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BayCom Corp Reports 2017 Second Quarter Earnings of $1.5 Million

WALNUT CREEK, Calif., July 26, 2017 (GLOBE NEWSWIRE) -- BayCom Corp, “Company”, (OTCBB:BCML), announced quarterly earnings of $1.5 million in the second quarter of 2017, compared to $1.4 million in the first quarter of 2017 and $1.5 million in the second quarter of 2016. Diluted earnings per share were $0.27 in the second quarter 2017 compared to $0.26 in the first quarter and to $0.27 in the second quarter of 2016.

President and Chief Executive Officer, George J. Guarini stated, “A highlight of our second quarter 2017 financial performance was the closing of our merger for First ULB Corp. In addition, our financial performance continues to demonstrate our presence in the SBA lending market. Our total assets increased to nearly $1.2 billion.”

Mr. Guarini added, “We have completed the conversion and integration of the two banks in the second quarter and we are now positioned to take on new opportunities. This is demonstrated by our recent announcement to acquire Plaza Bank in Seattle, Washington. The merger with Plaza Bank allows us to expand our market presence in Seattle.”

The Bank also provided the following highlights on its operating and financial performance for the second quarter of 2017:

  • Loans totaled $859.3 million at June 30, 2017, compared to $535.5 million at March 31, 2017 and $508.3 million at December 31, 2016. New loan volume was approximately $42.2 million in the second quarter of 2017 compared to $38.4 million in the first quarter 2017.
  • Deposits totaled $1,031.8 million at June 30, 2017 compared to $610.0 million at March 31, 2017 and $590.8 million at December 31, 2016. As of June 30, 2017, non-interest bearing deposits represent 30.2% of total deposits and the cost of total deposits decreased to 0.38% compared to 0.68% at March 31, 2017.
  • Non-accrual loans represented 0.04% of total loans as of June 30, 2017 resulting in a Texas ratio of 0.59%. The provision for loan losses recorded in the second quarter 2017 totaled $144 thousand.
  • All capital ratios are well above regulatory requirements for a Well-capitalized institution. The Bank’s total risk-based capital ratio was 12.15% at June 31, 2017 compared to 13.86% at December 31, 2016, and the tangible common equity to tangible assets ratio was 8.61% compared to 11.45% at December 31, 2016.

Loans and Credit Quality

Loan originations in the second quarter of 2017 were spread throughout our markets with the majority focused in Santa Clara, Alameda and San Francisco Counties. By loan type, owner-user real estate, investor real estate and multi-family residential real estate accounted for the majority of the new loan volume in the quarter.

Year-to-date loan originations of $35.5 million are approx. $8.2 million lower than compared to the first quarter 2017. Payoffs totaled $20.5 million in the quarter ended June 30, 2017 were primarily the result of property sales or planned events. Payoffs for the first quarter 2017 were $21.7 million.

Non-accrual loans totaled $368 thousand, or 0.04% of the loan portfolio at June 30, 2017, compared to $1.0 million, or 0.21%, at December 31, 2016 and $1.9 million, or 0.38% a year ago. Accruing loans past due 30 to 89 days totaled $654 thousand at June 30, 2017, compared to $625 thousand at December 31, 2016 and $174 thousand a year ago.

The provision for loan losses recorded in the second quarter of 2017 totaled $144 thousand primarily to provide for loan growth. Recoveries net of charge-offs for the first quarter totaled $5 thousand compared to net recoveries of $7 thousand in the first quarter 2017 and recoveries of $4 thousand in the same quarter a year ago. The ratio of allowance for loan losses to loans totaled 0.51% at June 30, 2017 compared to 0.73% at March 31, 2017. As of June 30, 2017, acquired loans totaling $386.2 million are covered by mark to market valuations.

Investments and Borrowings

The investment portfolio totaled $61.9 million at June 30, 2017, an increase of $37.2 million from March 31, 2017 mainly due to the acquisition of investment securities in the merger with First ULB.

As of June 30, 2017, other borrowings totaled $6.0 million and Trust Preferred Securities, net of a market value premium, totaled $5.4 million. Neither was outstanding as of March 31, 2017.

Deposits

Deposits totaled $1,031.8 million at June 30, 2017, compared to $610.0 million at March 31, 2017 and $535.7 million at June 30, 2016. While day-to-day volatility continues due to the normal business activity of our customers, the trend is upward in both average and ending balances. Non-interest bearing deposits totaled $311.5 million, or 30.2% of total deposits, compared to 23.3% at March 31, 2017 and 21.7% at December 31, 2016.

Earnings

Net interest income totaled $9.4 million for the second quarter 2017 compared to $6.6 million for the same period in 2016.

The tax-equivalent net interest margin was 4.07% in the second quarter of 2017, compared to 4.15% in the prior quarter and 3.91% in the same quarter a year ago. The increase from last quarter includes 29 basis points related to the payoffs of PCI loans.

Loans acquired through the acquisition of other banks are classified as PCI or non-PCI loans and are recorded at fair value at acquisition date. For acquired loans not considered credit impaired, the level of accretion varies due to maturities and early payoffs. Accretion on PCI loans fluctuates based on changes in cash flows expected to be collected. Gains on payoffs of PCI loans are recorded as interest income when the payoff amounts exceed the recorded investment. PCI loans totaled $14.4 million, $7.4 million, and $8.9 million at June 30, 2017, December 31, 2016, and June 30, 2016, respectively.

Accretion and gains on payoffs of purchased loans recorded to interest income were $735 thousand for the second quarter 2017 compared to $557 thousand for first quarter 2017, and $650 thousand for the same period last year.

Non-interest income in the first quarter of 2017 totaled $1.6 million, compared to $735 thousand in the prior quarter and $308 thousand in the same quarter a year ago. The increase compared to the prior quarter primarily relates to gain on sale of loans totaling $875 thousand in the second quarter 2017 compared to $400 thousand in the first quarter of 2017 and to none in the same quarter last year.

Non-interest expense totaled $8.2 million in the second quarter of 2017 up from $4.5 million last quarter and $4.0 million in the same quarter last year. Merger related expenses recorded in the second quarter total $2.3 million. The remaining increase is related to higher operating expenses due to the merger including an increase in the number of employees, branch offices and data process charges as a result of higher volume.

About BayCom Corp

Through its wholly owned subsidiary, United Business Bank, the Company offers a full-range of loans, including SBA, FSA and USDA guaranteed loans, and deposit products and services to businesses and its affiliates throughout the Greater Bay Area. The Bank also offers business escrow services and facilitates tax free exchanges through its Bankers Exchange Division. The Bank is an Equal Housing Lender and member FDIC. It is traded Over the Counter Bulletin Board under the symbol “BCML”. For more information, go to www.unitedbusinessbank.com.

Forward-Looking Statements

This release may contain certain forward-looking statements that are based on management's current expectations regarding economic, legislative, and regulatory issues that may impact Bank's earnings in future periods. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "intend," "estimate" or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could" or "may." Factors that could cause future results to vary materially from current management expectations include, but are not limited to, general economic conditions, economic uncertainty in the United States and abroad, changes in interest rates, deposit flows, real estate values, costs or effects of future acquisitions, competition, changes in accounting principles, policies or guidelines, legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors (including external fraud and cyber-security threats) affecting Bank's operations, pricing, products and services. These and other important factors are detailed in various securities law filings made periodically by Bank, copies of which are available from Bank without charge. The Bank undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.


FINANCIAL HIGHLIGHTS
June 30, 2017
March 31, 2017
June 30, 2016
Quarter-To-Date
Net Income$ 1,501,414 $ 1,416,266 $ 1,455,333
Diluted Earnings Per Common Share$ 0.27 $ 0.26 $ 0.27
Return On Average Assets (ROA) 0.60% 0.83% 0.92%
Return On Average Equity (ROE) 6.24% 7.17% 7.86%
Efficiency Ratio 73.91% 63.82% 58.15%
Net Interest Margin 3.90% 3.91% 4.40%
Net Charge-Offs/(Recoveries)$ (5,250) $ (6,503) $ (4,173)
Net Charge-Offs/(Recoveries) To Average Loans 0.00% 0.00% 0.00%
Year-To-Date
Net Income$ 2,917,680 $ 1,416,266 $ 2,804,087
Diluted Earnings Per Common Share$ 0.53 $ 0.26 $ 0.52
Return On Average Assets (ROA) 0.69% 0.83% 0.88%
Return On Average Equity (ROE) 6.66% 7.17% 7.63%
Efficiency Ratio 69.95% 63.82% 61.39%
Net Interest Margin 3.95% 3.96% 4.27%
Net Charge-Offs/(Recoveries)$ (11,753) $ (6,503) $ (8,048)
Net Charge-Offs/(Recoveries) To Average Loans 0.00% 0.00% 0.00%
At Period End
Total Assets$ 1,155,943,167 $ 697,397,629 $ 641,773,583
Loans:
Real Estate$ 761,120,570 $ 461,299,207 $ 443,545,296
Non-real estate 107,092,657 73,570,589 66,098,087
Loans Held for Sale 4,383,428 -
Non-accrual loans 367,795 991,755 1,909,952
Mark to market on acquired loans (9,261,310) (4,717,212) (6,636,817)
Total Loans$ 859,319,712 $ 535,527,767 $ 504,916,518
Classified Assets (Graded Substandard and Doubtful)$ 7,164,099 $ 8,644,709 $ 9,150,090
Total Accruing Loans 30-89 Days Past Due$ 654,483 $ 338,668 $ 228,000
Loan Loss Reserve To Loans 0.51% 0.73% 0.84%
Loan Loss Reserve to Non-accrual loans 1184.08% 395.76% 220.95%
Non-Accrual Loans To Total Loans 0.04% 0.19% 0.38%
Texas Ratio 0.59% 2.45% 2.42%
Total Deposits$ 1,031,780,780 $ 609,952,562 $ 535,660,525
Loan-To-Deposit Ratio 83.29% 87.80% 95.50%
Stockholders' Equity$ 104,017,747 $ 79,579,734 $ 74,555,843
Book Value Per Share$ 15.20 $ 14.54 $ 13.71
Tangible Book Value Per Share$ 13.14 $ 14.40 $ 13.53
Tangible Common Equity To Tangible Assets 8.61% 11.32% 11.48%
Total Risk-Based Capital Ratio-Bank 12.15% 13.99% 13.65%
Full-Time Equivalent Employees 152 105 106


BAYCOM CORP
STATEMENT OF CONDITION (UNAUDITED)
At June 30, 2017, March 31, 2017, and December 31, 2016
Audited
June 30, 2017March 31, 2017December 31, 2016
Assets
Cash and due from banks$ 201,181,847$ 125,531,611$ 128,684,416
Investments 61,894,919 24,690,663 26,393,451
Loans, net of allowance for loan losses and deferred fees 854,640,346 531,441,926 504,264,026
Bank premises and equipment, net 8,527,362 1,008,798 1,106,030
Core Deposit Premium 4,941,677 719,372 802,436
Goodwill 9,125,500 - -
Interest receivable and other assets 15,631,516 14,005,259 14,048,162
Total assets$ 1,155,943,167$ 697,397,629$ 675,298,520
Liabilities and Stockholders' Equity
Liabilities
Deposits
Non-interest bearing$ 311,522,277$ 142,436,582$ 128,696,712
Interest bearing
MMA/NOW/SVG 376,952,820 125,059,037 128,970,967
Premium MM 146,783,810 178,197,667 171,947,166
Time Deposits 196,521,873 164,259,276 161,143,915
Total deposits$ 1,031,780,780$ 609,952,562$ 590,758,760
Federal Home Loan Bank (FHLB) and other borrowings 11,356,954 - -
Interest Payable and other liabilities 8,787,686 7,865,333 6,476,580
Total liabilities$ 1,051,925,420$ 617,817,895$ 597,235,340
Stockholders' Equity
Common Stock, no par value$ 69,393,816$ 47,632,398$ 47,540,808
Retained earnings 34,521,615 31,850,203 30,433,937
Accumulated other comprehensive income 102,316 97,133 88,434
Total stockholders' equity 104,017,747 79,579,734 78,063,179
Total liabilities and stockholders' equity$ 1,155,943,167$ 697,397,629$ 675,298,520

STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
Audited
Three months ended Six months ended Years Ended
June 30,June 30, June 30,June 30, December 31,
2017 2016 2017 2016 2016
Interest income
Interest Income - Non RE$ 1,304,685 $ 873,450 $ 2,278,483 $ 1,812,524 $ 3,542,281
Interest Income - RE 8,130,506 5,487,036 13,605,147 10,579,450 21,496,827
Interest on investment securities 480,813 187,224 758,926 428,492 809,398
Interest on Federal funds sold and other bank deposits 137,908 102,847 255,400 163,511 422,510
Mark to market accretion and FAS 91 Fee amortization 663,306 815,134 1,220,803 1,624,787 3,354,471
Total interest income$10,717,218 $ 7,465,691 $18,118,759 $14,608,764 $ 29,625,487
Interest expense
Interest on transaction accounts 466,358 367,712 917,505 742,147 1,597,440
Interest on time deposits 504,618 344,445 971,743 660,239 1,476,134
Premium on core deposits 212,696 105,000 295,760 210,000 398,064
Interest on borrowings 100,955 - 100,955 - -
Total interest expense$ 1,284,627 $ 817,157 $ 2,285,963 $ 1,612,386 $ 3,471,638
Net interest income 9,432,591 6,648,534 15,832,796 12,996,378 26,153,849
Provision for loan losses 143,949 365,828 287,446 361,953 598,463
Net interest income after provision for loan losses$ 9,288,642 $ 6,282,706 $15,545,350 $12,634,425 $ 25,555,386
Non-interest income
Loan Fee Income 252,777 74,671 309,699 142,694 331,336
Service Charge Income 60,006 53,310 107,974 116,912 227,904
Other Fees & Service Charges 238,967 94,133 333,516 189,949 379,132
Gain on sale of loans 875,434 - 1,275,434 - -
Other Income 201,824 86,227 337,926 198,206 420,166
Total non-interest income$ 1,629,008 $ 308,341 $ 2,364,549 $ 647,761 $ 1,358,538
Non-interest expense
Salaries and Benefits 3,946,848 2,575,184 7,029,101 5,407,188 10,610,511
Occupancy 790,103 544,666 1,359,492 1,081,893 2,147,472
Professional 461,219 175,474 591,190 414,955 773,073
Insurance 121,626 106,875 199,654 198,048 349,072
Data processing 2,073,766 355,951 2,433,661 679,042 1,386,115
Office 310,137 162,982 476,883 326,367 670,759
Marketing 156,373 55,411 211,366 114,724 269,576
Net Loan 127,219 11,611 178,212 36,000 118,630
Other Miscellaneous 188,045 57,160 249,811 117,378 241,279
Total non-interest expense$ 8,175,336 $ 4,045,314 $12,729,370 $ 8,375,595 $ 16,566,487
Income before provision for income taxes 2,742,314 2,545,733 5,180,529 4,906,589 10,347,437
Provision for income taxes 1,240,900 1,090,400 2,262,850 2,102,500 4,435,500
Net income$ 1,501,414 $ 1,455,333 $ 2,917,680 $ 2,804,087 $ 5,911,936
Net income per common share:
Basic$ 0.27 $ 0.27 $ 0.53 $ 0.52 $ 1.10
Diluted$ 0.27 $ 0.27 $ 0.53 $ 0.52 $ 1.09
Weighted average shares used to compute net income per common share:
Basic 5,572,643 5,359,762 5,484,390 5,359,762 5,392,597
Diluted 5,625,756 5,377,257 5,537,503 5,377,257 5,430,345
Comprehensive income:
Net income $ 1,501,414 $ 1,455,333 $ 2,917,680 $ 2,804,087 $ 5,911,936
Other comprehensive income
Change in net unrealized gain (loss) on available-for-sale securities 8,807 82,733 23,589 114,535 (231,687)
Deferred tax expense (benefit) (3,624) (34,333) (9,707) (47,532) 198,493
Other comprehensive income (loss), net of tax 5,183 48,400 13,882 67,003 (33,194)
Comprehensive income$ 1,506,597 $ 1,503,733 $ 2,931,562 $ 2,871,090 $ 5,878,742


BayCom Corp Keary Colwell, 925-476-1800 kcolwell@ubb-us.com

Source:BayCom Corp