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Mar 31, 2020
Baycom Q1 2020 Earnings Report
Reported first quarter earnings impacted by the COVID-19 pandemic and acquisition-related expenses.
Key Takeaways
BayCom Corp reported earnings of $2.8 million, or $0.23 per diluted share, for the first quarter of 2020. The results reflect the impact of the COVID-19 pandemic, which led to reduced business activity and business closures in the states where BayCom operates. The company also completed its merger with Grand Mountain Bank during the quarter.
Earnings decreased by $1.8 million, or 38.6%, compared to the prior quarter.
Noninterest expense increased by $1.7 million, including a $500,000 increase in acquisition-related expenses.
Provision for loan losses increased by $690,000, primarily related to the COVID-19 pandemic.
Net interest income increased by $864,000.
Baycom
Baycom
Baycom Revenue by Segment
Revenue by Segment
Net Interest Income Revenue
CapyFin.comNoninterest Income Revenue
CapyFin.com Forward Guidance
The Company anticipates future results will be further impacted by the COVID-19 pandemic. There may be expected added pressures on asset quality in future quarters which may require additional provisions. There will be declining interest income on loans as they reprice in the current interest rate environment, which may be partially offset by the lagging decline in deposit interest rates.
Positive Outlook
- Capital and liquidity positions remain strong.
- Assisting businesses with access to programs like the Paycheck Protection Program and the Main Street Lending Program.
- Continuing to be a reliable partner to clients in helping them achieve their financial goals.
- Employees demonstrating their commitment to communities by continuing to provide vital banking services and assistance to western regional client base from office locations and via remote means.
- Offering a variety of relief options designed to support clients and communities, including participating in the U.S. Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”).
Challenges Ahead
- First quarter results were impacted by the COVID-19 pandemic.
- Future results will be further impacted in a number of areas.
- Increased allowance for loan losses to reflect some credit deterioration due to the COVID-19 pandemic in the first quarter of 2020.
- There may be expected added pressures on asset quality in future quarters which may require additional provisions.
- Reduction in short-term interest rates by the Federal Reserve was significant and had an immediate adverse impact on net interest margin.