WALNUT CREEK, Calif.–(BUSINESS WIRE)–BayCom Corp (“BayCom” or the “Company”) (NASDAQ: BCML), the holding company for United Business Bank (the “Bank” or “UBB”), announced earnings of $6.9 million, or $0.63 per diluted common share, for the fourth quarter of 2025, compared to earnings of $5.0 million, or $0.46 per diluted common share, for the third quarter of 2025 and $6.1 million, or $0.55 per diluted common share, for the fourth quarter of 2024.
Net income for the fourth quarter of 2025 increased $1.9 million, or 37.0%, compared to the third quarter of 2025. This increase was primarily the result of a $2.7 million decrease in provision for credit losses and a $1.6 million increase in net interest income, partially offset by a $1.4 million decrease in noninterest income, primarily due to changes in equity securities valuations, an $885,000 increase in provision for income taxes, and a $220,000 increase in noninterest expense. Compared to the fourth quarter of 2024, net income increased $738,000, or 12.1%, primarily as a result of a $1.4 million increase in net interest income and a $798,000 increase in noninterest income, partially offset by a $653,000 increase in provision for credit losses, reflecting a provision in the current quarter compared to a reversal in the prior-year quarter, a $648,000 increase in provision for income taxes, and a $190,000 increase in noninterest expense.
Net income for the year ended December 31, 2025 increased $317,000, or 1.3%, compared to the year ended December 31, 2024, primarily as a result of a $3.3 million increase in net interest income and a $278,000 decrease in noninterest expense, partially offset by a $2.8 million increase in provision for credit losses, a $291,000 decrease in noninterest income and a $180,000 increase in provision for income taxes.
George Guarini, President and Chief Executive Officer, commented, “Our financial results for the fourth quarter and full year 2025 reflect a continuing trend of growth in core lending activity and improvement in net interest income, supported by disciplined balance sheet management. Net interest income increased both quarter over quarter and year over year, while full-year noninterest expense declined, reflecting our ongoing focus on operating efficiency. We also took steps in 2025 to strengthen our balance sheet by repaying our subordinated debt and increasing our loan loss reserves. These actions were taken to enhance our financial flexibility and prudently position the Company amid economic and interest rate uncertainty. Overall, our financial condition remains strong, and our earnings remain steady.”
Looking ahead, Guarini added, “We are optimistic that 2026 will see a continuing demand for lending and expect credit quality to remain stable. We believe that continued focus on disciplined loan growth, prudent credit risk management, and expense control will support earnings performance and further strengthen our overall financial position. We remain committed to enhancing shareholder value through share repurchases and cash dividends, while continuing to provide exceptional value to our clients, communities and shareholders.”
Fourth Quarter Performance Highlights:
- Annualized net interest margin was 4.03% for the current quarter, up from 3.68% the preceding quarter and 3.80% the same quarter a year ago.
- Annualized return on average assets was 1.05% for current quarter, up from 0.75% the preceding quarter and 0.94% the same quarter a year ago.
- Total assets remained steady at $2.6 billion at both December 31, 2025 and September 30, 2025, compared to $2.7 billion at December 31, 2024.
- Loans, net of deferred fees, totaled $2.1 billion at December 31, 2025, compared to $2.0 billion at both September 30, 2025 and December 31, 2024.
- Nonperforming loans totaled $13.4 million or 0.65% of total loans, at December 31, 2025, compared to $13.9 million, or 0.68% of total loans, at September 30, 2025, and $9.5 million, or 0.48% of total loans, at December 31, 2024.
- The allowance for credit losses for loans totaled $21.2 million, or 1.03% of total loans outstanding, at December 31, 2025, compared to $20.8 million, or 1.02% of total loans outstanding, at September 30, 2025, and $17.9 million, or 0.92% of total loans outstanding, at December 31, 2024.
- A $250,000 provision for credit losses was recorded during the current quarter, compared to a $2.9 million provision for credit losses in the prior quarter, and a $403,000 reversal of provision for credit losses in the same quarter a year ago.
- Deposits totaled $2.2 billion at December 31, 2025, September 30, 2025, and December 31, 2024. At December 31, 2025, noninterest-bearing deposits totaled $578.1 million, or 26.1% of total deposits, compared to $618.1 million, or 27.7% of total deposits, at September 30, 2025, and $689.0 million, or 30.8% of total deposits, at December 31, 2024.
- The Company repurchased 29,111 shares of common stock at an average cost of $27.75 per share during the fourth quarter of 2025, compared to 33,300 shares of common stock repurchased at an average cost of $27.29 per share during the third quarter of 2025, and 1,500 shares of common stock repurchased at an average cost of $24.28 per share during the fourth quarter of 2024.
- On November 20, 2025, the Company announced the declaration of a cash dividend on the Company’s common stock of $0.30 per share, which was paid on January 9, 2026 to shareholders of record as of December 11, 2025.
- The Bank remained a “well-capitalized” institution for regulatory capital purposes at December 31, 2025.
Earnings
Net interest income increased $1.6 million, or 6.8%, to $25.0 million for the fourth quarter of 2025 from $23.4 million for the prior quarter, and increased $1.4 million, or 6.1%, from $23.6 million for the same quarter a year ago. The increase from the prior quarter was primarily driven by an increase in interest income on loans, including fees, a decrease in interest expense on subordinated debt, and a decrease in interest expense on deposits. These changes were partially offset by a decrease in interest income on fed funds sold and interest-bearing balances in banks, and to a lesser extent a decrease in interest income on investment securities.
The increase in net interest income compared to the same quarter in 2024 primarily reflects an increase in interest income on loans, including fees, a decrease in interest expense on subordinated debt, and a decrease in interest expense on deposits. These changes were partially offset by a decrease in interest income on fed funds sold and interest-bearing balances in banks. Average interest-earning assets decreased $60.8 million, or 2.4%, compared to the third quarter of 2025, and $3.4 million, or 0.1%, compared to the fourth quarter of 2024.
The average yield earned (annualized) on interest earning assets for the fourth quarter of 2025 was 5.53%, up from 5.49% for the third quarter of 2025 and 5.50% for the fourth quarter of 2024. The increase from the prior quarter reflects higher average yields on loans and, to a lesser extent, investments, partially offset by a lower average yield on interest-bearing balances in banks. The increase from the fourth quarter of 2024 reflects the repricing of adjustable-rate loans to higher rates, as well as the origination of new loans at higher rates, partially offset by a lower average yield on interest-bearing balances in banks.
The average rate paid (annualized) on interest-bearing liabilities decreased to 2.28% for the fourth quarter of 2025, down from 2.73% for the prior quarter and 2.58% for the fourth quarter of 2024. The decrease in funding costs was primarily due to the acceleration of amortization of deferred debt issuance costs related to the early redemption of subordinated debt during the third quarter of 2025 and lower rates paid on premium money market and time deposits. The decline in deposit rates reflects moderating competitive pricing in the deposit market and the repricing of maturing time deposits at lower market rates as short-term interest rates stabilized during the quarter. The decrease in funding costs from the fourth quarter of 2024 was due to the pay-off of the subordinated debt and lower rates paid on premium money market and time deposits, reflecting similar market-driven repricing conditions.
Interest income on loans, including fees, increased $583,000, or 2.0%, to $29.8 million for the three months ended December 31, 2025, from $29.2 million for the prior quarter, primarily due to a $26.1 million increase in the average balance of loans and a four basis point increase in the average loan yield. Interest income on loans, including fees, increased $2.2 million, or 8.1%, for the three months ended December 31, 2025, from $27.6 million for three months ended December 31, 2024, primarily due to a $132.3 million increase in the average balance of loans and a five basis point increase in the average loan yield. The average balance of loans was $2.1 billion for the fourth and third quarters of 2025, compared to $1.9 billion for the fourth quarter of 2024. The average yield on loans was 5.74% for the fourth quarter of 2025, compared to 5.70% for the third quarter of 2025 and 5.69% for the fourth quarter of 2024.
Interest income on loans also included $58,000 in accretion of the net discount on acquired loans for the three months ended December 31, 2025, compared to $155,000 and $51,000 for the three months ended September 30, 2025 and December 31, 2024, respectively. Accretion of the net discount had minimal impact on the average loan yield during these periods. The balance of the net discounts on these acquired loans totaled $87,000, $146,000, and $326,000 at December 31, 2025, September 30, 2025, and December 31, 2024, respectively. Interest income also included fees related to prepayment penalties of $209,000 for the three months ended December 31, 2025, compared to $119,000 and $264,000 for the three months ended September 30, 2025 and December 31, 2024, respectively.
Interest income on investment securities decreased $72,000, or 3.1%, to $2.2 million for the three months ended December 31, 2025, compared to $2.3 million for the three months ended September 30, 2025, and decreased $207,000, or 8.4%, from $2.5 million for the three months ended December 31, 2024. The average yield on investment securities increased one basis point to 4.61% for the three months ended December 31, 2025, compared to 4.60% for the three months ended September 30, 2025, and decreased six basis points from 4.67% for the three months ended December 31, 2024. The decrease from the same quarter a year ago was due to paydowns and calls on higher variable-rate securities and rate resets on variable rate securities. The average balance of investment securities totaled $193.1 million for the three months ended December 31, 2025, compared to $199.8 million and $208.9 million for the three months ended September 30, 2025 and December 31, 2024, respectively. In addition, for the three months ended December 31, 2025, we received $386,000 in cash dividends on our FRB and FHLB stock, compared to $401,000 for the three months ended September 30, 2025 and $394,000 for the three months ended December 31, 2024.
Interest income on federal funds sold and interest-bearing balances in banks decreased $1.1 million, or 36.6%, to $1.9 million for the three months ended December 31, 2025, compared to $3.0 million for the three months ended September 30, 2025, as a result of decreases in both the average balance and average yield. It decreased $1.8 million, or 48.7%, from $3.7 million for the three months ended December 31, 2024, also due to decreases in both the average yield and average balance. The average yield on federal funds sold and interest-bearing balances in banks decreased 46 basis points to 3.98% for the three months ended December 31, 2025, compared to 4.44% for the three months ended September 30, 2025, and decreased 81 basis points from 4.79% for the three months ended December 31, 2024, reflecting decreases in Federal Reserve policy rates. The average balance of federal funds sold and interest-bearing balances in banks totaled $190.8 million for the three months ended December 31, 2025, compared to $269.8 million and $309.6 million for the three months ended September 30, 2025 and December 31, 2024, respectively.
Interest expense decreased $2.2 million, or 19.1%, to $9.3 million for the three months ended December 31, 2025, compared to $11.5 million for the three months ended September 30, 2025, and decreased $1.2 million, or 11.6%, compared to $10.6 million for the three months ended December 31, 2024. The decrease in interest expense compared to both the prior quarter and the same quarter of 2024 primarily reflects the Company’s redemption of all outstanding subordinated debt, resulting in lower interest expense. For the third quarter of 2025, interest expense on subordinated debt included $835,000 of amortized debt issuance costs recognized in connection with the Company’s redemption of all outstanding subordinated debt. The average cost of interest-bearing liabilities for the fourth quarter of 2025 was 2.28%, down from 2.73% for the third quarter of 2025 and 2.58% for fourth quarter of 2024.
Interest expense on deposits decreased $626,000, or 6.4%, to $9.2 million for the three months ended December 31, 2025, compared to $9.8 million for the three months ended September 30, 2025, and decreased $312,000, or 3.3% compared to $9.5 million for the three months ended December 31, 2024. The decrease from the prior quarter was due to lower rates paid on money market and time deposits. Compared to the same quarter last year, the decrease also reflects lower rates on money market and time deposits, offset by competitive pricing pressures, and a shift in deposit mix from noninterest-bearing to higher-cost accounts. The average cost of deposits (including noninterest-bearing deposits) for the three months ended December 31, 2025 was 1.64%, down from 1.76% for the three months ended September 30, 2025 and 1.73% for the three months ended December 31, 2024. The average balance of deposits totaled $2.2 billion for the fourth quarter of 2025, consistent with both the third quarter of 2025 and the fourth quarter of 2024. The average balance of noninterest-bearing deposits decreased $11.8 million, or 1.9%, to $605.7 million for the three months ended December 31, 2025, compared to $617.5 million for the three months ended September 30, 2025, and decreased $13.6 million, or 2.2%, compared to $619.3 million for the three months ended December 31, 2024.
Annualized net interest margin was 4.03% for the fourth quarter of 2025, compared to 3.68% for the third quarter of 2025 and 3.80% for the fourth quarter of 2024. The average yield on interest-earning assets for the fourth quarter of 2025 increased four basis points and three basis points from the prior quarter and the fourth quarter of 2024, respectively. The average rate paid on interest-bearing liabilities decreased 45 basis points and 30 basis points from the prior quarter and the fourth quarter of 2024, respectively. The increase in net interest margin from the prior quarter and the same quarter a year ago reflects lower average costs of interest-bearing liabilities, particularly on money market and time deposits, and the redemption of subordinated debt. For the fourth quarter of 2025, the average yield on loans increased to 5.74%, contributing to the year-over-year improvement in asset yields.
The Company recorded a $250,000 provision for credit losses for the fourth quarter of 2025, compared to provisions of $3.0 million for the third quarter of 2025 and $403,000 reversal of provision for credit losses for the fourth quarter of 2024. The provision in the current quarter was due to loan growth and an increase in specific reserves. No net charge-offs were recorded in the fourth quarter of 2025, compared to net charge offs of $833,000 in the third quarter of 2025 and net recoveries of $3,000 in the fourth quarter of 2024.
Noninterest income for the fourth quarter of 2025 decreased $1.4 million, or 60.6%, to $885,000 compared to $2.2 million for the prior quarter of 2025, and increased $798,000, or 917.2%, compared to $87,000 for the fourth quarter of 2024. The decrease in noninterest income compared to the prior quarter of 2025 was primarily due to a $1.5 million swing in equity securities, which went from a gain of $771,000 in the third quarter of 2025 to a loss of $753,000 in the fourth quarter of 2025, reflecting negative fair value adjustments due to weaker market conditions. These decreases were partially offset by increases of $116,000 in gain on a Small Business Investment Company (“SBIC”) fund investment, $28,000 in service charges and other fees, $17,000 in gain on sale of loans, and $14,000 in loan servicing fees and other fees. The increase in noninterest income compared to the same quarter of 2024 was primarily due to a $456,000 decrease in loss on equity securities, resulting from smaller negative fair value adjustments due to changes in market conditions, a $375,000 decrease in loss on SBIC fund investment, a $24,000 increase in loan servicing fees and other fees, and a $17,000 increase in gain on sale of loans, partially offset by a $28,000 decrease in service charges and other fees.
Noninterest expense for the fourth quarter of 2025 increased $220,000, or 1.4%, to $16.2 million, compared to $15.9 million for the third quarter of 2025, and increased $190,000, or 1.2%, compared to $16.0 million for the fourth quarter of 2024. The increase from the prior quarter primarily reflects a $224,000 increase in salaries and employee benefits, resulting from higher incentive expense, and a $25,000 increase in data processing expense due to higher vendor costs. These increases were partially offset by a $15,000 decrease in other expense, primarily due to lower borrower default-related expense, as well as a $14,000 decrease in occupancy and equipment expense.
Compared to the fourth quarter of 2024, the increase in noninterest expense was primarily due to a $733,000 increase in salaries and employee benefits, resulting from higher incentive expense and increased base wages, and a $165,000 increase in data processing expense due to newly implemented services in 2025. These increases were partially offset by a $658,000 decrease in other expense and a $50,000 decrease in occupancy and equipment expense. The decrease in other expense was due to lower legal and professional service costs, reduced deposit premium amortization, and lower borrower default-related expenses. In addition, $400,000 in excess funds were returned to the Bank in the current quarter from a loss reserve account previously established under the California Capital Access Program (CalCAP), which supports small business lending by requiring contributions to a reserve fund that covers potential loan losses. These funds were no longer needed due to strong loan performance. No unused CalCAP funds were returned during the fourth quarter of 2024.
The provision for income taxes increased $885,000, or 51.1%, to $2.6 million for the fourth quarter of 2025, compared to $1.7 million for the third quarter of 2025 and increased $648,000, or 32.9%, from $1.9 million for the fourth quarter of 2024. The effective tax rate for the fourth quarter of 2025 was 27.6%, compared to 25.7% for the prior quarter of 2025 and 24.3% for the fourth quarter of 2024. The increase in the effective tax rate from the prior quarter primarily reflects true-up adjustments for state apportionment and other year-end adjustments. The increase from the fourth quarter of 2024 was due to true-up adjustments related to low-income housing tax credits and losses, along with other year-end adjustments.
Loans and Credit Quality
Loans, net of deferred fees, totaled $2.1 billion at December 31, 2025 and $2.0 billion at both September 30, 2025 and December 31, 2024. Loans increased $24.0 million from September 30, 2025, and $113.4 million from December 31, 2024. The increase in loans from September 30, 2025 was primarily due to $103.2 million of new loan originations and $6.4 million of loan purchases, partially offset by $82.5 million of loan repayments. During the current quarter, the Company sold loans totaling $1.8 million, of which are $1.5 million were nonperforming assets.
Nonperforming loans, consisting of non-accrual loans and accruing loans 90 days or more past due totaled $13.4 million, or 0.65% of total loans, at December 31, 2025, compared to $13.9 million, or 0.68% of total loans, at September 30, 2025, and $9.5 million, or 0.48% of total loans, at December 31, 2024. The decrease in nonperforming loans from the prior quarter-end was primarily due to a $395,000 decrease in loans 90 days or most past due that were still accruing and in the process of collection, along with payoffs of two non-accrual loans totaling $3.8 million. These reductions were partially offset by three new commercial real estate loans totaling $1.7 million that were placed on non-accrual during the current quarter. The three new commercial real estate loans placed on non-accrual are secured by various types of real estate, and management believes the collateral coverage remains sufficient.
The majority of nonperforming loans remain concentrated in the commercial real estate portfolio, while consumer and other commercial loans continue to exhibit low levels of delinquencies. The allowance for credit losses continues to provide coverage for nonperforming loans, and the provision for credit losses recorded during the quarter reflects both the replenishment of the allowance and anticipated potential losses.
The portion of nonaccrual loans guaranteed by government agencies totaled $903,000 at December 31, 2025, compared to $946,000 at September 30, 2025, and $2.0 million at December 31, 2024. As of December 31, 2025, there were no loans 90 days or more past due that were still accruing and in the process of collection, compared to two such loans totaling $395,000 at September 30, 2025 and two such loans totaling $220,000 at December 31, 2024. Accruing loans past due 30-89 days totaled $1.1 million at December 31, 2025, compared to $2.4 million at September 30, 2025, and $6.7 million at December 31, 2024. The $1.3 million decrease in accruing loans past due 30-89 days at December 31, 2025, as compared to September 30, 2025, was primarily due to two SBA commercial real estate loans totaling $1.3 million, which were 30-89 days past due at September 30, 2025, being placed on non-accrual during the current quarter.
At December 31, 2025, the Company’s allowance for credit losses for loans was $21.2 million, or 1.03% of total loans, compared to $20.8 million, or 1.02% of total loans, at September 30, 2025 and $17.9 million, or 0.92% of total loans, at December 31, 2024. We recorded no net charge-offs for the fourth quarter of 2025, compared to net charge-offs of $833,000 in the prior quarter, and net recoveries of $3,000 in the fourth quarter of 2024. The increase in the allowance for loan losses at December 31, 2025, as compared to September 30, 2025, was primarily attributable to an increase of $570,000 in specific reserves on individually evaluated loans, partially offset by a $160,000 decrease in the reserve for pooled loans. During the current quarter, the increase in specific reserves on individually evaluated loans was primarily due to increased impairment on one commercial real estate loan secured by retail property.
Contacts
BayCom Corp
Keary Colwell, 925-476-1800
[email protected]
