Bay p(BCML) - 2025 Q2 - Quarterly Results

BayCom Corp Q2 2025 Earnings Release Earnings Summary BayCom Corp reported strong Q2 2025 earnings, with net income and diluted EPS increasing, primarily driven by higher net interest income and reduced credit loss provision Quarterly Earnings Performance | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Income | $6.4 million | $5.7 million | $5.6 million | | Diluted EPS | $0.58 | $0.51 | $0.50 | - Quarter-over-quarter net income growth was mainly due to a $439,000 decrease in provision for credit losses and a $280,000 increase in net interest income[2] - Year-over-year net income growth was primarily the result of an $865,000 increase in net interest income and a $258,000 decrease in noninterest expense[2] - For the six months ended June 30, 2025, net income increased by 5.1% compared to the same period in 2024, driven by a $1.4 million rise in net interest income[3] CEO Commentary CEO George Guarini highlighted positive financial trends, emphasizing the company's focus on managing operating expenses, maintaining credit discipline, and enhancing shareholder value through repurchases and dividends - The company's financial condition is described as resilient, with no observed signs of systemic credit weakness[4] - Strategic priorities include managing operating expenses, maintaining credit discipline, and closely monitoring new loan originations in anticipation of potential economic deterioration[4] - The company remains committed to strategic share repurchases and paying cash dividends to enhance shareholder value[4] Key Performance Highlights The company maintained stable total assets and grew net loans, achieving a 3.77% annualized net interest margin, while actively repurchasing shares and declaring a cash dividend Key Financial Metrics | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Annualized Net Interest Margin | 3.77% | 3.83% | 3.69% | | Annualized Return on Average Assets | 0.98% | 0.89% | 0.87% | | Total Assets | $2.6B | $2.6B | $2.6B | | Loans, net of deferred fees | $2.0B | $2.0B | $1.9B | Asset Quality and Capital Actions | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Nonperforming Loans | $16.4M (0.82% of total) | $10.0M (0.51% of total) | $16.1M (0.87% of total) | | Allowance for Credit Losses | $18.7M (0.93% of total) | $18.5M (0.94% of total) | $19.0M (1.02% of total) | | Shares Repurchased | 148,450 | 50,793 | 204,794 | - A cash dividend of $0.20 per share was declared on May 21, 2025[10] - The Bank remained a "well-capitalized" institution for regulatory purposes at June 30, 2025[10] Detailed Financial Analysis Q2 2025 financial performance was marked by increased net interest income and decreased noninterest expenses, alongside a significantly lower provision for credit losses compared to the prior quarter Net Interest Income Net interest income rose in Q2 2025, driven by higher interest income from a larger average loan balance, with the annualized net interest margin slightly decreasing QoQ but improving YoY Net Interest Income and Margin | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Interest Income | $23.2M | $22.9M | $22.3M | | Annualized Net Interest Margin | 3.77% | 3.83% | 3.69% | | Avg. Yield on Interest Earning Assets | 5.45% | 5.46% | 5.37% | | Avg. Rate on Interest-Bearing Liabilities | 2.54% | 2.49% | 2.54% | - The QoQ increase in net interest income was primarily due to higher interest on loans, partially offset by increased interest expense on deposits[6] - The YoY increase was driven by a $2.9 million (11.8%) rise in interest income on loans, reflecting a $133.4 million increase in the average loan balance and a 22 basis point increase in the average loan yield[9] - Total interest expense increased 5.4% QoQ to $10.3 million, reflecting higher average balances and funding costs on money market accounts[15] Provision for Credit Losses The company recorded a significantly reduced provision for credit losses in Q2 2025 compared to the prior quarter, primarily due to a reduction in specific reserves, with minimal net charge-offs Provision and Net Charge-offs | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Provision for Credit Losses | $203,000 | $642,000 | $171,000 | | Net Charge-offs | $13,000 | $102,000 | $76,000 | - The decrease in provision compared to the prior quarter was mainly driven by a decrease in specific reserves, partially offset by loan growth and an increase in the overall required allowance level[18] Noninterest Income Noninterest income for Q2 2025 increased from both prior periods, primarily driven by a significant decrease in losses on equity securities Noninterest Income Breakdown | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Total Noninterest Income | $1.51M | $1.44M | $1.48M | | (Loss) on equity securities | $7,000 | ($255,000) | ($321,000) | - The QoQ increase was driven by a $262,000 decrease in loss on equity securities and a $127,000 increase in loan servicing fees, partially offset by a $144,000 decrease in gain on sale of loans[19] Noninterest Expense Noninterest expense decreased in Q2 2025 from both prior periods, primarily due to lower salaries and benefits and a significant reduction in other expenses Noninterest Expense Breakdown | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Total Noninterest Expense | $15.8M | $16.0M | $16.0M | | Salaries and employee benefits | $9.7M | $9.9M | $9.6M | | Other expense | $1.9M | $2.1M | $2.6M | - The decrease from the prior quarter was mainly due to a $207,000 decrease in salaries and a $135,000 reduction in other expenses[21] - The YoY decrease was primarily due to a $657,000 reduction in other expenses, partly from the return of unused funds from a California Capital Access Program (CalCap) loss reserve account[21] Provision for Income Taxes The provision for income taxes for Q2 2025 resulted in an effective tax rate of 27.0%, which was higher than both the prior quarter and prior year Income Tax Provision and Effective Rate | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Provision for Income Taxes | $2.4M | $2.0M | $2.0M | | Effective Tax Rate | 27.0% | 25.8% | 26.3% | Balance Sheet and Credit Quality Total assets remained stable, with net loans growing and deposits increasing, while nonperforming loans rose quarter-over-quarter Loans and Credit Quality Net loans increased significantly, fueled by new originations, while nonperforming loans rose primarily due to new commercial real estate loans placed on non-accrual status - Loan growth in Q2 2025 was driven by $155.1 million of new originations and $13.1 million of loan purchases, partially offset by $134.4 million of repayments[23][24] Nonperforming Loan (NPL) Status | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Nonperforming Loans | $16.4M | $10.0M | $16.1M | | NPLs as % of Total Loans | 0.82% | 0.51% | 0.87% | - The increase in NPLs from Q1 2025 was mainly due to seven new commercial real estate loans totaling $5.2 million being placed on non-accrual status[25] - The allowance for credit losses for loans was $18.7 million, or 0.93% of total loans, compared to $18.5 million (0.94%) at the end of Q1 2025[27] Deposits and Borrowings Total deposits increased during the quarter, driven by organic growth and a shift towards higher-costing money market accounts, with noninterest-bearing deposits constituting 28.2% of the total Deposit Balances | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Total Deposits | $2.20B | $2.13B | $2.18B | | Noninterest-bearing Deposits | $616.1M | $589.5M | $618.6M | | % Noninterest-bearing | 28.2% | 27.7% | 28.4% | - The deposit mix shifted during 2025 due to interest-rate sensitive clients moving balances from lower-costing deposits to higher-costing money market accounts and time deposits[29] - The company has no outstanding FHLB advances, Federal Funds line borrowings, or FRB discount window advances as of June 30, 2025[31][33] Shareholders' Equity Shareholders' equity increased at Q2 2025, primarily driven by net income, partially offset by common stock repurchases and cash dividends Shareholders' Equity Movement (Q2 2025) | Description | Amount | | :--- | :--- | | Equity at March 31, 2025 | $329.3M | | Net Income | +$6.4M | | Other Comprehensive Income | +$0.8M | | Common Stock Repurchases | -$3.9M | | Cash Dividends | -$2.2M | | Equity at June 30, 2025 | $330.6M | - A total of 264,855 shares remained available for repurchase under the Company's current stock repurchase plan at quarter-end[34] About BayCom Corp and Forward-Looking Statements BayCom Corp, operating through United Business Bank, provides banking services across five western states, with the report containing forward-looking statements subject to various economic and competitive uncertainties - The Company operates through its wholly owned subsidiary, United Business Bank, offering loans and deposit services in five western states[36] - The report contains forward-looking statements subject to significant business, economic, and competitive uncertainties, including inflation, interest rate environment, and potential bank failures[37][39] Consolidated Financial Statements This section presents BayCom Corp's unaudited consolidated financial statements, including comprehensive income, condition, financial highlights, and GAAP to Non-GAAP reconciliations Consolidated Statements of Comprehensive Income This statement presents the company's revenues, expenses, net income, and other comprehensive income for the three and six months ended June 30, 2025, with comparative periods Consolidated Statements of Comprehensive Income (Unaudited, Dollars in thousands) | | Three months ended | Six months ended | | :--- | :--- | :--- | | | Q2 2025 | Q1 2025 | Q2 2024 | H1 2025 | H1 2024 | | Net interest income | $23,160 | $22,880 | $22,295 | $46,040 | $44,702 | | Provision for credit losses | 203 | 642 | 171 | 845 | 423 | | Total noninterest income | 1,513 | 1,440 | 1,483 | 2,953 | 3,545 | | Total noninterest expense | 15,754 | 15,989 | 16,012 | 31,743 | 32,083 | | Net income | $6,364 | $5,702 | $5,600 | $12,066 | $11,477 | | Diluted EPS | $0.58 | $0.51 | $0.50 | $1.09 | $1.01 | | Comprehensive income | $7,153 | $7,797 | $6,106 | $14,950 | $12,467 | Consolidated Statements of Condition This statement details the company's assets, liabilities, and shareholders' equity as of June 30, 2025, with comparative figures for prior periods Consolidated Statements of Condition (Unaudited, Dollars in thousands) | | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Assets | | | | | Cash and cash equivalents | $291,624 | $256,549 | $391,208 | | Loans, net of allowance | $1,981,549 | $1,948,168 | $1,845,172 | | Total Assets | $2,622,379 | $2,563,798 | $2,593,933 | | Liabilities & Equity | | | | | Total deposits | $2,186,634 | $2,128,830 | $2,175,010 | | Total Liabilities | $2,291,817 | $2,234,461 | $2,278,668 | | Total Shareholders' Equity | $330,562 | $329,337 | $315,265 | | Total Liabilities and Equity | $2,622,379 | $2,563,798 | $2,593,933 | Financial Highlights This section summarizes key performance ratios, per share data, asset quality metrics, and capital ratios for the quarter, providing a quick reference for overall health Selected Financial Ratios (Q2 2025 vs Q2 2024) | Ratio | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Return on average assets (annualized) | 0.98% | 0.87% | | Return on average equity (annualized) | 7.69% | 7.11% | | Net interest margin (annualized) | 3.77% | 3.69% | | Efficiency ratio | 63.85% | 67.34% | | Nonperforming loans to total loans | 0.82% | 0.87% | | Book value per share | $30.21 | $28.22 | | Tangible book value per share (Non-GAAP) | $26.46 | $24.45 | Non-GAAP Financial Measures Reconciliation This section reconciles GAAP to non-GAAP measures, including tangible book value per share and tangible equity to tangible assets, to facilitate capital quality comparison Reconciliation of GAAP to Non-GAAP Measures (June 30, 2025, in thousands) | Measure | Amount | | :--- | :--- | | Total shareholders' equity (GAAP) | $330,562 | | less: Goodwill and other intangibles | $41,025 | | Tangible common shareholders' equity (Non-GAAP) | $289,537 | | Total assets (GAAP) | $2,622,379 | | less: Goodwill and other intangibles | $41,025 | | Total tangible assets (Non-GAAP) | $2,581,354 | Book Value Per Share Reconciliation (June 30, 2025) | Measure | Value | | :--- | :--- | | Book value per share (GAAP) | $30.21 | | Tangible book value per share (Non-GAAP) | $26.46 |