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BayCom Corp Reports 2017 Third Quarterly Earnings of $3.2 Million

WALNUT CREEK, Calif., Oct. 26, 2017 (GLOBE NEWSWIRE) -- BayCom Corp, “Company”, (OTCBB:BCML), and its wholly owned subsidiary, United Business Bank, “Bank”, announced quarterly earnings of $3.2 million in the third quarter of 2017, compared to $1.5 million in the second quarter of 2017 and $1.4 million in the first quarter of 2017. Diluted earnings per share were $0.47 in the third quarter, compared to $0.27 in the prior quarter and $0.22 in the same quarter a year ago. Year-to-date earnings of $6.1 million compared to $2.9 million for the same nine-month period a year ago. Diluted earnings per share were $0.98 in the first nine months of 2017, an increase from $0.74 for the same period in 2016. The higher earnings per share in the third quarter 2017 compared to the second quarter 2017 is attributed to lower operating expenses partially and non-recurring gains on payoff of purchase credit impaired loans partially offset by lower gains on sale of loans.

President and Chief Executive Officer, George J. Guarini stated, “We are pleased to report our third quarter 2017 financial performance as this is the first full quarter of on-going operating results without any non-recurring charges since our merger in April 2017. We are pleased with our continuing success in the SBA lending market and expect to see continuing growth in earnings from SBA.”

Mr. Guarini added, “With the UBB core processing conversion now behind us and our document imaging nearing completion, we are preparing to close our merger with Plaza Bank, Seattle, Washington. The closing on November 3rd will add to our Seattle market presence. We find ourselves in the familiar position of looking for new opportunities and anticipate that the M&A environment will allow us to improve scale, move toward a liquid security and significantly expand our geographical market reach.”

Company also provided the following highlights on its operating and financial performance for the third quarter of 2017:

  • Loans totaled $853.9 million at September 30, 2017, compared to $859.3 million at June 30, 2017 and $504.9 million at September 30, 2016. New loan volume was approximately $49.2 million in the third quarter of 2017 compared to $42.2 million in the second quarter.
  • Deposits totaled $1,054.5 million at September 30, 2017 compared to $1,031.8 million at June 30, 2017 and $535.7 million at September 30, 2016. Non-interest bearing deposits represent 29.1% of total deposits and the cost of total deposits decreased to 0.53%.
  • Non-accrual loans represented 0.02% of total loans as of September 30, 2017 resulting in a Texas ratio of 0.41%. The provision for loan losses recorded in the quarter totaled $57.8 thousand.
  • All capital ratios are well above regulatory requirements for a well-capitalized institution. The Bank’s total risk-based capital ratio was 12.70% at September 30, 2017 compared to 12.15% at June 30, 2017, and tangible common equity to tangible assets increased to 8.70% at September 30, 2017 from 8.61% at June 30, 2017.

Loans and Credit Quality

Loan originations in the third quarter of 2017 were spread throughout our markets with the majority focused in Solano, Contra Costa and San Mateo Counties. By loan type, owner-user real estate, investor real estate and residential real estate accounted for the majority of the new loan volume for the quarter.

Year-to-date loan 2017 originations of $91.4 million are slightly lower compared to the same period in 2016 of $92.5 million while year-to-date payoffs in 2017 are slightly lower than the same period in 2016. Payoffs totaling $14.9 million in the quarter ended September 30, 2017 were primarily the result of property sales or planned events.

Non-accrual loans totaled $186.6 thousand or 0.02% of the loan portfolio at September 30, 2017, compared to $368 thousand, or 0.04%, at June 30, 2017 and $1.5 million, or 0.29% a year ago. The decrease in non-accrual loans from a year ago primarily relates to repayment on delinquent loans. Accruing loans past due 30 to 89 days totaled zero at September 30, 2017, compared to $654 thousand at June 30, 2017 and $751 thousand a year ago.

The provision for loan losses recorded in the third quarter of 2017 totaled $57.8 thousand as the quality of the loan portfolio did not warrant a higher provision. Net charge-offs for the third quarter totaled $45.3 thousand compared to small recoveries in the prior quarter and in the same quarter a year ago. The ratio of loan loss reserve to loans totaled 0.48% at September 30, 2017 compared to 0.47% at June 30, 2017 and compared to 0.84% at September 30, 2016. As of September 30, 2017, acquired loans totaling $372.3 million are coved by mark to market valuations totaling $7.3 million.

Investments and Borrowings

The investment portfolio, including Bank Owned Life Insurance totaled $66.3 million at September 30, 2017, an increase of $4.4 million from June 30, 2017 mainly due to an increase in the Bank Owned Life Insurance investment and to a lesser extent the purchase of certain CRA qualifying investments.

Deposits

Deposits totaled $1,054.5 million at September 30, 2017, compared to $1,031.8 million at June 30, 2017 and $568.7 million at September 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 $307.1 million, or 29.1% of total deposits, compared to 30.2% at June 30, 2017 and 24.0% at September 30, 2016.

Earnings

Net interest income totaled $31.3 million in the first nine months of 2017 compared to $21.7 million for the same period of 2016. The increase of $9.6 million was primarily due to a combination of an increase in average earning assets of $307.7 million and an increase in gain on repayment of acquired loans.

Net interest income totaled $13.1 million in the third quarter of 2017, compared to $10.7 million in the prior quarter and $7.1 million in the same quarter a year ago. Net interest income increased $2.4 thousand in the third quarter compared to the prior quarter partially due to higher average earnings assets and higher gains on payoffs of Purchased Credit Impaired ("PCI") loans in the third quarter of 2017 compared to the second quarter of 2017.

The net interest margin was 4.05% in the third quarter of 2017, compared to 3.95% in the prior quarter and 4.14% in the same quarter a year ago. The increase from last quarter includes 19 basis points related to gain on 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 $13.8 million, $14.4 million, and $8.9 million at September 30, 2017, June 30, 2017 and September 30, 2016, respectively.

Accretion and gains on payoffs of purchased loans recorded to interest income were $1.5 million for the third quarter 2017 compared to $663 thousand for the second quarter 2017 and $2.7 million for the nine months ended 2017.

Non-interest income in the third quarter of 2017 totaled $1.1 thousand, compared to $1.6 million in the prior quarter and $339 thousand in the same quarter a year ago. The decrease compared to the prior quarter primarily relates to a decline in gain on sale of loans in the third quarter of 2017 compared to the second quarter of 2017. The increase from the same quarter last year is primarily due to gain on sale of loans and higher servicing income.

Non-interest expense totaled $7.5 million in the third quarter of 2017 down from the prior quarter but higher from the same quarter a year ago. The second quarter of 2017 was higher due to the one-time recognition of merger related expenses. The increase from the same quarter in 2016 was due to higher operating costs due to the merger including an increase in the number of employees, branch offices and data processing charges as a result of higher volume.

About BayCom Corp

The Bank 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. The Company 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
September 30, 2017 June 30, 2017 March 31, 2017 September 30, 2016
Quarter-To-Date
Net Income $3,181,703 $1,501,413 $1,416,266 $1,206,950
Diluted Earnings Per Common Share $0.47 $0.27 $0.26 $0.22
Return On Average Assets (ROA) 1.08% 0.60% 0.83% 0.77%
Return On Average Equity (ROE) 11.99% 6.24% 7.17% 6.52%
Efficiency Ratio 63.92% 73.91% 63.82% 63.87%
Net Interest Margin 4.24% 3.99% 3.91% 4.14%
Net Charge-Offs/(Recoveries) $57,031 $(5,250) $(6,503) $(4,173)
Net Charge-Offs/(Recoveries) To Average Loans 0.01% 0.00% 0.00% 0.00%
Year-To-Date
Net Income $6,099,382 $2,917,679 $1,416,266 $4,011,039
Diluted Earnings Per Common Share $0.98 $0.53 $0.26 $0.74
Return On Average Assets (ROA) 0.85% 0.69% 0.83% 1.26%
Return On Average Equity (ROE) 8.63% 6.66% 7.17% 10.91%
Efficiency Ratio 65.23% 69.95% 63.82% 64.32%
Net Interest Margin 4.05% 3.95% 3.96% 4.14%
Net Charge-Offs/(Recoveries) $45,278 $(11,753) $(6,503) $(8,048)
Net Charge-Offs/(Recoveries) To Average Loans 0.01% 0.00% 0.00% 0.00%
At Period End
Total Assets $1,185,520,515 $1,155,943,167 $697,397,629 $641,773,583
Loans:
Real Estate $753,227,054 $761,120,570 $461,299,207 $443,545,296
Non-real estate 106,816,202 107,092,657 73,570,589 66,098,087
Loans Held for Sale 1,490,434 - 4,383,428 -
Non-accrual loans 186,551 367,795 991,755 1,909,952
Mark to market on acquired loans (7,863,687) (9,261,310) (4,717,212) (6,636,817)
Total Loans $853,856,554 $859,319,712 $535,527,767 $504,916,518
Classified Assets (Graded Substandard and Doubtful) $6,639,265 $7,164,099 $8,644,709 $9,150,090
Total Accruing Loans 30-89 Days Past Due $- $654,483 $- $228,000
Loan Loss Reserve To Loans 0.48% 0.47% 0.73% 0.84%
Loan Loss Reserve to Non-accrual loans 2184.39% 1107.95% 395.76% 220.95%
Non-Accrual Loans To Total Loans 0.02% 0.04% 0.19% 0.38%
Texas Ratio 0.41% 0.59% 2.45% 2.42%
Total Deposits $1,054,482,651 $1,031,780,780 $609,952,562 $535,660,525
Loan-To-Deposit Ratio 80.97% 83.29% 87.80% 95.50%
Stockholders' Equity $107,394,795 $104,017,747 $79,579,734 $74,555,843
Book Value Per Share $15.63 $15.20 $14.50 $13.71
Tangible Common Equity To Tangible Assets 8.74% 8.61% 11.32% 11.48%
Total Risk-Based Capital Ratio-Bank 12.70% 12.15% 13.99% 13.65%
Full-Time Equivalent Employees 148 152 105 106

BAYCOM CORP
STATEMENT OF CONDITION (UNAUDITED)
At September 30, 2017, June 30, 2017, March 31, 2017, and December 31, 2016
September 30, 2017June 30, 2017March 31, 2017December 31, 2016
Assets
Cash and due from banks$ 242,518,078$ 201,181,847$ 125,531,611$ 128,684,416
Investments, including Bank Owned Life Insurance policies 66,328,078 61,894,919 24,690,663 26,393,451
Loans, net of allowance for loan losses and deferred fees 841,132,083 854,640,346 531,441,926 504,264,026
Bank premises and equipment, net 8,549,480 8,527,362 1,008,798 1,106,030
Core deposit premium 4,664,166 4,941,677 719,372 802,436
Goodwill 9,125,500 9,125,500
Interest receivable and other assets 13,203,130 15,631,516 14,005,259 14,048,162
Total assets$ 1,185,520,515$ 1,155,943,167$ 697,397,629$ 675,298,520
Liabilities and Stockholders' Equity
Liabilities
Deposits
Non-interest bearing$ 307,107,386$ 311,522,277$ 142,436,582$ 128,696,712
Interest bearing
MMA/NOW/SVG 387,663,055 376,952,820 125,059,037 128,970,967
Premium MM 154,741,721 146,783,810 178,197,667 171,947,166
Time Deposits 204,970,489 196,521,873 164,259,276 161,143,915
Total deposits 1,054,482,651 1,031,780,780 609,952,562 590,758,760
Other borrowings 6,000,000 6,000,000 - -
Trust Preferred Subordinated Debentures, net 5,371,886 5,356,954 - -
Interest payable and other liabilities 12,271,183 8,787,686 7,865,333 6,476,580
Total liabilities 1,078,125,720 1,051,925,420 617,817,895 597,235,340
Stockholders' Equity
Common stock, no par value 69,524,425 69,393,816 47,632,398 47,540,808
Retained earnings 37,703,318 34,521,615 31,850,203 30,433,937
Accumulated other comprehensive income 167,052 102,316 97,133 88,434
Total stockholders' equity 107,394,795 104,017,747 79,579,734 78,063,179
Total liabilities and stockholders' equity$ 1,185,520,515$ 1,155,943,167$ 697,397,629$ 675,298,520

BAYCOM CORP
STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
Three months ended Nine months ended Year Ended
September 30,June 30,September 30, September 30,September 30, December 31,
2017 2017 2016 2017 2016 2016
Interest income
Interest - Non RE loans$1,400,645 $1,304,685 $892,219 $3,679,128 $2,704,743 $3,542,281
Interest - RE loans 9,224,331 8,130,506 5,520,245 22,829,478 16,099,695 21,496,827
Interest on investment securities 242,329 480,813 150,635 407,404 579,127 809,398
Interest on Federal funds sold and other bank deposits 774,897 137,908 119,092 1,624,148 282,603 422,510
Mark to market accretion and FAS 91 Fee amortization 1,489,191 663,306 438,906 2,709,995 2,063,693 3,354,471
Total interest income$13,131,393 $10,717,218 $7,121,097 $31,250,153 $21,729,861 $29,625,487
Interest expense
Interest on transaction accounts 457,976 466,358 392,029 1,375,481 1,134,176 1,597,440
Interest on time deposits 530,131 504,618 366,532 1,501,873 1,026,771 1,476,134
Premium on core deposits 277,511 212,696 105,000 573,270 315,000 398,064
Interest on borrowings and subordinated debentures 151,432 100,955 - 252,386 - -
Total interest expense$1,417,050 $1,284,627 $863,561 $3,703,010 $2,475,947 $3,471,638
Net interest income 11,714,343 9,432,591 6,257,536 27,547,143 19,253,914 26,153,849
Provision for loan losses 57,832 143,949 255,801 345,278 617,754 598,463
Net interest income after provision for loan losses$11,656,511 $9,288,642 $6,001,735 $27,201,865 $18,636,160 $25,555,386
Non-interest income
Loan fee income 150,044 252,777 109,232 459,743 251,926 331,336
Service charge income 76,944 60,006 52,788 184,918 169,700 227,904
Other fees & service charges 302,806 238,967 88,865 636,322 278,814 379,132
Gain on sale of loans 436,483 875,434 - 1,711,917 - -
Other income 117,120 201,823 88,412 455,046 286,618 420,166
Total non-interest income$1,083,397 $1,629,007 $339,297 $3,447,946 $987,058 $1,358,538
Non-interest expense
Salaries and benefits 4,685,663 3,946,848 2,676,450 11,714,767 8,083,638 10,610,511
Occupancy 931,229 790,103 518,447 2,290,723 1,600,340 2,147,472
Professional 157,835 461,219 187,086 749,026 602,041 773,073
Insurance 156,774 121,626 115,490 356,428 313,538 349,072
Data processing 813,767 2,073,766 352,171 3,247,429 1,031,213 1,386,115
Office 334,710 310,137 173,641 811,594 500,008 670,759
Marketing 206,660 156,373 68,035 418,026 182,759 269,576
Net Loan expenses 40,378 127,219 64,782 218,590 100,782 118,630
Other miscellaneous 161,089 188,045 57,380 410,897 174,758 241,279
Total non-interest expense$7,488,105 $8,175,336 $4,213,482 $20,217,480 $12,589,077 $16,566,487
Income before provision for income taxes 5,251,803 2,742,313 2,127,550 10,432,331 7,034,141 10,347,437
Provision for income taxes 2,070,100 1,240,900 920,600 4,332,950 3,023,100 4,435,500
Net income$3,181,703 $1,501,413 $1,206,950 $6,099,382 $4,011,039 $5,911,936
Net income per common share:
Basic$0.47 $0.27 $0.23 $0.99 $0.75 $1.10
Diluted$0.47 $0.27 $0.22 $0.98 $0.73 1.09
Weighted average shares used to compute net income per common share:
Basic 6,790,001 5,572,643 5,359,762 6,187,178 5,359,762 5,392,597
Diluted 6,800,956 5,625,756 5,377,257 6,197,577 5,377,257 5,433,719
Comprehensive income:
Net income$3,181,703 $1,501,413 $1,206,950 $6,099,382 $4,011,039 $5,911,936
Other comprehensive income
Change in net unrealized gain (loss) on available-for-sale
securities
110,002 8,807 (26,982) 124,605 87,553 (231,687)
Deferred tax expense (benefit) (45,266) (3,624) 2,959 (45,987) (44,573) 198,493
Other comprehensive income (loss), net of tax 64,736 5,183 (24,023) 78,618 42,980 (33,194)
Comprehensive income
$3,246,439 $1,506,596 $1,182,927 $6,178,000 $4,054,019 $5,878,742

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

Source:BayCom Corp