Bay p(US:BCML)2023-11-12 16:00Financial Position - As of September 30, 2023, the company had approximately $2.6 billion in total assets, $2.0 billion in total loans, $2.2 billion in total deposits, and $307.3 million in shareholders' equity[184]. - Total assets increased by $61.1 million, or 2.4%, to $2.6 billion as of September 30, 2023, compared to December 31, 2022[217]. - Cash and cash equivalents rose by $125.1 million, or 70.8%, to $301.9 million at September 30, 2023, driven by a $121.7 million increase in federal funds sold and interest-bearing balances[218]. - Total deposits increased by $74.0 million, or 3.5%, to $2.2 billion as of September 30, 2023, compared to December 31, 2022[250]. - Shareholders' equity decreased by $9.9 million to $307.3 million at September 30, 2023, primarily due to stock repurchases and dividends[257]. Loan Portfolio - The total loan portfolio included $426.6 million, or 21.7%, of acquired loans, while $1.5 billion, or 78.3%, consisted of originated loans[185]. - Loans receivable, net, decreased by $53.2 million, or 2.7%, as of September 30, 2023[217]. - Total loans amounted to $1.968 billion, down 2.6% from $2.021 billion at the end of 2022[222]. - New loan originations amounted to $135.0 million, partially offsetting $180.0 million in loan repayments[220]. - The commercial and industrial loan portfolio decreased by 7.5% to $170.7 million as of September 30, 2023[222]. - The owner-occupied commercial real estate loans decreased by 19.8% to $514.5 million, while non-owner occupied CRE loans increased by 12.6% to $909.9 million[222]. Credit Losses and Allowance - The company established an allowance for credit losses to reflect estimated credit losses in its loan and investment portfolios[192]. - The allowance for credit losses increased by 4.8% to $(19.8) million as of September 30, 2023, from $(18.9) million at the end of 2022[222]. - The allowance for credit losses for loans was $19.8 million, representing 1.01% of total loans as of September 30, 2023, compared to $18.9 million or 0.94% at December 31, 2022[241]. - The company recorded net charge-offs of $399,000 for the nine months ended September 30, 2023, compared to $3.5 million for the same period in 2022[242]. - The allowance for credit losses on loans as a percentage of nonaccrual loans was 138.26% at September 30, 2023, up from 110.27% at September 30, 2022[246]. Income and Expenses - Net income for the three months ended September 30, 2023, was $6.6 million, a decrease of $340,000 or 4.9% compared to the same period in 2022[258]. - Net income for the nine months ended September 30, 2023, increased by $4.9 million or 30.6% to $21.0 million compared to $16.1 million for the same period in 2022[259]. - Interest income for the three months ended September 30, 2023, was $32.8 million, an increase of $5.7 million or 21.0% compared to $27.1 million for the same period in 2022[260]. - Noninterest income decreased by $728,000, or 30.6%, to $1,654,000 for Q3 2023 compared to $2,382,000 for Q3 2022[290]. - Noninterest expense increased by $423,000, or 2.6%, to $16,519,000 for Q3 2023 compared to $16,096,000 for Q3 2022[294]. Interest Rates and Margins - The Federal Reserve has increased the target range for the federal funds rate by 525 basis points since March 2022, with a range of 5.25% to 5.50% as of the latest quarter[190]. - The net interest margin is influenced by changes in market interest rates and the composition of interest-earning assets and liabilities[190]. - The annualized net interest margin for the three months ended September 30, 2023, was 4.03%, compared to 3.99% for the same period in 2022[281]. - Interest expense increased by $5.6 million, or 232.5%, to $8.0 million for the three months ended September 30, 2023, reflecting higher funding costs due to increased market rates[271]. - Average yield on loans increased to 5.42% for the three months ended September 30, 2023, from 4.73% for the same period in 2022[263]. Strategic Initiatives - The company completed the acquisition of Pacific Enterprise Bancorp on February 1, 2022, enhancing its market presence[186]. - The company aims to continue expanding its commercial banking franchise through strategic acquisitions and organic growth, having completed 10 acquisitions since 2010[184]. - The company is focused on enhancing its banking experience by providing a comprehensive suite of banking products and services tailored to client needs[184]. Regulatory and Capital Position - The Bank maintained "Well Capitalized" status under Federal Reserve regulations as of September 30, 2023[311]. - The Common Equity Tier 1 capital ratio for BayCom Corp was 14.12% as of September 30, 2023, exceeding the minimum requirement for "Well Capitalized" status[313]. - As of September 30, 2023, the Bank had a borrowing capacity of $597.6 million with the FHLB of San Francisco, with no borrowings outstanding[300]. Market Risks - Interest rate risk is considered a significant market risk, with assessments conducted quarterly to manage exposure[318].