On July 18, 2024, BayCom Corp (BCML, Financial) released its 8-K filing detailing its financial performance for the second quarter of 2024. BayCom Corp, a bank holding company for United Business Bank, provides a broad range of financial services to businesses, business owners, and individuals through its full-service branches and loan production office.
Performance Overview
BayCom Corp (BCML, Financial) reported net income of $5.6 million, or $0.50 per diluted common share, for the second quarter of 2024. This compares to $5.9 million, or $0.51 per diluted common share, in the first quarter of 2024, and $7.2 million, or $0.59 per diluted common share, in the second quarter of 2023. The company's earnings per share exceeded the analyst estimate of $0.47.
Key Financial Metrics
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Net Income | $5.6 million | $5.9 million | $7.2 million |
| Earnings Per Share (Diluted) | $0.50 | $0.51 | $0.59 |
| Net Interest Income | $22.3 million | $22.4 million | $24.3 million |
| Noninterest Income | $1.5 million | $2.1 million | $1.1 million |
| Noninterest Expense | $16.0 million | $16.1 million | $16.6 million |
Income Statement Highlights
Net interest income for Q2 2024 was $22.3 million, a slight decrease from $22.4 million in Q1 2024 and a more significant drop from $24.3 million in Q2 2023. The decrease was primarily due to a minimal decrease in interest income on loans and an increase in interest expense on deposits.
Noninterest income decreased by $579,000, or 28.08%, to $1.5 million compared to the prior quarter, but increased by $397,000, or 36.6%, compared to the same quarter last year. The decrease from the previous quarter was mainly due to a $894,000 decrease in gain on equity securities.
Noninterest expense for Q2 2024 was $16.0 million, a slight decrease from $16.1 million in Q1 2024 and a decrease from $16.6 million in Q2 2023. The decrease was primarily due to a reduction in salaries and employee benefits.
Balance Sheet and Cash Flow Highlights
As of June 30, 2024, total assets were $2.59 billion, compared to $2.56 billion at the end of Q1 2024 and $2.57 billion at the end of Q2 2023. Total deposits were $2.18 billion, up from $2.14 billion in Q1 2024 and $2.15 billion in Q2 2023.
Loans, net of deferred fees, decreased to $1.86 billion from $1.89 billion in Q1 2024 and $2.01 billion in Q2 2023. Nonperforming loans totaled $16.1 million, or 0.87% of total loans, consistent with Q1 2024 but up from $12.8 million, or 0.64% of total loans, in Q2 2023.
Commentary and Outlook
"Our financial results have continued on a similar trend for the past five quarters; however, the decline in net interest margin has slowed. We continue to see low loan demand, but our deposit base has stabilized. Overall, our financial condition remains strong, and we have not observed systemic credit weakness," said George Guarini, President and Chief Executive Officer.
"We anticipate continued challenges in loan demand and M&A prospects; however, we believe the tide may be turning in loan demand and are positioning our lending platform accordingly. We remain vigilant in managing operating costs and remain committed to strategically repurchasing shares and paying cash dividends, reinforcing our dedication to delivering long-term value for both our clients and shareholders," added Guarini.
Analysis
BayCom Corp (BCML, Financial) has demonstrated resilience in a challenging economic environment, maintaining a stable deposit base and managing operating costs effectively. Despite a decrease in net interest income and noninterest income, the company has managed to keep noninterest expenses in check, contributing to a relatively stable net income. The company's focus on strategic share repurchases and cash dividends highlights its commitment to delivering long-term value to shareholders.
Value investors may find BayCom Corp (BCML, Financial) appealing due to its strong financial condition, stable deposit base, and strategic initiatives aimed at enhancing shareholder value. However, the ongoing challenges in loan demand and rising interest expenses are factors to watch closely in the coming quarters.
Explore the complete 8-K earnings release (here) from BayCom Corp for further details.
