Item 1A. Risk Factors
Item 1A. Risk Factors
There have been no material changes in the Risk Factors previously disclosed in Item 1A of the 2020 Annual Report, except for the following:
The success of our pending acquisition of Pacific Enterprise Bancorp is dependent on uncertain factors.
The success of the Company’s pending acquisition of Pacific Enterprise Bancorp, or PEB, whereby PEB would be merged with BayCom, and PEB’s subsidiary bank, Pacific Enterprise Bank, would be merged with United Business Bank, BayCom’s subsidiary bank, is subject to a number of uncertain factors, including, but not limited to:
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obtaining the requisite regulatory approvals in order to consummate the transactions. The Company and PEB must obtain approvals from the Federal Reserve Board, the Federal Deposit Insurance Corporation and the California Department of Financial Protection and Innovation. Other approvals, waivers or consents from regulators may also be required. An adverse development in either party’s regulatory standing or other factors could result in an inability to obtain approval or delay their receipt. These regulators may impose conditions on the completion of the transactions. It is a condition to each company’s obligation to complete the merger that the requisite regulatory approvals be obtained without the imposition of any non-standard condition or requirement, which individually or in the aggregate, is reasonably deemed unduly burdensome by the Board of Directors of BayCom including any condition that would increase the minimum regulatory capital requirements of BayCom or United Business Bank;
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obtaining the requisite stockholder approvals from the Company’s and PEB’s shareholders;
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our ability to realize expected revenues, cost savings, synergies and other benefits from the acquisition within the expected time frames or at all, and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected; and
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the credit quality of loans and other assets acquired from PEB.
BayCom and PEB have operated and, until the completion of the acquisition, will continue to operate, independently. The success of the acquisition, including anticipated benefits and cost savings, will depend, in part, on BayCom’s ability to successfully combine the businesses of BayCom and PEB. To realize these anticipated benefits and cost savings, after the completion of the acquisition, BayCom expects to integrate PEB’s business into its own. It is possible that the integration process could result in the loss of key employees, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the combined company’s ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits and cost savings of the merger. The loss of key employees could adversely affect BayCom’s ability to successfully conduct its business in the market in which PEB now operates, which could have an adverse effect on BayCom’s financial results and the value of its common stock. If BayCom experiences difficulties with the integration process, the anticipated benefits of the acquisition may not be realized fully or at all, or may take longer to realize than expected. As with any merger of financial institutions, there also may be business disruptions that cause BayCom and/or PEB to lose customers or cause customers to close their accounts with BayCom and/or PEB and move their business to competing financial institutions. Integration efforts between the two companies will also divert management attention and resources.
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