or 0.75% of total loans at December 31, 2022, compared to
$19.7 million or 0.99% of total loans at September 30, 2022, and
$6.9 million or 0.41% of total loans at December 31, 2021. The
decrease in nonperforming loans from the prior quarter was
primarily due to repayment of $3.3 million in accruing SBA
guaranteed PPP loans which were 90 days or more past due and in the
process of forgiveness at September 30, 2022, and repayment of a
$1.7 million participation interest in a shared national credit,
which was restructured as a TDR and placed on non-accrual during
the first quarter of 2022. The portion of nonaccrual loans
guaranteed by government agencies totaled $839,000, $862,000, and
$822,000 at December 31, 2022, September 30, 2022, and December 31,
2021, respectively. There was one loan totaling $934,000 that was
90 days or more past due, still accruing and in the process of
collection at December 31, 2022, compared to $3.3 million in
accruing SBA guaranteed PPP loans which were 90 days or more past
due and in the process of forgiveness at September 30, 2022.
Accruing loans past due between 30 and 89 days at December 31,
2022, were $1.5 million, compared to $5.3 million at September 30,
2022, and $3.8 million at December 31, 2021.
At December 31, 2022, the Company’s allowance for loan losses
was $18.9 million, or 0.94% of total loans, compared to $18.1
million, or 0.90% of total loans, at September 30, 2022 and $17.7
million, or 1.06% of total loans, at December 31, 2021. The
decrease in the allowance for loan losses as a percentage of total
loans outstanding at December 31, 2022, as compared to December 31,
2021, was due to the Company’s acquisition of PEB and related
acquisition accounting as acquired loans were recorded at their
estimate fair value at acquisition and no allowance for loan losses
was recorded. We recorded net recoveries of $233,000 for the fourth
quarter of 2022, compared to net charge-offs of $944,000 in the
prior quarter 2022 and net charge-offs of $95,000 in the same
quarter in 2021.
In accordance with acquisition accounting, loans acquired from
acquisitions were recorded at their estimated fair value, which
resulted in a net discount to the loans contractual amounts. Credit
discounts are included in the determination of fair value and as a
result, no allowance for loan losses is recorded for acquired loans
at the acquisition date. However, the allowance for loan loss
includes an estimate for credit deterioration of acquired loans
that occurs after the date of acquisition, which is included in the
loan loss provision in the period that the deterioration occurred.
The discount recorded on the acquired loans is not reflected in the
allowance for loan losses or related allowance coverage ratios. As
of December 31, 2022, acquired loans net of their discount totaled
$257.9 million with a remaining net discount on these loans of
$522,000, compared to $299.4 million of acquired loans with a
remaining net discount of $480,000 at September 30, 2022, and $53.4
million of acquired loans with a remaining net discount of $2.1
million at December 31, 2021. The net discount includes a credit
discount based on estimated losses in the acquired loans partially
offset a premium, if any, based market interest rates on the date
of acquisition.
Deposits and Borrowings
Deposits totaled $2.1 billion at both December 31, 2022, and
September 30, 2022, and $2.0 billion at December 31, 2021. At
December 31, 2022, noninterest bearing deposits totaled $773.3
million, or 37.1% of total deposits, compared to $813.5 million, or
38.5% of total deposits at September 30, 2022, and $710.1 million,
or 35.8% of total deposits at December 31, 2021.
At both December 31, 2022 and September 30, 2022, the Company
had outstanding junior subordinated debt, net of marked-to-market
adjustments, related to junior subordinated deferrable interest
debentures assumed in connection with its previous acquisitions
totaling $8.5 million, compared to $8.4 million at December 31,
2021. At both December 31, 2022 and September 30, 2022, the Company
also had outstanding subordinated debt, net of costs to issue,
totaling $63.7 million compared to $63.5 million at December 31,
2021.
At December 31, 2022, September 30, 2022 and December 31, 2021,
the Company had no other borrowings outstanding.
Shareholders’ Equity
Shareholders’ equity totaled $317.1 million at December 31,
2022, compared to $314.4 million at September 30, 2022, and $262.6
million at December 31, 2021. The increase from the prior period of
2022 reflects net income earned during the quarter, offset by
repurchases of $4.2 million of common stock and $644,000 of accrued
cash dividends payable for the quarter. In addition, shareholder’s
equity was adversely impacted by increased unrealized losses on
available for sale securities reflecting the increase in market
interest rates during the current quarter, resulting in a $481,000
increase in accumulated other comprehensive loss, net of tax. At
December 31, 2022, 480,773 shares remained available for future
purchases under the current stock repurchase plan.
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 its affiliates in California,
Washington, New Mexico and Colorado. The Bank is an Equal Housing
Lender and a member of FDIC. The Company is traded on the NASDAQ
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 released 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 important 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, potential 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 potential recession or slowed economic growth caused
by increasing political instability from acts of war including
Russia’s invasion of Ukraine, as well as increasing prices and
supply chain disruptions, and any governmental or societal
responses to new COVID-19 variants; expected revenues, cost
savings, synergies and other benefits from our recent acquisition
of PEB might not be realized within the expected time frames or at
all and costs or difficulties relating to integration matters,
including but not limited to customer and employee retention, might
be greater than expected; future acquisitions by the Company of
other depository institutions or lines of business; future
acquisitions by the Company of other depository institutions or
lines of business; fluctuations in interest rates, including the
effects of inflation; 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 loan losses; the Company's ability to
access cost-effective funding; fluctuations in real estate values
and both residential and commercial real estate market conditions;
demand for loans and deposits in the Company's market area;
increased competitive pressures; changes in management’s business
strategies; and other factors described in the Company’s latest
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and
other filings with the Securities and Exchange Commission (“SEC”)
that 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, which
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,
2022
2022
2021
2022
2021
Interest income
Loans, including fees
$
25,801
$
24,010
$
19,751
$
95,722
$
76,099
Investment securities
1,602
1,555
1,179
6,085
3,893
Fed funds sold and interest-bearing
balances in banks
1,722
1,286
186
4,025
665
FHLB dividends
217
160
148
684
494
FRB dividends
162
126
117
549
458
Total interest and dividend income
29,504
27,137
21,381
107,065
81,609
Interest expense
Deposits
1,963
1,387
1,201
6,273
4,875
Subordinated debt
896
896
896
3,582
3,582
Junior subordinated debt
176
129
84
496
345
Total interest expense
3,035
2,412
2,181
10,351
8,802
Net interest income
26,469
24,725
19,200
96,714
72,807
Provision for loan losses
617
1,194
496
4,441
466
Net interest income after provision for
loan losses
25,852
23,531
18,704
92,273
72,341
Noninterest income
Gain on sale of loans
33
1,278
1,090
2,747
4,795
Service charges and other fees
942
817
584
3,107
2,403
Loan servicing fees and other fees
507
488
410
2,176
1,833
(Loss) income on investment in SBIC
fund
(225
)
(63
)
253
(70
)
1,274
Bargain purchase gain
—
—
—
1,665
—
Other income and fees
252
224
232
1,048
963
Total noninterest income
1,509
2,744
2,569
10,673
11,268
Noninterest expense
Salaries and employee benefits
10,729
10,164
8,603
40,480
33,761
Occupancy and equipment
1,996
2,043
1,774
8,384
7,384
Data processing
1,467
1,562
1,330
6,969
5,565
Other expense
2,116
2,327
2,048
10,102
8,419
Total noninterest expense
16,308
16,096
13,755
65,935
55,129
Income before provision for income
taxes
11,052
10,179
7,518
37,011
28,480
Provision for income taxes
3,000
2,950
2,080
10,024
7,789
Net income
$
8,047
$
7,229
$
5,438
$
26,987
$
20,691
Net income per common share:
Basic
$
0.62
$
0.54
$
0.51
$
2.06
$
1.90
Diluted
0.62
0.54
0.51
2.06
1.90
Weighted average shares used to compute
net income per common share:
Basic
12,960,723
13,307,555
10,683,702
13,124,179
10,882,344
Diluted
12,960,723
13,307,555
10,683,702
13,124,179
10,882,344
Comprehensive income
Net income
$
8,047
$
7,229
$
5,438
$
26,987
$
20,691
Other comprehensive income (loss):
Change in unrealized loss on
available-for-sale securities
(677
)
(7,198
)
(458
)
(23,848
)
(740
)
Deferred tax benefit
196
2,071
132
6,864
209
Other comprehensive loss, net of tax
(481
)
(5,127
)
(326
)
(16,984
)
(531
)
Comprehensive income
$
7,566
$
2,102
$
5,112
$
10,003
$
20,160
BAYCOM CORP
STATEMENTS OF CONDITION
(UNAUDITED)
At December 31, 2022,
September 30, 2022, December 31, 2021
(Dollars in thousands)
December 31,
September 30,
December 31,
2022
2022
2021
Assets
Cash and due from banks
$
26,980
$
32,206
$
21,178
Federal funds sold and interest-bearing
balances in banks
149,835
192,475
358,509
Cash and cash equivalents
176,815
224,681
379,687
Time deposits in banks
2,241
2,490
3,585
Investment securities
available-for-sale
167,761
167,213
174,435
Federal Home Loan Bank ("FHLB") stock, at
par
10,679
10,679
8,385
Federal Reserve Bank ("FRB") stock, at
par
9,602
9,595
7,650
Loans held for sale
2,380
3,491
6,470
Loans, net of deferred fees
2,021,124
1,994,966
1,664,890
Allowance for loans losses
(18,900
)
(18,050
)
(17,700
)
Premises and equipment, net
13,278
13,697
14,370
Other real estate owned ("OREO")
21
21
21
Core deposit intangible
5,201
5,718
6,489
Cash surrender value of bank owned life
insurance policies, net
22,193
22,043
21,590
Right-of-use assets
16,569
15,875
12,127
Goodwill
38,838
38,838
38,838
Interest receivable and other assets
45,532
43,241
29,860
Total Assets
$
2,513,334
$
2,534,498
$
2,350,697
Liabilities and Shareholders’ Equity
Noninterest bearing deposits
$
773,274
$
813,510
$
710,137
Interest bearing deposits
Transaction accounts and savings
837,289
937,076
916,379
Premium money market
181,567
140,377
136,563
Time deposits
293,349
224,488
222,160
Total deposits
2,085,479
2,115,451
1,985,239
Junior subordinated deferrable interest
debentures, net
8,484
8,464
8,403
Subordinated debt, net
63,711
63,669
63,542
Salary continuation plans
4,840
4,724
4,393
Lease liabilities
17,138
16,411
12,657
Interest payable and other liabilities
16,533
11,376
13,856
Total liabilities
2,196,185
2,220,095
2,088,090
Shareholders’ Equity
Common stock, no par value
204,588
208,770
157,385
Retained earnings
127,379
119,971
103,056
Accumulated other comprehensive (loss)
income, net of tax
(14,818
)
(14,338
)
2,166
Total shareholders’ equity
317,149
314,403
262,607
Total Liabilities and Shareholders’
Equity
$
2,513,334
$
2,534,498
$
2,350,697
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:
2022
2022
2021
2022
2021
Performance Ratios:
Return on average assets (1)
1.28
%
1.11
%
0.92
%
1.03
%
0.89
%
Return on average equity (1)
10.15
8.97
8.33
8.50
8.06
Yield on earning assets (1)
4.91
4.38
3.79
4.31
3.74
Rate paid on average interest-bearing
liabilities
0.89
0.66
0.64
0.70
0.67
Interest rate spread - average during the
period
4.02
3.72
3.15
3.61
3.07
Net interest margin (1)
4.40
3.99
3.41
3.90
3.34
Loan to deposit ratio
96.91
94.30
83.86
96.91
83.86
Efficiency ratio (2)
58.29
58.60
63.19
61.40
65.57
(Recoveries)/charge-offs, net
$
(233
)
$
944
$
95
$
3,241
$
266
Per Share Data:
Shares outstanding at end of period
12,838,462
13,075,447
10,680,386
12,838,462
10,680,386
Average diluted shares outstanding
12,960,723
13,307,555
10,683,702
13,124,179
10,882,344
Diluted earnings per share
$
0.62
$
0.54
$
0.51
$
2.06
$
1.90
Book value per share
24.70
24.05
24.59
24.70
24.14
Tangible book value per share (3)
21.27
20.64
20.34
21.27
20.34
Asset Quality Data:
Nonperforming assets to total assets
(4)
0.61
%
0.78
%
0.29
%
Nonperforming loans to total loans (5)
0.75
%
0.99
%
0.41
%
Allowance for loan losses to nonperforming
loans (5)
124.16
%
91.70
%
256.98
%
Allowance for loan losses to total
loans
0.94
%
0.90
%
1.06
%
Classified assets (graded substandard and
doubtful)
$
20,355
$
23,904
$
13,062
Total accruing loans 30‑89 days past
due
1,497
5,343
3,832
Total loans 90 days past due and still
accruing
934
3,315
—
Capital Ratios (6):
Tier 1 leverage ratio - Bank
13.64
%
12.90
%
10.87
%
Common equity tier 1 - Bank
16.42
%
16.16
%
14.60
%
Tier 1 capital ratio - Bank
16.42
%
16.16
%
14.60
%
Total capital ratio - Bank
17.36
%
17.07
%
15.65
%
Equity to total assets at end of
period
12.62
%
12.40
%
11.17
%
Loans:
Real estate
$
1,806,187
$
1,746,157
$
1,407,860
Non-real estate
201,252
233,178
254,131
Nonaccrual loans
14,289
16,369
6,888
Mark to fair value at acquisition
(522
)
(480
)
(2,086
)
Total Loans
2,021,206
1,995,224
1,666,793
Net deferred fees on loans (7)
(82
)
(258
)
(1,903
)
Loans, net of deferred fees
$
2,021,124
$
1,994,966
$
1,664,890
Other Data:
Number of full-service offices
34
34
33
Number of full-time equivalent
employees
374
375
307
(1)
Annualized.
(2)
Total noninterest expense as a
percentage of net interest income and total noninterest income.
(3)
Tangible book value per share
using outstanding common shares excludes goodwill and intangible
assets. This ratio 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)
Capital ratios are for United
Business Bank only.
(7)
Deferred fees include $94,000,
$227,000 and $2.0 million as of December 31, 2022, September 30,
2022, and December 31, 2021, respectively, in fees related to PPP
loans.
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 the tangible book value
per share, a non-GAAP financial measure. 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 common shareholders’ equity is calculated by
excluding intangible assets from shareholders’ equity. For this
financial measure, the Company’s intangible assets are goodwill and
core deposit intangibles. The Company believes that this measure is
consistent with the capital treatment by our bank regulatory
agencies, which excludes intangible assets from the calculation of
risk-based capital ratios, and presents this measure to facilitate
comparison of the quality and composition of the Company’s capital
over time in comparison to its competitors. Non-GAAP financial
measures have inherent limitations, are not required to be
uniformly applied, and are not audited. Further, these non-GAAP
financial measure 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 a similarly
titled measure 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,
2022
2022
2021
Tangible Book Value:
Total common shareholders’ equity
$
317,149
$
314,404
$
262,607
less: Goodwill and other intangibles
44,039
44,556
45,327
Tangible common shareholders’ equity
$
273,110
$
269,848
$
217,280
Total assets
$
2,513,334
$
2,534,498
$
2,350,697
less: Goodwill and other intangibles
44,039
44,556
45,327
Total tangible assets
$
2,469,295
$
2,489,942
$
2,305,370
Tangible equity to tangible assets
11.06
%
10.84
%
9.42
%
Average equity to average assets
12.12
%
11.96
%
11.05
%
Tangible book value per share
$
21.27
$
20.64
$
20.34
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230126005921/en/
BayCom Corp Keary Colwell, 925-476-1800
kcolwell@ubb-us.com
BayCom (NASDAQ:BCML)
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