BayCom Corp [BCML] Filings

10-Q 1 bcml-20230630x10q.htm 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended June 30, 2023

	or

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from to

Commission File Number: 001-38483

BAYCOM CORP

(Exact name of registrant as specified in its charter)


California		37-1849111
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

500 Ygnacio Valley Road, Suite 200, Walnut Creek, California		94596
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (925) 476-1800

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value per share	BCML	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐	Accelerated filer ☐

Non-accelerated filer ☒	Smaller reporting company ☒

	Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date.

As of August 10, 2023, there were 11,829,339 shares of the registrant’s common stock outstanding.

Table of Contents

BAYCOM CORP

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION	2

ITEM 1. FINANCIAL STATEMENTS	2

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	39

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	66

ITEM 4. CONTROLS AND PROCEDURES	66

PART II — OTHER INFORMATION	68

ITEM 1. LEGAL PROCEEDINGS	68

ITEM 1A. RISK FACTORS	68

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	68

ITEM 3. DEFAULTS UPON SENIOR SECURITIES	68

ITEM 4. MINE SAFETY DISCLOSURES	68

ITEM 5. OTHER INFORMATION	69

ITEM 6. EXHIBITS	69

SIGNATURES	70

As used throughout this report, the terms “we,” “our,” “us,” “BayCom,” or the “Company” refer to BayCom Corp and its consolidated subsidiary, United Business Bank, which we sometimes refer to as the “Bank,” unless the context otherwise requires.

Table of Contents

BAYCOM CORP

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements


	Condensed Consolidated Balance Sheets (unaudited)	3

	Condensed Consolidated Statements of Income (unaudited)	4

	Condensed Consolidated Statements of Comprehensive Income (unaudited)	5

	Condensed Consolidated Statements of Changes in Shareholders’ Equity (unaudited)	6

	Condensed Consolidated Statements of Cash Flows (unaudited)	8

	Notes to Condensed Consolidated Financial Statements (unaudited)	10

Table of Contents

BAYCOM CORP AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for share data)

(unaudited)


	June 30,		December 31,
	2023		2022
			(As Restated)
ASSETS
Cash due from banks	$	36,637	$	26,980
Federal funds sold and interest-bearing balances in banks		213,562		149,835
Cash and cash equivalents		250,199		176,815
Time deposits in banks		1,992		2,241
Investment securities available-for-sale ("AFS"), at fair value, net of allowance for credit losses of $0 at both June 30, 2023 and December 31, 2022		146,506		154,004
Equity securities		11,912		13,757
Federal Home Loan Bank ("FHLB") stock, at par		11,313		10,679
Federal Reserve Bank ("FRB") stock, at par		9,616		9,602
Loans held for sale		—		2,380
Loans, net of allowance for credit losses of $19,100 at June 30, 2023 and $18,900 at December 31, 2022		1,994,207		2,002,224
Premises and equipment, net		13,039		13,278
Other real estate owned ("OREO")		—		21
Core deposit intangible, net		4,527		5,201
Cash surrender value of bank owned life insurance ("BOLI") policies, net		22,528		22,193
Right-of-use assets ("ROU"), net		15,270		16,569
Goodwill		38,838		38,838
Interest receivable and other assets		47,539		45,532
Total assets	$	2,567,486	$	2,513,334
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest and interest bearing deposits	$	2,147,066	$	2,085,479
Junior subordinated deferrable interest debentures, net		8,524		8,484
Subordinated debt, net		63,796		63,711
Salary continuation plan		4,955		4,840
Lease liabilities		15,947		17,138
Interest payable and other liabilities		20,184		16,533
Total liabilities		2,260,472		2,196,185
Commitments and contingencies (Note 18)
Shareholders' equity
Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding at both June 30, 2023 and December 31, 2022		—		—
Common stock, no par value; 100,000,000 shares authorized; 11,900,022 and 12,838,462 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		187,579		204,301
Additional paid in capital		287		287
Accumulated other comprehensive loss, net of tax		(16,420)		(11,561)
Retained earnings		135,568		124,122
Total shareholders’ equity		307,014		317,149
Total liabilities and shareholders’ equity	$	2,567,486	$	2,513,334

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

BAYCOM CORP AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except for share and per share data)

(unaudited)


	Three months ended				Six months ended
	June 30,				June 30,
	2023		2022		2023		2022
			(As Restated)				(As Restated)
Interest income:
Loans, including fees	$	26,667	$	22,984	$	52,922	$	45,911
Investment securities		1,693		1,531		3,333		2,928
Fed funds sold and interest-bearing balances in banks		2,560		806		4,389		1,017
FHLB dividends		196		158		384		307
FRB dividends		144		140		288		261
Total interest and dividend income		31,260		25,619		61,316		50,424
Interest expense:
Deposits		5,881		1,453		9,581		2,923
Subordinated debt		895		895		1,791		1,791
Junior subordinated deferrable interest debentures		203		104		406		190
Total interest expense		6,979		2,452		11,778		4,904
Net interest income		24,281		23,167		49,538		45,520
(Reversal of) provision for credit losses		(1,260)		2,623		(985)		2,630
Net interest income after (reversal of) provision for credit losses		25,541		20,544		50,523		42,890
Noninterest income:
Gain on sale of loans		68		299		480		1,436
Loss on equity securities		(917)		(1,841)		(1,813)		(3,609)
Service charges and other fees		882		718		1,767		1,348
Loan servicing and other loan fees		593		607		1,003		1,181
Income on investment in Small Business Investment Company (“SBIC”) fund		225		21		714		218
Bargain purchase gain		—		—		—		1,665
Other income and fees		235		376		496		572
Total noninterest income		1,086		180		2,647		2,811
Noninterest expense:
Salaries and employee benefits		10,745		9,277		21,781		19,587
Occupancy and equipment		1,974		1,920		4,001		4,346
Data processing		1,616		1,666		3,081		3,939
Other expense		2,222		2,347		4,223		5,659
Total noninterest expense		16,557		15,210		33,086		33,531
Income before provision for income taxes		10,070		5,514		20,084		12,170
Provision for income taxes		2,864		1,607		5,687		3,034
Net income	$	7,206	$	3,907	$	14,397	$	9,136
Earnings per common share:
Basic earnings per common share	$	0.59	$	0.29	$	1.16	$	0.70
Weighted average common shares outstanding		12,228,206		13,575,995		12,462,539		13,114,054

Diluted earnings per common share	$	0.59	$	0.29	$	1.16	$	0.70
Weighted average common shares outstanding		12,228,206		13,575,995		12,462,539		13,114,054

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

BAYCOM CORP AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(unaudited)


		Three months ended			Six months ended
	June 30,				June 30,
	2023		2022		2023		2022
			(As Restated)				(As Restated)
Net income	$	7,206	$	3,907	$	14,397	$	9,136
Other comprehensive loss:
Change in unrealized loss on available-for-sale securities		(4,999)		(4,372)		(6,823)		(12,365)
Deferred tax benefit		1,437		1,258		1,964		3,558
Other comprehensive loss, net of tax		(3,562)		(3,114)		(4,859)		(8,807)
Total comprehensive income	$	3,644	$	793	$	9,538	$	329

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

BAYCOM CORP AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(In thousands, except for share and per share data)

(unaudited)


						Accumulated
		Common		Additional		Other				Total
	Number of	Stock		Paid in		Comprehensive		Retained		Shareholders’
	Shares	Amount		Capital		Income/(Loss)		Earnings		Equity
Three months ended June 30, 2023
Balance, April 1, 2023 (As Restated)	12,443,977	$	196,485	$	287	$	(12,858)	$	129,558	$	313,472
Net income									7,206		7,206
Other comprehensive loss, net							(3,562)				(3,562)
Cash dividends of $0.10 per share									(1,196)		(1,196)
Stock based compensation			182								182
Repurchase of shares	(543,955)		(9,088)								(9,088)
Balance, June 30, 2023	11,900,022	$	187,579	$	287	$	(16,420)	$	135,568	$	307,014

Three months ended June 30, 2022
Balance, April 1, 2022 (As Restated)	13,677,729	$	220,294	$	287	$	(3,527)	$	107,600	$	324,654
Net income									3,907		3,907
Other comprehensive loss, net							(3,114)				(3,114)
Restricted stock forfeited	(1,322)										—
Cash dividends of $0.05 per share									(677)		(677)
Stock based compensation			233								233
Repurchase of shares	(205,044)		(4,448)								(4,448)
Balance, June 30, 2022 (As Restated)	13,471,363	$	216,079	$	287	$	(6,641)	$	110,830	$	320,555

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

BAYCOM CORP AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(In thousands, except for share and per share data)

(unaudited)


						Accumulated
		Common		Additional		Other				Total
	Number of	Stock		Paid in		Comprehensive		Retained		Shareholders’
	Shares	Amount		Capital		Income/(Loss)		Earnings		Equity
Six months ended June 30, 2023
Balance, January 1, 2023 (As Restated)	12,838,462	$	204,301	$	287	$	(11,561)	$	124,122	$	317,149
Net income									14,397		14,397
Other comprehensive loss, net							(4,859)				(4,859)
Cumulative change from adoption of ASU 2016-13, net of tax									(491)		(491)
Restricted stock granted	28,392										—
Cash dividends of $0.20 per share									(2,460)		(2,460)
Stock based compensation			432								432
Repurchase of shares	(966,832)		(17,154)								(17,154)
Balance, June 30, 2023	11,900,022	$	187,579	$	287	$	(16,420)	$	135,568	$	307,014

Six months ended June 30, 2022
Balance, January 1, 2022	10,680,386	$	157,098	$	287	$	2,166	$	103,056	$	262,607
Net income									9,136		9,136
Other comprehensive loss, net							(8,807)				(8,807)
Restricted stock granted	22,473										—
Restricted stock forfeited	(1,854)										—
Issuance of common shares to acquire Pacific Enterprise Bancorp	3,032,579		64,140								64,140
Cash dividends of $0.10 per share									(1,362)		(1,362)
Stock based compensation			557								557
Repurchase of shares	(262,221)		(5,716)								(5,716)
Balance, June 30, 2022 (As Restated)	13,471,363	$	216,079	$	287	$	(6,641)	$	110,830	$	320,555

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

BAYCOM CORP AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)


	Six months ended
	June 30,
	2023			2022
				(As Restated)
Cash flows from operating activities:
Net income	$	14,397		$	9,136
Adjustments to reconcile net income to net cash provided by operating activities:
(Reversal of) provision for credit losses		(985)			2,630
(Decrease) increase in deferred tax assets		(1,285)			1,779
Accretion on acquired loans		(853)			(353)
Gain on sale of loans		(480)			(1,436)
Proceeds from sale of loans		9,176			15,161
Loans originated for sale		(6,882)			(13,239)
Loss on sale of OREO		21			—
Bargain purchase gain		—			(1,665)
Accretion on junior subordinated debentures		40			40
Increase in cash surrender value of life insurance policies		(335)			(301)
Amortization/accretion of premiums/discounts on investment securities, net		227			291
Loss on equity securities		1,813			3,609
Depreciation and amortization		883			1,011
Core deposit intangible amortization		674			1,011
Stock based compensation expense		432			557
Decrease in deferred loan origination fees, net		(92)			(1,572)
Net change in interest receivable and other assets		1,956			(853)
Increase in salary continuation plan, net		115			224
Net change in interest payable and other liabilities		967			(4,529)
Net cash provided by operating activities		19,789			11,501
Cash flows from investing activities:
Proceeds from maturities of interest bearing deposits in banks		249	</

BayCom Corp [BCML] Filings
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10-Q	[2023-05-15]
10-K	[2023-03-31]
10-Q	[2022-11-10]
10-Q	[2022-08-15]
10-Q	[2022-05-16]
10-K	[2022-03-31]
10-Q	[2021-11-15]
10-Q	[2021-08-16]
10-Q	[2021-05-13]
10-K	[2021-03-23]
10-Q	[2020-11-06]
10-Q	[2020-08-10]
10-Q	[2020-05-08]
10-K	[2020-03-16]
10-Q	[2019-11-12]
10-Q	[2019-08-09]
10-Q	[2019-05-15]
10-K	[2019-03-19]
10-Q	[2018-11-09]
10-Q	[2018-08-14]
10-Q	[2018-06-18]
S-1	[2018-04-11]