Table of Contents BAYCOM CORP | --- | --- | --- | |----------------------------------------------------------------|-----------------------------------------------------------|-------------------------------------------| | California | (Exact Name of Registrant as Specified in its Charter) \n | 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 princi ...

Table of Contents BAYCOM CORP | --- | --- | --- | |----------------------------------------------------------------|-----------------------------------------------------------|-------------------------------------------| | California | (Exact Name of Registrant as Specified in its Charter) \n | 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 princi ...

Loan Portfolio - As of December 31, 2021, the company had net loans of $1.6 billion, representing 70.1% of total assets[39] - The loan portfolio primarily consists of commercial real estate loans totaling $1.3 billion, which constitutes 78.8% of total loans[40] - Commercial and industrial loans, including PPP loans, amounted to $230.2 million, representing 13.8% of total loans[40] - The company held $1.4 billion in loans secured by real estate, accounting for 85.9% of total loans receivable[53] - The average loan size in the commercial real estate portfolio was approximately $1.0 million with a weighted average loan-to-value ratio of 49.3%[59] - As of December 31, 2021, the aggregate amount of loans to the 10 largest borrowers was approximately $148.4 million, or 8.9% of total loans[43] - The company originated $39.9 million in commercial real estate SBA 7(a) loans during 2021, selling $32.8 million of the guaranteed portion[58] - The commercial real estate loan portfolio included $44.0 million of loans originated under the SBA's 504 loan program[57] - As of December 31, 2021, agricultural real estate secured loans totaled $17.3 million, representing 1.3% of total loans[63] - The commercial real estate loan portfolio amounted to $1.3 billion, with retail loans at $326.3 million (25.1% of total), multifamily residential at $203.9 million (15.7%), and hotel/motel loans at $171.6 million (13.2%)[65] - Construction and land loans outstanding were $13.4 million, accounting for 0.8% of total loans, with an average loan size of approximately $147,000 and a weighted average loan-to-value ratio of 51.4%[66] - The one-to-four family loan portfolio totaled $118.4 million, or 7.1% of total loans, primarily acquired through mergers and purchases[70] - Home equity loans and lines of credit amounted to $10.3 million, representing 0.6% of total loans, with unfunded commitments totaling $15.6 million[71] - Commercial and industrial loans included $14.6 million in SBA 7(a) loans originated in 2021, with $1.4 million as the unguaranteed portion[76] - As of December 31, 2021, the bank received SBA forgiveness for 1,794 PPP loans totaling $164.8 million, leaving 306 loans with an aggregate balance of $69.6 million[77] - Agricultural operating loans totaled $770,000, representing 0.05% of total loans, reflecting the dependency on the agricultural business's cash flow for repayment[78] - Consumer loans amounted to $5.1 million, or 0.3% of total loans, with higher risk due to potential difficulties in assessing collateral value[81] Financial Position - As of December 31, 2021, the investment portfolio totaled $174.4 million with an average yield of 3.0% and an estimated duration of approximately 5.5 years[95] - The company had $12.5 million in reciprocal CDARS and $96.1 million in one-way CDARS and ICS deposits as of December 31, 2021[87] - At December 31, 2021, there were no FHLB borrowings outstanding, with $483.1 million of available credit capacity with the FHLB[89] - The company maintained a short-term borrowing line of credit with the Federal Reserve Bank with available credit capacity of $69.6 million as of December 31, 2021[89] - The company paid $580,000 in FDIC assessments for the year ending December 31, 2021[103] - Deposits related to Business Escrow Services totaled $1.7 million and $4.0 million at December 31, 2021 and December 31, 2020, respectively[88] - The company has implemented deposit gathering strategies that utilize technology to enhance commercial depository services[85] - The company offers a variety of deposit accounts with competitive interest rates to attract a diverse client base[83] - The company has an approved secured borrowing facility with the FHLB for up to 25% of total assets[89] Capital Adequacy - As of December 31, 2021, the Bank met the requirements to be "well capitalized" with a Tier 1 risk-based capital ratio of at least 8% and a total risk-based capital ratio of at least 10%[113] - The minimum capital ratios required include a common equity Tier 1 (CET1) capital ratio of 4.5%, a Tier 1 capital ratio of 6.0%, and a total risk-based capital ratio of 8.0%[111] - The Bank's aggregate recorded loan balances for construction, land development, and land loans were 7.1% of total regulatory capital as of December 31, 2021[123] - The Bank's commercial real estate loans represented 342.5% of total regulatory capital as of December 31, 2021, indicating a relatively high concentration in commercial real estate loans[124] - The capital conservation buffer requirement mandates an additional CET1 capital greater than 2.5% of risk-weighted assets above the required minimum risk-based capital levels[112] - The Bank's compliance with reserve requirements was confirmed as of December 31, 2021, following the Federal Reserve's reduction of reserve requirement ratios to zero percent effective March 26, 2020[129] - The Community Bank Leverage Ratio (CBLR) provides a simple measure of capital adequacy for qualifying institutions, requiring a leverage ratio greater than 9.0%[114] Regulatory Compliance - The Bank received a "satisfactory" rating during its most recent Community Reinvestment Act examination, reflecting its performance in meeting community credit needs[132] - The Bank's dividends are limited by federal and state laws, dependent on its earnings and capital position, and cannot exceed the lesser of retained earnings or net income for the last three fiscal years[134] - The Federal Reserve requires that covered transactions between a bank and its affiliates be on terms as favorable to the bank as transactions with non-affiliates, limiting such transactions to 10% of the bank's capital and surplus[130] - The Bank is required to notify its primary federal regulator within 36 hours of determining a significant cybersecurity incident has occurred[135] - The California Consumer Privacy Act (CCPA) grants California residents rights regarding their personal information, including the right to request deletion and opt-out of sales[136] - The Bank must comply with various consumer protection laws, including the Truth-in-Lending Act and the Fair Credit Reporting Act, to avoid penalties and enforcement actions[142] - The Company is subject to comprehensive regulation by the Federal Reserve and must file quarterly reports[143] - The Dodd-Frank Act requires public companies to provide shareholders with a non-binding vote on executive compensation at least once every three years[149] - The Company is considered "well capitalized" and is not subject to individualized capital level requirements under the Federal Reserve's regulations[148] - The Federal Reserve must approve any acquisition of control of a bank located in a different state[154] - The Federal Reserve has issued guidelines regarding cash dividends, emphasizing the need for adequate capital before payment[156] - A bank holding company must notify the Federal Reserve prior to purchasing or redeeming equity securities if the amount exceeds 10% of its consolidated net worth[157] Workforce and Diversity - As of December 31, 2021, the company had approximately 307 full-time equivalent employees, with 76% identifying as female and 24% as male[165] - The average tenure of employees was 5.2 years, with a workforce composition of 41% White, 27% Asian, 22% Hispanic/Latino, 5% Black, 2% Two or More Races, and 3% Other[167] - The Board of Directors includes three female directors and two directors from underrepresented communities, reflecting a commitment to diversity[169] - The company offers a comprehensive total rewards program, including annual bonuses, a matched 401(k) plan, and various health benefits to attract and retain talent[169] - The company is focused on developing talent from within while also supplementing with external hires to foster loyalty and continuous improvement[172] Market Competition and Risks - The company emphasizes competitive pricing, personalized service, and community involvement to effectively compete in the financial services market[163] - The company faces competition from larger financial institutions and FinTech companies, which may have greater resources and product offerings[161] - The company is committed to maintaining a strong risk management process while pursuing growth strategies[182] - The company noted that loan delinquencies, problem assets, and foreclosures may increase due to economic downturns, particularly in the San Francisco Bay Area[193] - The company faces risks from potential declines in the value of collateral for loans, especially real estate, which could lead to increased loan losses[197] - The Federal Reserve's near-zero federal funds rate may reduce the yield on assets more than the decline in interest-bearing liabilities, impacting net interest margin[188] - The company highlighted that significant inflation and supply chain disruptions continue to affect its operational environment[187] - The uncertain future developments related to COVID-19 could materially and adversely affect the company's business and financial condition[191] Acquisition Strategy - The company intends to continue selectively acquiring other financial institutions, but the market for acquisitions remains highly competitive[235] - The company is incurring time and expense associated with identifying, evaluating, and negotiating potential acquisitions[237] - The company’s strategy of pursuing acquisitions exposes it to financial, execution, compliance, and operational risks that could adversely affect growth prospects[234] Loan Losses and Provisions - The company believes the allowance for loan losses is adequate to cover probable incurred losses in the loan portfolio as of December 31, 2021[41] - The company’s allowance for loan losses may prove insufficient to absorb potential losses, requiring additional provisions[222] - The company is evaluating the impact of the CECL accounting model, which may require an increase in the allowance for loan losses starting from the first fiscal year after December 15, 2022[225] - The company has not incurred any other-than-temporary impairments on its securities portfolio for the year ended December 31, 2021[233]

Table of Contents BAYCOM CORP | --- | --- | --- | |----------------------------------------------------------------|-----------------------------------------------------------|-------------------------------------------| | California | (Exact Name of Registrant as Specified in its Charter) \n | 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 princi ...

Table of Contents BAYCOM CORP | --- | --- | --- | |----------------------------------------------------------------|-----------------------------------------------------------|-------------------------------------------| | California | (Exact Name of Registrant as Specified in its Charter) \n | 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 princi ...

Table of Contents BAYCOM CORP | --- | --- | --- | |----------------------------------------------------------------|-----------------------------------------------------------|-------------------------------------------| | California | (Exact Name of Registrant as Specified in its Charter) \n | 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 princi ...

Table of Contents Common Stock, no par value per shareBCMLThe NASDAQ Stock Market LLC Title of each class Trading Symbol(s) Name of each exchange on which registered Securities Registered Pursuant to Section 12(g) of the Act: None UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURI ...

Table of Contents BAYCOM CORP | --- | --- | --- | |----------------------------------------------------------------|-----------------------------------------------------------|-------------------------------------------| | California | (Exact Name of Registrant as Specified in its Charter) \n | 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 princi ...

Table of Contents BAYCOM CORP | --- | --- | --- | |----------------------------------------------------------------|-----------------------------------------------------------|-------------------------------------------| | California | (Exact Name of Registrant as Specified in its Charter) \n | 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 princi ...

Financial Position - As of March 31, 2020, the company had approximately $2.2 billion in total assets, $1.6 billion in total loans, $1.8 billion in total deposits, and $253.6 million in shareholders' equity[109]. - Total assets increased by $174.6 million, or 8.8%, to $2.2 billion at March 31, 2020, from $2.0 billion at December 31, 2019[148]. - Loans receivable, net of allowance for loan losses, increased by $167.4 million, or 11.5%, to $1.6 billion at March 31, 2020, from $1.5 billion at December 31, 2019[151]. - Total deposits increased by $77.5 million, or 4.6%, to $1.8 billion at March 31, 2020, from $1.7 billion at December 31, 2019[174]. - Shareholders' equity decreased by $659,000, or 0.3%, to $253.6 million at March 31, 2020, primarily due to the repurchase of $4.6 million of common stock[180]. Earnings Performance - Net income for the three months ended March 31, 2020, was $2.8 million, a decrease of $2.1 million or 43.0% from $4.9 million for the same period in 2019[182]. - Diluted earnings per share were $0.23 for the three months ended March 31, 2020, a decrease of $0.22 from $0.45 for the same period in 2019[183]. - The efficiency ratio was 74.81% for the three months ended March 31, 2020, compared to 57.39% for the same period in 2019, largely due to acquisition-related expenses[184]. Interest Income and Expenses - Interest income for Q1 2020 was $22.5 million, a 37.5% increase from $16.4 million in Q1 2019, driven by a $579.0 million increase in average loans outstanding[185]. - Interest on loans increased by $7.1 million, or 52.2%, due to the growth in average loan balances, despite a 33 basis point decrease in average loan yield to 5.34%[185]. - Interest expense rose by $961,000, or 64.4%, to $2.5 million in Q1 2020, with total average interest-bearing liabilities increasing by $310.1 million, or 35.8%, to $1.2 billion[189]. - Net interest income increased by $5.2 million, or 34.8%, to $20.0 million for Q1 2020, while the annualized net interest margin decreased by eight basis points to 4.22%[190]. Noninterest Income and Expenses - Noninterest income includes loan servicing fees, gains on loan sales, and other related income, contributing to overall revenue growth[115]. - Noninterest income increased by $458,000, or 21.6%, to $2.6 million for the three months ended March 31, 2020, compared to $2.1 million for the same period in 2019[196]. - Gain on sale of loans rose to $642,000, a 237.9% increase from $190,000 in the prior year, while loan servicing fees increased by $236,000, or 57.6%, to $646,000[197]. - Noninterest expense increased by $7.2 million, or 73.6%, to $16.9 million for the three months ended March 31, 2020, compared to $9.7 million for the same period in 2019[198]. Loan Loss Provisions and Credit Quality - The provision for loan losses was recorded at $1.7 million for Q1 2020, compared to $277,000 in Q1 2019, reflecting concerns over economic conditions due to the COVID-19 pandemic[194]. - The allowance for loan losses was $9.1 million at March 31, 2020, or 0.56% of total loans, compared to $7.4 million, or 0.51% of total loans at December 31, 2019[168]. - Nonperforming assets increased by $1.6 million, or 21.1%, to $9.3 million at March 31, 2020, compared to $7.7 million at December 31, 2019[155]. - Nonaccrual loans totaled $8.3 million, or 0.51% of total loans, as of March 31, 2020, up from $6.8 million, or 0.47%, at December 31, 2019[163]. COVID-19 Impact and Relief Measures - The company funded over $78.3 million in Paycheck Protection Program (PPP) loans as of April 30, 2020, with an average loan amount of $180,000[135]. - The company has provided various short-term relief options to borrowers affected by COVID-19, including interest-only payments for up to 180 days and full payment deferrals for up to 90 days[140]. - The company has accepted more than 999 applications for PPP loans, including from new and existing clients, small to midsize businesses, independent contractors, sole proprietors, and partnerships[134]. - The company intends to utilize the Federal Reserve's Paycheck Protection Program Liquidity Facility (PPPLF) to pledge its PPP loans as collateral for non-recourse loans[137]. Capital Adequacy and Regulatory Compliance - The Bank was considered to be well-capitalized based on capital levels at March 31, 2020, in compliance with Federal Reserve regulations[206]. - BayCom Corp's leverage ratio decreased to 10.29% as of March 31, 2020, from 11.15% as of December 31, 2019[207]. - United Business Bank's common equity tier 1 (CET1) ratio was 12.55% at March 31, 2020, down from 14.23% at December 31, 2019[207]. - The minimum requirement for "well-capitalized" status for BayCom Corp is 10.00% for total risk-based capital ratio, which it exceeded[207]. Operational Growth and Strategy - The company aims to increase shareholder value and generate consistent earnings growth through strategic acquisitions and organic growth, having completed nine acquisitions in recent years[111]. - The company operates 35 full-service branches across California, Washington, Colorado, and New Mexico, enhancing its geographic footprint[109]. - The company is focused on expanding its commercial client base and increasing market share in targeted areas, including the San Francisco Bay area and metropolitan markets of Los Angeles and Seattle[111].