Baycom Corp 2026 Q2 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 30, 2026. Baycom Corp is a bank holding company headquartered in Walnut Creek, California, operating primarily through its wholly-owned subsidiary, United Business Bank. The bank serves small and mid-sized businesses and individuals through 34 full-service branches across California, Colorado, Nevada, New Mexico, and Washington.
Key Financial Metrics
| Metric | Q2 2026 (Three Months) | Q2 2025 (Three Months) | YTD 2026 (Six Months) | YTD 2025 (Six Months) |
|---|---|---|---|---|
| Net Interest Income | $23.7 million | $23.2 million | $48.9 million | $46.0 million |
| Provision for Credit Losses | $5.2 million | $0.2 million | $4.6 million | $0.8 million |
| Noninterest Income | $1.5 million | $1.5 million | $3.0 million | $3.0 million |
| Noninterest Expense | $27.2 million | $15.8 million | $43.7 million | $31.7 million |
| Net (Loss) Income | $(7.0) million | $6.4 million | $1.2 million | $12.1 million |
| Diluted EPS | $(0.64) | $0.58 | $0.11 | $1.09 |
| Total Assets | $2.58 billion | $2.59 billion (Dec 2025) | N/A | |
| Total Loans (Net) | $2.05 billion | $2.05 billion (Dec 2025) | ||
| Total Deposits | $2.17 billion | $2.21 billion (Dec 2025) | N/A | |
| Shareholders' Equity | $335.4 million | $338.6 million (Dec 2025) |
Material Changes vs. Prior Period
- Net Loss vs. Profit: The Company reported a net loss of $7.0 million for Q2 2026, a significant reversal from the $6.4 million net income in Q2 2025. YTD 2026 net income was $1.2 million, down 90% from $12.1 million in YTD 2025.
- Expense Surge: Noninterest expense increased by $11.4 million (72.4%) in Q2 2026 compared to the prior year. This was driven primarily by a one-time charge of approximately $10.5 million related to severance, accelerated equity award vesting, and employee benefit costs associated with the departure of three senior executives.
- Credit Provision Increase: The provision for credit losses rose to $5.2 million in Q2 2026 from $0.2 million in Q2 2025. This increase was due to $2.8 million in net charge-offs and increased specific reserves on individually evaluated commercial real estate loans.
- Net Interest Margin (NIM): Annualized NIM improved to 3.95% in Q2 2026 from 3.77% in Q2 2025, aided by higher loan yields and lower deposit costs, despite lower yields on federal funds.
- Deposit Mix: Total deposits decreased $43.7 million from year-end 2025. Time deposits declined significantly ($106.2 million), while money market accounts increased ($73.3 million), reflecting customer migration to higher-yielding products.
Guidance, Outlook, and Risks
Management Commentary: Management attributes the Q2 loss primarily to the one-time executive departure costs and increased credit provisions. The Company maintains that its allowance for credit losses is adequate, though it noted increased specific reserves for certain CRE loans. The Company continues to focus on organic growth and strategic acquisitions.
Subsequent Events: Following the quarter-end, the Board adopted a 2026 Performance Stock Unit Program for senior executives. Additionally, the departure of three senior executives triggered the acceleration of vesting for approximately 47,205 restricted stock shares.
Risks and Contingencies:
- Credit Quality: Nonperforming loans decreased to $9.8 million (0.47% of total loans) from $13.4 million at year-end 2025, but net charge-offs remain elevated compared to the prior year.
- Interest Rate Risk: The Company is exposed to interest rate risk; while NIM improved, future rate changes could impact asset yields and funding costs.
- Regulatory Capital: The Bank remains "Well Capitalized" under Federal Reserve regulations, with a Leverage Ratio of 11.66% and Common Equity Tier 1 Ratio of 13.76% as of June 30, 2026.
Investor Verification Checklist
- One-Time Costs: Verify the specific breakdown and tax implications of the $10.5 million executive departure charge to assess its impact on future earnings.
- Credit Concentration: Review the specific details of the commercial real estate loans requiring increased specific reserves and the nature of the $2.8 million in net charge-offs.
- Deposit Stability: Monitor the trend of time deposit outflows versus money market inflows to assess funding cost stability in a changing rate environment.
- Executive Transition: Assess the impact of the three senior executive departures on strategic execution and operational continuity.
- Dividend Sustainability: Confirm the Board's commitment to the $0.30 per share quarterly dividend given the Q2 net loss and reduced YTD earnings.