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BayCom Corp

BayCom CorpBCML決算レポート

Nasdaq · 金融 · 国有商業銀行

BayCom Corp is a U.S.-headquartered bank holding company operating through its wholly owned subsidiary Bay Commercial Bank. It primarily serves small and medium-sized enterprises and retail customers across Northern California, offering commercial lending, deposit products, personal banking services, and localized wealth management solutions.

What changed in BayCom Corp's 10-K — 2024 vs 2025

Top changes in BayCom Corp's 2025 10-K

474 paragraphs added · 472 removed · 406 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

133 edited+11 added−9 removed212 unchanged
The Company’s business activities generally are limited to passive investment activities and the monitoring of its investment in the Bank. Accordingly, the information set forth in this Form 10-K, including consolidated financial statements and related data, relate primarily to the Bank.
The Company’s business activities generally are limited to passive investment activities and the monitoring of its investment in the Bank. Accordingly, the information set forth in this Form 10-K, including the consolidated financial statements and related data, relate primarily to the Bank.
We strive to provide an enhanced banking experience for our clients by providing them with a comprehensive suite of sophisticated banking products and services tailored to meet their needs, while delivering the high-quality, relationship-based client service of a community bank.
We strive to provide an enhanced banking experience for our clients by providing them with a comprehensive suite of sophisticated products and services tailored to meet their needs, while delivering the high-quality, relationship-based client service of a community bank.
At the time of acquisition, United Business Bank, FSB had total assets of approximately $473.1 million, which significantly increased our total asset size and provided us with nine full-service banking offices in Long Beach, Oakland, Sacramento, San Francisco, San Jose and Glendale, California; and Seattle, Washington and Albuquerque, New Mexico.
At the time of acquisition, United Business Bank, FSB had total assets of approximately $473.1 million, which significantly increased our asset size and provided us with nine full-service banking offices in Long Beach, Oakland, Sacramento, San Francisco, San Jose and Glendale, California; Seattle, Washington and Albuquerque, New Mexico.
Our lending activities are subject to a variety of lending limits imposed by federal and state law. In general, we are subject to a limit on loans to a single borrower based on the Bank’s capital level. The dollar amounts of our lending limit increase or decrease as the Bank’s capital increases or decreases.
Our lending activities are subject to a variety of limits imposed by federal and state law. In general, we are subject to a limit on loans to a single borrower based on the Bank’s capital level. The dollar amounts of our lending limits increase or decrease as the Bank’s capital increases or decreases.
We originate a limited amount of home equity loans and home equity lines of credit. Home equity loans and home equity lines of credit generally have a loan-to-value ratio of up 80% at the time origination when combined with the first mortgage. The majority of these loans are secured by a first or second mortgage on residential property.
We originate a limited amount of home equity loans and home equity lines of credit. Home equity loans and home equity lines of credit generally have a loan-to-value ratio of up 80% at the time of origination when combined with the first mortgage. The majority of these loans are secured by a first or second mortgage on residential property.
In addition to loans, we invest in debt and equity securities in accordance with our investment policy to support liquidity, earnings, and risk management objectives. Our debt securities portfolio primarily consists of obligations issued by U.S. government agencies and sponsored enterprises, including mortgage-backed securities, collateralized mortgage obligations, municipal securities, SBA securities, and corporate bonds.
In addition to loans, we invest in debt and equity securities in accordance with our investment policy to support liquidity, earnings, and risk management objectives. Our debt securities portfolio primarily consists of obligations issued by U.S. government agencies and government-sponsored enterprises, including mortgage-backed securities, collateralized mortgage obligations, municipal securities, SBA securities, and corporate bonds.
The Federal Reserve must approve an application of a bank holding company to acquire control of, or acquire all or substantially all of the assets of, a bank located in a state other than the holding company’s home state, without regard to whether the transaction is prohibited by the laws of any state.
The Federal Reserve must approve an application of a bank holding company to acquire control, or acquire all or substantially all of the assets, of a bank located in a state other than the holding company’s home state, without regard to whether the transaction is prohibited by the laws of any state.
Commercial real estate loan terms generally are limited to 15 years or less, although payments may be structured on a longer amortization basis of up to 20 years, with balloon payments or rate adjustments due at the end of three to seven years. We generally charge the borrower an origination fee.
Commercial real estate loan terms generally are limited to 15 years or less, although payments may be structured on a amortization basis of up to 20 years, with balloon payments or rate adjustments due at the end of three to seven years. We generally charge the borrower an origination fee.
The Federal Reserve may disapprove such a purchase or redemption if it determines that the proposal would constitute an unsafe or unsound practice, or violate any law or regulation, Federal Reserve order, or any condition imposed by or written agreement with, the Federal Reserve. See “Item 5.
The Federal Reserve may disapprove of such a purchase or redemption if it determines that the proposal would constitute an unsafe or unsound practice, or violate any law or regulation, Federal Reserve order, or any condition imposed by or written agreement with, the Federal Reserve. See “Item 5.
Consumer loans entail greater risk than do residential real estate loans because they may be unsecured or, if secured, the value of the collateral, such as an automobile or boat, may be more difficult to assess and more likely to decrease in value than real estate.
Consumer loans entail greater risk than residential real estate loans because they may be unsecured or, if secured, the value of the collateral, such as an automobile or boat, may be more difficult to assess and more likely to decrease in value than real estate.
The real estate portion of our loan portfolio is comprised of the following: mortgage loans secured typically by commercial and multifamily properties; construction and land loans; and mortgages and revolving lines of credit secured by equity in residential properties.
The real estate portion of our loan portfolio is comprised of the following: mortgage loans secured typically by commercial and multifamily properties; construction and land loans; and mortgage loans and revolving lines of credit secured by equity in residential properties.
The primary objectives of our investment policy are to maintain a high-quality portfolio, provide liquidity during periods of high loan demand, support earnings when loan demand is low, and maximize returns while managing various risks, including credit, reinvestment, liquidity, and interest rate risk. The policy also defines criteria for classifying securities as either available for sale or held to maturity.
The primary objectives of our investment policy are to maintain a high-quality portfolio, provide liquidity during periods of strong loan demand, support earnings when loan demand is low, and maximize returns while managing risks, including credit, reinvestment, liquidity, and interest rate risk. The policy also defines criteria for classifying securities as either available for sale or held to maturity.
While the list set forth below is not exhaustive, these include the Truth-in-Lending Act, Truth in Savings Act, Electronic Fund Transfers Act, Expedited Funds Availability Act, Equal Credit Opportunity Act, Fair Housing Act, Real Estate Settlement Procedures Act, Home Mortgage Disclosure Act, Fair Credit Reporting Act, Right to Financial Privacy Act, Home Ownership and Equity Protection Act, Fair Credit Billing Act, Homeowners Protection Act, Check Clearing for the 21st Century Act, laws governing flood insurance, laws governing consumer protections in connection with the sale of insurance, federal and state laws prohibiting unfair and deceptive business practices, and various regulations that implement some or all of the foregoing.
While the list set forth below is not exhaustive, these include the Truth-in-Lending Act, Truth in Savings Act, Electronic Fund Transfers Act, Expedited Funds Availability Act, Equal Credit Opportunity Act, Fair Housing Act, Real Estate Settlement Procedures Act, Home Mortgage Disclosure Act, Fair Credit Reporting Act, Right to Financial Privacy Act, Home Ownership and Equity Protection Act, Fair Credit Billing Act, Homeowners Protection Act, Check Clearing for the 21st Century Act, laws governing flood insurance, laws governing consumer protections in connection with the sale of insurance, federal and state laws prohibiting unfair and deceptiv e business practices, and various regulations that implement some or all of the foregoing.
We have sought to integrate the acquired banks into our existing operational platform to create operational efficiencies within the combined operations, all geared towards enhancing shareholder value. Continuing our vision, in August 2023, we opened a de novo branch in Las Vegas, Nevada to expand our geographic footprint and market areas and augment our deposit and loan growth.
We have sought to integrate the acquired banks into our existing operational platform to create operational efficiencies within th e combined operations, all geared towards enhancing shareholder value. Continuing our vision, in August 2023, we opened a de novo branch in Las Vegas, Nevada to expand our geographic footprint and market areas and augment our deposit and loan growth.
The Los Angeles-Long Beach-Anaheim, California MSA, with approximately 12.8 million residents, is the largest MSA in California, the second largest MSA in the United States, and one of the most significant business markets in the world. The economic base of the area is heavily dependent on small and medium-sized businesses, providing us with a market rich in potential customers.
The Los Angeles-Long Beach-Anaheim, California MSA, with approximately 12.9 million residents, is the largest MSA in California, the second largest MSA in the United States, and one of the most significant business markets in the world. The economic base of the area is heavily dependent on small and medium-sized businesses, providing us with a market rich in potential customers.
Junior Subordinated Deferrable Interest Debentures” and “Note 14 Subordinated Debt” in the Notes to Consolidated Financial Statements contained in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K. Investments Our investment policy, established by the Board of Directors, is reviewed annually by both the Board of Directors and the Asset/Liability Management Committee.
Junior Subordinated Deferrable Interest Debentures” and “Note 13 Subordinated Debt” in the Notes to Consolidated Financial Statements contained in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K. Investments Our investment policy, established by the Board of Directors, is reviewed annually by both the Board of Directors and the Asset/Liability Management Committee.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Comparison of Financial Condition at December 31, 2024 and 2023 — Securities” contained in this Form 10-K. Supervision and Regulation BayCom and United Business Bank are subject to significant regulation by federal and state laws and regulations, and the policies of applicable federal and state banking agencies.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Comparison of Financial Condition at December 31, 2025 and 2024 — Securities” contained in this Form 10-K. Supervision and Regulation BayCom and United Business Bank are subject to significant regulation by federal and state laws and regulations, and the policies of applicable federal and state banking agencies.
This strategy fosters loyalty and commitment within our existing employee base, contributing to business growth, product innovation, and enhanced client relationships. Simultaneously, incorporating external perspectives supports a continuous improvement mindset, ensuring our workforce remains dynamic and innovative. Corporate Information Our principal executive offices are located at 500 Ygnacio Valley Road, Suite 200, Walnut Creek, California 94596.
This strategy fosters loyalty and commitment within our existing employee base, contributing to business g rowth, product innovation, and enhanced client relationships. Simultaneously, incorporating external perspectives supports a continuous improvement mindset, ensuring our workforce remains dynamic and innovative. Corporate Information Our principal executive offices are located at 500 Ygnacio Valley Road, Suite 200, Walnut Creek, California 94596.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” and “Note 19 — Regulatory Matters” of the Notes to Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Schedules” contained in this report. Commercial Real Estate Lending Concentrations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” and “Note 18 — Regulatory Matters” of the Notes to Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Schedules” contained in this report. Commercial Real Estate Lending Concentrations.
We have also grown organically by leveraging the potential within metropolitan and community markets where we operate. These markets offer significant opportunities to expand our commercial client base, increase interest-earning assets, and enhance market share.
We have also grown organically by leveraging the potential within metropolitan and community markets where we operate. These markets have offered significant opportunities to expand our commercial client base, increase interest-earning assets, and enhance market share.
We believe we have a successful track record of selectively acquiring, integrating and consolidating community banks. Since 2010, we have completed 10 acquisitions, with aggregate total assets acquired of approximately $2.3 billion and total deposits assumed of approximately $1.9 billion.
We believe we have a successful track record of selectively acquiring, integrating and consolidating community banks. Since 2010, we have completed ten acquisitions, with aggregate total assets acquired of approximately $2.3 billion and total deposits assumed of approximately $1.9 billion.
These policies prescribe underwriting guidelines and procedures for all loan categories to establish risk tolerances and parameters that are communicated throughout the Bank to ensure consistent and uniform lending practices. The underwriting guidelines include, among other things, approval limitation and hierarchy, documentation standards, loan-to-value limits, debt coverage ratio, overall credit-worthiness of the borrower, guarantor support, etc.
These policies prescribe underwriting guidelines and procedures for all loan categories to establish risk tolerances and parameters that are communicated throughout the Bank to ensure consistent and uniform lending practices. The underwriting guidelines include, among other things, approval limitation and hierarchy, documentation standards, loan-to-value limits, debt coverage ratio, overall creditworthiness of the borrower, guarantor support, etc.
Our equity portfolio currently consists of marketable preferred stock, which is carried at fair value, with unrealized holding gains and losses recognized as non-interest income in the consolidated statement of income. Gains and losses from sales are determined using the specific identification method. Premium amortization and discount accretion are recorded as adjustments to interest income over the securities’ maturity period.
Our equity portfolio consists of marketable preferred stock, which is carried at fair value, with unrealized gains and losses recognized as non-interest income in the consolidated statement of income. Gains and losses from sales are determined using the specific identification method. Premium amortization and discount accretion are recorded as adjustments to interest income over the securities’ remaining maturity period.
The guidance provides that the strength of an institution’s lending and risk management practices with respect to such concentrations will be taken into account in supervisory guidance on evaluation of capital adequacy. As of December 31, 2024, the Bank’s aggregate recorded loan balances for construction, land development and land loans were 2.0% of total regulatory capital.
The guidance provides that the strength of an institution’s lending and risk management practices with respect to such concentrations will be taken into account in supervisory evaluation of capital adequacy. As of December 31, 2025, the Bank’s aggregate recorded loan balances for construction, land development and land loans were 2.0% of total regulatory capital.
In addition, the collateral securing commercial and industrial loans generally includes moveable property such as equipment and inventory, which may decline in value more rapidly than we anticipate, exposing 14 Table of Contents us to increased credit risk. As a result of these additional complexities, variables and risks, commercial and industrial loans require extensive underwriting and servicing. Consumer Loans.
In addition, the collateral securing commercial and industrial loans generally includes moveable property such as equipment and inventory, which may decline in value more rapidly than we anticipate, exposing us to increased credit risk. As a result of these additional complexities, variables and risks, commercial and industrial loans require extensive underwriting and servicing. Consumer Loans.
Our flexible health and welfare programs provide employees and their families with tools and resources to enhance or maintain their physical and mental well-being. We emphasize choice, enabling customization of benefits to meet individual and family needs. Central to our talent strategy is a dual approach—developing talent internally while supplementing with external hires.
Our flexible health and welfare programs provide employees and their families with tools and resources to enhance or maintain their physical and mental well-being. We emphasize choice, enabling customization of benefits to meet individual and family needs. 27 Table of Contents Central to our talent strategy is a dual approach—developing talent internally while supplementing with external hires.
In August 2023, we opened a branch in Las Vegas, Nevada to expand our geographic footprint and augment our deposit and loan growth. As of December 31, 2024, borrowers or properties located in the states of Colorado, New Mexico and Washington comprised 6.9%, 3.2% and 4.3% of our loan portfolio, respectively.
In August 2023, we opened a branch in Las Vegas, Nevada to expand our geographic footprint and augment our deposit and loan growth. As of December 31, 2025, borrowers or properties located in the states of Colorado, New Mexico, Washington and Nevada comprised 6.4%, 3.4%, 4.4% and 2.2% of our loan portfolio, respectively.
Nor may the Federal Reserve approve an application if the applicant (and its depository institution affiliates) controls or would control more than 10.0% of the insured deposits in the United States or 30% or more of the deposits in the target bank’s home state or any state in which the target bank maintains a branch.
Nor may the Federal Reserve approve an application if the applicant (and its depository institution affiliates) controls or would control more than 10.0% of the insured deposits in the United States or 30% or more of the deposits in the target bank’s home state or any state in which the target bank 25 Table of Contents maintains a branch.
Interest on the Notes is payable semi-annually on March 15 and September 15 of each year through September 15, 2025 and quarterly thereafter on March 15, June 15, September 15 and December 15 of each year through the maturity date or early redemption date.
Interest on the Notes was payable semi-annually on March 15 and September 15 of each year through September 15, 2025 and quarterly thereafter on March 15, June 15, September 15 and December 15 of each year through the maturity date or early redemption date.
At December 31, 2024, there were four loans to a total of four individuals, entities, or their related interests that exceeded internal limits, all of which were approved by the Board’s Loan Committee. Loan Types. We provide a variety of loans to meet our clients’ needs.
At December 31, 2025, there were seven loans to a total of four individuals, entities, or their related interests that exceeded internal limits, all of which were approved by the Board’s Loan Committee. Loan Types. We provide a variety of loans to meet our clients’ needs.
An acquisition of the Company or the Bank, an acquisition of control of either, or an acquisition by either of another bank holding company or depository institution or control of such a company or institution is generally subject to prior approval by applicable federal and state banking regulators, as are certain acquisitions by the Company or the Bank of other types of entities, as discussed below.
An acquisition of the Company or the Bank, an acquisition of control of either, or an acquisition by either of another bank holding company or depository institution or control of such a company or institution is generally subject to prior approval by applicable federal and state banking regulators, as are certain acquisitions by the Company or 24 Table of Contents the Bank of other types of entities, as discussed below.
Any interruption or discontinuance of operating cash flows from the business, which may be influenced by events not under the control of the borrower such as economic events and changes in governmental regulations, could materially affect the ability of the borrower to repay the loan.
Any interruption or discontinuance of operating cash flows from the business, which may be influenced by events not under the control of the borrower such as economic events and changes in governmental regulations, could materially affect the ability of the 14 Table of Contents borrower to repay the loan.
The loan-to-value ratio as established by an independent appraisal typically will not exceed 80% at loan origination and is lower in most cases. At December 31, 2024, the average loan size in our commercial real estate portfolio was approximately $1.2 million, with an estimated weighted average loan-to-value ratio of 55.5%.
The loan-to-value ratio as established by an independent appraisal typically will not exceed 80% at loan origination and is lower in most cases. At December 31, 2025, the average loan size in our commercial real estate portfolio was approximately $1.3 million, with an estimated weighted average loan-to-value ratio of 55.5%.
As of December 31, 2024, the one-to-family loan portfolio included one loan to a real estate investor, which had a net outstanding balance of $26.9 million, and was secured by a multi-unit residential property complex located in Atwater, California. This loan was performing in accordance with its repayment terms as of December 31, 2024.
As of December 31, 2025, the one-to-family loan portfolio included one loan to a real estate investor, which had a net outstanding balance of $36.9 million, and was secured by a multi-unit residential property complex located in Atwater, California. This loan was performing in accordance with its repayment terms as of December 31, 2025.
As of December 31, 2024, the Bank met the requirements to be “well capitalized” and met the fully phased-in capital conservation buffer requirement.
As of December 31, 2025, the Bank met the requirements to be “well capitalized” and met the fully phased-in capital conservation buffer requirement.
The offering of the Notes closed on August 10, 2020. The Notes initially bears a fixed interest rate of 5.25% per year. Commencing on September 15, 2025, the interest rate on the Notes resets quarterly to the three-month Secured Overnight Financing rate (“SOFR”) plus a spread of 521 basis points (5.21%), payable quarterly in arrears.
The offering of the Notes closed on August 10, 2020. The Notes initially bore a fixed interest rate of 5.25% per year. Commencing on September 15, 2025, the interest rate on the Notes reset quarterly to the three-month Secured Overnight Financing rate (“SOFR”) plus a spread of 521 basis points (5.21%), payable quarterly in arrears.
In addition, on November 18, 2021, the federal banking agencies announced the adoption of a final rule providing for new notification requirements for banking organizations and their service providers for significant cybersecurity incidents.
In addition, on November 18, 2021, the federal banking agencies announced the adoption of a final rule providing for new notification requirements for banking organizations and their service providers for significant 22 Table of Contents cybersecurity incidents.
When the loss reserve account balance exceeds the total associated loan balance, the excess is to be remitted to CalCAP. As of December 31, 2024, we had loans enrolled in this program totaling $17.3 million or 0.9% of total loans. In general, commercial and industrial loans may involve increased credit risk and, therefore, typically yield a higher return.
When the loss reserve account balance exceeds the total associated loan balance, the excess is to be remitted to CalCAP. As of December 31, 2025, we had loans enrolled in this program totaling $19.0 million or 0.9% of total loans. In general, commercial and industrial loans may involve increased credit risk and, therefore, typically yield a higher return.
As of December 31, 2024, including our principal executive offices, we had 35 full-service banking branches, consisting of branch offices in Northern and Southern California; Las Vegas, Nevada; Denver, Colorado; Custer, Delta, and Grand Counties, Colorado; Seattle, Washington; and Central New Mexico.
As of December 31, 2025, including our principal executive offices, we had 34 full-service banking branches, consisting of branch offices in Northern and Southern California; Las Vegas, Nevada; Denver, Colorado; Custer, Delta, and Grand Counties, Colorado; Seattle, Washington; and Central New Mexico.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Comparison of Financial Condition at December 31, 2024 and 2023 — Loans and “Note 4 – Loans” in the Notes to Consolidated Financial Statements contained in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K. Sources of Funds Deposits.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Comparison of Financial Condition at December 31, 2025 and 2024 — Loans and “Note 3 – Loans” in the Notes to Consolidated Financial Statements contained in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K. Sources of Funds Deposits.
At December 31, 2024, we had outstanding junior subordinated deferrable interest debentures, net of mark-to-market adjustments, totaling $8.6 million. For additional information concerning our borrowings, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Comparison of Financial Condition at December 31, 2024 and 2023 — Borrowings” and “Note 12 – Other Borrowings”, “Note 13.
At December 31, 2025, we had outstanding junior subordinated deferrable interest debentures, net of mark-to-market adjustments, totaling $8.7 million. For additional information concerning our borrowings, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Comparison of Financial Condition at December 31, 2025 and 2024 — Borrowings” and “Note 11 – Other Borrowings”, “Note 12.
As a California chartered bank that is a member of the Federal Reserve System, the Bank is subject to supervision, periodic examination, and regulation by the 17 Table of Contents California Department of Financial Protection and Innovation (“DFPI”), previously known as the California Department of Business Oversight, and by the Federal Reserve as its primary federal regulator.
As a California chartered bank that is a member of the Federal Reserve System, the Bank is subject to supervision, periodic examination, and regulation by the California Department of Financial Protection and Innovation (“DFPI”), and by the Federal Reserve as its primary federal 17 Table of Contents regulator.
These regulations require the Bank to disclose its privacy policy, including informing consumers of its information sharing practices and informing consumers of their rights to opt out of 22 Table of Contents certain practices.
These regulations require the Bank to disclose its privacy policy, including informing consumers of its information sharing practices and informing consumers of their rights to opt out of certain practices.
In October 2022, the FDIC adopted a final rule to increase initial base deposit insurance assessment rates by two basis points beginning with the first quarterly assessment period of 2023. 18 Table of Contents Any significant increases in insurance assessments may have an adverse effect on the operating expenses and results of operations of the Company.
In October 2022, the FDIC adopted a final rule to increase initial base deposit insurance assessment rates by two basis points beginning with the first quarterly assessment period of 2023. Any significant increases in insurance assessments may have an adverse effect on the operating expenses and results of operations of the Com pany.
Our second largest commercial real estate loan had a net outstanding balance of $23.6 million as of December 31, 2024, and was secured by retail shopping center located in Sacramento, California. Both of these loans were performing according to their respective loan repayment terms as of December 31, 2024. Construction and Land Loans.
Our second largest commercial real estate loan had a net outstanding balance of $22.1 million as of December 31, 2025, and was secured by retail shopping center located in Sacramento, California. Both of these loans were performing according to their respective loan repayment terms as of December 31, 2025. Construction and Land Loans.
BayCom’s wholly owned banking subsidiary, United Business Bank, provides a broad range of financial services to businesses and business owners as well as individuals through its network of 35 full-service branches, with 16 locations in California, one in Nevada, two in Washington, five in New Mexico and 11 in Colorado.
BayCom’s wholly owned banking subsidiary, United Business Bank, provides a broad range of financial services to businesses and business owners, as well as individual consumers, through its network of 34 full-service branches, with 16 locations in California, one in Nevada, one in Washington, five in New Mexico and 11 in Colorado.
Our commercial real estate loans include loans secured by office buildings, retail facilities, hotels, gas stations, convalescent facilities, industrial use buildings, restaurants, multifamily properties and agricultural real estate. At December 31, 2024, our commercial real estate loan portfolio totaled $1.7 billion, or 85.4% of total loans. Our commercial real estate loans may be owner-occupied or non-owner occupied.
Our commercial real estate loans include loans secured by office buildings, retail facilities, hotels, gas stations, convalescent facilities, industrial use buildings, restaurants, multifamily properties and agricultural real estate. At December 31, 2025, our commercial real estate loan portfolio totaled $1.8 billion, or 85.5% of total loans. Our commercial real estate loans may be owner-occupied or non-owner occupied.
The Bank bases its SBA 7(a) loan sales on the level of its SBA 7(a) loan originations, the premiums available in the secondary market for the sale of such loans, and general liquidity considerations of the Bank. During 2024, the Bank originated $21.1 million in commercial real estate SBA 7(a) loans.
The Bank bases its SBA 7(a) loan sales on the level of its SBA 7(a) loan originations, the premiums available in the secondary market for the sale of such loans, and general liquidity considerations of the Bank. During 2025, the Bank originated $7.3 million in commercial real estate SBA 7(a) loans.
At December 31, 2024, we had the ability to borrow up to $41.9 million from the FRB of San Francisco, with no FRB of San Francisco advances outstanding at that date. ​ The Bank also has uncommitted Federal Funds lines with four corresponding banks, with aggregate available commitments totaling $65.0 million at December 31, 2024.
At December 31, 2025, we had the ability to borrow up to $49.3 million from the FRB of San Francisco, with no FRB of San Francisco advances outstanding at that date. The Bank also has uncommitted Federal Funds lines with four corresponding banks, with aggregate available commitments totaling $65.0 million at December 31, 2025.
The Bank bases its SBA 7(a) loan sales on the level of its SBA 7(a) loan originations, the premiums available in the secondary market for the sale of such loans, and general liquidity considerations of the Bank. During 2024, the Bank originated $4.7 million in commercial and industrial SBA 7(a) loans.
The Bank bases its SBA 7(a) loan sales on the level of its SBA 7(a) loan originations, the premiums available in the secondary market for the sale of such loans, and general liquidity considerations of the Bank. During 2025, the Bank originated $3.0 million in commercial and industrial SBA 7(a) loans.
The Bank paid $1.1 million in FDIC assessments for both the year ended December 31, 2024 and the year ended December 31, 2023. The FDIC also may prohibit any insured institution from engaging in any activity determined by regulation or order to pose a serious risk to the DIF.
The Bank paid $1.1 million in FDIC assessments for both the year ended December 31, 2025 and the year ended December 31, 2024. 18 Table of Contents The FDIC also may prohibit any insured institution from engaging in any activity determined by regulation or order to pose a serious risk to the DIF.
Under the BHCA, as a bank holding company, we are supervised by the Federal Reserve. The Federal Reserve has a long-standing policy that a bank holding company is required to serve as a source of financial and managerial strength to its subsidiary banks and may not conduct its operations in an unsafe or unsound manner.
The Federal Reserve has a long-standing policy that a bank holding company is required to serve as a source of financial and managerial strength to its subsidiary banks and may not conduct its operations in an unsafe or unsound manner.
We operate primarily in the San Francisco-Oakland-Hayward, and the San Jose-Sunnyvale-Santa Clara, California Metropolitan Statistical Areas (“MSA”) with additional operations in the Los Angeles-Long Beach-Anaheim, California MSA, with borrowers or properties located in San Francisco Bay Area comprising 19.7%, Northern California comprising 4.4% and Southern California comprising 27.5% of our loan portfolio as of December 31, 2024.
We operate primarily in the San Francisco-Oakland-Hayward, and the San Jose-Sunnyvale-Santa Clara, California Metropolitan Statistical Areas (“MSA”) with additional operations in the Los Angeles-Long Beach-Anaheim, California MSA, with borrowers or properties located in San Francisco Bay Area comprisin g 19.5%, Northern California comprising 4.5% and Southern California comprising 29.1% of our loan portfolio as of December 31, 2025.
Commercial and industrial loans totaled $173.9 million and constituted 8.9% of total loans as of December 31, 2024. Our commercial real estate loans are generally secured by first liens on real property. The commercial and industrial loans are typically secured by general business assets, accounts receivable inventory and/or the corporate guaranty of the borrower and personal guaranty of its principals.
Commercial and industrial loans totaled $175.4 million and constituted 8.5% of total loans as of December 31, 2025. Our commercial real estate loans are generally secured by first liens on real property. The commercial and industrial loans are typically secured by general business assets, accounts receivable inventory and/or the corporate guaranty of the borrower and personal guaranty of its principals.
The well capitalized category is described above. An institution that is not well capitalized is subject to certain restrictions on brokered deposits, including restrictions on the rates it can offer on its deposits generally. To be considered adequately capitalized, an institution must have the minimum capital ratios described above.
An institution that is not well capitalized is subject to certain restrictions on brokered deposits, including restrictions on the rates it can offer on its deposits generally. To be considered adequately capitalized, an institution must have the minimum capital ratios described above. Any institution which is neither well capitalized nor adequately capitalized is considered undercapitalized.
Our one-to-four family loans do not allow for interest-only payments, or negative amortization of principal, and carry allowable prepayment restrictions. At December 31, 2024, our one-to-four family loan portfolio, including home equity loans and lines of credit, totaled $109.7 million or 5.6% of total loans.
Our one-to-four family loans do not allow for interest-only payments, or negative amortization of principal, and carry allowable prepayment restrictions. At December 31, 2025, our one-to-four family loan portfolio, including home equity loans and lines of credit, totaled $113.2 million or 5.5% of total loans.
The Company generally offers SBA 504 loans within a range of $600,000 to $5.0 million. At December 31, 2024, our commercial real estate loan portfolio included $96.3 million of loans originated under the SBA’s 504 loan program.
The Company generally offers SBA 504 loans within a range of $600,000 to $5.0 million. At December 31, 2025, our commercial real estate loan portfolio included $83.8 million of loans originated under the SBA’s 504 loan program.
Our preference is for owner-occupied real estate and commercial and industrial loans. We also offer consumer loans, predominantly as an accommodation to our commercial clients, which include installment loans, unsecured and secured personal lines of credit, and overdraft protection. Lending activities originate from the relationships and efforts of our bankers. We are a preferred lender under the SBA loan program.
Our preference is for owner-occupied real estate and commercial and industrial loans. We also offer consumer loans, predominantly as an accommodation to our commercial clients, which include installment loans, unsecured and secured personal lines of credit, and overdraft protection. Lending activities originate from the relationships and efforts of our bankers.
MyBank operated through five branches serving Central New Mexico. At the time of acquisition, MyBank had approximately $157.8 million in total assets and $135.5 million in deposits. In May 2019, we acquired Uniti Financial Corporation (“UFC”), the holding company for Uniti Bank, headquartered in Buena Park, California, which had three branch offices located in Southern California.
At the time of acquisition, MyBank had approximately $157.8 million in total assets and $135.5 million in deposits. In May 2019, we acquired Uniti Financial Corporation (“UFC”), the holding company for Uniti Bank, headquartered in Buena Park, California, which had three branch offices located in Southern California.
We periodically purchase whole loans and loan participation interests and participate in syndicates originating new loans, including shared national credits, primarily during periods of reduced loan demand in our primary market areas 7 Table of Contents and at times to support our Community Reinvestment Act lending activities.
We are a preferred lender under the SBA loan program. 7 Table of Contents We periodically purchase whole loans and loan participation interests and participate in syndicates originating new loans, including shared national credits, primarily during periods of reduced loan demand in our primary market areas and at times to support our Community Reinvestment Act lending activities.
The largest portion of our loan portfolio represents lending conducted with businesses and individuals in Northern California, including the San Francisco Bay Area and Southern California. Our loan portfolio consists primarily of commercial real estate loans (including multifamily) and construction loans, which totaled $1.7 billion and constituted 85.5% of total loans as of December 31, 2024.
The largest portion of our loan portfolio represents lending conducted with businesses and individuals in Northern California, including the San Francisco Bay Area, and Southern California. Our loan portfolio consists primarily of commercial real estate loans (including multifamily) and construction loans, which totaled $1.8 billion and constituted 86.0% of total loans as of December 31, 2025.
Federal law generally limits the activities and equity investments of state-chartered banks to those that are permissible for national banks.
California-chartered banks have powers generally comparable to those of national banks. Federal law generally limits the activities and equity investments of state-chartered banks to those that are permissible for national banks.
Deposits located in California comprised 62.7% of our total deposits as of December 31, 2024. With a population of approximately 4.6 million, the San Francisco-Oakland-Hayward MSA represents the third most populous area in California and the thirteenth largest in the United States.
Depositors located in California comprised 51.5% of our total deposits as of December 31, 2025. With a population of approximately 4.6 million, the San Francisco-Oakland-Hayward MSA represents the third most populous area in California and the thirteenth largest in the United States.
Unfunded commitments on home equity lines of credit at December 31, 2024, totaled $6.0 million. Commercial and Industrial Loans.
Unfunded commitments on home equity lines of credit at December 31, 2024, totaled $5.8 million. Commercial and Industrial Loans.
In return, those participating financial institutions place their excess client deposits with us in a reciprocal amount. We also participate in the ICS One-Way Sell program, which allows us to buy cost effective wholesale funding on customizable terms. At December 31, 2024, we had $248.0 million and $120.5 million in reciprocal CDARS and ICS deposits, respectively.
In return, those participating financial institutions place their excess client deposits with us in a reciprocal amount. We also participate in the ICS One-Way Sell program, which allows us to buy cost effective wholesale funding on customizable terms. At December 31, 2025, we had $261.2 million and $119.9 million in reciprocal CDARS and ICS deposits, respectively.
We retain a lien on the real estate, obtain a title insurance policy that insures the property is free from encumbrances and require hazard insurance. At December 31, 2024, home equity loans and lines of credit totaled $5.1 million, or 0.3% of total loans, of which $78,000 were secured by junior liens.
We retain a lien on the real estate, obtain a title insurance policy that insures the property is free from encumbrances and require hazard insurance. At December 31, 2025, home equity loans and lines of credit totaled $4.8 million, or 0.2% of total loans, of which $52,000 were secured by junior liens.
In addition to its current size, the market also demonstrates key characteristics we believe provide the opportunity for additional growth, with a median household income of $127,792 versus a national average of $77,719, and the third highest population density in the nation.
In addition to its current size, the market also demonstrates key characteristics we believe provide the opportunity for additional growth, with a median household income of $135,590 versus a national average of $81,604, and the third highest population density in the nation.
As of December 31, 2024, our investment in equity securities totaled $13.1 million, with holding periods determined by market conditions and strategic asset allocation. This investment policy serves as a guideline to ensure prudent investment decisions that align with the Bank’s overall financial objectives and risk management principles. For additional information concerning our investments, see “Item 7.
As of December 31, 2025, our investment in equity securities totaled $12.6 million, with holding periods determined by market conditions and strategic asset allocation. This investment policy serves as a guideline to promote prudent investment decisions aligned with the Bank’s overall financial objectives and risk management principles. For additional information concerning our investments, see “Item 7.
Subordinated Notes, such as the ones the Company issued in 2020, are also included in Tier 2 Capital. 19 Table of Contents In addition to the minimum CET1, Tier 1, leverage ratio and total capital ratios, the capital regulations require a capital conservation buffer consisting of additional CET1 capital greater than 2.5% of risk-weighted assets above the required minimum risk-based capital levels to avoid limitations on paying dividends, repurchasing shares, and paying discretionary bonuses.
In addition to the minimum CET1, Tier 1, leverage ratio and total capital ratios, the capital regulations require a capital conservation buffer consisting of additional CET1 capital greater than 2.5% of risk-weighted assets above the 19 Table of Contents required minimum risk-based capital levels to avoid limitations on paying dividends, repurchasing shares, and paying discretionary bonuses.
We are not presently party to any legal proceedings where we believe the resolution would have a material adverse effect on our business, prospects, financial condition, liquidity, results of operation, cash flows or capital levels.
From time to time, we are a party to various claims and litigation matters incidental to the conduct of our business. We are not presently party to any legal proceedings where we believe the resolution would have a material adverse effect on our business, prospects, financial condition, liquidity, results of operation, cash flows or capital levels.
Losses on qualified loans are charged to this account after approval by CalCAP. Under the program, if a loan defaults, the participating lender has immediate coverage of 100% of the loss. The participating lender must return recoveries from the borrower, less expenses, to the loan loss reserve account.
The borrower contributions to the loss reserve account are attributed to the participating lender. Losses on qualified loans are charged to this account after approval by CalCAP. Under the program, if a loan defaults, the participating lender has immediate coverage of 100% of the loss.
As of December 31, 2024, our largest commercial real estate loan had a net outstanding balance of $26.6 million and was secured by a church located in San Diego, California.
As of December 31, 2025, our largest commercial real estate loan had a net outstanding ba lance of $26.0 million and was secured by a church located in San Diego, California.
At December 31, 2024, we had outstanding subordinate debt, net of costs to issue, totaling $63.7 million. 16 Table of Contents In connection with its previous acquisitions, the Company acquired junior subordinated deferrable interest debentures issued in connection with the sale of trust preferred securities by two statutory business trusts with stated maturity terms of 30 years.
As of December 31, 2025, the Company had no outstanding Notes, compared to $63.7 million, net of issuance costs, as of December 31, 2024. 16 Table of Contents In connection with its previous acquisitions, the Company acquired junior subordinated deferrable interest debentures issued in connection with the sale of trust preferred securities by two statutory business trusts with stated maturity terms of 30 years.
The Federal Reserve reviews, as part of the regular, risk-focused examination process, the incentive compensation arrangements of banking organizations. The Federal Reserve tailors its reviews for each organization based on the scope and complexity of the organization’s activities and the prevalence of incentive compensation arrangements. The findings of the supervisory initiatives are included in reports of examination.
The Federal Reserve tailors its reviews for each organization based on the scope and complexity of the organization’s activities and the prevalence of incentive compensation arrangements. The findings of the supervisory initiatives are included in reports of examination.
This review is intended to ensure ongoing compliance with the policy and allow for necessary updates. Additionally, all securities transactions are reported to the Board of Directors on a monthly basis.
This review ensures ongoing compliance with the policy and allows for any necessary updates. Additionally, all securities transactions are reported to the Board of Directors on a monthly basis.
As of December 31, 2024, consumer loans totaled $391,000 or 0.02% of total loans. For additional information concerning our loan portfolio, see “Item 7.
As of December 31, 2025, consumer loans totaled $916,000 or 0.04% of total loans. For additional information concerning our loan portfolio, see “Item 7.
The Dodd-Frank-Act imposed new restrictions and an expanded framework of regulatory oversight for depository institutions and their holding companies, and capital requirements that are discussed above under the section entitled “United Business Bank - Capital Requirements.” In addition, among other changes, the Dodd-Frank Act requires public companies to (i) provide their shareholders with a non-binding vote (a) at least once every three years on the compensation paid to executive officers and (b) at least once every six years on whether they should have a “say on pay” vote every one, two or three years; (ii) have a separate, non-binding shareholder vote regarding golden parachutes for named executive officers when a shareholder vote takes place on mergers, acquisitions, dispositions or other transactions that would trigger the parachute payments; (iii) provide disclosure in annual proxy materials concerning the relationship between the executive compensation paid and the financial performance of the issuer; and (iv) disclose the ratio of the Chief Executive Officer’s annual total compensation to the median annual total compensation of all other employees. 25 Table of Contents The regulations to implement the provisions of Section 619 of the Dodd-Frank Act, commonly referred to as the Volcker Rule, contain prohibitions and restrictions on the ability of financial institution holding companies and their affiliates to engage in proprietary trading and to hold certain interests in, or to have certain relationships with, various types of investment funds, including hedge funds and private equity funds.
The Dodd-Frank-Act imposed new restrictions and an expanded framework of regulatory oversight for depository institutions and their holding companies, and capital requirements that are discussed above under the section entitled “United Business Bank - Capital Requirements.” In addition, among other changes, the Dodd-Frank Act requires public companies to (i) provide their shareholders with a non-binding vote (a) at least once every three years on the compensation paid to executive officers and (b) at least once every six years on whether they should have a “say on pay” vote every one, two or three years; (ii) have a separate, non-binding shareholder vote regarding golden parachutes for named executive officers when a shareholder vote takes place on mergers, acquisitions, dispositions or other transactions that would trigger the parachute payments; (iii) provide disclosure in annual proxy materials concerning the relationship between the executive compensation paid and the financial performance of the issuer; and (iv) disclose the ratio of the Chief Executive Officer’s annual total compensation to the median annual total compensation of all other employees.
If an institution grows above $15 billion as a result of an acquisition, the trust preferred securities are excluded from Tier 1 capital and instead included in Tier 2 capital.
If an institution grows above $15 billion as a result of an acquisition, the trust preferred securities are excluded from Tier 1 capital and instead included in Tier 2 capital. Subordinated Notes, such as the ones the Company issued in 2020, are also included in Tier 2 Capital.
During 2024, the Bank sold $1.3 million of the guaranteed portion of its commercial and industrial SBA 7(a) loans, for which it recognized a gain of $87,000. At December 31, 2024, the Bank had $34.9 million of commercial and industrial SBA 7(a) loans where the guaranteed portion (totaling $26.2 million) had not been sold.
During 2025, the Bank sold $1.3 million of the guaranteed portion of its commercial and industrial SBA 7(a) loans, for which it recognized a gain of $120,000. At December 31, 2025, the Bank had $41.9 million of commercial and industrial SBA 7(a) loans where the guaranteed portion (totaling $30.8 million) had not been sold.
The San Jose-Sunnyvale-Santa Clara MSA also demonstrates key characteristics that provide us growth opportunities, including a population of approximately 1.9 million and a median household income of $153,202.
The San Jose-Sunnyvale-Santa Clara MSA also demonstrates key characteristics that provide us growth opportunities, including a population of approximately 2.0 million and a median household income of $164,801.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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A downturn in the commercial real estate market could increase delinquencies, defaults, foreclosures, and significantly impair the value of our collateral, hindering our ability to sell the collateral upon foreclosure. Builders with multiple loans heighten these risks, as adverse developments in one credit relationship can increase overall exposure.
A downturn in the commercial real estate market could increase delinquencies, defaults and foreclosures and significantly impair the value of our collateral, hindering our ability to sell the collateral upon foreclosure. Builders with multiple loans heighten these risks, as adverse developments in one credit relationship can increase overall exposure.
In such cases, any repossessed collateral for a defaulted agricultural operating loan may not provide an adequate source of repayment of 31 Table of Contents the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation or because the assessed value of the collateral exceeds the eventual realization value.
In such cases, any repossessed collateral for a defaulted agricultural operating loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater 31 Table of Contents likelihood of damage, loss or depreciation, or because the assessed value of the collateral exceeds the eventual realization value.
Our acquisition activities strategy involves a number of significant risks, including: • Diverting management attention and resources toward identifying, evaluating, and negotiating potential acquisitions, potentially detracting from our existing business operations. • Reliance on estimates and judgments, which could be inaccurate, in evaluating credit, operational, management, and market risks of the target company or the assets and liabilities we aim to acquire. • Exposure to potential asset quality and credit risks. • Higher than expected deposit attrition; • Potential exposure to unknown or contingent liabilities from acquired banks and businesses, including regulatory and compliance issues. • The risk of not realizing expected revenue increases, cost savings, geographic or product expansions, or other projected acquisition benefits. • Costs and time required to integrate operations and personnel from the combined businesses. • Inconsistencies in standards, procedures, and policies that may adversely affect client and employee relationships; • Potential increase in operating expenses relative to operating income from the new operations. • Short-term adverse effects on our financial results, such as increases in general and administrative expenses initially, which potentially adversely affects our efficiency ratio. • Challenges related to the conversion and integration of financial and client data. • Borrowing funds or alternative financing methods, such as issuing common or convertible preferred stock, that may increase leverage, diminish liquidity, and result in dilution for existing shareholders. • Risks of impairment to goodwill, which would require a charge to earnings. ​ Any of the foregoing could have a material adverse effect on our business, financial condition, and results of operations.
Our acquisition activities strategy involves a number of significant risks, including: • Diverting management attention and resources toward identifying, evaluating, and negotiating potential acquisitions, potentially detracting from our existing business operations. • Reliance on estimates and judgments, which could be inaccurate, in evaluating credit, operational, management, and market risks of the target company or the assets and liabilities we aim to acquire. • Exposure to potential asset quality and credit risks. • Higher than expected deposit attrition; • Potential exposure to unknown or contingent liabilities from acquired banks and businesses, including regulatory and compliance issues. • The risk of not realizing expected revenue increases, cost savings, geographic or product expansions, or other projected acquisition benefits. • Costs and time required to integrate operations and personnel from the combined businesses. • Inconsistencies in standards, procedures, and policies that may adversely affect client and employee relationships; • Potential increase in operating expenses relative to operating income from the new operations. • Short-term adverse effects on our financial results, such as increases in general and administrative expenses initially, which potentially adversely affects our efficiency ratio. • Challenges related to the conversion and integration of financial and client data. • Borrowing funds or alternative financing methods, such as issuing common or convertible preferred stock, which may increase leverage, diminish liquidity, and result in dilution for existing shareholders. • Risks of impairment to goodwill, which would require a charge to earnings. ​ Any of the foregoing could have a material adverse effect on our business, financial condition, and results of operations.
Business — Supervision and Regulation.” These regulations, along with the currently existing tax, accounting, securities, insurance, privacy and monetary laws, regulations, rules, standards, policies and interpretations, control the methods by which financial institutions conduct business, implement strategic initiatives and tax compliance, and govern financial reporting and disclosures.
Business — Supervision and Regulation.” These regulations, along with the currently existing tax, accounting, securities, insurance, privacy and monetary laws, regulations, rules, standards, and policies and interpretations, control the methods by which financial institutions conduct business, implement strategic initiatives and tax compliance, and govern financial reporting and disclosures.
Several of our large depositors have relationships with each other, which creates a higher risk that one client’s withdrawal of its deposit could lead to a loss of other deposits from clients within the relationship, which, in turn, could force us to fund our business through more expensive and less stable sources.
Several of our large depositors have relationships with each other, which creates a higher risk that one client’s withdrawal of its deposit could lead to a loss of deposits from other clients within the relationship, which, in turn, could force us to fund our business through more expensive and less stable sources.
Item 1A. Risk Factors An investment in our common stock is subject to risks inherent in our business. Before making an investment decision, you should carefully consider the risks and uncertainties described below together with all of the other information included in this Form 10-K. The risks described below are not the only ones we face.
Item 1A. Risk Factors An investment in our common stock is subject to risks inherent in our business. Before making an investment decision, you should carefully consider the risks and uncertainties described below together with all the other information included in this Form 10-K. The risks described below are not the only ones we face.
Our evaluation of the fair value of goodwill involves a substantial amount of judgment. If our judgment were incorrect, or if events or circumstances change, and an impairment of goodwill was deemed to exist, we would be required to write down our goodwill, resulting in a charge against operations, which may materially adversely affect our results of operations.
Our evaluation of the fair value of goodwill involves a substantial amount of judgment. If our judgment were incorrect, or if events or circumstances change, and an impairment of goodwill was deemed to exist, we would be required to write down our goodwill, resulting in a charge against earnings, which may materially adversely affect our results of operations.
Moreover, climate change may adversely affect regional and local economic activity, harming our customers and the communities in which we operate. Regardless of changes in federal policy, the effects of climate change and their unknown long-term impacts could still have a material adverse effect on our financial condition and results of operations.
Moreover, climate change may adversely affect regional and local economic activity, harming our customers and the communities in which we operate. Regardless of changes in federal policy, the effects of climate change and their unknown long-term impacts could have a material adverse effect on our financial condition and results of operations.
To the extent that our underlying assumptions prove inaccurate or undergo unexpected changes, such as an unanticipated decline in the real estate market, the purchase price paid these loans could exceed the actual value, resulting in a lower yield or a loss of some or all of the loan principal.
To the extent that our underlying assumptions prove inaccurate or undergo unexpected changes, such as an unanticipated decline in the real estate market, the purchase price paid for these loans could exceed the actual value, resulting in a lower yield or a loss of some or all of the loan principal.
We require sufficient liquidity to meet customer loan requests, customer deposit maturities/withdrawals, payments on our debt obligations as they come due, and other cash commitments under both normal operating conditions and other unpredictable circumstances causing industry or general financial market stress.
We require liquidity to meet customer loan requests, customer deposit maturities/withdrawals, payments on our debt obligations as they come due, and other cash commitments under both normal operating conditions and other unpredictable circumstances causing industry or general financial market stress.
Additionally, there is no assurance that the declines in market value will not result in credit losses, which would lead to additional provisions for credit losses that could materially affect our net income and capital levels. 34 Table of Contents Risks Related to our Merger and Acquisition Strategy Our strategy of pursuing acquisitions exposes us to financial, execution, compliance and operational risks that could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
Additionally, there is no assurance that the declines in market value will not result in credit losses, which would lead to additional provisions for credit losses that could have a material adverse effect on our net income and capital levels. 34 Table of Contents Risks Related to our Merger and Acquisition Strategy Our strategy of pursuing acquisitions exposes us to financial, execution, compliance and operational risks that could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
Management also recognizes that significant new growth in loan portfolios, new loan products, and the refinancing of existing loans can result in portfolios comprised of unseasoned loans that may not perform consistently with a historical or projected manner and will increase the risk that our allowance for credit losses on loans may be insufficient to absorb credit losses without significant additional provisions.
Management also recognizes that significant new growth in loan portfolios, new loan products, and the refinancing of existing loans can result in portfolios comprised of unseasoned loans that may not perform consistently with a historical or projected manner and will increase the risk that our allowance for credit losses on loans may be insufficient to absorb credit losses without signific ant additional provisions.
We performed our test for goodwill impairment at December 31, 2024 and the test concluded that recorded goodwill was not impaired. Our test of goodwill for potential impairment is based on a qualitative assessment by management that takes into consideration macroeconomic conditions, industry and market conditions, cost or margin factors, financial performance and share price.
We performed our test for goodwill impairment at December 31, 2025 and the test concluded that recorded goodwill was not impaired. Our test of goodwill for potential impairment is based on a qualitative assessment by management that takes into consideration macroeconomic conditions, industry and market conditions, cost or margin factors, financial performance and share price.
The financial services market, including banking services, is undergoing rapid changes with frequent introductions of new technology-driven products and services. Our future success will depend, in part, on our ability to keep pace with technological changes and to use technology to satisfy and grow customer demand for our products and services and to create additional efficiencies in our operations.
The financial services market, including banking services, is undergoing rapid changes with frequent introductions of new technology-driven products and services. Our future success will depend, in part, on our ability to keep pace with technological changes and to use technology to satisfy and increase customer demand for our products and services and to create additional efficiencies in our operations.
Investor advocacy groups, investment funds, and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions, and human rights. Increased ESG-related compliance costs could result in increases to our overall operational costs.
Investor advocacy groups, investment funds, and influential investors are also focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions, and human rights. ESG-related compliance costs could result in increases to our overall operational costs.
In some cases, management must select the accounting policy or method to apply from two or more alternatives, any of which might be reasonable under the circumstances, yet might result in us reporting materially different results than would have been reported under a different alternative.
In some cases, management must select the accounting policy or method to apply from two or more alternatives, any of which might be reasonable under the circumstances, yet might result in our reporting materially different results than would have been reported under a different alternative.
Our securities portfolio may be impacted by fluctuations in market value, potentially reducing accumulated other comprehensive income and/or earnings. These fluctuations may result from changes in market interest rates, rating agency actions, issuer defaults, issues with underlying securities, lower market prices, or limited investor demand.
Our securities portfolio may be impacted by fluctuations in market value, potentially reducing accumulated other comprehensive income and/or earnings. These fluctuations may result from changes in market interest rates, rating agency actions, issuer defaults, issues with underlying securities, changes in market prices, or changes in investor demand.
Investments in cybersecurity, data privacy protections, and employee training are critical to managing these risks. ​ We are subject to certain risks in connection with our data management or aggregation. We are reliant on our ability to manage data and our ability to aggregate data in an accurate and timely manner to ensure effective risk reporting and management.
Investments in cybersecurity, data privacy protections, and employee training are critical to managing these risks. ​ We are subject to certain risks in connection with our data management or aggregation. We are reliant on our ability to manage data and our ability to aggregate data in an accurate and timely manner to ensure effective risk reporting and decision-making.
Increases in interest rates could 33 Table of Contents reduce our net interest income, weaken the housing market by curbing refinancing activity and home purchases, and negatively affect the broader U.S. economy, potentially leading to slower economic growth or recessionary conditions. We principally manage interest rate risk by managing our volume and mix of our earning assets and funding liabilities.
Increases in interest rates could reduce our net interest income, weaken the housing market by curbing refinancing activity and home purchases, and negatively affect the broader U.S. economy, potentially leading to slower economic growth or recessionary conditions. We principally manage interest rate risk by managing our volume and mix of earning assets and funding liabilities.
As of December 31, 2024, the Bank’s aggregate recorded loan balances for construction, land development and land loans were 2.0% of total regulatory capital, while the Bank’s commercial real estate loans as calculated in accordance with regulatory guidance were 320.2% of total regulatory capital.
As of December 31, 2025, the Bank’s aggregate recorded loan balances for construction, land development and land loans were 2.0% of total regulatory capital, while the Bank’s commercial real estate loans as calculated in accordance with regulatory guidance were 320.2% of total regulatory capital.
We anticipate that our capital resources will satisfy our capital requirements for the foreseeable future. Nonetheless, we may at some point need to raise additional capital to support continued growth or be required by our regulators to increase our capital resources.
We anticipate that our capital resources will enable us to satisfy our capital requirements for the foreseeable future. Nonetheless, we may at some point need to raise additional capital to support continued growth or be required by our regulators to increase our capital resources.
AI introduces model risk, where flawed algorithms or biased data could result in inaccurate credit decisions, compliance violations, or discriminatory outcomes in lending or customer service. Cybersecurity threats, such as data breaches, adversarial attacks, and data 37 Table of Contents poisoning, pose significant challenges, particularly as these systems handle large volumes of sensitive customer information.
AI introduces model risk, where flawed algorithms or biased data could result in inaccurate credit decisions, compliance violations, or discriminatory outcomes in lending or customer service. Cybersecurity threats, such as data breaches, adversarial attacks, and data poisoning, pose significant challenges, particularly as these systems handle large volumes of sensitive customer information.
The particular focus of the guidance is on exposure to commercial real estate loans that are dependent on the cash flow from the real estate held as collateral and that are likely to be at greater risk to conditions in the commercial real estate market (as opposed to real estate collateral held as a secondary source of repayment or as an abundance of caution).
The particular focus of the guidance is on exposure to commercial real estate loans that are dependent on the cash flow from the real estate held as collateral and that are likely to be at greater risk to 38 Table of Contents conditions in the commercial real estate market (as opposed to real estate collateral held as a secondary source of repayment or as an abundance of caution).
Inaccurate estimates or declines in economic conditions or real estate values in the markets where we purchase loans could significantly adversely affect the level of our nonperforming loans and our results of operations. 32 Table of Contents Our allowance for credit losses may prove to be insufficient to absorb losses in our loan portfolio.
Inaccurate estimates or declines in economic conditions or real estate values in the markets where we purchase loans could significantly adversely affect the level of our nonperforming loans and our results of operations. Our allowance for credit losses may prove to be insufficient to absorb losses in our loan portfolio.
Higher than anticipated construction costs may cause actual results to vary significantly from those estimated. Further, this type of lending often involves larger loan principal amounts and might be 30 Table of Contents concentrated among a limited number of builders.
Higher than anticipated construction costs may cause actual results to vary significantly from those estimated. Further, this type of lending often involves larger loan principal amounts and might be concentrated among a limited number of builders.
Risks Related to Our Business and Industry Generally We rely on other companies to provide key components of our business infrastructure. We rely on numerous external vendors to provide products and services necessary for our day-to-day operations. Accordingly, our operations are exposed to risks associated with vendor performance under service level agreements.
Risks Related to Our Business and Industry Generally We rely on other companies to provide key components of our business infrastructure. We rely on numerous external vendors for our day-to-day operations. Accordingly, our operations are exposed to risks associated with vendor performance under service-level agreements.
Factors that could detrimentally impact our access to liquidity sources include a downturn in the geographic markets in which our loans and operations are concentrated or difficult credit markets. Our access to deposits may also be affected by the liquidity needs of our depositors.
Factors that could detrimentally impact our access to liquidity sources include a downturn in the geographic markets in which our loans and operations are concentrated or difficult credit markets. Our access to deposits 40 Table of Contents may also be affected by the liquidity needs of our depositors.
Additionally, disruptions or failures in the physical infrastructure or operating systems supporting our business and customers, or cyber-attacks or security breaches involving networks, systems, or devices used by our customers to access our services, could lead to client attrition, regulatory fines 40 Table of Contents or penalties, reputational damage, reimbursement or compensation costs, and increased compliance expenses.
Additionally, disruptions or failures in the physical infrastructure or operating systems supporting our business and customers, or cyber-attacks or security breaches involving networks, systems, or devices used by our customers to access our services, could lead to client attrition, regulatory fines or penalties, reputational damage, reimbursement or compensation costs, and increased compliance expenses.
Furthermore, when loans are at their floor interest rates, our interest income may not rise as quickly as our cost of funds during periods of increasing interest rates, which could materially and adversely affect our results of operations.
Furthermore, when loans are at their floor interest rates, our interest income may not rise as quickly as our cost of funds during periods of increasing interest rates, which could compress net interest margin and materially and adversely affect our results of operations.
Any of these occurrences could have a material adverse effect on our financial condition and results of operations. ​ Our current and future uses of Artificial Intelligence (AI) and other emerging technologies may create additional risks. ​ The increasing adoption of AI in financial services presents significant opportunities but also introduces a range of risks that could impact our operations, regulatory compliance, and customer trust.
Any of these occurrences could have a material adverse effect on our financial condition and results of operations. ​ Our current and future uses of Artificial Intelligence (AI) and other emerging technologies may create additional risks. ​ The increasing adoption of AI in financial services presents a range of risks that could impact our operations, regulatory compliance, and customer trust.
In addition, at December 31, 2024, our home equity loans and lines of credit totaled $5.1 million. A portion of our one-to-four family residential loan portfolio consists of jumbo loans, which exceed the maximum balance allowed for sale to Fannie Mae or Freddie Mac and therefore cannot be sold to these government-sponsored enterprises.
In addition, at December 31, 2025, our home equity loans and lines of credit totaled $4.8 million. A portion of our one-to-four family residential loan portfolio consists of jumbo loans, which exceed the maximum balance allowed for sale to Fannie Mae or Freddie Mac and therefore cannot be sold to these government-sponsored enterprises.
Additional risks and uncertainties not currently known to us or that are currently deemed to be immaterial may also materially and adversely affect our business, financial condition, capital levels, cash flows, liquidity, results of operations and prospects.
Additional risks and uncertainties not currently known to us or that we may currently deem to be immaterial may also materially and adversely affect our business, financial condition, capital levels, cash flows, liquidity, results of operations and prospects.
Our success in growing our loan portfolio through loan purchases depends on our ability to price the loans properly and relies on the economic conditions in the geographic areas where the underlying properties or collateral for the acquired loans are located.
Our success in growing our loan portfolio through loan purchases depends on our ability to price the loans properly and relies on the economic conditions in the geographic areas where the underlying properties or collateral for the acquired loans are 32 Table of Contents located.
As a result, navigating this evolving regulatory and public opinion landscape may require us to balance compliance with regulatory requirements against maintaining investor, customer, and stakeholder trust. ​ 42 Table of Contents Item 1B. Unresolved Staff Comments None. ​ ​
As a result, navigating this evolving regulatory and public opinion landscape may require us to balance compliance with regulatory requirements against maintaining investor, customer, and stakeholder trust. ​ Item 1B. Unresolved Staff Comments None. ​ ​
We may also be forced, as a result of any material withdrawal of deposits, to rely more heavily on other, potentially more expensive and less stable funding sources. Consequently, the occurrence of any of these events could have a material adverse effect on our business, financial condition and results of operations.
We may also be forced, as a result of any material withdrawal of deposits, to rely more heavily on other, potentially more expensive and less stable funding sources. Any of these occurrences could have a material adverse effect on our business, financial condition, and results of operations.
In the event the Bank is unable to pay dividends to BayCom, we may not be able to service any debt we may incur, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
In the event the Bank is unable to pay dividends to BayCom, BayCom may not be able to service any debt it 41 Table of Contents may incur, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
As an SBA Preferred Lender, we streamline the SBA loan process for clients by bypassing the lengthy approval procedures required for non-Preferred Lenders. The SBA periodically reviews participating lenders to evaluate risk management practices. If deficiencies are identified, the SBA may request corrective actions, impose restrictions, or revoke a lender’s Preferred Lender status.
As an SBA Preferred Lender, we streamline the SBA loan process for clients by bypassing the lengthy approval procedures required for non-Preferred Lenders. The SBA periodically reviews participating lenders to evaluate risk management practices and compliance with evolving program requirements. If deficiencies are identified, the SBA may request corrective actions, impose restrictions, or revoke a lender’s Preferred Lender status.
A downturn in economic conditions in the market areas we serve, in particular the San Francisco Bay Area, Southern California, Denver, Colorado, Seattle, Washington, Central New Mexico and the agricultural region of the California Central Valley, be it due to inflation, recessionary trends, geopolitical conflicts, adverse weather, or other factors, could have a material adverse effect on our business, financial condition, and results of operations, including but not limited to: ​ ● Reduced demand for our products and services , potentially leading to a decline in our overall loans or assets. ● Elevated levels of loan delinquencies, problem assets , and foreclosures . ● An increase in our allowance for credit losses on loans. ● Depreciation in collateral values linked to our loans, thereby diminishing borrowing capacities and asset values tied to existing loans . ● Reduced net worth and liquidity of loan guarantors , possibly impairing their ability to meet commitments to us . ● Reduction in our low-cost or noninterest -bearing deposits. ​ A decline in local or regional economic conditions may have a greater effect on our earnings and capital compared to larger financial institutions with more geographically diverse real estate loan portfolios.
A downturn in economic conditions in the market areas we serve, in particular the San Francisco Bay Area, Southern California, Denver, Colorado, Seattle, Washington, Central New Mexico and the agricultural region of the California Central Valley, whether due to inflation, recessionary trends, geopolitical instability or conflicts, or environmental and climate-related events such as wildfires, floods, or other factors, could have a material adverse effect on our business, financial condition, liquidity, and results of operations, including but not limited to: 28 Table of Contents ​ ​ ● Reduced demand for our products and services , potentially leading to a decline in our overall loans or assets. ● Elevated levels of loan delinquencies, problem assets , and foreclosures . ● An increase in our allowance for credit losses on loan s. ● Depreciation in collateral values linked to our loans, thereby diminishing borrowing capacities and asset values tied to existing loans . ● Reduced net worth and liquidity of loan guarantors , possibly impairing their ability to meet their commitments to us . ● Reduction in our low-cost or noninterest -bearing deposits. ​ A decline in local or regional economic conditions may have a greater effect on our earnings and capital compared to larger financial institutions with more geographically diverse real estate loan portfolios.
Compliance with the CCPA, the CPRA and other state statutes or regulations designed to protect consumer personal data could potentially require us to implement substantive technology infrastructure and process changes. Non-compliance with the CCPA, the CPRA or similar laws and regulations could lead to substantial regulatory imposed fines and penalties, damages from private causes of action and/or reputational harm.
Compliance with the CCPA, the CPRA, and other state or federal statutes or regulations designed to protect consumer personal data could require us to implement substantive technology infrastructure and process changes. Non-compliance with these privacy laws or regulations could lead to substantial regulatory fines and penalties, damages from private causes of action or reputational harm.
During the term of some of our construction loans, borrowers do not make payments, as accumulated interest is added to the principal through an interest reserve. Consequently, repayment often depends on the project's success and the borrower's ability to sell or lease the property rather than solely on repayment capacity.
During the terms of some of our construction loans, borrowers do not make payments, as accumulated interest is added to the principal balance through an interest reserve. Consequently, repayment 30 Table of Contents often depends on the project's success and the borrower's ability to sell or lease the property rather than solely on repayment capacity.
For example, changes in consumer privacy laws, such as the recently enacted CCPA and CPRA in California, or any non-compliance with such laws, could adversely affect our business, financial condition and results of operations. See “Item 1. Business—Supervision and Regulation—Privacy Standards” for additional information on the CCPA and the CPRA.
For example, changes in consumer privacy laws, such as the recently enacted CCPA and CPRA in California, other state privacy statutes, or any future federal privacy legislation, or any non-compliance with such laws, could adversely affect our business, financial condition and results of operations. See “Item 1. Business—Supervision and Regulation—Privacy Standards” for additional information on the CCPA and the CPRA.
During these extended periods, the collateral typically generates no cash flow. Our business may be adversely affected by credit risk associated with residential property. At December 31, 2024, $109.7 million, or 5.6% of total loans, was secured by first liens on one-to-four family residential real estate.
During these extended periods, the collateral typically generates no cash flow. Our business may be adversely affected by credit risk associated with residential property. At December 31, 2025, $113.2 million, or 5.5% of total loans, was secured by first liens on one-to-four family residential real estate .
Because a significant portion of our loan portfolio is secured by real estate, deterioration in real estate markets could impair borrowers’ ability to repay loans and reduce the value of the underlying collateral.
Because a significant portion of our loan portfolio is secured by real estate, deterioration in real estate markets, including stress in certain commercial real estate sectors, could impair borrowers’ ability to repay loans and reduce the value of the underlying collateral.
These adverse conditions could result in losses and negatively impact our business, financial condition, and results of operations. Agricultural lending and volatility in government regulations may adversely affect our financial condition and results of operations. At December 31, 2024, agricultural loans, including agricultural real estate and operating loans, were $12.0 million, or 0.61% of total loans.
These adverse conditions could result in losses and negatively impact our business, financial condition, and results of operations. Agricultural lending and volatility in government regulations may adversely affect our financial condition and results of operations. At December 31, 2025, agricultural loans, including agricultural real estate and operating loans, were $10.3 million, or 0.51% of total loans.
A significant increase in the level of nonperforming assets from current levels would also increase our risk profile and may impact the capital levels our regulators believe are appropriate in light of 29 Table of Contents the increased risk profile.
A significant increase in the level of nonperforming assets from current levels would also increase our risk profile and may impact the capital levels and supervisory expectations our regulators believe are appropriate in light of the increased risk profile.
If we are forced to pay higher rates on these deposits to retain the funds, or if we are unable to retain the funds and are forced to turn to borrowings and other funding sources for our lending and investment activities, the interest expense associated with such borrowings or other funding sources may be higher than the rates we are paying on these deposits, which could adversely affect our net margin and net income.
If we are forced to pay higher rates on these deposits to retain them, or if we are unable to retain them and are forced to turn to borrowings and other funding sources for our lending and investment activities, the interest expense associated with such borrowings or other funding sources may exceed the cost of these deposits, which could adversely affect our net interest margin and net income.
Losing this status could impair our ability to compete with other Preferred Lenders and materially affect our financial results. Additionally, changes to the SBA program, such as adjustments to federal guaranty levels or funding allocations, could adversely impact our business, results of operations, and financial condition.
Losing this status could impair our ability to compete with other Preferred Lenders and materially affect our financial results. Additionally, changes to the SBA program, such as adjustments to federal guaranty levels, program eligibility requirements, or funding allocations, including as a result of legislative, budgetary, or policy changes, could adversely impact our business, results of operations, and financial condition.
Accordingly, SBA loans in our portfolio often have weaker credit characteristic compared to other loans, increasing the risk of default during economic downturns or borrower financial distress.
Accordingly, SBA loans in our portfolio often have weaker credit characteristics compared to other loans, increasing the risk of default during economic downturns, periods of elevated interest rates, or borrower financial distress.
If deposit and borrowing rates rise faster than loan and investment yields, our net interest income and overall earnings could decline. A substantial amount of our loans have adjustable interest rates, which may result in a higher incidence of default in a rising interest rate environment.
Rising rates can also increase the cost of deposits and other funding sources. If deposit and borrowing rates rise faster than loan and investment yields, our net interest income and overall earnings could decline. A substantial amount of our loans have adjustable interest rates, which may result in a higher incidence of default in a rising interest rate environment.
The occurrence of any systems failure or interruption could damage our reputation and result in a loss of clients and business, could subject us to additional regulatory scrutiny, or could expose us to legal liability.
The occurrence of any system failure or interruption may damage our reputation, result in loss of clients and business, subject us to regulatory scrutiny, and expose us to legal liability.
Recent changes in the regulatory landscape under the new Trump administration have moved toward a reduction in emphasis on certain ESG priorities, particularly around climate change and diversity, equity, and inclusion (“DEI”). This shift is leading to the rollback of regulations that mandate specific disclosures and operational practices in these areas.
Recent changes in the regulatory landscape and shifting federal priorities have moved toward a reduction in emphasis on certain ESG priorities, particularly around climate change and diversity, equity, and inclusion (“DEI”). This shift has led to a rollback of regulations that mandate specific disclosures and operational practices in these areas.
Risks Related to Macroeconomic Conditions Our business may be adversely affected by downturns in the national economy and the regional economies in which we operate. We provide banking and financial services primarily to businesses and individuals in the states of California, Colorado, Nevada, New Mexico, and Washington.
This Form 10-K is qualified in its entirety by these risk factors. Risks Related to Macroeconomic Conditions Our business may be adversely affected by downturns in the national economy and the regional economies in which we operate. We provide banking and financial services primarily to businesses and individuals in the states of California, Colorado, Nevada, New Mexico, and Washington.
We have established policies and procedures to prevent or limit the impact of system breaches, failures and interruptions. In addition, we outsource certain aspects of our data processing and other operational functions to certain third-party providers. While we select third-party vendors carefully, we do not control their actions.
We have established policies and procedures to prevent or limit the impact of system breaches, failures and interruptions. In addition, we outsource certain aspects of our data processing and other operational functions to certain third-party providers.
These factors include adverse weather conditions that prevent the planting of a crops or limit crop yields (such as hail, drought and floods), loss of livestock due to disease or other factors, declines in market prices for agricultural products (both domestically and internationally) and the impact of government regulations (including changes in price supports, subsidies, tariffs and environmental regulations).
These factors include adverse weather conditions that prevent the planting of crops or limit crop yields (such as hail, drought and floods), increasing climate variability and extreme weather events, loss of livestock due to disease or other factors, declines in market prices for agricultural products (both domestically and internationally), supply chain disruptions, and the impact of government regulations (including changes in price supports, subsidies, tariffs and environmental regulations, water usage restrictions, labor regulations, and environmental compliance requirements).
While we attempt to reduce problem assets through collection efforts, asset sales and workouts and restructurings, decreases in the value of the underlying collateral, or in the borrower’s performance or financial condition, could adversely affect our business, results of operations and financial condition.
While we attempt to reduce problem assets through collection efforts, asset sales and workouts and restructurings, decreases in the value of the underlying collateral, including as a result of valuation uncertainty, reduced market liquidity, or refinancing challenges, or in the borrower’s performance or financial condition, could adversely affect our business, results of operations and financial condition.
If we cannot raise additional capital when needed, our operations could be materially impaired and our financial condition and 41 Table of Contents liquidity could be materially and adversely affected. In addition, if we are unable to raise additional capital when required by our banking regulators, we may be subject to additional adverse regulatory action.
If we cannot raise additional capital when needed, our operations could be materially impaired, and our financial condition and liquidity could be materially and adversely affected. In addition, if we are unable to raise additional capital when required by our banking regulators, we may be subject to additional adverse regulatory action. Our liquidity is dependent on dividends from the Bank.
Selling the guaranteed portion of SBA loans also exposes us to credit risk on the retained, non-guaranteed portion. To qualify for an SBA loan, a borrower must demonstrate an inability to secure conventional financing without the SBA guaranty.
Selling the guaranteed portion of SBA loans also exposes us to credit risk on the retained, non-guaranteed portion, as well as interest rate and valuation risk on loans held for sale prior to disposition. To qualify for an SBA loan, a borrower must demonstrate an inability to secure conventional financing without the SBA guaranty.
Our business operations are significantly influenced by the extensive body of accounting regulations in the United States. Regulatory bodies regularly issue new guidance, altering accounting rules and reporting requirements, which can substantially affect the preparation and presentation of our financial statements. These changes may require retrospective application, potentially leading to restatements of prior period financial statements.
Our business operations are significantly influenced by the extensive body of accounting regulations in the United States. Regulatory bodies regularly issue new guidance, altering accounting rules and reporting requirements, which can substantially affect the preparation and presentation of our financial statements.
I ncreasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks. Companies are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social, and governance (“ESG”) practices and disclosure.
S crutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks. In recent years, companies have faced scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social, and governance (“ESG”) practices and disclosure.
The $1.7 billion of commercial real estate loans includes $225.2 million of multifamily loans and $1.5 million of commercial construction and land loans. Commercial loans typically involve larger principal amounts than other types of loans, and some of our commercial borrowers have more than one loan outstanding with us.
The $1.8 billion of 29 Table of Contents commercial real estate loans includes $310.3 million of multifamily loans and $9.0 million of commercial construction and land loans. Commercial loans typically involve larger principal amounts than other types of loans, and some of our commercial borrowers have more than one loan outstanding with us.
If a loan defaults and the SBA determines there were deficiencies in how the loan was originated, funded, or serviced, the SBA may deny or reduce its guaranty, require us to repurchase the sold portion, or seek recovery of losses. We have established a recourse reserve to cover estimated losses on the outstanding guaranteed portion of SBA loans.
If a borrower defaults and the SBA determines there were deficiencies in how the loan was originated, funded, or serviced, the SBA may deny or reduce its guaranty, require us to repurchase the sold portion, delay payment on the guaranty, or seek recovery of losses.
Our liquidity is dependent on dividends from the Bank. BayCom is a legal entity separate and distinct from the Bank. A substantial portion of BayCom’s cash flow, including cash flow to pay principal and interest on any debt it may incur, including the Notes, comes from dividends BayCom receives from the Bank.
BayCom is a legal entity separate and distinct from the Bank. A substantial portion of BayCom’s cash flow, including cash flow to pay principal and interest on any debt it may incur, comes from dividends BayCom receives from the Bank. Various federal and state laws and regulations limit the amount of dividends that the Bank may pay to BayCom.
The market price of our common stock could decline significantly due to any identified or other risks, and some or all of your investment value could diminish. The risks discussed below include forward-looking statements, and our actual results may differ substantially from those discussed in these forward-looking statements. This Form 10-K is qualified in its entirety by these risk factors.
The market price of our common stock could decline significantly due to any of these identified or other risks, and you could lose some or all of your investment. The risks discussed below include forward-looking statements, and our actual results may differ substantially from those discussed in these forward-looking statements.
Replacing these third-party vendors could also entail significant delay and expense. Threats to information security also exist in the processing of client information through various other vendors and their personnel.
Replacing these third-party vendors may cause significant delays and expenses. Threats to information security also exist in the processing of client information through other vendors and their personnel.
If our third-party providers encounter difficulties, including those resulting from breakdowns or other disruptions in communication services provided by a vendor, failure of a vendor to handle current or higher transaction volumes, cyber-attacks or security breaches or if we otherwise have difficulty in communicating with them, our ability to adequately process and account for transactions could be affected, and our ability to deliver products and services to our clients and otherwise conduct business operations could be adversely impacted.
If our third-party providers encounter difficulties, including breakdowns or disruptions in communication services, failure to handle transaction volumes, cyber-attacks or security breaches, or if we otherwise have difficulty in communicating with them, our ability to adequately process and account for transactions will be affected, and our ability to deliver products and services and conduct operations will be disrupted.
Disruptions in AI systems could impact critical functions such as fraud detection, transaction monitoring, and customer support. Ethical and reputational risks, including unintended consequences or perceived unfairness in AI-driven decisions, may erode customer trust and expose us to regulatory scrutiny. ​ Mitigating these risks requires a robust governance framework, regularly testing and auditing of AI models, and strong human oversight.
Ethical and reputational risks, including unintended consequences or perceived unfairness in AI-driven decisions, may erode customer trust and expose us to regulatory scrutiny. ​ 37 Table of Contents Mitigating these risks requires a robust governance framework, regularly testing and auditing of AI models, and strong human oversight.
Real estate values are influenced by a range of factors, including economic conditions, government policies, natural disasters (e.g., earthquakes, flooding and tornadoes), and trade-related pressures affecting construction costs or material availability. Liquidating significant collateral during a period of depressed real estate values could negatively impact our financial condition and profitability.
Real estate values are influenced by a range of factors, including economic conditions, interest rates, government policies, natural disasters, construction and material availability, and other market or policy factors. Liquidating significant collateral during a period of depressed real estate values could negatively impact our financial condition and profitability.
Monetary policy, inflation, deflation, and other external economic factors could adversely impact our financial performance and operations. ​ Our financial condition and results of operations are affected by credit policies of monetary authorities, particularly the Federal Reserve.
Monetary policy, inflation, deflation, and other external economic factors could adversely impact our financial performance and operations. ​ Our financial condition and results of operations are influenced by monetary, fiscal, and trade policies, including those of the Federal Reserve, the U.S. Treasury, and other governmental authorities.
Interest rates are highly sensitive to factors beyond our control, such as general economic conditions and policies set by governmental and regulatory bodies, particularly the Federal Reserve.
Our earnings and cash flows are largely dependent upon our net interest income, which is significantly affected by interest rates. Interest rates are highly sensitive to factors beyond our control, such as general economic conditions and policies set by governmental and regulatory bodies, particularly the Federal Reserve.
At December 31, 2024, we had $1.8 billion of commercial loans, consisting of $1.7 billion of commercial real estate and construction and land loans, representing 85.5% of total loans, and $173.9 million of commercial and industrial loans, representing 8.9% of total loans, where real estate is not the primary source of collateral.
At December 31, 2025, we had $2.0 billion of commercial loans, consisting of $1.8 billion of commercial real estate and construction and land loans, representing 86.8% of total loans, and $175.4 million of commercial and industrial loans, representing 8.6% of total loans, where real estate is not the primary source of collateral.
Significant increases to this reserve could reduce our net income and adversely affect our business, results of operations, and financial condition. To meet our growth objectives, we may originate or purchase loans outside our market areas, which could affect the level of our net interest margin and nonperforming loans.
To meet our growth objectives, we may originate or purchase loans outside our market areas, which could affect the level of our net interest margin and nonperforming loans.
For loans secured by non-owner-occupied properties, repayments rely heavily on tenant rent payments, and downturns in the real estate market or economic conditions heighten repayment risks.
For loans secured by non-owner-occupied properties, repayments rely heavily on tenant rent payments, and downturns in the real estate market or economic conditions heighten repayment risks. In addition, many of our commercial real estate loans are not fully amortizing and require large balloon payments upon maturity.
Security breaches in our internet banking activities could further expose us to possible liability and damage our reputation.
Security breaches in our internet banking activities may expose us to liability, loss of business, and damage to our reputation.
Additionally, any perceived or actual failure to prevent money laundering or terrorist financing activities could significantly damage our reputation. These outcomes could have a material adverse effect on our business, financial condition, results of operations, and growth prospects. If our enterprise risk management framework is not effective at mitigating risk and loss to us, we could suffer unexpected losses.
These outcomes could have a material adverse effect on our business, financial condition, results of operations, and growth prospects. 39 Table of Contents If our enterprise risk management framework is not effective at mitigating risk and loss to us, we could suffer unexpected losses.
As of December 31, 2024, our ten largest depositors, none of which include brokered deposits, accounted for $304.5 million in deposits, or approximately 13.6% of total deposits.
As of December 31, 2025, our ten largest depositors, none of which include brokered deposits, accounted for $235.8 million in deposits, or approximately 11.7% of total deposits.
However, interest rates do not necessarily move in the same direction or magnitude as the prices of goods and services, creating additional uncertainty in the economic environment. ​ Risks Related to Our Lending Activities Nonperforming assets take significant time to resolve and adversely affect our results of operations and financial condition and could result in further losses in the future.
Interest rates may not move in alignment with inflation or deflation, adding uncertainty to the economic environment. ​ Risks Related to Our Lending Activities Nonperforming assets take significant time to resolve and adversely affect our results of operations and financial condition and could result in further losses in the future.
If our policies, procedures and systems are deemed deficient, we would be subject to liability, including fines and regulatory actions, which may include the denial of regulatory approvals to proceed with certain aspects 39 Table of Contents of our business plan, including our acquisition plans.
If our policies, procedures and systems are deemed deficient, we would be subject to liability, including fines and regulatory actions, which may include the denial of regulatory approvals to proceed with certain aspects of our business plan, including our acquisition plans. Additionally, any perceived or actual failure to prevent money laundering or terrorist financing activities could significantly damage our reputation.
Federal banking regulators also have raised concerns about weaknesses in the commercial real estate market. Failures in our risk management policies and controls could lead to higher delinquencies and losses, adversely affecting our business, financial condition, and results of operations. Construction loans are based upon estimates of costs and values associated with the completed project.
Failures in our risk management policies and controls could lead to higher delinquencies and losses, adversely affecting our business, financial condition, and results of operations. Construction loans are based upon estimates of costs and values associated with the completed project. These estimates may be inaccurate, and we may be exposed to significant losses on loans for these projects.
As a result, our ability to effectively compete to retain or acquire new business may be impaired, and our business, financial condition or results of operations may be adversely affected .
As a result, our ability to effectively compete to retain or acquire new business may be impaired, and our business, financial condition or results of operations may be adversely affected . Risks Related to Regulatory and Compliance Matters The level of our commercial real estate loan portfolio may subject us to additional regulatory scrutiny.
These loans involve additional risks because funds are advanced based on the project’s uncertain value prior to its completion, and costs may exceed realizable values in declining real estate markets.
Construction and land development loans totaled $9.0 million, or 0.4% of total loans as of December 31, 2025, nearly all of which were commercial real estate construction loans. These types of loans involve additional risks because funds are advanced based on the project’s uncertain value prior to its completion, and costs may exceed realizable values in declining real estate markets.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Our Information Security Program aligns with industry frameworks, such as the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework, Federal Financial Institutions Examination Council (FFIEC) Information Technology Examination Handbooks, and the FFIEC Cybersecurity Assessment Tool, and is periodically reviewed and updated at least annually or more frequently upon significant changes to our operating environment.
Our Information Security Program aligns with industry frameworks, such as the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework, Federal Financial Institutions Examination Council (“FFIEC”) Information Technology Examination Handbooks, and the FFIEC Cybersecurity Assessment Tool, and is periodically reviewed and updated at least annually or more frequently upon significant changes to our operating environment.
The Chief Operating Officer, Chief Risk Officer, and board-level risk committees of the Bank also provide comprehensive reports to the full Board of Directors regarding pertinent cybersecurity risk management topics. 44 Table of Contents ​ Our Director of Information Technology has more than 20 years’ experience in financial services, substantial relevant expertise and formal training in the areas of information security and cybersecurity risk management and is accountable for managing our enterprise information technology department and developing and implementing our cybersecurity and information security programs.
The Chief Operating Officer, Chief Risk Officer, and board-level risk committees of the Bank also provide comprehensive reports to the full Board of Directors regarding pertinent cybersecurity risk management topics. ​ Our Director of Information Technology has more than 20 years’ experience in financial services, substantial relevant expertise and formal training in the areas of information security and cybersecurity risk management and is accountable for managing our enterprise information technology department and developing and implementing our cybersecurity and information security programs.
Additionally, our robust Vendor Management Program ensures proper oversight during the onboarding of new products, projects, and third-party vendors. ​ Identified Cybersecurity Risks Federal and state regulators have issued guidance requiring financial institutions to implement layered security controls, strengthen client authentication for online services, and address risks from compromised credentials.
Additionally, our robust Vendor Management Program ensures proper oversight during the onboarding of new products, projects, and third-party vendors. ​ 43 Table of Contents Identified Cybersecurity Risks Federal and state regulators have issued guidance requiring financial institutions to implement layered security controls, strengthen client authentication for online services, and address risks from compromised credentials.
These risks extend to our customers, shareholders, suppliers, and partners, emphasizing the critical need for a robust cybersecurity stance. In light of these challenges, maintaining resilience in our cybersecurity posture is not just a priority but a fundamental necessity to safeguard our operations, performance, and the maintenance of customer confidence in our banking services.
These risks extend to our customers, shareholders, suppliers, and partners, emphasizing the critical need for a robust cybersecurity stance. In light of these 42 Table of Contents challenges, maintaining resilience in our cybersecurity posture is not just a priority but a fundamental necessity to safeguard our operations, performance, and the maintenance of customer confidence in our banking services.
Our assets are classified and protected based on the results of our risk assessment practices, which assess a variety of critical factors, including the type of data stored, system availability needs, confidentiality requirements, recovery 43 Table of Contents time objectives, transactional processing, the number of users, and the volume and magnitude of transactions.
Our assets are classified and protected based on the results of our risk assessment practices, which assess a variety of critical factors, including the type of data stored, system availability needs, confidentiality requirements, recovery time objectives, transactional processing, the number of users, and the volume and magnitude of transactions.
These qualifications, certifications, and experience include a degree from the University of California, Santa Barbara with a focus on business administration coursework and a Certified Information Systems Security Professional designation from ISC2 Organization. ​ ​ ​
These qualifications, certifications, and experience include a degree from the University of California, Santa Barbara with a focus on business administration coursework and a Certified Information Systems Security Professional designation from ISC2 Organization. ​ ​ 44 Table of Contents ​

Item 2. Properties

Properties — owned and leased real estate

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At December 31, 2024, we owned 15 of our banking branches and leased the remaining 20 branches, which leases expire on various dates through 2030. At December 31, 2024, all our leases had an option to renew with renewal periods between three and 12 years. Many of our branches are equipped with automated teller machines and drive through facilities.
At December 31, 2025, we owned 15 of our banking branches and leased the remaining 19 branches, which leases expire on various dates through 2030. At December 31, 2025, all our leases had an option to renew with renewal periods between three and 12 years. Many of our branches are equipped with automated teller machines and drive-through facilities.
At December 31, 2024, including our principal executive offices, we operated a total of 35 full-service banking branches consisting of branch offices in Northern and Southern California; Las Vegas, Nevada; Denver, Colorado and Custer, Delta, and Grand Counties, Colorado; Seattle, Washington and Central New Mexico at December 31, 2024.
At December 31, 2025, including our principal executive offices, we operated a total of 34 full-service banking branches consisting of branch offices in Northern and Southern California; Las Vegas, Nevada; Denver, Colorado and Custer, Delta, and Grand Counties, Colorado; Seattle, Washington and Central New Mexico.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Our common stock is listed on the NASDAQ Global Select Market under the symbol “BCML.” At December 31, 2024, we had approximately 750 shareholders of record (not including the number of persons or entities holding stock in nominee or street name through various brokerage firms).
Our common stock is listed on the NASDAQ Global Select Market under the symbol “BCML.” At December 31, 2025, we had approximately 724 shareholders of record (not including the number of persons or entities holding stock in nominee or street name through various brokerage firms).
On February 20, 2025, the Company announced that its Board of Directors declared a quarterly cash dividend of $0.15 per share on the Company's outstanding common stock . The cash dividend will be payable on April 10, 2025 to shareholders of record as of the close of business on March 13, 2025. BayCom commenced paying dividends in 2022.
On February 19, 2026, the Company announced that its Board of Directors declared a quarterly cash dividend of $0.30 per share on the Company's outstanding common stock . The cash dividend will be payable on April 9, 2026 to shareholders of record as of the close of business on March 12, 2026. BayCom commenced paying dividends in 2022.
During the year ended December 31, 2024, the Company repurchased a total of 455,654 shares of the Company’s common stock at an average price of $20.31 per share, compared to 1,329,040 shares at an average price of $18.14 per share during the year ended December 31, 2023. Equity Compensation Plan Information.
During the year ended December 31, 2025, the Company repurchased a total of 261,654 shares of the Company’s common stock at an average price of $26.40 per share, compared to 455,654 shares at an average price of $20.31 per share during the year ended December 31, 2024. Equity Compensation Plan Information.
The following table sets forth information with respect to our repurchases of our outstanding common shares during the three months ended December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total number of shares ​ Maximum number of ​ ​ ​ ​ ​ ​ ​ purchased as part of ​ shares that may yet be ​ ​ Total number of ​ Average price ​ publicly announced ​ purchased under the ​ shares purchased paid per share plans or programs plans or programs (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ October 1, 2024 - October 31, 2024 1,100 $ 24.28 ​ 1,100 464,498 November 1, 2024 - November 30, 2024 400 ​ ​ 24.28 ​ 400 464,098 December 1, 2024 - December 31, 2024 — ​ ​ — ​ — 464,098 ​ 1,500 $ 24.28 1,500 ​ (1) In May 2024, the Company announced that its Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to five percent of BayCom’s common stock, or approximately 560,000 shares.
The following table sets forth information with respect to our repurchases of our outstanding common shares during the three months ended December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total number of shares ​ Maximum number of ​ ​ ​ ​ ​ ​ ​ purchased as part of ​ shares that may yet be ​ ​ Total number of ​ Average price ​ publicly announced ​ purchased under the ​ ​ ​ ​ shares purchased ​ ​ ​ paid per share ​ ​ ​ ​ ​ ​plans or programs ​ ​ ​ ​ ​plans or programs (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ October 1, 2025 - October 31, 2025 ​ ​ ​ 19,029 $ 27.78 ​ 19,029 ​ ​ ​ 212,526 November 1, 2025 - November 30, 2025 10,082 ​ ​ 27.69 ​ 10,082 202,444 December 1, 2025 - December 31, 2025 — ​ ​ — ​ — 202,444 ​ 29,111 $ 27.75 29,111 ​ (1) In May 2024, the Company announced that its Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to five percent of BayCom’s common stock, or approximately 560,000 shares, with no set expiration date.
The repurchase program will expire on April 21, 2025, unless sooner completed. The repurchase program may be suspended, terminated or modified at any time for any reason, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, and other factors deemed appropriate.
The repurchase program may be suspended, terminated or modified at any time for any reason, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, and other factors deemed appropriate. The repurchase program does not obligate the Company to purchase any particular number of shares.
Removed
The repurchase program does not obligate the Company to purchase any particular number of shares.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

146 edited+27 added−30 removed88 unchanged
We offer a variety of deposit accounts with a competitive range of interest rates and terms to both consumers and businesses. Deposits include interest bearing and noninterest bearing demand accounts, 59 Table of Contents savings, money market, certificates of deposit and individual retirement accounts.
We offer a variety of deposit accounts with a competitive range of interest rates and terms to both consumers and businesses. Deposits include interest bearing and noninterest bearing demand accounts, savings, 59 Table of Contents money market, certificates of deposit and individual retirement accounts.
We incur capital expenditures on an ongoing basis to expand and improve our product offerings, enhance and modernize our technology infrastructure, and to introduce new technology-based products to compete effectively in our markets.
We incur capital expenditures on an ongoing basis to expand and improve our product offerings, enhance and modernize our technology infrastructure, and introduce new technology-based products to compete effectively in our markets.
The Company’s method for assessing the appropriateness of the allowance for credit losses includes specific allowances for individually analyzed loans, pooled loans component which includes both quantitative and qualitative factors, and reserve for unfunded loan commitments. ​ Under the CECL methodology, expected credit losses reflect expected losses over the remaining contractual life of an asset, considering the effect of prepayments and available information about the collectability of cash flows, including information about relevant historical experience, current conditions, and reasonable and supportable forecasts of future events and circumstances.
The Company’s method for assessing the appropriateness of the allowance for credit losses includes specific allowances for individually analyzed loans, pooled loans component which includes both quantitative and qualitative factors, and a reserve for unfunded loan commitments. ​ Under the CECL methodology, expected credit losses reflect expected losses over the remaining contractual life of an asset, considering the effect of prepayments and available information about the collectability of cash flows, including information about relevant historical experience, current conditions, and reasonable and supportable forecasts of future events and circumstances.
Treasuries and SOFR (basis risk). The Asset Liability Committee of our Board of Directors (“ALCO”) establishes broad policy limits with respect to interest rate risk. ALCO establishes specific operating guidelines within the parameters of the Board of Directors’ policies.
Treasuries and SOFR (basis risk). The Asset Liability Committee of our Board of Directors (“ALCO”) sets broad policy limits with respect to interest rate risk. ALCO establishes specific operating guidelines within the parameters of the Board of Directors’ policies.
Regardless of the determination that a charge-off is appropriate for financial accounting purposes, the Company manages its loan portfolio by continually monitoring, where possible, a borrower's ability to pay through the collection of financial information, delinquency status, borrower discussion and the encouragement to repay in accordance with the original contract or modified terms, if appropriate. 49 Table of Contents ​ All loans with an outstanding balance of $100,000 or more greater are individually evaluated for expected credit loss when it is probable that we will be unable to collect all amounts due according to the original contractual terms of the loan agreement.
Regardless of the determination that a charge-off is appropriate for financial accounting purposes, the Company manages its loan portfolio by continually monitoring, where possible, a borrower's ability to pay through the collection of financial information, delinquency status, borrower discussion and the encouragement to repay in accordance with the original contract or modified terms, if appropriate. ​ All loans with an outstanding balance of $250,000 or more are individually evaluated for expected credit loss when it is probable that we will be unable to collect all amounts due according to the original contractual terms of the 49 Table of Contents loan agreement.
For information regarding our operating leases, see “Note 7, Leases” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K. We believe that our liquid assets combined with the available lines of credit provide adequate liquidity to meet our current financial obligations for at least the next 12 months.
For information regarding our operating leases, see “Note 6, Leases” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K. We believe that our liquid assets combined with the available lines of credit provide adequate liquidity to meet our current financial obligations for at least the next 12 months.
At December 31, 2024, the Bank’s Common Equity Tier 1 capital exceeded the required capital conservation buffer. For a bank holding company with less than $3.0 billion in assets, the capital guidelines apply on a bank only basis and the Federal Reserve expects the holding company’s subsidiary banks to be Well Capitalized under the prompt corrective action regulations.
At December 31, 2025, the Bank’s Common Equity Tier 1 capital exceeded the required capital conservation buffer. For a bank holding company with less than $3.0 billion in assets, the capital guidelines apply on a bank-only basis, and the Federal Reserve expects the holding company’s subsidiary banks to be Well Capitalized under the prompt corrective action regulations.
We also have purchase obligations, generally with remaining terms of less than three years and contracts with various vendors to provide services, including information processing, for periods generally ranging from one to five years, for which our financial obligations are dependent upon acceptable performance by the vendor.
We also have purchase obligations, generally with remaining terms of less than three years and contracts with various vendors to provide services, including information processing, for periods generally ranging from one to five years, for which our financial obligations are dependent upon satisfactory performance by the vendor.
Interest rate risk arises from timing differences in the repricing and maturities of interest earning assets and interest bearing liabilities (reprice risk), changes in the expected maturities of assets and liabilities arising from embedded options, such as borrowers’ ability to prepay residential mortgage loans at any time and depositors’ ability to redeem certificates of deposit before maturity (option risk), changes in the shape of the yield curve where interest rates increase or decrease in a nonparallel fashion (yield curve risk), and changes in spread relationships between different yield curves, such as U.S.
Interest rate risk arises from timing differences in the repricing and maturities of interest earning assets and interest 70 Table of Contents bearing liabilities (reprice risk), changes in the expected maturities of assets and liabilities arising from embedded options, such as borrowers’ ability to prepay residential mortgage loans at any time and depositors’ ability to redeem certificates of deposit before maturity (option risk), changes in the shape of the yield curve where interest rates increase or decrease in a nonparallel fashion (yield curve risk), and changes in spread relationships between different yield curves, such as U.S.
For information regarding our commitments, see “Note 16 - Commitments and Contingencies” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10 K. Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities.
For information regarding our commitments, see “Note 15 - Commitments and Contingencies” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10 K. Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities.
While the provision for credit losses associated with unfunded loan commitments is included in "provision for credit losses" on the consolidated statement of income, the allowance for credit losses for unfunded loan commitments is maintained on the consolidated balance sheet in "Interest payable and other liabilities" . Comparison of Financial Condition at December 31, 2024 and 2023 Total assets.
While the provision for credit losses associated with unfunded loan commitments is included in "provision for credit losses" on the consolidated statement of income, the allowance for credit losses for unfunded loan commitments is maintained on the consolidated balance sheet in "Interest payable and other liabilities" . Comparison of Financial Condition at December 31, 2025 and 2024 Total assets.
Business — Supervision and Regulation — United Business Bank — Capital Requirements” and Note 19, “Regulatory Matters” in the Notes to the Consolidated Financial Statements, included in “Item 8. Financial Statements and Supplementary Data”, within this Form 10-K. Item 7A Quantitative and Qualitative Disclosures About Market Risk Market Risk.
Business — Supervision and Regulation — United Business Bank — Capital Requirements” and Note 18, “Regulatory Matters” in the Notes to the Consolidated Financial Statements, included in “Item 8. Financial Statements and Supplementary Data”, within this Form 10-K. Item 7A Quantitative and Qualitative Disclosures About Market Risk Market Risk.
PCD loans are considered performing and are not included in nonperforming assets in the table above. At December 31, 2024 and 2023, we had no PCD loans that were 90 days or more past due and still accruing. Allowance for credit losses.
PCD loans are considered performing and are not included in nonperforming assets in the table above. At December 31, 2025 and 2024, we had no PCD loans that were 90 days or more past due and still accruing. Allowance for credit losses.
If the Company were subject to regulatory guidelines for bank holding companies with $3.0 billion or more in assets, at December 31, 2024, the Company would have exceeded all regulatory capital requirements. For additional information see “Item 1.
If the Company were subject to regulatory guidelines for bank holding companies with $3.0 billion or more in assets, at December 31, 2025, the Company would have exceeded all regulatory capital requirements. For additional information see “Item 1.
Loan originations in 2024 were concentrated in California markets, primarily Los Angeles, Irvine/Southern California, San Francisco Bay Area and Sacramento/Northern California, with commercial and multifamily real estate secured loans accounting for the majority of the originations.
Loan originations in 2025 were concentrated in California markets, primarily Los Angeles, Irvine/Southern California, San Francisco Bay Area and Sacramento/Northern California, with commercial and multifamily real estate secured loans accounting for the majority of the originations.
In addition to its operating expenses, the Company is responsible for paying any dividends declared to its shareholders, funds paid out for Company stock repurchases, and payments on trust-preferred securities and the subordinated notes issued at the holding company level.
In addition to its operating expenses, the Company is responsible for paying any dividends declared to its shareholders, funds paid out for Company stock repurchases, and payments on trust-preferred securities issued at the holding company level.
The Company expects to continue to pay quarterly cash dividends on its common stock, subject to the Board of Director’s discretion to modify or terminate this practice at any time and for any reason without prior notice.
The Company expects to continue paying quarterly cash dividends on its common stock, subject to the Board of Director’s discretion to modify or terminate this practice at any time and for any reason without prior notice.
Management considers the allowance for credit losses for loans at December 31, 2024 to be adequate to cover future expected losses inherent in the loan portfolio based on the assessment of the above-mentioned factors affecting the loan portfolio.
Management considers the allowance for credit losses for loans at December 31, 2025 to be adequate to cover future expected losses inherent in the loan portfolio based on the assessment of the above-mentioned factors affecting the loan portfolio.
History and Overview BayCom is a bank holding company headquartered in Walnut Creek, California. The Company’s wholly owned banking subsidiary, United Business Bank, provides a broad range of financial services primarily to businesses and business owners, as well as individuals, through its branch network.
History and Overview BayCom is a bank holding company headquartered in Walnut Creek, California. The Company’s wholly owned banking subsidiary, United Business Bank, provides a broad range of financial services primarily to businesses and business owners, as well as individual consumers, through its branch network.
Actual loan prepayments and early 70 Table of Contents withdrawals from certificates may significantly differ from the assumptions made in the model when interest rates change. Lastly, the methodology does not evaluate the potential impact of higher rates on the ability of adjustable-rate loan borrowers to manage their debt.
Actual loan prepayments and early withdrawals from certificates may significantly differ from the assumptions made in the model when interest rates change. Lastly, the methodology does not evaluate the potential impact of higher rates on the ability of adjustable-rate loan borrowers to manage their debt.
(3) Net interest margin is calculated as net interest income divided by total average earning assets. (4) Average balances are average daily balances. ​ ​ 64 Table of Contents Rate/Volume Analysis.
(3) Net interest margin is calculated as net interest income divided by total average earning assets. (4) Average balances are average daily balances. ​ ​ 65 Table of Contents Rate/Volume Analysis.
In general, we seek to minimize the impact of changing interest rates on net interest income and the economic 69 Table of Contents values of assets and liabilities. Our ALCO meets quarterly to monitor the level of interest rate risk sensitivity to ensure compliance with the Board of Directors’ approved risk limits.
In general, we seek to minimize the impact of changing interest rates on net interest income and the economic values of assets and liabilities. Our ALCO meets quarterly to monitor the level of interest rate risk sensitivity to ensure compliance with the Board of Directors’ approved risk limits.
We expect to continue to make opportunistic hires of talented and entrepreneurial bankers, to further augment our growth. Our bankers are incentivized to increase the size of their loan and deposit portfolios and generate fee income while maintaining strong credit quality.
We expect to continue to make opportunistic hires of talented and entrepreneurial bankers, to further augment our growth. Our bankers are incentivized to 48 Table of Contents increase the size of their loan and deposit portfolios and generate fee income while maintaining strong credit quality.
We evaluate capital expenditure projects based on a variety of factors, including expected strategic impacts (such as forecasted impact on revenue growth, productivity, expenses, service levels and customer retention) and our expected return on investment.
We evaluate capital expenditure projects based on a variety of factors, including expected strategic impacts (such as forecasted impact on revenue growth, productivity, expenses, service levels and customer retention) and our expected 68 Table of Contents return on investment.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” of this Form 10-K for additional information relating to stock. Regulatory capital. The Bank, as a state-chartered, federally insured commercial bank, and member of the Federal Reserve is subject to the capital requirements established by the Federal Reserve.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” of this Form 10-K for additional information relating to stock repurchases. 69 Table of Contents Regulatory capital. The Bank, as a state-chartered, federally insured commercial bank, and member of the Federal Reserve is subject to the capital requirements established by the Federal Reserve.
There were no amounts outstanding under these facilities at both December 31, 2024 and 2023. At December 31, 2024 and 2023, the Company had outstanding junior subordinated debt, net of marked-to-market, related to junior subordinated deferrable interest debentures assumed in connection with its previous acquisitions totaling $8.6 million.
There were no amounts outstanding under these facilities at both December 31, 2025 and 2024. At December 31, 2025 and 2024, the Company had outstanding junior subordinated debt, net of marked-to-market, related to junior subordinated deferrable interest debentures assumed in connection with its previous acquisitions totaling $8.7 million.
At December 31, 2024, the $4.4 million of loans less than 30 days past due was comprised of 15 loans all of which were placed on nonaccrual due to concerns over the financial condition of the borrowers.
At December 31, 2025, the $9.4 million of loans less than 30 days past due was comprised of 15 loans all of which were placed on nonaccrual due to concerns over the financial condition of the borrowers.
Loan modifications to borrowers experiencing financial difficulty as of December 31, 2024 totaled $2.7 million compared to $4.3 million at December 31, 2023. All modified loans were classified as nonaccrual at both dates. Modified loans that are accruing and performing according to their modified terms are not considered nonperforming.
Loan modifications to borrowers experiencing financial difficulty as of December 31, 2025 totaled $1.4 million compared to $2.7 million at December 31, 2024. All modified loans were classified as nonaccrual at both dates. Modified loans that are accruing and performing according to their modified terms are not considered nonperforming.
The Company takes all these factors into account when monitoring its exposure to interest rate risk. ​ 71 Table of Contents
The Company takes all these factors into account when monitoring its exposure to interest rate risk. ​ 72 Table of Contents
Comparison of Operating Results for the Years Ended December 31, 2023 and 2022 For a discussion of the Company’s 2023 results compared to 2022, refer to Part I, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on March 15, 2024.
Comparison of Operating Results for the Years Ended December 31, 2024 and 2023 For a discussion of the Company’s 2024 results compared to 2023, refer to Part I, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on March 14, 2025.
At December 31, 2024, the Bank had 35 full-service branches, with 16 locations in California, one in Nevada, two in Washington, five in New Mexico and 11 in Colorado. Our principal objective is to enhance shareholder value and generate consistent earnings growth by expanding our commercial banking franchise through both strategic acquisitions and organic growth.
At December 31, 2025, the Bank had 34 full-service branches, with 16 locations in California, one in Nevada, one in Washington, five in New Mexico and 11 in Colorado. Our principal objective is to enhance shareholder value and generate consistent earnings growth by expanding our commercial banking franchise through both strategic acquisitions and organic growth.
Over the 19 years since our inception, which timeframe includes a U.S. recession and a global pandemic, we have cumulative net charge-offs of $10.9 million. We believe our success in managing asset quality is illustrated by our aggregate net charge-off history. Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with GAAP.
Over the 21 years since our inception, which timeframe includes a U.S. recession and a global pandemic, we have cumulative net charge-offs of $11.8 million. We believe our success in managing asset quality is illustrated by our aggregate net charge-off history. Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with GAAP.
Interest income on loans for the years ended December 31, 2024 and 2023, also included $158,000 and $44,000, respectively, in accretion and amortization of the net discount on acquired loans, as well as revenue from PCD loans in excess of discounts.
Interest income on loans for the years ended December 31, 2025 and 2024, also included $638,000 and $158,000, respectively, in accretion and amortization of the net discount on acquired loans, as well as revenue from PCD loans in excess of discounts.
BayCom Corp is a separate legal entity from the Bank and must provide for its own liquidity. At December 31, 2024, the Company, on an unconsolidated basis, had liquid assets of $9.7 million.
BayCom Corp is a separate legal entity from the Bank and must provide for its own liquidity. At December 31, 2025, the Company, on an unconsolidated basis, had liquid assets of $7.5 million.
Acquired PCD loans are loans acquired through a business combination with evidence of more than insignificant credit deterioration and are accounted for under ASC Topic 326. Acquired non-PCD loans represent loans acquired through a business combination without more than insignificant evidence of credit deterioration and are accounted for under ASC Topic 310-20.
Acquired PCD loans are loans acquired through a business combination with evidence of more than insignificant credit deterioration and are accounted for under Accounting Standards Codification (“ASC”) Topic 326. Acquired non-PCD loans represent loans acquired through a business combination without more than insignificant evidence of credit deterioration and are accounted for under ASC Topic 310-20.
As of December 31, 2024, the Bank had an available borrowing capacity of $540.2 million with the FHLB of San Francisco, with no borrowings outstanding at that date. The Bank also had Federal Funds lines with available commitments totaling $65.0 million with four correspondent banks. There were no amounts outstanding under these facilities at both December 31, 2024 and 2023.
As of December 31, 2025, the Bank had an available borrowing capacity of $580.7 million with the FHLB of San Francisco, with no borrowings outstanding at that date. The Bank also had Federal Funds lines with available commitments totaling $65.0 million with four correspondent banks. There were no amounts outstanding under these facilities at both December 31, 2025 and 2024.
For all segments, the Company's actual loss history was not statistically relevant, thus the loss history of peers, defined as commercial financial institutions with asset size of one to five billion dollars, domiciled in California, with similar concentrations of lending were utilized to determine loss rates. The peers utilized in the allowance for credit losses are segment specific.
For all segments, the Company's actual loss history was not statistically relevant, thus the loss history of peers, defined as commercial financial institutions with asset size of $1.0 billion to $5.0 billion, domiciled in California, with similar concentrations of lending were utilized to determine loss rates. The peers utilized in the allowance for credit losses are segment specific.
At December 31, 2024, we had the ability to borrow up to $41.9 million from the FRB of San Francisco, with no FRB of San Francisco advances outstanding at that date. The Bank also has uncommitted Federal Funds lines with four corresponding banks. Cumulative available commitments totaled $65.0 million at both December 31, 2024 and December 31, 2023.
At December 31, 2025, we had the ability to borrow up to $49.3 million from the FRB of San Francisco, with no FRB of San Francisco advances outstanding at that date. The Bank also has uncommitted Federal Funds lines with four corresponding banks. Cumulative available commitments totaled $65.0 million at both December 31, 2025 and December 31, 2024.
The average yield earned on loans, including the accretion of the net discount and deferred loan fees recognized, was 5.49% for the year ended December 31, 2024, compared to 5.32% for the year ended December 31, 2023.
The average yield earned on loans, including the accretion of the net discount and deferred loan fees recognized, was 5.68% for the year ended December 31, 2025, compared to 5.49% for the year ended December 31, 2024.
These advances may be made pursuant to several different credit programs, each of which has its own interest rate, range of maturities and call features. At December 31, 2024 and 2023, we had the ability to borrow from the FHLB up to $540.2 million and $576.9 million, respectively.
These advances may be made pursuant to several different credit programs, each of which has its own interest rate, range of maturities and call features. At December 31, 2025 and 2024, we had the ability to borrow from the FHLB up to $580.7 million and $540.2 million, respectively.
In acquiring United Business Bank, FSB in 2017, we acquired a large deposit base from the local and regional unionized labor community. As of December 31, 2024, our top ten depositors, which included nine labor unions, accounted for roughly 11.5% of our total deposits.
In acquiring United Business Bank, FSB in 2017, we acquired a large deposit base from the local and regional unionized labor community. As of December 31, 2025, our top ten depositors, which included 10 labor unions, accounted for roughly 11.7% of our total deposits.
While maturities and scheduled amortization of loans are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by market interest rates, economic conditions, and competition. During the years ended December 31, 2024 and 2023, deposits increased by $101.3 million and $47.3 million, respectively.
While maturities and scheduled amortization of loans are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by market interest rates, economic conditions, and competition. During the years ended December 31, 2025 and 2024, deposits decreased by $20.4 million and increased by $101.3 million, respectively.
We believe our credit culture supports accountability amongst our bankers, who maintain an ability to expand our client base as well as make sound decisions for our Company. At December 31, 2024, our ratio of nonperforming assets to total assets was 0.36% and our ratio of nonperforming loans to total loans was 0.48%.
We believe our credit culture supports accountability amongst our bankers, who maintain an ability to expand our client base as well as make sound decisions for our Company. At December 31, 2025, our ratio of nonperforming assets to total assets was 0.52% and our ratio of nonperforming loans to total loans was 0.65%.
Based on the current conditions of the loan portfolio, management believes that the $17.9 million allowance for credit losses at December 31, 2024 is adequate to absorb probable losses inherent in the Company’s loan portfolio. No assurance can be given, however, that adverse economic conditions or other circumstances will not result in increased losses in the portfolio.
Based on the current composition of the Company’s loan portfolio, management believes that the $21.2 million allowance for credit losses at December 31, 2025 is adequate to absorb probable losses inherent in the portfolio. No assurance can be given, however, that adverse economic conditions or other circumstances will not result in increased losses in the portfolio.
Interest income on loans for the year ended December 31, 2024 and 2023, included $523,000 and $486,000 respectively, in fees related to prepayment penalties.
Interest income on loans for the year ended December 31, 2025 and 2024, included $501,000 and $523,000 respectively, in fees related to prepayment penalties.
At that date, nearly 30.8% of our deposit base was comprised of noninterest bearing demand deposit accounts, significantly lowering our aggregate cost of funds. 48 Table of Contents ● Our Team of Seasoned Bankers Represents an Important Driver of our Organic Growth by Expanding Banking Relationships with Current and Potential Clients.
At that date, nearly 26.1% of our deposit base was comprised of noninterest bearing demand deposit accounts, significantly lowering our aggregate cost of funds. ● Our Team of Seasoned Bankers Represents an Important Driver of our Organic Growth by Expanding Banking Relationships with Current and Potential Clients.
The remaining net discount on these acquired loans was $326,000 and $395,000 at December 31, 2024 and 2023, respectively. 62 Table of Contents Interest income on investment securities, excluding FRB and FHLB stock, increased $2.0 million, or 28.4%, to $9.0 million for the year ended December 31, 2024 from $7.0 million for the year ended December 31, 2023.
The remaining net discount on these acquired loans was $87,000 and $326,000 at December 31, 2025 and 2024, respectively. 62 Table of Contents Interest income on investment securities, excluding FRB and FHLB stock, increased $438,000, or 4.9%, to $9.4 million for the year ended December 31, 2025 from $9.0 million for the year ended December 31, 2024.
Liquid assets in the form of cash and cash equivalents, time deposit in banks and investment securities available-for-sale increased to $557.6 million at December 31, 2024 from $471.9 million at December 31, 2023. Further, management believes that our security portfolio is of high quality, helping to ensure marketability.
Liquid assets in the form of cash and cash equivalents, time deposit in banks and investment securities available-for-sale decreased to $386.2 million at December 31, 2025 from $557.6 million at December 31, 2024. Further, management believes that our security portfolio is of high quality, helping to ensure marketability.
Net cash provided by operating activities was $31.5 million and $30.8 million for the years ended December 31, 2024 and 2023, respectively.
Net cash provided by operating activities was $31.8 million and $30.4 million for the years ended December 31, 2025 and 2024, respectively.
Accruing loans past due 30 to 89 days totaled $6.7 million at December 31, 2024, compared to $4.8 million at December 31, 2023. At December 31, 2024 and 2023, nonaccrual loans included $643,000 and $4.4 million of loans 30-89 days past due, and $4.4 million and $2.1 million of loans less than 30 days past due, respectively.
Accruing loans past due 30 to 89 days totaled $1.1 million at December 31, 2025, compared to $6.7 million at December 31, 2024. At December 31, 2025 and 2024, nonaccrual loans included $562,000 and $643,000 of loans 30-89 days past due, and $9.4 million and $4.4 million of loans less than 30 days past due, respectively.
We use our sources of funds primarily to meet our ongoing commitments, pay maturing deposits and fund withdrawals, and to fund loan commitments. Loan commitments and letters of credit were $73.4 million and $77.4 million, including $9.6 million and $133,000 of undisbursed construction and development loan commitments, at December 31, 2024 and 2023, respectively.
We use our sources of funds primarily to meet our ongoing commitments, pay maturing deposits and fund withdrawals, and to fund loan commitments. Loan commitments and letters of credit were $67.5 million and $73.4 million, including $1.5 million and $9.6 million of undisbursed construction and development loan commitments, at December 31, 2025 and 2024, respectively.
Lease liabilities decreased $369,000, or 2.5%, to $14.4 million at December 31, 2024 from $14.8 million at December 31, 2023. The decrease in right-of-use assets and lease liabilities was due to normal depreciation and amortization, respectively, partially offset by changes in the ROU asset and liabilities resulting from lease extensions. Premises and Equipment.
Lease liabilities decreased $724,000, or 5.0%, to $13.7 million at December 31, 2025 from $14.4 million at December 31, 2024. The decrease in right-of-use assets and lease liabilities was due to normal depreciation and amortization, respectively, partially offset by changes in the ROU asset and liabilities resulting from lease extensions. Premises and Equipment.
We elected to exclude historical data from 2020 - 2021 to assess the quantitative expected credit losses because we believe that period is an outlier and did not represent normal economic behavior considering the COVID-19 pandemic lockdown with changes in macroeconomic variables and the significant levels of government relief programs in place during that period.
We elected to exclude historical data from 2020 first quarter to 2021 third quarter for purposes of estimating expected credit losses because we believe that period is an outlier and did 50 Table of Contents not represent normal economic behavior considering the COVID-19 pandemic lockdown with changes in macroeconomic variables and the significant levels of government relief programs in place during that period.
Securities purchased during the years ended December 31, 2024 and 2023, excluding FHLB and FRB stock, totaled $49.9 million and $25.3 million, while securities repayments, maturities and sales in those periods were $21.9 million, and $11.6 million, respectively. Certificates of deposit scheduled to mature in one year or less at December 31, 2024, totaled $485.2 million.
Securities purchased during the years ended December 31, 2025 and 2024, excluding FHLB and FRB stock, totaled $15.6 million and $49.9 million, while securities repayments, maturities and sales in those years were $38.2 million, and $21.9 million, respectively. Certificates of deposit scheduled to mature in one year or less at December 31, 2025, totaled $471.2 million.
Assuming continued payment during 2025 at this rate of $0.15 per share, our average total dividend paid each quarter would be approximately $1.7 million based on the number of our current outstanding shares at December 31, 2024.
Assuming continued payment during 2026 at this rate of $0.30 per share, our average total dividend paid each quarter would be approximately $3.3 million based on the number of our outstanding shares at December 31, 2025.
The average rate paid on interest bearing liabilities for the year ended December 31, 2024 was 2.54% compared to 1.87% for year ended December 31, 2023.
The average rate paid on interest bearing liabilities for the year ended December 31, 2025 was 2.51% compared to 2.54% for year ended December 31, 2024.
The Company recognizes operating leases on the Consolidated Balance Sheet as ROU assets and lease liabilities based on the value of the discounted future lease payments. ROU assets decreased $556,000, or 4.0%, to $13.4 million at December 31, 2024 from $13.9 million at December 31, 2023.
The Company recognizes operating leases on the Consolidated Balance Sheet as ROU assets and lease liabilities based on the value of the discounted future lease payments. ROU assets decreased $718,000, or 5.4%, to $12.7 million at December 31, 2025 from $13.4 million at December 31, 2024.
The total average balance of interest-bearing liabilities increased $78.1 million, or 5.13%, to $1.6 billion for the year ended December 31, 2024, from the year ended December 31, 2023, primarily due to an increase in interest-bearing time deposits.
The total average balance of interest-bearing liabilities increased $30.4 million, or 1.90%, to $1.6 billion for the year ended December 31, 2025, from the year ended December 31, 2024, primarily due to an increase in interest-bearing time deposits.
Our net income is also affected by noninterest income and noninterest expenses. Noninterest income consists of, among other things: (i) service charges on loans and deposits; (ii) gain on sale of loans; and (iii) gain (loss) on equity securities and (iv) other noninterest income. Our noninterest income decreased $600,000 during the year ended December 31, 2024, as compared to 2023.
Noninterest income consists of, among other things: (i) service charges on loans and deposits; (ii) gain on sale of loans; and (iii) gain (loss) on equity securities and (iv) other noninterest income. Our noninterest income decreased $291,000 during the year ended December 31, 2025, as compared to 2024.
Of these individually evaluated loans, $2.7 million had a specific allowance of $392,000 as of December 31, 2024. As of December 31, 2023, the Company individually evaluated $13.0 million in loans, all of which were on nonaccrual status. Of these individually evaluated loans, $9.7 million had a specific allowance of $4.4 million as of December 31, 2023.
Of these individually evaluated loans, $4.5 million had a specific allowance of $1.4 million as of December 31, 2025. As of December 31, 2024, the Company individually evaluated $17.4 million in loans, all of which were on nonaccrual status. Of these individually evaluated loans, $9.2 million had a specific allowance of $392,000 as of December 31, 2024.
Premises and equipment decreased $348,000, or 2.5%, to $13.4 million at December 31, 2024 from $13.7 million at December 31, 2023, driven by normal depreciation expenses associated with these assets. Deposits. Deposits are our primary source of funding and consist of core deposits from the communities served by our branch and office locations.
Premises and equipment decreased $166,000, or 1.2%, to $13.2 million at December 31, 2025 from $13.4 million at December 31, 2024, driven by normal depreciation expenses associated with these assets. Deposits. Deposits are our primary source of funding and mainly consist of core deposits from the communities served by our branch network.
At December 31, 2024, the Company, on a consolidated basis, had assets of $2.7 billion, loans receivable, net of $1.9 billion, deposits of $2.2 billion and shareholders’ equity of $324.4 million. We continue to focus on growing our commercial loan portfolios through both acquisitions and organic growth.
At December 31, 2025, the Company, on a consolidated basis, had total assets of $2.6 billion, loans receivable, net of $2.0 billion, deposits of $2.2 billion and shareholders’ equity of $338.6 million. We continue to focus on growing our commercial loan portfolios through both acquisitions and organic growth.
The related allowance for credit losses on individually evaluated modified loans totaled $24,000 and $1.3 million at December 31, 2024 and December 31, 2023, respectively. 56 Table of Contents The following table sets forth the nonperforming loans, nonperforming assets and modified loans to borrowers experiencing financial difficulty as of the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2024 2023 ​ ​ (Dollars in thousands) ​ Loans accounted for on a nonaccrual basis: ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ $ 293 ​ $ 2,072 ​ Real estate: ​ ​ ​ ​ ​ ​ ​ Residential ​ ​ 1,103 ​ ​ 1,496 ​ Multifamily residential ​ ​ 77 ​ ​ 5,305 ​ Owner occupied CRE ​ ​ 4,284 ​ ​ 3,573 ​ Non-owner occupied CRE ​ ​ 3,486 ​ ​ 165 ​ Construction and land ​ ​ — ​ ​ 366 ​ Total real estate ​ ​ 8,950 ​ ​ 10,905 ​ Consumer ​ ​ 4 ​ ​ — ​ Total nonaccrual loans ​ ​ 9,247 ​ ​ 12,977 ​ Accruing loans 90 days or more past due ​ ​ 220 ​ ​ — ​ Total nonperforming loans ​ ​ 9,467 ​ ​ 12,977 ​ Real estate owned ​ ​ — ​ ​ — ​ Total nonperforming assets (1) ​ $ 9,467 ​ $ 12,977 ​ Modified loans to borrowers experiencing financial difficulty – performing ​ $ — ​ $ — ​ PCD loans ​ $ 22,450 ​ $ 25,723 ​ Nonperforming assets to total assets (1) ​ ​ 0.36 % ​ 0.51 % Nonperforming loans to total loans (1) ​ ​ 0.48 % ​ 0.67 % (1) Performing modified loans to borrowers experiencing financial difficulty are neither included in nonperforming loans above nor are they included in the numerators used to calculate these ratios.
The related allowance for credit losses on individually evaluated modified loans totaled $1,500 and $24,000 at December 31, 2025 and December 31, 2024, respectively. 56 Table of Contents ​ The following table sets forth the nonperforming loans, nonperforming assets and performing modified loans to borrowers experiencing financial difficulty as of the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ ​ ​ (Dollars in thousands) ​ Loans accounted for on a nonaccrual basis: ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ $ 839 ​ $ 293 ​ Real estate: ​ ​ ​ ​ ​ ​ ​ Residential ​ ​ 716 ​ ​ 1,103 ​ Multifamily residential ​ ​ — ​ ​ 77 ​ Owner occupied CRE ​ ​ 4,513 ​ ​ 4,284 ​ Non-owner occupied CRE ​ ​ 7,375 ​ ​ 3,486 ​ Construction and land ​ ​ — ​ ​ — ​ Total real estate ​ ​ 12,604 ​ ​ 8,950 ​ Consumer ​ ​ — ​ ​ 4 ​ Total nonaccrual loans ​ ​ 13,443 ​ ​ 9,247 ​ Accruing loans 90 days or more past due ​ ​ — ​ ​ 220 ​ Total nonperforming loans ​ ​ 13,443 ​ ​ 9,467 ​ Real estate owned ​ ​ — ​ ​ — ​ Total nonperforming assets (1) ​ $ 13,443 ​ $ 9,467 ​ Performing modified loans to borrowers experiencing financial difficulty – performing ​ $ — ​ $ — ​ PCD loans ​ $ 16,788 ​ $ 22,450 ​ Nonperforming assets to total assets (1) ​ ​ 0.52 % ​ 0.36 % Nonperforming loans to total loans (1) ​ ​ 0.65 % ​ 0.48 % (1) Performing modified loans to borrowers experiencing financial difficulty are neither included in nonperforming loans above nor are they included in the numerators used to calculate these ratios.
At December 31, 2024, the Company’s allowance for credit losses for loans was $17.9 million, or 0.92% of total loans, compared to $22.0 million, or 1.14% of total loans, at December 31, 2023. A $1.3 million provision for credit losses was recorded for the year ended December 31, 2024.
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 $17.9 million, or 0.92% of total loans, at December 31, 2024. A $4.1 million provision for credit losses was recorded for the year ended December 31, 2025.
(2) Includes loans located in Sacramento and Northern California counties totaling $86.4 million and loans located in Los Angeles and Orange counties totaling $537.1 million. (3) Includes loans located in the states of Colorado, New Mexico, Washington and other states.
(2) Includes loans located in Sacramento and Northern California counties totaling $92.3 million and loans located in Los Angeles and Orange counties totaling $601.5 million. (3) Includes loans located in the states of Colorado, Nevada, New Mexico, Washington and other states.
Interest expense increased $12.1 million, or 42.5%, to $40.6 million for the year ended December 31, 2024 from $28.5 million for the year ended December 31, 2023, reflecting higher funding costs primarily related to increased rates of interest payable on our money market and time deposits .
Interest expense increased $366,000, or 0.9%, to $40.9 million for the year ended December 31, 2025 from $40.6 million for the year ended December 31, 2024, reflecting higher funding costs primarily related to increased rates of interest payable on our money market and time deposits .
During the years ended December 31, 2024, 2023 and 2022, the Bank sold $14.0 million , $9.6 million and 66 Table of Contents $42.5 million in loans and loan participation interests, and received $299.9 million, $196.7 million and $469.6 million in principal repayments, respectively.
During the years ended December 31, 2025, 2024 and 2023, the Bank sold $5.1 million, $14.0 million and $9.6 million in loans and loan participation interests, and received $354.1 million, $299.9 million and $196.7 million in principal repayments, respectively.
At December 31, 2024, our $1.9 billion total loan portfolio included $299.2 million, or 15.3%, of acquired loans (all of which were recorded to their estimated fair values at the time of acquisition), and the remaining $1.7 billion, or 84.7%, consisted of loans we originated.
At December 31, 2025, our $2.0 billion total loan portfolio included $224.9 million, or 10.9%, of acquired loans (all of which were recorded to their estimated fair values at the time of acquisition), and the remaining $1.8 billion, or 89.1%, consisted of loans we originated.
The uninsured amounts are estimates based on the methodologies and assumptions used for United Business Bank’s regulatory reporting requirements. ​ The following table sets forth the portion of our time deposits that are in excess of the FDIC insurance limit, by remaining time until maturity, as of December 31, 2024. ​ (Dollars in thousands) ​ ​ ​ ​ Less than 3 months ​ $ 19,666 Over 3 through 6 months ​ ​ 52,019 Over 6 through 12 months ​ ​ 19,766 Over 12 months ​ ​ 9,001 Total ​ $ 100,452 ​ For additional information regarding our deposits, see “Note 11 – Deposits” of the Notes to Consolidated Financial Statements contained in “Item 8.
The uninsured amounts are estimates based on the methodologies and assumptions used for United Business Bank’s regulatory reporting requirements. ​ The following table sets forth the portion of our time deposits that are in excess of the FDIC insurance limit, by remaining time until maturity, as of December 31, 2025. ​ (Dollars in thousands) ​ ​ ​ ​ Less than 3 months ​ $ 40,012 Over 3 through 6 months ​ ​ 32,681 Over 6 through 12 months ​ ​ 67,448 Over 12 months ​ ​ 34,196 Total ​ $ 174,337 ​ For additional information regarding our deposits, see “Note 10 – Deposits” of the Notes to Consolidated Financial Statements contained in “Item 8.
As of December 31, 2024, acquired non-PCD loans totaled $140.6 million with a remaining net premium of $1.8 million, compared to $187.7 million with a remaining net premium of $2.1 million as of December 31, 2023.
As of December 31, 2025, acquired non-PCD loans totaled $121.1 million with a remaining net premium of $397,000 compared to $140.6 million with a remaining net premium of $1.8 million as of December 31, 2024.
Dividends on FHLB and FRB stock totaled $1.6 million and $1.4 million for the years ended December 31, 2024 and 2023, respectively. Interest income on fed funds sold and interest-bearing balances in banks increased $5.5 million, or 47.4% to $17.1 million for the year ended December 31, 2024 from $11.6 million for the year ended December 31, 2023.
Dividends on FHLB and FRB stock totaled $1.6 million and $1.4 million for the years ended December 31, 2025 and 2024, respectively. Interest income on fed funds sold and interest-bearing balances in banks decreased $6.8 million, or 39.9% to $10.3 million for the year ended December 31, 2025 from $17.1 million for the year ended December 31, 2024.
During the year ended December 31, 2024, there was a shift in interest rate sensitive clients moving a portion of their non-operating deposit balances from lower costing deposits, including noninterest-bearing deposits, into higher costing money market and time deposits.
During the year ended December 31, 2025, some interest rate sensitive clients shifted a portion of their non-operating deposit balances from lower-cost deposits, including noninterest-bearing deposits, into higher-cost money market and time deposits.
At both December 31, 2024 and 2023, there were no FHLB advances outstanding. During the first quarter of 2024, the Bank was approved for discount window advances with the FRB of San Francisco secured by certain types of loans.
At both December 31, 2025 and 2024, there were no FHLB advances outstanding. The Bank has been approved for discount window advances from the FRB of San Francisco secured by certain types of loans.
The increase was due to a 46 basis point increase in the yield on investment securities to 4.51% for the year ended December 31, 2024 from 4.05% for the year ended December 31, 2023, and a $26.6 million increase in the average balance of investment securities.
The increase was due to a 14 basis point increase in the average yield on investment securities to 4.65% for the year ended December 31, 2025 from 4.51% for the year ended December 31, 2024, and a $3.1 million increase in the average balance of investment securities.
Nonperforming assets generally consist of nonaccrual loans, accruing loans 90 days or more past due, and other real estate owned (“OREO”). Nonperforming assets decreased $3.5 million to $9.5 million, or 0.48% of total loans, at December 31, 2024 compared to $13.0 million, or 0.67% of total loans, at December 31, 2023.
Nonperforming assets and nonaccrual loans. Nonperforming assets generally consist of nonaccrual loans, accruing loans 90 days or more past due, and other real estate owned (“OREO”). Nonperforming assets increased $3.8 million to $13.4 million, or 0.65% of total loans, at December 31, 2025 compared to $9.7 million, or 0.50% of total loans, at December 31, 2024.
Our efficiency ratio, which is calculated by dividing noninterest expense by the sum of net interest income before provision for credit losses and noninterest income, was 65.77% for the year ended December 31, 2024, compared to 61.69% for the year ended December 31, 2023.
Our efficiency ratio, calculated as noninterest expense divided by the sum of net interest income before provision for credit losses and noninterest income, was 63.51% for the year ended December 31, 2025, compared to 65.77% for the year ended December 31, 2024.
On February 20, 2025, the Company declared a quarterly cash dividend of $0.15 per share on the Company’s outstanding common stock payable on April 10, 2025 to shareholders of record as of the close of business on March 13, 2025.
On February 19, 2026, the Company declared a quarterly cash dividend of $0.30 per share on the Company’s outstanding common stock, payable on April 9, 2026 to shareholders of record as of the close of business on March 12, 2026.
Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions including relative levels of market interest rates, loan prepayments and deposit decay, and should not be relied upon as indicative of actual results. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Interest Income Sensitivity Immediate Changes in Rates (1) ​ ​ -300 ​ -200 -100 +100 +200 +300 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in thousands) ​ December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dollar change ​ $ (24,725) ​ $ (15,384) ​ $ (6,089) ​ $ 3,559 ​ $ 6,284 ​ $ 8,289 Percent change ​ (12) % (7) % (3) % 2 % 3 % 4 % December 31, 2023 ​ ​ ​ ​ ​ ​ ​ Dollar change ​ $ (24,515) ​ $ (13,747) ​ $ (4,176) ​ $ (2,007) ​ $ (2,449) ​ $ (3,424) Percent change ​ (12) % (6) % (2) % (1) % (1) % ​ (2) % (1) This data does not reflect any actions that we may undertake in response to changes in interest rates such as changes in rates paid on certain deposit accounts based on local competitive factors, which could reduce the actual impact on net interest income, if any.
Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions, including relative levels of market interest rates, loan prepayments and deposit decay, and should not be relied upon as indicative of actual results. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Interest Income Sensitivity Immediate Changes in Rates (1) ​ ​ ​ ​ ​ -300 ​ -200 ​ ​ ​ -100 ​ ​ ​ +100 ​ ​ ​ +200 ​ ​ ​ +300 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in thousands) ​ December 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dollar change ​ $ (18,022) ​ $ (10,881) ​ $ (4,629) ​ $ (3,187) ​ $ (9,812) ​ $ (17,163) Percent change ​ (9) % (5) % (2) % (2) % (5) % (8) % December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dollar change ​ $ (24,725) ​ $ (15,384) ​ $ (6,089) ​ $ 3,559 ​ $ 6,284 ​ $ 8,289 Percent change ​ (12) % (7) % (3) % 2 % 3 % 4 % (1) This data does not reflect any actions that we may undertake in response to changes in interest rates such as changes in rates paid on certain deposit accounts based on local competitive factors, which could reduce the actual impact on net interest income, if any. 71 Table of Contents As of December 31, 2025, the Company maintained a well-balanced asset-liability profile designed to manage interest rate risk while supporting ongoing growth.
Income tax expense decreased $2.2 million, or 20.7%, to $8.5 million for the year ended December 31, 2024 from $10.7 million for the year ended December 31, 2023, reflecting an decrease in pre-tax income for the period ended December 31, 2024. The Company’s effective tax rate was 26.5% for the year ended December 31, 2024 compared to 28.1% for 2023.
Income tax expense increased $180,000, or 2.1%, to $8.7 million for the year ended December 31, 2025 from $8.5 million for the year ended December 31, 2024, reflecting an increase in pre-tax income for the year ended December 31, 2025. The Company’s effective tax rate was 26.6% for the year ended December 31, 2025 compared to 26.5% for 2024.
During the year ended December 31, 2024, net cash used in investing activities, which consisted primarily of net change in loans receivable and purchases, sales and maturities of investment securities, was $62.2 million compared to $80.4 million of net cash provided in investing activities for the year ended December 31, 2023.
Net cash used in investing activities, which consisted primarily of net change in loans receivable and purchases, sales and maturities of investment securities, was $90.8 million and $62.2 million for the years ended December 31, 2025 and 2024, respectively.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 69 ​ ​ ​ ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 72 ​ ​ ​ ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 131 ​ ​ ​ ITEM 9(A). CONTROLS AND PROCEDURES 131 ​ ​ ​ ITEM 9B. OTHER INFORMATION 132 ​ ​ ​
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 70 ​ ​ ​ ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 73 ​ ​ ​ ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 127 ​ ​ ​ ITEM 9(A). CONTROLS AND PROCEDURES 128 ​ ​ ​ ITEM 9B. OTHER INFORMATION 129 ​ ​ ​

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