BayCom Corp 10-K

Item 8. Financial Statements and Supplementary Data BAYCOM CORP AND SUBSIDIARY INDEX TO CONSOLIDATED FINANCIAL STATEMENTS ​ Report of Independent Registered Public Accounting Firm – Moss Adams LLP (PCAOB ID 659 ) 78 ​ ​ Consolidated Financial Statements ​ ​ ​ Consolidated Balance Sheets – December 31, 2022 and 2021 79 ​ ​ Consolidated Statements of Income – Years Ended December 31, 2022, 2021 and 2020 80 ​ ​ Consolidated Statements of Comprehensive Income – Years Ended December 31, 2022, 2021 and 2020 81 ​ ​ Consolidated Statements of Changes in Shareholders’ Equity – Years ended December 31, 2022, 2021 and 2020 82 ​ ​ Consolidated Statements of Cash Flows – Years Ended December 31, 2022, 2021, and 2020 83 ​ ​ Notes to Consolidated Financial Statements 85 ​ ​ ​ 77 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of BayCom Corp Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of BayCom Corp and Subsidiary (the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2022 and 2021, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Moss Adams LLP Sacramento, California March 30, 2023 We have served as the Company’s auditor since 2018. ​ 78 Table of Contents ​ BAYCOM CORP AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS December 31, 2022 and 2021 (In thousands, except for share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2022 2021 ASSETS ​ ​ Cash due from banks ​ $ 26,980 ​ $ 21,178 Federal funds sold and interest-bearing balances in banks ​ 149,835 ​ 358,509 Cash and cash equivalents ​ ​ 176,815 ​ 379,687 Time deposits in banks ​ ​ 2,241 ​ 3,585 Investment securities available-for-sale ​ ​ 167,761 ​ 174,435 Federal Home Loan Bank ("FHLB") stock, at par ​ ​ 10,679 ​ 8,385 Federal Reserve Bank ("FRB") stock, at par ​ ​ 9,602 ​ 7,650 Loans held for sale ​ ​ 2,380 ​ 6,470 Loans, net of allowance for loan losses of $ 18,900 at December 31, 2022 and $ 17,700 at December 31, 2021 ​ ​ 2,002,224 ​ 1,647,190 Premises and equipment, net ​ ​ 13,278 ​ 14,370 Other real estate owned ("OREO") ​ ​ 21 ​ 21 Core deposit intangible, net ​ ​ 5,201 ​ 6,489 Cash surrender value of bank owned life insurance ("BOLI") policies, net ​ ​ 22,193 ​ 21,590 Right-of-use assets ("ROU"), net ​ ​ 16,569 ​ ​ 12,127 Goodwill ​ ​ 38,838 ​ 38,838 Interest receivable and other assets ​ ​ 45,532 ​ 29,860 Total assets ​ $ 2,513,334 ​ $ 2,350,697 LIABILITIES AND SHAREHOLDERS’ EQUITY ​ ​ ​ ​ ​ Noninterest and interest bearing deposits ​ $ 2,085,479 ​ $ 1,985,239 Junior subordinated deferrable interest debentures, net ​ 8,484 ​ 8,403 Subordinated debt, net ​ ​ 63,711 ​ ​ 63,542 Salary continuation plan ​ 4,840 ​ 4,393 Lease liabilities ​ 17,138 ​ 12,657 Interest payable and other liabilities ​ 16,533 ​ 13,856 Total liabilities ​ 2,196,185 ​ 2,088,090 Commitments and contingencies (Note 16) ​ ​ Shareholders' equity ​ ​ Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding at both December 31, 2022 and December 31, 2021 ​ — ​ — Common stock, no par value; 100,000,000 shares authorized; 12,838,462 and 10,680,386 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively ​ 204,301 ​ 157,098 Additional paid in capital ​ 287 ​ 287 Accumulated other comprehensive (loss) income, net of tax ​ ( 14,818 ) ​ 2,166 Retained earnings ​ 127,379 ​ 103,056 Total shareholders’ equity ​ 317,149 ​ 262,607 Total liabilities and shareholders’ equity ​ $ 2,513,334 ​ $ 2,350,697 ​ The accompanying notes are an integral part of the consolidated financial statements. ​ 79 Table of Contents BAYCOM CORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME For the years ended December 31, 2022, 2021 and 2020 (In thousands, except for share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 Interest income: ​ ​ ​ Loans, including fees ​ $ 95,722 ​ $ 76,099 ​ $ 82,186 Investment securities ​ 6,085 ​ 3,893 ​ 2,962 Fed funds sold and interest-bearing balances in banks ​ ​ 4,025 ​ ​ 665 ​ ​ 1,251 FHLB dividends ​ 684 ​ 494 ​ 340 FRB dividends ​ 549 ​ 458 ​ 453 Total interest and dividend income ​ 107,065 ​ 81,609 ​ 87,192 Interest expense: ​ ​ ​ Deposits ​ 6,273 ​ 4,875 ​ 6,954 Subordinated debt ​ ​ 3,582 ​ ​ 3,582 ​ ​ 1,405 Junior subordinated debt ​ 496 ​ 345 ​ 540 Total interest expense ​ 10,351 ​ 8,802 ​ 8,899 Net interest income ​ 96,714 ​ 72,807 ​ 78,293 Provision for loan losses ​ 4,441 ​ 466 ​ 10,320 Net interest income after provision for loan losses ​ 92,273 ​ 72,341 ​ 67,973 Noninterest income: ​ ​ ​ Gain on sale of loans ​ 2,747 ​ 4,795 ​ 1,835 Service charges and other fees ​ 3,107 ​ 2,403 ​ 2,548 Loan servicing and other loan fees ​ 2,176 ​ 1,833 ​ 2,465 (Loss) income on investment in Small Business Investment Company (“SBIC”) fund ​ ( 70 ) ​ 1,274 ​ 875 Bargain purchase gain ​ ​ 1,665 ​ ​ — ​ ​ — Other income and fees ​ 1,048 ​ 963 ​ 1,052 Total noninterest income ​ 10,673 ​ 11,268 ​ 8,775 Noninterest expense: ​ ​ ​ Salaries and employee benefits ​ 40,480 ​ 33,761 ​ 33,942 Occupancy and equipment ​ 8,384 ​ 7,384 ​ 7,088 Data processing ​ 6,969 ​ 5,565 ​ 8,221 Other expense ​ 10,102 ​ 8,419 ​ 9,268 Total noninterest expense ​ 65,935 ​ 55,129 ​ 58,519 Income before provision for income taxes ​ 37,011 ​ 28,480 ​ 18,229 Provision for income taxes ​ 10,024 ​ 7,789 ​ 4,503 Net income ​ $ 26,987 ​ $ 20,691 ​ $ 13,726 Earnings per common share: ​ ​ ​ Basic earnings per common share ​ $ 2.06 ​ $ 1.90 ​ $ 1.15 Weighted average shares outstanding ​ 13,124,179 ​ 10,882,344 ​ 11,965,245 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted earnings per common share ​ $ 2.06 ​ $ 1.90 ​ $ 1.15 Weighted average shares outstanding ​ 13,124,179 ​ 10,882,344 ​ 11,965,245 ​ The accompanying notes are an integral part of the consolidated financial statements. ​ 80 Table of Contents BAYCOM CORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the years ended December 31, 2022, 2021 and 2020 (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 Net income ​ $ 26,987 ​ $ 20,691 ​ $ 13,726 Other comprehensive (loss) income: ​ ​ ​ Change in unrealized (loss) gain on available-for-sale securities ​ ( 23,848 ) ​ ( 740 ) ​ 2,024 Deferred tax benefit (expense) ​ 6,864 ​ 209 ​ ( 578 ) Other comprehensive (loss) gain income, net of tax ​ ( 16,984 ) ​ ( 531 ) ​ 1,446 Total comprehensive income ​ $ 10,003 ​ $ 20,160 ​ $ 15,172 ​ The accompanying notes are an integral part of the consolidated financial statements. ​ 81 Table of Contents BAYCOM CORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY For the years ended December 31, 2022, 2021 and 2020 (In thousands, except for share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ Common ​ Additional ​ Other ​ ​ ​ ​ Total ​ ​ Number of ​ Stock ​ Paid in ​ Comprehensive ​ Retained ​ Shareholders’ ​ ​ Shares ​ Amount ​ Capital ​ Income/(Loss) ​ Earnings ​ Equity Balance, January 1, 2020 ​ 12,444,632 ​ $ 184,043 ​ $ 287 ​ $ 1,251 ​ $ 68,639 ​ $ 254,220 Net income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 13,726 ​ ​ 13,726 Other comprehensive income, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,446 ​ ​ ​ ​ ​ 1,446 Restricted stock granted ​ 129,066 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — Restricted stock forfeited ​ ( 1,432 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — Stock based compensation ​ ​ ​ ​ 1,456 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,456 Repurchase of shares ​ ( 1,276,869 ) ​ ​ ( 18,257 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 18,257 ) Balance, December 31, 2020 ​ 11,295,397 ​ ​ 167,242 ​ ​ 287 ​ ​ 2,697 ​ ​ 82,365 ​ ​ 252,591 Net income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 20,691 ​ ​ 20,691 Other comprehensive loss, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 531 ) ​ ​ ​ ​ ​ ( 531 ) Restricted stock granted ​ 36,415 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — Restricted stock forfeited ​ ( 2,692 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — Stock based compensation ​ ​ ​ ​ 1,407 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,407 Repurchase of shares ​ ( 648,734 ) ​ ​ ( 11,551 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 11,551 ) Balance, December 31, 2021 ​ 10,680,386 ​ ​ 157,098 ​ ​ 287 ​ ​ 2,166 ​ ​ 103,056 ​ ​ 262,607 Net income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 26,987 ​ ​ 26,987 Other comprehensive loss, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 16,984 ) ​ ​ ​ ​ ​ ( 16,984 ) Restricted stock granted ​ 33,091 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — Restricted stock forfeited ​ ( 1,854 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — Cash dividends of $ 0.05 per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 2,664 ) ​ ​ ( 2,664 ) Stock based compensation ​ ​ ​ ​ 1,022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,022 Issuance of common shares to acquire Pacific Enterprise Bancorp ​ 3,032,579 ​ ​ 64,140 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 64,140 Repurchase of shares ​ ( 905,740 ) ​ ​ ( 17,959 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 17,959 ) Balance, December 31, 2022 ​ 12,838,462 ​ $ 204,301 ​ $ 287 ​ $ ( 14,818 ) ​ $ 127,379 ​ $ 317,149 ​ The accompanying notes are an integral part of the consolidated financial statements. ​ 82 Table of Contents BAYCOM CORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, 2022, 2021 and 2020 (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 ​ 2020 Cash flows from operating activities: ​ ​ ​ ​ Net income ​ $ 26,987 ​ $ 20,691 ​ $ 13,726 ​ Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ Provision for loan losses ​ 4,441 ​ 466 ​ 10,320 ​ Increase (decrease) in deferred tax assets ​ ( 396 ) ​ 117 ​ ( 2,538 ) ​ Accretion on acquired loans ​ ( 375 ) ​ ( 1,262 ) ​ ( 5,100 ) ​ Gain on sale of loans ​ ( 2,747 ) ​ ( 4,795 ) ​ ( 1,835 ) ​ Gain on sale of securities ​ ​ — ​ ​ ( 41 ) ​ ​ — ​ Proceeds from sale of loans ​ 42,515 ​ 45,846 ​ 23,953 ​ Loans originated for sale ​ ( 33,957 ) ​ ( 54,577 ) ​ ( 32,635 ) ​ Loss on sale of premises, net ​ ​ — ​ ​ ( 12 ) ​ ​ ( 40 ) ​ Gain on sale of OREO ​ — ​ ( 15 ) ​ ( 86 ) ​ Bargain purchase gain ​ ( 1,665 ) ​ — ​ — ​ Accretion on junior subordinated debentures ​ 81 ​ 251 ​ 80 ​ Increase in cash surrender value of life insurance policies ​ ( 603 ) ​ ( 680 ) ​ ( 666 ) ​ Amortization/accretion of premiums/discounts on investment securities, net ​ 592 ​ 499 ​ 689 ​ Depreciation and amortization ​ 1,975 ​ 2,043 ​ 1,864 ​ Core deposit intangible amortization ​ 2,044 ​ 1,813 ​ 1,832 ​ Stock based compensation expense ​ 1,022 ​ 1,407 ​ 1,456 ​ (Decrease) increase in deferred loan origination fees, net ​ ( 1,821 ) ​ ( 1,944 ) ​ 3,396 ​ Increase in interest receivable and other assets ​ ( 2,342 ) ​ ( 2,553 ) ​ ( 1,155 ) ​ Increase in salary continuation plan, net ​ 447 ​ 384 ​ 351 ​ Increase (decrease) in interest payable and other liabilities ​ 3,414 ​ 2,791 ​ ( 3,615 ) ​ Net cash provided by operating activities ​ 39,612 ​ 10,429 ​ 9,997 ​ Cash flows from investing activities: ​ ​ ​ ​ Proceeds from maturities of interest bearing deposits in banks ​ 1,344 ​ 4,133 ​ 10,061 ​ Purchase of investment securities ​ ( 28,878 ) ​ ( 91,024 ) ​ ( 21,195 ) ​ Proceeds from the maturities, repayments and calls of investment securities ​ 11,052 ​ 27,955 ​ 31,215 ​ Proceeds from the sales of investment securities ​ 63 ​ 3,026 ​ — ​ Purchase of Federal Home Loan Bank stock ​ — ​ ( 648 ) ​ ( 398 ) ​ Purchase of Federal Reserve Bank stock ​ ( 1,010 ) ​ ( 45 ) ​ ( 874 ) ​ Increase (decrease) in loans, net ​ 53,789 ​ ( 2,918 ) ​ ( 82,215 ) ​ Proceeds from sale of premises ​ ​ — ​ ​ 46 ​ ​ 660 ​ Proceeds from sale of OREO ​ — ​ 422 ​ 736 ​ Purchase of equipment and leasehold improvements, net ​ ( 843 ) ​ ( 1,309 ) ​ ( 3,215 ) ​ Net cash received (paid) for acquisitions ​ 18,423 ​ — ​ ( 8,432 ) ​ Net cash provided by (used in) investing activities ​ 53,940 ​ ( 60,362 ) ​ ( 73,657 ) ​ ​ The accompanying notes are an integral part of the consolidated financial statements. ​ 83 Table of Contents BAYCOM CORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS – (continued) For the years ended December 31, 2022, 2021 and 2020 (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 Cash flows from financing activities: ​ ​ ​ (Decrease) increase in noninterest and interest bearing deposits ​ ( 30,954 ) ​ 168,389 ​ 111,241 (Decrease) increase in time deposits, net ​ ( 245,491 ) ​ ( 21,547 ) ​ ( 92,174 ) Repayment of junior subordinated debentures ​ ​ — ​ ​ — ​ ​ ( 1,575 ) Proceeds from issuance of subordinated debt, net ​ — ​ — ​ 63,372 Advances from Federal Home Loan Bank ​ — ​ — ​ 110,000 Repayment of Federal Home Loan Bank borrowings ​ — ​ ( 5,000 ) ​ ( 105,000 ) Increase in other borrowings ​ — ​ — ​ 6,000 Repayment of other borrowings ​ — ​ — ​ ( 6,000 ) Repurchase of common stock ​ ( 17,959 ) ​ ( 11,551 ) ​ ( 18,257 ) Dividends paid on common stock ​ ​ ( 2,020 ) ​ ​ — ​ ​ — Net cash (used in) provided by financing activities ​ ( 296,424 ) ​ 130,291 ​ 67,607 (Decrease) increase in cash and cash equivalents ​ ( 202,872 ) ​ 80,358 ​ 3,947 Cash and cash equivalents at beginning of period ​ 379,687 ​ 299,329 ​ 295,382 Cash and cash equivalents at end of period ​ $ 176,815 ​ $ 379,687 ​ $ 299,329 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental disclosure of cash flow information: ​ ​ ​ Cash paid during the year for: ​ ​ ​ Interest expense ​ $ 10,246 ​ $ 9,013 ​ $ 9,214 Income taxes paid, net ​ ​ 7,648 ​ 7,100 ​ 8,071 Non-cash investing and financing activities: ​ ​ ​ Change in unrealized (loss) gain on available-for-sale securities, net of tax ​ $ ( 16,984 ) ​ $ ( 531 ) ​ $ 1,446 Transfer of loans to other real estate owned ​ — ​ — ​ 505 Recognition of ROU assets ​ ​ 3,256 ​ ​ 645 ​ ​ 760 Recognition of lease liability ​ ​ 3,261 ​ ​ 652 ​ ​ 707 Cash dividends declared on common stock not yet paid ​ ​ ( 644 ) ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquisition: ​ ​ ​ Assets acquired, net of cash received ​ $ 440,785 ​ $ — ​ $ 109,429 Liabilities assumed ​ 380,055 ​ — ​ 120,409 Cash consideration ​ 275 ​ — ​ 13,886 Common stock issued ​ 64,140 ​ — ​ — ​ The accompanying notes are an integral part of the consolidated financial statements. ​ ​ 84 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BayCom Corp (the “Company”), a California corporation, is the bank holding company for United Business Bank (the “Bank”), a California state-chartered bank. The Company is primarily engaged in the business of planning, directing and coordinating the business activities of the Bank, its wholly owned operating subsidiary. The Bank, formerly known as Bay Commercial Bank, opened for business on July 20, 2004. The Bank provides a broad range of financial services primarily to local small and mid-sized businesses, service professionals and individuals through its 34 full-service banking branches. The main office is located in Walnut Creek, California and branch offices are located in Oakland, Castro Valley, Mountain View, Stockton, Pleasanton, Livermore, San Jose, Long Beach, Sacramento, San Francisco, Buena Park, Los Angeles, and Garden Grove, Waterloo, Irvine, California, and Seattle, Washington ( 2 ), New Mexico ( 5 ) and Colorado ( 11 ). The Company is subject to regulation by the Board of Governors of the Federal Reserve System (“Federal Reserve”). The Bank is subject to regulation by the California Department of Financial Protection and Innovation (“DFPI”), which until September 29, 2020 was known as the California Department of Business Oversight, and as a state-member bank, by the Federal Reserve. The Company has two subsidiary grantor trusts, First ULB Statutory Trust I (“FULB Trust”) and Bethlehem Capital Trust (“BFC Trust”) (collectively, the “Trusts”) which were established in connection with the issuance of trust preferred securities (see Note 13). In accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), the accounts and transactions of the Trusts are not included in the accompanying consolidated financial statements. The Trusts were acquired through acquisitions. The accounting and reporting policies of the Company conform to U.S. GAAP and prevailing practice within the banking industry. As an “emerging growth company” as defined in the Jumpstart Our Business Startups Act, the Company has elected to use the extended transition period to delay adoption of new or reissued accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. Accordingly, the consolidated financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards. As of December 31, 2022, there is no significant difference in the comparability of the consolidated financial statements as a result of this extended transition period. The following is a summary of the significant accounting and reporting policies used in preparing the consolidated financial statements. Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, the Bank. All material intercompany transactions and accounts have been eliminated in consolidation. For financial reporting purposes, the Trusts are accounted for under the equity method and are included in other assets on the consolidated balance sheets. The junior subordinated debentures issued and guaranteed by the Company and held by the Trusts are reflected as liabilities on the Company’s consolidated balance sheets. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates reflected in the consolidated financial statements include the allowance for loan losses, the valuation for deferred tax assets, the valuation of financial assets and liabilities, and the determination, recognition and measurement of impaired loans. Actual results could differ from these estimates. 85 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) Business Combinations On February 1, 2022 , the Company acquired all of the assets and assumed all of the liabilities of Pacific Enterprise Bancorp (“PEB”) and its wholly owned subsidiary, Pacific Enterprise Bank , under a Merger and Plan of Reorganization dated September 7, 2021 . On February 4, 2020 , the Company acquired all of the assets and assumed all of the liabilities of Grand Mountain Bancshares, Inc. (“GMB”) and its wholly owned subsidiary Grand Mountain Bank , under a Merger and Plan of Reorganization dated November 4, 2019 . The acquired assets and assumed liabilities, both tangible and intangible for all acquisitions were measured at estimated fair values, as required by the acquisition method of accounting for business combinations Financial Accounting Standards Board (“FASB”) ASC 805, Business Combinations. Management made significant estimates and exercised significant judgment in accounting for the acquisition. For additional information, see “Note 2-Acquisitions.” Cash and Cash Equivalents Cash equivalents are defined as short-term, highly liquid investments both readily convertible into known amounts of cash and so near maturity that there is insignificant risk of change in value because of changes in interest rates. Generally, only investments with original maturities of three months or less at the time of purchase qualify as cash equivalents. Cash and cash equivalents include cash and due from banks and federal funds sold. Generally, banks are required to maintain noninterest bearing cash reserves equal to a percentage of certain deposits. For the years ended December 31, 2022 and 2021, $ 175.8 million and $ 177.6 million in reserve balances were required, respectively. As of December 31, 2022 and 2021, the Company had cash deposits at other financial institutions in excess of FDIC insured limits. The Company places these deposits with major financial institutions and management monitors the financial condition of these institutions and believes the risk of loss to be minimal. At both December 31, 2022 and December 31, 2021, the Company did not hold interest bearing money market accounts in these financial institutions. Interest Bearing Deposits in Banks The Company invests in certificates of time deposits with other banks. At December 31, 2022 and 2021, the certificates of time deposits with other banks totaled $ 2.2 million and $ 3.6 million, with a yield of 2.77 % and 2.45 %, respectively. These deposits do not exceed FDIC limits and mature between one and six years . Investment Securities Available-for-Sale Available-for-sale debt securities include bonds, notes, mortgage-backed securities, and debentures not classified as held-to-maturity securities. These securities are carried at estimated fair value with unrealized holding gains and losses, net of tax impact, if any, reported as a net amount in a separate component of shareholders’ equity, accumulated other comprehensive income (loss), until realized. Gains and losses on the sale of available-for-sale debt securities are determined using the specific identification method. The amortization of premiums and accretion of discounts are recognized as adjustments to interest income over the period to maturity. Investments with fair values that are less than amortized costs are considered impaired. Impairment may result from either a decline in the financial condition of the issuing entity or in the case of fixed interest rate investments, from rising interest rates. At each financial statement date management assesses each investment to determine if impaired investments are temporarily impaired or if the impairment is other than temporary. This assessment includes a determination of whether the Company intends to sell the security, or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis less any current-period credit losses. For debt 86 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) securities that are considered other than temporarily impaired and that the Company does not intend to sell and will not be required to sell prior to recovery of the amortized cost basis, the amount of impairment is separated into the amount that is credit related (credit loss component) and the amount due to all other factors. The credit loss component is recognized in earnings and is calculated as the difference between the security’s amortized costs basis and the present value of its expected future cash flows. The remaining difference between the security’s fair value and the present value of the future expected cash flow is deemed to be due to factors that are not credit related and is recognized in other comprehensive income (loss). Federal Home Loan Bank Stock As a member of the FHLB, the Bank is required to own common stock in the FHLB based on the level of borrowings and outstanding FHLB advances. FHLB stock is carried at cost and is periodically evaluated for impairment based on ultimate recovery of par value. Cash dividends from the FHLB are reported as interest income. Federal Reserve Bank Stock As a member of the FRB, the Bank is required to own stock in the FRB of San Francisco based on a specified ratio relative to our capital. FRB stock is recorded at cost and redeemable at par value. FRB stock is periodically evaluated for impairment based on ultimate recovery of par value. Cash dividends are reported as interest income. Loans Loans are stated at the principal amount outstanding, net of the allowance for loan losses, net deferred fees, and unearned discounts, if any. The Company holds loans receivable primarily for investment purposes. The Company purchases and sells interests in certain loans referred to as participations. The participations are sold without recourse. The Company acquires loans in business combinations that are recorded at estimated fair value as of their purchase date. The purchaser cannot carryover the related allowance for loan losses as probable credit losses are considered in the estimation of fair value. Purchased loans are accounted for under ASC 310-30, Loans and Debt Securities with Deteriorated Credit Quality , or ASC 310-20, Non-refundable Fees and other Costs . Certain acquired loans exhibited credit quality deterioration since origination and are therefore being accounted for under ASC 310-30. The acquired loans that did not exhibit credit quality deterioration are accounted for under ASC 310-20. Interest on loans is calculated and accrued daily using the simple interest method based on the daily amount of principal outstanding. Generally, loans with temporarily impaired values and loans to borrowers experiencing financial difficulties are placed on nonaccrual even though the borrowers continue to repay the loans as scheduled. When the ability to fully collect nonaccrual loan principal is in doubt, cash payments received are applied first to principal until such time as full collection of the remaining recorded balance is expected. Loans are returned to accrual basis when principal and interest payments are being paid currently and full payment of principal and interest is probable. The Paycheck Protection Program (“PPP”), established by the Coronavirus Aid, Relief, and Economic Security Act of 2020 ("CARES Act") and implemented by the U.S. Small Business Administration (“SBA”), provided the Bank with delegated authority to process and originate PPP loans. When certain criteria are met, PPP loans are subject to forgiveness and the Bank will receive payment of the forgiveness amount from the SBA. PPP loans have a contractual term of two or five years and provide borrowers with an automatic payment deferral of principal and interest. PPP processing fees are deferred and recognized into interest income on straight line basis over the contractual life of the loans, but may be accelerated upon forgiveness or prepayment. The SBA guarantees 100% of the PPP loans made to eligible borrowers. The PPP expired on May 31, 2021. 87 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) Loans Purchased From time to time, the Bank may purchase whole-loans including multi-family residential, single-family residential and commercial and industrial loans that were not acquired in bank acquisitions. As of December 31, 2022 and 2021, purchased loans outstanding of collection totaled $ 134.5 million and $ 145.4 million respectively. Purchase premiums remaining on the purchased loans totaled $ 10,000 and $ 533,000 at December 31, 2022 and 2021, respectively. The purchased loans consist of adjustable-rate multi-family residential mortgages on properties within the Company’s markets and adjustable rate commercial and industrial loans both inside and outside the Company’s markets. The purchase decision is usually based on several factors, including current loan origination volumes, market interest rates, excess liquidity, our continuous efforts to meet the credit needs of certain borrowers under the Community Reinvestment Act (“CRA”), as well as other asset/liability management strategies. All of the purchased loans are selected using the Bank’s normal underwriting criteria at the time of purchase, or in some cases guaranteed by third parties. At December 31, 2022 and 2021, none of the purchased loans were past due 30 days or more. At December 31, 2022 and 2021, the Company has allocated approximately $ 1.3 million and $ 1.5 million, respectively, of the allowance for loan losses to the purchased loans. These loans are reserved for under the Company’s general allowance component. The decrease in the reserves is consistent with the decrease in balance of purchased loans outstanding of collection at December 31, 2022. Purchased Credit Impaired Loans The Company purchases individual loans and groups of loans, some of which show evidence of credit deterioration since origination. The purchased credit impaired (“PCI”) loans are recorded at the amount paid, since there is no carryover of the seller’s allowance for loan losses. PCI loans are accounted for individually or aggregated into pools of loans on common risk characteristics. The Company estimates the amount and timing of expected cash flows for the loan or pool. The expected cash flows in excess of the amount paid are recorded as interest income over the life of the loan (“accretable yield”). The excess of the loan or pool’s contractual principal and interest over the expected cash flows is not recorded (“nonaccretable differences”). Over the life of the loan or pool, expected cash flows continue to be estimated. If the present value of the expected cash flows is less than the amount, a loss is recorded as a provision for loan losses. If the present value of expected cash flows is greater than the carrying amount, it is recognized as part of the future interest income. Loan Fees and Costs Loan origination fees, commitment fees, direct loan origination costs and purchase premiums and discounts on loans are deferred and recognized as an adjustment of yield, to be amortized to interest income over the contractual term of the loan. Other loan fees and charges which represent income from delinquent payment charges, and miscellaneous loan or letter of credit services, are recognized as noninterest income when collected. Salaries, employee benefits and other expenses totaling $ 2.2 million and $ 2.0 million were deferred as loan origination costs for the years ended December 31, 2022 and 2021, respectively. Allowance for Loan Losses The allowance for loan losses is evaluated on a regular basis by management. Periodically, the Company charges current earnings with provisions for estimated probable losses of loans receivable. The provision or adjustment takes into consideration the adequacy of the total allowance for loan losses giving due consideration to specifically identified problem loans, the financial condition of the borrower, fair value of the underlying collateral, recourse provisions, prevailing economic conditions, and other factors. Additional consideration is given to the Company’s historical loan loss experience 88 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) relative to the Company’s loan portfolio concentrations related to industry, collateral and geography. The Company considers this concentration of credit risk when assessing and assigning qualitative factors in the allowance for loan losses. Portfolio segments identified by the Company include commercial and industrial, construction and land, commercial real estate including multifamily, residential real estate and consumer. This evaluation is inherently subjective and requires estimates that are susceptible to significant change as additional or new information becomes available. Relevant risk characteristics for the Company’s loan portfolio segments include vintage of the loan, debt service coverage, loan-to-value ratios and other financial performance ratios. At December 31, 2022 and 2021, management believes the allowance for loan losses adequately reflects the credit risk in the loan portfolio. Generally, the allowance for loan losses consists of various components including a component for specifically identified weaknesses as a result of individual loans being impaired, a component for general non-specific weakness related to historical experience, economic conditions and other factors that indicate probable loss in the loan portfolio. Loans determined to be impaired are individually evaluated by management for specific risk of loss. The Company evaluates and assigns a risk grade to each loan based on certain criteria to assess the credit quality of each loan. The assignment of a risk rating is done for each individual loan. Loans are graded from inception and on a continuing basis until the debt is repaid. Any adverse or beneficial trends will trigger a review of the loan risk rating. Each loan is assigned a risk grade based on its characteristics. Loans with low to average credit risk are assigned a lower risk grade than those with higher credit risk as determined by the individual loan characteristics. The Company’s Pass loans includes loans with acceptable business or individual credit risk where the borrower’s operations, cash flow or financial condition provides evidence of low to average levels of risk. Loans that are assigned higher risk grades are loans that exhibit the following characteristics: Special Mention loans have potential weaknesses that deserve close attention. If left uncorrected, these potential weaknesses may result in a deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date. Special Mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. A Special Mention rating should be a temporary rating, pending the occurrence of an event that would cause the risk rating to either improve or to be downgraded. Loans in this category would be characterized by any of the following situations: ● Credit that is currently protected but is potentially a weak asset; ● Credit that is difficult to manage because of an inadequate loan agreement, the condition of and/or control over collateral, failure to obtain proper documentation, or any other deviation from product lending practices; and ● Adverse financial trends. Substandard loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged. Loans classified Substandard must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Loans are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. The potential loss does not have to be recognizable in an individual credit for that credit to be risk rated Substandard. A loan can be fully and adequately secured and still be considered Substandard. Some characteristics of Substandard loans are: ● Inability to service debt from ordinary and recurring cash flow; ● Chronic delinquency; ● Reliance upon alternative sources of repayment; 89 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) ● Term loans that are granted on liberal terms because the borrower cannot service normal payments for that type of debt; ● Repayment dependent upon the liquidation of collateral; ● Inability to perform as agreed, but adequately protected by collateral; ● Necessity to renegotiate payments to a non-standard level to ensure performance; and ● The borrower is bankrupt, or for any other reason, future repayment is dependent on court action. Doubtful loans have all the weaknesses inherent in loans classified as Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and value, highly questionable and improbable. Doubtful loans have a high probability of loss, yet certain important and reasonably specific pending factors may work toward the strengthening of the credit. Losses are recognized as charges to the allowance when the loan or portion of the loan is considered uncollectible or at the time of foreclosure. Recoveries on loans previously charged off are credited to the allowance for loan losses. A loan may be considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent. Troubled Debt Restructuring In situations where, for economic or legal reasons related to a borrower’s financial difficulties, the Company grants a concession to the borrower that it would not otherwise consider, the related loan is classified as a troubled debt restructuring (“TDR”). The Company measures any loss on the TDR in accordance with the guidance concerning impaired loans set forth above. Additionally, loans modified in troubled debt restructurings are generally placed on nonaccrual status at the time of restructuring and included in impaired loans. These loans are returned to accrual status after the borrower demonstrates performance with the modified terms for a sustained period of time (generally six months) and has the capacity to continue to perform in accordance with the modified terms of the restructured debt. Other Real Estate Owned Other real estate owned (“OREO”) acquired through, or in lieu of foreclosure is held-for-sale and are initially recorded at fair value, less selling expenses. At transfer, any write-downs to fair value are charged to the allowance for loan losses. Costs to hold OREO are expensed when incurred. After transfer, the Company obtains updated appraisals or market valuation analyses on all OREO, and is able to update information collected at time of transfer. If the periodic valuation indicates a decline in the fair value below recorded carrying value, an additional write-down or valuation allowance for OREO losses is established as a charge to earnings. Fair value is based on current market conditions, appraisals, and estimated sales values of similar properties. Operating expenses of such properties, net of related income, are included in other expenses. 90 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) Premises and Equipment Land is carried at cost. Premises and equipment are stated at historical cost less accumulated depreciation or amortization. Depreciation is determined using the straight-line method based on the estimated useful lives of the assets. ​ ​ ​ ​ ​ Estimated useful life (years) Buildings Up to 27.5 years Furniture, fixtures, and equipment ​ 3 to 7 years Leasehold improvements ​ Shorter of useful lives or the terms of the leases ​ ​ When assets are sold or otherwise disposed of, the cost and related accumulated depreciation or amortization are removed from the accounts, and any resulting gain or loss is recognized in noninterest income. The cost of maintenance and repairs is charged to expense as incurred. Annually at the end of each year, the Company evaluates premises and equipment for impairment as events or changes in circumstances indicate that the carrying amount of such assets may not be fully recoverable. Operating Lease Right of Use Assets and Liabilities The Company determines if a lease is present at the inception of an agreement. Operating leases are capitalized at commencement and are discounted using the Company’s FHLB borrowing rate for a similar term borrowing unless the lease defines an implicit rate within the contract. ​ The operating lease right of use assets (“ROU”) represent the Company’s right to use an underlying asset for the lease term, and the operating lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease right of use assets and operating lease liabilities are recognized on the lease commencement date based on the present value of lease payments over the lease term. Some of the Company's lease agreements include options to renew at the Company's discretion. The extensions are not reasonably certain to be exercised, therefore it was not considered in the calculation of the ROU asset and lease liability. No significant judgments or assumptions were involved in developing the estimated operating lease liabilities as the Company’s operating lease liabilities largely represent future rental expenses associated with operating leases and the borrowing rates are based on publicly available interest rates. ​ Goodwill, Core Deposit Intangible and Long-Lived Assets Goodwill is determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquire, over the fair value of the net assets acquired and the liabilities assumed as of the acquisition date. Goodwill and other intangible assets are assessed for impairment annually or whenever events or changes in circumstances indicate the carrying amount may not be recoverable. The Company performed its annual impairment analysis and determined no impairment existed as of December 31, 2022. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Core deposit intangible represents the estimated future benefit of deposits related to an acquisition and is booked separately from the related deposits and amortized over an estimated useful life of seven to ten years . Bank Owned Life Insurance The Bank owns life insurance policies (“BOLI”) on certain key current officers. BOLI is recorded on the consolidated balance sheets at the amount that can be realized based on cash surrender value. 91 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) Transfers of Financial Assets Transfers of an entire financial asset, a group of financial assets, or a participating interest in an entire financial asset are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. The Company may sell certain portions of government guaranteed loans in the secondary market. These sales are recorded by the Company when control is surrendered and any warranty period or recourse provision expires. Servicing Assets and Liabilities All servicing assets and liabilities are initially measured at fair value. The Company amortizes servicing rights in proportion to and over the period of the estimated net servicing income or loss assuming prepayments and assesses the rights for impairment. Loans serviced for others totaled $ 272.8 million and $ 253.7 million as of December 31, 2022 and 2021, respectively. Servicing assets, included in interest receivable and other assets in the consolidated statements of financial condition, totaled $ 2.1 million and $ 1.9 million as of December 31, 2022 and 2021, respectively. There were no servicing liabilities, included in interest payable and other liabilities on the consolidated balance sheets at both December 31, 2022 and December 31, 2021. In connection with the sale of the Company’s SBA loans, the Company recognizes servicing assets when servicing rights are retained. The Company initially recognizes and measures at fair value servicing rights obtained by SBA loan sales. The Company subsequently measures these servicing assets by using the amortization method, which amortizes servicing assets in proportion to, and over the period of, estimated net servicing income. The amortization of the servicing assets is analyzed periodically and is adjusted to reflect changes in prepayment rates and other estimates. The servicing asset and the related amortization are netted against other non-operating income in the consolidated statement of income. Gain or loss on sale of loans is included in noninterest income. Loans Held for Sale Periodically, the Company sells loans and retains the servicing rights. The gain or loss on sale of loans depends in part on the previous carrying amount of the financial assets involved in the transfer, allocated between the assets sold and the retained interests based on their relative fair value at the date of transfer. The portions of the SBA loans that are guaranteed by the SBA are classified by management as loans held for sale since the Company intends to sell these loans. Loans held for sale are recorded at their lower aggregate cost or estimated fair value. During 2022, the Company sold $ 34.0 million of SBA loans (guaranteed portion) in the secondary market, all of which settled by end of year 2022. During 2021, the Company sold $ 45.8 million of SBA loans (guaranteed portion) the secondary market, all of which settled by end of year 2021. The fair value of SBA loans held for sale is based primarily on prices that secondary markets are currently offering for loans with similar characteristics. Net unrealized losses, if any, are recognized through a valuation allowance through a charge to income. The carrying value of SBA loans held for sale is net of premiums as well as deferred originations fees and costs. Premiums and net origination fees and costs are deferred and included in the basis of the loans in calculating gains or losses upon sale. SBA loans are generally secured by the borrowing entities’ assets such accounts receivable, property and equipment and other business assets. The Company generally recognizes gains and losses on these loan sales 92 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) based on the differences between the sales proceeds received and the allocated carrying value of the loans sold (which can include deferred premiums and net origination fees and costs). The non-guaranteed portion of the SBA loans is not typically sold by the Company and is classified as held for investment. Reserve for Unfunded Commitments The reserve for unfunded commitments is established through a provision for losses-unfunded commitments, the changes of which are recorded in noninterest expense. The reserve for unfunded commitments is an amount that Management believes will be adequate to absorb probable losses inherent in existing commitments, including unused portions of revolving lines of credit and other loans, standby letters of credit, and unused deposit account overdraft privileges. The reserve for unfunded commitments is based on evaluations of the collectability, and prior loss experience of unfunded commitments. The evaluations take into consideration such factors as changes in the nature and size of the loan portfolio, overall loan portfolio quality, loan concentrations, specific problem loans and related unfunded commitments, and current economic conditions that may affect the borrower’s or depositor’s ability to pay. Income Taxes The Company and the Bank file a United States consolidated federal income tax return and state income tax returns in California, Colorado and New Mexico. Income taxes are accounted for using the asset and liability method. Under such method, deferred tax assets and liabilities are recognized for the future tax consequences of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis (temporary differences). Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in the period of change. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in tax expense. A valuation allowance is established as a reduction to deferred tax assets to the extent that it is more than likely than not that the benefits associated with the deferred tax assets will not be realized. The determination, recognition, and measurement of deferred tax assets and the requirement for a related valuation allowance is based on estimated future taxable income. Revenue Recognition The Company records revenue from contracts with clients in accordance with Accounting Standards Codification Topic 606, “Revenue from Contracts with Clients” (“Topic 606”). Under Topic 606, the Company must identify the contract with a client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) the Company satisfies a performance obligation. Most of our revenue-generating transactions are not subject to Topic 606, including revenue generated from financial instruments, such as our loans and investment securities. In addition, certain noninterest income streams such as fees associated with mortgage servicing rights, financial guarantees, derivatives, and certain credit card fees are also not in scope of the new guidance. The Company’s noninterest revenue streams are largely based on transactional activity, or standard month-end revenue accruals such as asset management fees based on month-end market values. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does not typically enter into long-term revenue contracts with clients, and therefore, does not experience significant contract balances. As of December 31, 2022 and December 31, 2021, the Company did not have any significant contract balances. The following are descriptions of revenues within the scope of ASC 606. 93 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) Deposit fees and service charges The Company earns fees from its deposit clients for account maintenance, transaction-based and overdraft services. Account maintenance fees consist primarily of account fees and analyzed account fees charged on deposit accounts on a monthly basis. The performance obligation is satisfied and the fees are recognized on a monthly basis as the service period is completed. Transaction-based fees on deposit accounts are charged to deposit clients for specific services provided to the client, such as non-sufficient funds fees, overdraft fees, and wire fees. The performance obligation is completed as the transaction occurs and the fees are recognized at the time each specific service is provided to the client. Debit and ATM interchange fee income and expenses Debit and ATM interchange income represent fees earned when a debit card issued by the Company is used. The Company earns interchange fees from debit cardholder transactions through the Visa payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. The performance obligation is satisfied and the fees are earned when the cost of the transaction is charged to the cardholders’ debit card. Certain expenses directly associated with the credit and debit card are recorded on a net basis with the interchange income. Merchant fee income Merchant fee income represents fees earned by the Company for card payment services provided to its merchant clients. The Company outsources these services to a third party to provide card payment services to these merchants. The third-party provider passes the payments made by the merchants through to the Company. The Company, in turn, pays the third-party provider for the services it provides to the merchants. These payments to the third party provider are recorded as expenses as a net reduction against fee income. In addition, a portion of the payment received represents interchange fees which are passed through to the card issuing bank. Income is primarily earned based on the dollar volume and number of transactions processed. The performance obligation is satisfied and the related fee is earned when each payment is accepted by the processing network. Gain/loss on other real estate owned, net The Company records a gain or loss from the sale of other real estate owned when control of the property transfers to the buyer, which generally occurs at the time of an executed deed of trust. When the Company finances the sale of other real estate owned to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on sale, the Company adjusts the transaction price and related gain or loss on sale if a significant financing component is present. Stock Based Compensation Restricted Equity Grants The Company granted restricted stock to directors and employees in 2022 and 2021. The grant-date fair value of the award is amortized on the straight-line basis over the requisite service period, which is generally the vesting period, as compensation expense in salaries and benefits for employees and other noninterest expense for directors. Earnings per Share Earnings per common share (“EPS”) is computed based on the weighted average number of common shares outstanding during the period. Basic EPS excludes dilution and is computed by dividing net earnings available to common 94 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) stockholders by the weighted average of common shares outstanding. Non-vested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are considered participating securities and are included in the computation of basic earnings per share. All of the Company’s non-vested restricted stock awards qualify as participating securities. Repurchase of Common Stock In December 2021, the Company’s Board of Directors approved a fifth stock repurchase program for the repurchase up to 747,000 shares, or approximately 7.0 % , of the Company’s outstanding common stock over a one year period. In October 2022, the Company’s Board of Directors approved a sixth stock repurchase program, to commence following completion of the fifth stock repurchase program, for the repurchase of up to 645,000 shares, or approximately 5.0 % , of the Company’s outstanding common stock over a one year period. Under the repurchase programs, the Company was authorized to repurchase its common stock through open market purchases, privately-negotiated transactions, or pursuant to any trading plan adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in compliance with Rule 10b-18 of the Exchange Act. The stock repurchase program does not obligate the Company to acquire any specific number of shares in any period, and may be expanded, extended, modified or discontinued at any time. As of December 31, 2022, 481,792 shares of Company common stock remained available for future purchases under the October 2022 stock repurchase plan. Comprehensive Income (Loss) Comprehensive income (loss) includes disclosure of other comprehensive income or loss that historically has not been recognized in the calculation of net income or loss. Unrealized gains and losses on the Company’s available-for-sale investment securities are included in other comprehensive income or loss. Total comprehensive income or loss and the components of accumulated other comprehensive income are presented as a separate statement of comprehensive income. Loss Contingencies and Legal Claims In the normal course of business, the Company may be subject to claims and lawsuits. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits, if any, will not have a material adverse effect on the financial position of the Company. Recent Accounting Guidance Not Yet Effective In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” and subsequent amendments to the initial guidance in November 2018, ASU No. 2018-19, April 2019, ASU 2019-04, May 2019, ASU 2019-05, November 2019, ASU 2019-11, February 2020, ASU 2020-02, and March 2020, ASU 2020-03, all of which clarifies codification and corrects unintended application of the guidance. ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace today’s “incurred loss” approach with an “expected loss” model. The new model, referred to as the current expected credit loss (“CECL”) model, will apply to: (1) financial assets subject to credit losses and measured at amortized cost, and (2) certain off-balance sheet credit exposures. This includes, but is not limited to, loans, leases, held-to-maturity securities, loan commitments, and financial guarantees. The CECL model does not apply to available-for-sale (“AFS”) debt securities. For AFS debt securities with unrealized losses, entities will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than reductions in the amortized cost of the securities. As a result, entities will recognize improvements to estimated credit losses immediately in earnings rather than as interest income over time, as they do today. The ASU also simplifies the accounting model for purchased credit-impaired (“PCI”) debt securities and loans. ASU 2016-13 also expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for loan and lease losses. In addition, 95 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) public business entities will need to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination. ASU 2018-19 clarifies that receivables arising from operating leases are accounted for using lease guidance and not as financial instruments. ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments — Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,” affects a variety of topics in the Codification and applies to all reporting entities within the scope of the affected accounting guidance. The amendments in these ASUs are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted for smaller reporting companies, such as the Company. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (i.e., modified retrospective approach). This accounting pronouncement is applicable to the Company effective January 1, 2023. The Company has established a multidisciplinary project team and implementation plan, evaluated various loss methodologies to determine their correlation to our various loan categories historical performance, captured and validated data, and engaged an outside third-party CECL vendor to develop loan loss driver models. Based on these activities, we determined that our primary credit loss methodology will utilize a discounted cash flow approach that considers the probability of default and loss given default. Ongoing CECL implementation activities include, among other things, refining forecast methodologies and evaluating the qualitative factor framework and assumptions. In addition, the Company also continues to focus on researching and resolving interpretive accounting issues in the ASU, contemplating various related accounting policies, developing processes and related controls and considering various reporting disclosures. Internal controls related to CECL have been designed and are being evaluated; however, all internal controls related to CECL implementation are not operational. As of the implementation date, following sensitivity analyses and considering changes in economic conditions, credit quality of the loan portfolio and changes in interest rates, management estimates that our adoption of the CECL model will result in a $ 1 million to $ 3 million increase to our allowance for credit losses for loans. Once finalized, the impact as a result of the adoption of this guidance will be recorded as a cumulative-effect, net of tax, adjustment to retained earnings effective January 1, 2023. The magnitude of the change in the Company’s allowance for credit losses at the adoption date will depend upon the nature and characteristics of the portfolio at the adoption date, as well as macroeconomic conditions and forecasts at that time, other management judgements, and continued refinement and validation of the model and methodologies. ​ In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of reference Rate Reform on Financial Reporting . This ASU applies to contracts, hedging relationships and other transactions that reference LIBOR or other rate references expected to be discontinued because of reference rate reform. The ASU permits an entity to make necessary modifications to eligible contracts (e.g., loans, debt securities, derivatives, borrowings) or transactions without requiring contract remeasurement or reassessment of a previous accounting determination. In January 2021, ASU 2021-01 updated amendments in the new ASU to clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. Amendments in this ASU to the expedients and exceptions in Topic 848 capture the incremental consequences of the scope clarification and tailor the existing guidance to derivative instruments affected by the discounting transition. An entity may elect to apply the amendments in this ASU on a full retrospective basis. The amendments in this ASU have differing effective dates, beginning with an interim period including and subsequent to March 12, 2020 through December 31, 2022. The Company does not expect the adoption of ASU 2020-04 to have a material impact on its consolidated financial statements. In March 2022 the FASB issued ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures . The ASU eliminates the accounting guidance for loans modified as troubled debt restructurings (“TDR loans”) by creditors while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Additionally, the ASU requires disclosure of current-period gross write-offs by year of origination for financing receivables and net investments in leases. This ASU will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, 96 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) upon the Corporation’s adoption of the amendments in ASU 2016-13, which is referred to as the current expected credit loss model. Subsequent Events Management has evaluated subsequent events for potential recognition and disclosure through the date the financial statements were issued. Reclassifications Certain prior year amounts are reclassified to conform to the current year presentation. None of the reclassifications impact net income or earnings per common share. ​ ​ 2. ACQUISITIONS On February 1, 2022, the Company completed its acquisition of PEB. As of the acquisition date, PEB merged into the Company and Pacific Enterprise Bank, PEB’s wholly owned bank subsidiary, merged into the Bank. The acquisition expanded the Company’s market share in California with one branch in Irvine. At the effective time of the PEB merger, the Company paid aggregate consideration to PEB shareholders of approximately $ 64.1 million consisting of 3,032,579 shares of Company common stock and $ 275,000 in cash. Noninterest income for the year ended December 31, 2022 included $ 1.7 million in bargain purchase gain, and included in noninterest expense was $ 3.1 million of nonrecurring acquisition-related expenses related to the Company’s acquisition of PEB. 97 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) The following table summarizes the fair value of the assets acquired and liabilities assumed at the acquisition date: ​ ​ ​ ​ ​ ​ ​ PEB ​ ​ Acquisition ​ ​ ​ Date ​ ​ ​ February 1, 2022 ​ Fair value of assets: ​ Cash and due from banks ​ $ 5,350 ​ Total cash and cash equivalents ​ 5,350 ​ ​ ​ ​ ​ ​ Interest bearing deposits in banks ​ 13,348 ​ Investment securities available-for-sale ​ ​ 3 ​ FHLB stock, at par ​ 2,294 ​ FRB stock, at par ​ 942 ​ Loans, net ​ 412,851 ​ Premises and equipment, net ​ ​ 221 ​ Core deposit intangible ​ 756 ​ Deferred tax assets, net ​ 1,192 ​ Interest receivable and other assets ​ ​ 9,178 ​ Total assets acquired ​ 446,135 ​ Liabilities: ​ ​ Deposits ​ ​ Noninterest bearing ​ 60,006 ​ Interest bearing ​ 316,679 ​ Total Deposits ​ 376,685 ​ ​ ​ ​ ​ ​ Interest payable and other liabilities ​ ​ 3,370 ​ Total liabilities assumed ​ ​ 380,055 ​ ​ ​ ​ ​ ​ Stock consideration ​ 64,140 ​ Cash consideration ​ 275 ​ Bargain purchase gain ​ $ 1,665 ​ ​ ​ 98 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) The following table presents the net assets acquired and the estimated fair value adjustments, which resulted in goodwill at the acquisition date: ​ ​ ​ ​ ​ ​ ​ PEB ​ ​ Acquisition ​ ​ ​ Date ​ ​ ​ February 1, 2022 ​ Book value of net assets acquired ​ $ 61,469 ​ Fair value adjustments: ​ ​ Loans, net ​ 5,840 ​ Premises and equipment, net ​ ​ 26 ​ Core deposit intangible ​ 756 ​ Time deposits ​ ​ ( 869 ) ​ Reserve for unfunded commitments ​ 283 ​ Write-up right-of-use asset ​ 439 ​ Total purchase accounting adjustments ​ 6,475 ​ ​ ​ ​ ​ ​ Tax effect of purchase accounting adjustments at 27.9 % ​ ( 1,864 ) ​ Fair value of assets acquired ​ 66,080 ​ Value of stock issued/cash paid for stock options ​ 64,415 ​ Bargain purchase gain ​ $ ( 1,665 ) ​ ​ ​ Pro Forma Results of Operations (Unaudited) The operating results of the Company in the consolidated statements of income include the operating results of PEB and GMB, since their respective acquisition dates. The following table represents the net interest income, net income, basic and diluted earnings per share, as if the mergers with PEB and GMB were effective January 1, 2022 and January 1, 2020, for the respective years in which each acquisition was closed. The unaudited pro forma information in the following table is intended for informational purposes only and is not necessarily indicative of future operating results or operating results that would have occurred had the mergers been completed at the beginning of each respective year. No assumptions have been applied to the pro forma results of operation regarding possible revenue enhancements, expense efficiencies or asset dispositions. ​ Unaudited pro forma net interest income, net income and earnings per share are presented below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ ​ 2022 ​ ​ 2020 Net interest income ​ $ 97,566 ​ ​ $ 99,278 ​ Net income ​ 23,628 ​ ​ 28,104 ​ Basic earnings per share ​ $ 1.76 ​ ​ $ 2.01 ​ Diluted earnings per share ​ ​ 1.76 ​ ​ ​ 2.01 ​ ​ ​ These amounts include the acquisition-related third party expenses, accretion of the discounts on acquired loans and amortization of the fair value mark adjustments on core deposit intangible. 99 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) Acquisition Expenses Acquisition expenses are recognized as incurred and continue until all systems are converted and operational functions become fully integrated. No acquisition expenses were incurred in 2021. The Company incurred third-party acquisition expenses in the consolidated statements of income for the periods indicated are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ December 31, 2020 ​ ​ PEB ​ GMB Severance expense ​ $ 556 ​ $ 266 Occupancy expense ​ ​ 375 ​ ​ — Data processing ​ 1,073 ​ 2,000 Professional fees ​ 724 ​ 369 Other expenses ​ 347 ​ 383 Total ​ $ 3,075 ​ $ 3,018 ​ ​ ​ 3. INVESTMENT SECURITIES The amortized cost, gross unrealized gains and losses, and estimated fair value of securities classified as available-for-sale at the dates indicated are summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Gross ​ ​ ​ ​ Amortized ​ unrealized ​ unrealized ​ Estimated ​ ​ cost ​ gains ​ losses ​ fair value December 31, 2022 ​ ​ ​ ​ ​ U.S. Government Agencies ​ $ 1,505 ​ $ — ​ $ — ​ $ 1,505 Preferred equity securities ​ ​ 18,330 ​ ​ — ​ ​ ( 4,573 ) ​ ​ 13,757 Municipal securities ​ 21,099 ​ 2 ​ ( 1,544 ) ​ 19,557 Mortgage-backed securities ​ 37,199 ​ 23 ​ ( 4,212 ) ​ 33,010 Collateralized mortgage obligations ​ 28,153 ​ — ​ ( 2,729 ) ​ 25,424 SBA securities ​ 4,381 ​ 19 ​ ( 95 ) ​ 4,305 Corporate bonds ​ 77,900 ​ 156 ​ ( 7,853 ) ​ 70,203 Total ​ $ 188,567 ​ $ 200 ​ $ ( 21,006 ) ​ $ 167,761 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Gross ​ ​ ​ ​ Amortized ​ unrealized ​ unrealized ​ Estimated ​ ​ cost ​ gains ​ losses ​ fair value December 31, 2021 ​ ​ ​ ​ ​ U.S. Government Agencies ​ $ 1,510 ​ $ — ​ $ — ​ $ 1,510 Preferred equity securities ​ ​ 18,331 ​ ​ 446 ​ ​ — ​ ​ 18,777 Municipal securities ​ 23,646 ​ 493 ​ ( 16 ) ​ 24,123 Mortgage-backed securities ​ 33,973 ​ 1,333 ​ ( 210 ) ​ 35,096 Collateralized mortgage obligations ​ 27,228 ​ 436 ​ ( 158 ) ​ 27,506 SBA securities ​ 6,055 ​ 53 ​ ( 20 ) ​ 6,088 Corporate bonds ​ 60,650 ​ 851 ​ ( 166 ) ​ 61,335 Total ​ $ 171,393 ​ $ 3,612 ​ $ ( 570 ) ​ $ 174,435 ​ For the year ended December 31, 2022, the Company sold one available-for-sale investment security for a minimal net realized gain, sold $ 3.0 million in available-for-sale investments for net realized gains of $ 41,000 for the year ended December 31, 2021 and did no t sell any available-for-sale investments for the year ended December 31, 2020. 100 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) The estimated fair value and gross unrealized losses for securities available-for-sale aggregated by the length of time that individual securities have been in a continuous unrealized loss position at the dates indicated are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than 12 months ​ 12 months or more ​ Total ​ Estimated Unrealized Estimated Unrealized Estimated Unrealized ​ ​ fair value ​ loss ​ fair value ​ loss ​ fair value ​ loss December 31, 2022 ​ ​ ​ ​ ​ ​ ​ Preferred Equity Securities ​ $ — ​ $ — ​ $ 13,757 ​ $ ( 4,573 ) ​ $ 13,757 ​ $ ( 4,573 ) Municipal securities ​ ​ 1,147 ​ ​ ( 8 ) ​ ​ 16,843 ​ ​ ( 1,536 ) ​ ​ 17,990 ​ ​ ( 1,544 ) Mortgage-backed securities ​ ​ 23 ​ ​ — ​ ​ 31,291 ​ ​ ( 4,212 ) ​ ​ 31,314 ​ ​ ( 4,212 ) Collateralized mortgage obligations ​ 2,284 ​ ​ ( 26 ) ​ ​ 23,140 ​ ​ ( 2,703 ) ​ 25,424 ​ ( 2,729 ) SBA securities ​ — ​ ​ — ​ ​ 1,416 ​ ​ ( 95 ) ​ 1,416 ​ ( 95 ) Corporate bonds ​ — ​ ​ — ​ ​ 64,797 ​ ​ ( 7,853 ) ​ 64,797 ​ ( 7,853 ) Total ​ $ 3,454 ​ $ ( 34 ) ​ $ 151,244 ​ $ ( 20,972 ) ​ $ 154,698 ​ $ ( 21,006 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than 12 months ​ 12 months or more ​ Total ​ Estimated Unrealized Estimated Unrealized Estimated Unrealized ​ ​ fair value ​ loss ​ fair value ​ loss ​ fair value ​ loss December 31, 2021 ​ ​ ​ ​ ​ ​ ​ Municipal securities ​ $ 3,932 ​ $ ( 16 ) ​ $ — ​ $ — ​ $ 3,932 ​ $ ( 16 ) Mortgage-backed securities ​ 2,954 ​ ( 111 ) ​ 2,133 ​ ( 99 ) ​ 5,087 ​ ( 210 ) Collateralized mortgage obligations ​ 9,236 ​ ( 108 ) ​ 1,605 ​ ( 50 ) ​ 10,841 ​ ( 158 ) SBA securities ​ 134 ​ — ​ 1,058 ​ ( 20 ) ​ 1,192 ​ ( 20 ) Corporate bonds ​ 23,084 ​ ( 166 ) ​ — ​ — ​ 23,084 ​ ( 166 ) Total ​ $ 39,340 ​ $ ( 401 ) ​ $ 4,796 ​ $ ( 169 ) ​ $ 44,136 ​ $ ( 570 ) ​ Certain investment securities shown in the previous tables have fair values less than amortized cost and therefore contain unrealized losses. At December 31, 2022, management has evaluated all securities and has determined that no securities are other than temporarily impaired. Because the Company does not intend to sell and it is more likely than not that management will not be required to sell the securities prior to their anticipated recovery, which may be maturity, the Company does not consider these securities to be other-than temporarily impaired. At December 31, 2022, the Company held 351 investment securities, of which 102 were in an unrealized loss position for more than twelve months and 192 were in an unrealized loss position for less than twelve months. These temporary unrealized losses relate principally to current interest rates for similar types of securities. The Company anticipates full recovery of amortized cost with respect to these securities at maturity or sooner in the event of a more favorable market interest rate environment. 101 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) The amortized cost and estimated fair value of securities available-for-sale at the dates indicated by contractual maturity are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ December 31, 2021 ​ Amortized Estimated Amortized Estimated ​ ​ cost ​ fair value ​ cost ​ fair value Available-for-sale ​ ​ ​ ​ Due in one year or less ​ $ 4,994 ​ $ 4,960 ​ $ 862 ​ $ 865 Due after one through five years ​ 37,222 ​ 31,682 ​ 41,850 ​ 42,950 Due after five years through ten years ​ 95,071 ​ 85,482 ​ 79,116 ​ 79,993 Due after ten years ​ 51,280 ​ 45,637 ​ 49,565 ​ 50,627 Total ​ $ 188,567 ​ $ 167,761 ​ $ 171,393 ​ $ 174,435 ​ At December 31, 2022 and 2021, there were no securities pledged. ​ 4. LOANS The Company’s loan portfolio at the dates indicated is summarized below: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2022 ​ 2021 Commercial and industrial (1) ​ $ 188,538 ​ $ 230,177 Construction and land ​ 13,163 ​ 13,371 Commercial real estate ​ 1,704,716 ​ 1,299,684 Residential ​ 110,606 ​ 118,423 Consumer ​ 4,183 ​ 5,138 Total loans ​ 2,021,206 ​ 1,666,793 Net deferred loan fees ​ ( 82 ) ​ ( 1,903 ) Allowance for loan losses ​ ( 18,900 ) ​ ( 17,700 ) Net loans ​ $ 2,002,224 ​ $ 1,647,190 ​ (1) At December 31, 2022, included PPP loans of $ 11.1 million, compared to $ 69.6 million as of December 31, 2021. The Bank expects that the great majority of PPP borrowers will seek full or partial forgiveness of their loan obligations in accordance with the CARES Act. For the years ended December 31, 2022 and 2021, impaired loans on nonaccrual were $ 14.3 million and $ 6.9 million, respectively. Interest foregone on nonaccrual loans was approximately $ 580,000 and $ 281,000 for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, the Company had floating or variable rate loans totaling $ 1.3 billion and $ 955.2 million, respectively. As of December 31, 2022, a total of $ 965.8 million have interest rate floors, of which $ 854.0 million, were at their floors. As of December 31, 2021, a total of $ 693.0 million have interest rate floors, of which $ 651.7 million were at their floors. 102 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) The Company’s total impaired loans, including nonaccrual loans, accruing TDR loans and accreting PCI loans that have experienced post-acquisition declines in cash flows expected to be collected are summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial Construction Commercial ​ ​ ​ ​ ​ and industrial ​ and land ​ real estate ​ Residential ​ Consumer ​ Total December 31, 2022 ​ ​ ​ ​ ​ ​ ​ Recorded investment in impaired loans: ​ ​ ​ ​ ​ ​ With no specific allowance recorded ​ $ 89 ​ $ — ​ $ 11,706 ​ $ 1,991 ​ $ — ​ $ 13,786 With a specific allowance recorded ​ 789 ​ — ​ 259 ​ 214 ​ — ​ 1,262 Total recorded investment in impaired loans ​ $ 878 ​ $ — ​ $ 11,965 ​ $ 2,205 ​ $ — ​ $ 15,048 Specific allowance on impaired loans ​ $ 687 ​ $ — ​ $ 259 ​ $ 222 ​ $ — ​ $ 1,168 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2021 ​ ​ ​ ​ ​ ​ Recorded investment in impaired loans: ​ ​ ​ ​ ​ ​ With no specific allowance recorded ​ $ 112 ​ $ 36 ​ $ 5,015 ​ $ 1,441 ​ $ — ​ $ 6,604 With a specific allowance recorded ​ 681 ​ — ​ 262 ​ 146 ​ — ​ 1,089 Total recorded investment in impaired loans ​ $ 793 ​ $ 36 ​ $ 5,277 ​ $ 1,587 ​ $ — ​ $ 7,693 Specific allowance on impaired loans ​ $ 681 ​ $ — ​ $ 224 ​ $ 25 ​ $ — ​ $ 930 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, 2022 ​ ​ ​ ​ ​ ​ Average recorded investment in impaired loans ​ $ 2,628 ​ $ 325 ​ $ 7,835 ​ $ 1,601 ​ $ — ​ $ 12,389 Interest recognized ​ 30 ​ 5 ​ 75 ​ 39 ​ — ​ 149 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, 2021 ​ ​ ​ ​ ​ ​ Average recorded investment in impaired loans ​ $ 795 ​ $ 346 ​ $ 5,624 ​ $ 2,094 ​ $ — ​ $ 8,859 Interest recognized ​ 69 ​ — ​ ​ 123 ​ 50 ​ — ​ 242 ​ For the year ended December 31, 2022, the Company recorded TDR loan charge-offs of $ 3.2 million. For the year ended December 31, 2021 the Company recorded no TDR loan charge-offs. As of December 31, 2022 and 2021, TDR loans had a related allowance of $ 393,000 and $ 259,000 , respectively. There were no commitments to lend additional amounts to borrowers with outstanding loans that were classified as TDRs at December 31, 2022. As of December 31, 2022 and 2021, $ 759,000 and $ 765,000 of TDR loans were performing in accordance with their modified terms, respectively. A summary of TDRs by type of concession and type of loan as of the years ended: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Rate Term Rate & term ​ ​ ​ loans ​ modification ​ modification ​ modification ​ Total December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial 2 ​ $ — ​ $ 19 ​ $ — ​ $ 19 Construction and land — ​ — ​ — ​ — ​ — Commercial real estate 6 ​ — ​ 5,265 ​ — ​ 5,265 Residential 2 ​ — ​ ​ 975 ​ — ​ 975 Consumer — ​ — ​ — ​ — ​ — Total 10 ​ $ — ​ $ 6,259 ​ $ — ​ $ 6,259 ​ ​ 103 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Rate Term Rate & term ​ ​ ​ loans ​ modification ​ modification ​ modification ​ Total December 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial 2 ​ $ — ​ $ 25 ​ $ — ​ $ 25 Construction and land — ​ — ​ — ​ — ​ — Commercial real estate 4 ​ — ​ 2,237 ​ — ​ 2,237 Residential 1 ​ — ​ 146 ​ — ​ 146 Consumer — ​ — ​ — ​ — ​ — Total 7 ​ $ — ​ $ 2,408 ​ $ — ​ $ 2,408 ​ The following tables present information for loans by class, modified as TDRs, during the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pre-Modification Post-Modification ​ ​ Number of ​ Outstanding Recorded ​ Outstanding Recorded ​ ​ ​ loans ​ Investment ​ Investment ​ Year ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial 1 ​ $ 2,429 ​ $ 2,429 ​ Construction and land — ​ — ​ — ​ Commercial real estate 2 ​ 3,199 ​ 3,199 ​ Residential 1 ​ 850 ​ 850 ​ Consumer — ​ — ​ — ​ Total 4 ​ $ 6,478 ​ $ 6,478 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pre-Modification Post-Modification ​ ​ Number of ​ Outstanding Recorded ​ Outstanding Recorded ​ ​ ​ loans ​ Investment ​ Investment ​ Year ended December 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial — ​ $ — ​ $ — ​ Construction and land — ​ — ​ — ​ Commercial real estate 1 ​ 262 ​ 262 ​ Residential — ​ — ​ — ​ Consumer — ​ — ​ — ​ Total 1 ​ $ 262 ​ $ 262 ​ ​ The following tables represent the internally assigned risk grade by class of loans at the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Special ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ Mention ​ Substandard ​ Doubtful ​ Total December 31, 2022 ​ ​ ​ ​ ​ Commercial and industrial ​ $ 181,828 ​ $ 5,345 ​ $ 1,365 ​ $ — ​ $ 188,538 Construction and land ​ 13,101 ​ 62 ​ — ​ — ​ 13,163 Commercial real estate ​ 1,629,698 ​ 58,281 ​ 16,737 ​ — ​ 1,704,716 Residential ​ 108,127 ​ 247 ​ 2,232 ​ — ​ 110,606 Consumer ​ 4,162 ​ — ​ 21 ​ — ​ 4,183 Total ​ $ 1,936,916 ​ $ 63,935 ​ $ 20,355 ​ $ — ​ $ 2,021,206 ​ 104 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Special ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ Mention ​ Substandard ​ Doubtful ​ Total December 31, 2021 ​ ​ ​ ​ ​ Commercial and industrial ​ $ 216,611 ​ $ 9,178 ​ $ 4,388 ​ $ — ​ $ 230,177 Construction and land ​ 13,264 ​ 71 ​ 36 ​ — ​ 13,371 Commercial real estate ​ 1,264,269 ​ 28,438 ​ 6,977 ​ — ​ 1,299,684 Residential ​ 115,534 ​ 1,250 ​ 1,639 ​ — ​ 118,423 Consumer ​ 5,116 ​ — ​ 22 ​ — ​ 5,138 Total ​ $ 1,614,794 ​ $ 38,937 ​ $ 13,062 ​ $ — ​ $ 1,666,793 ​ ​ The following table provides an aging of the Company’s loans receivable as of the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Recorded ​ ​ ​ ​ ​ 90 Days ​ ​ ​ ​ ​ ​ ​ ​ investment > ​ ​ 30–59 Days ​ 60–89 Days ​ or more ​ Total ​ ​ ​ ​ ​ ​ ​ Total loans ​ 90 days and ​ ​ past due ​ past due ​ past due ​ past due ​ Current ​ PCI loans ​ receivable ​ accruing December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ $ 471 ​ $ 81 ​ $ — ​ $ 552 ​ $ 183,969 ​ $ 4,017 ​ $ 188,538 ​ $ 934 Construction and land ​ — ​ — ​ — ​ — ​ 9,109 ​ 4,054 ​ 13,163 ​ — Commercial real estate ​ 897 ​ — ​ 934 ​ 1,831 ​ 1,682,848 ​ 20,037 ​ 1,704,716 ​ — Residential ​ 22 ​ 3 ​ ​ — ​ 25 ​ 109,902 ​ 679 ​ 110,606 ​ — Consumer ​ — ​ — ​ — ​ — ​ 4,183 ​ — ​ 4,183 ​ — Total ​ $ 1,390 ​ $ 84 ​ $ 934 ​ $ 2,408 ​ $ 1,990,011 ​ $ 28,787 ​ $ 2,021,206 ​ $ 934 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Recorded ​ ​ ​ ​ ​ 90 Days ​ ​ ​ ​ ​ ​ ​ ​ investment > ​ ​ 30–59 Days ​ 60–89 Days ​ or more ​ Total ​ ​ ​ ​ ​ ​ ​ Total loans ​ 90 days and ​ ​ past due ​ past due ​ past due ​ past due ​ Current ​ PCI loans ​ receivable ​ accruing December 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ $ 275 ​ $ 10 ​ $ 606 ​ $ 891 ​ $ 228,980 ​ $ 306 ​ $ 230,177 ​ $ — Construction and land ​ — ​ 338 ​ 36 ​ 374 ​ 12,997 ​ — ​ 13,371 ​ — Commercial real estate ​ 196 ​ 410 ​ 2,621 ​ 3,227 ​ 1,286,311 ​ 10,146 ​ 1,299,684 ​ — Residential ​ 1,442 ​ 21 ​ 1,031 ​ 2,494 ​ 114,162 ​ 1,767 ​ 118,423 ​ — Consumer ​ 3 ​ — ​ — ​ 3 ​ 5,135 ​ — ​ 5,138 ​ — Total ​ $ 1,916 ​ $ 779 ​ $ 4,294 ​ $ 6,989 ​ $ 1,647,585 ​ $ 12,219 ​ $ 1,666,793 ​ $ — ​ PCI Loans The unpaid principal balance and carrying value of the Company’s PCI loans at the years indicated are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ December 31, 2021 ​ Unpaid ​ ​ Unpaid ​ ​ ​ ​ principal ​ Carrying ​ principal ​ Carrying ​ ​ balance ​ value ​ balance ​ value Commercial and industrial ​ $ 4,864 ​ $ 4,017 ​ $ 546 ​ $ 306 Construction and land ​ 4,299 ​ 4,054 ​ — ​ — Commercial real estate ​ 21,649 ​ ​ 20,037 ​ 11,519 ​ 10,146 Residential ​ 829 ​ 679 ​ 2,202 ​ 1,767 Total ​ $ 31,641 ​ $ 28,787 ​ $ 14,267 ​ $ 12,219 ​ 105 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) In connection with the Company's acquisitions, the contractual amount and timing of undiscounted principal and interest payments and the estimated amount and timing of undiscounted expected principal and interest payments were used to estimate the fair value of PCI loans at the acquisition date. The difference between these two amounts represented the nonaccretable difference. On the acquisition date, the amount by which the undiscounted expected cash flows exceed the estimated fair value of the acquired loans is the “accretable yield.” The accretable yield is then measured at each financial reporting date and represented the difference between the remaining undiscounted expected cash flows and the current carrying value of the loans. For PCI loans the accretable yield is accreted into interest income over the life of the estimated remaining cash flows. At each financial reporting date, the carrying value of each PCI loan is compared to an updated estimate of expected principal payment or recovery on each loan. To the extent that the loan carrying amount exceeds the updated expected principal payment or recovery, a provision of loan loss would be recorded as a charge to income and an allowance for loan loss established. At December 31, 2022, the accretable and nonaccretable differences were approximately $ 1.5 million and $ 1.3 million, respectively. At December 31, 2021, the accretable and nonaccretable differences were approximately $ 508,000 and $ 1.5 million, respectively. The Company had $ 18,000 of allowance for loan losses for PCI loans during the year ended December 31, 2022, compared to no allowance for any loan losses for PCI loans during the year ended December 31, 2021. The following table reflects the changes in the accretable yield of PCI loans for the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ December 31, ​ ​ ​ 2022 ​ 2021 ​ Balance at beginning of period ​ $ 508 ​ $ 383 ​ Additions ​ 1,299 ​ — ​ Removals ​ ( 134 ) ​ ( 183 ) ​ Transfers from nonaccretable yield ​ ​ 239 ​ ​ 145 ​ Accretion ​ ( 370 ) ​ 163 ​ Balance at end of period ​ $ 1,542 ​ $ 508 ​ ​ ​ 106 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) 5. ALLOWANCE FOR LOAN LOSSES The following table summarizes the Company’s allowance for loan losses and loan balances individually and collectively evaluated for impairment by loan product and collateral type as of or for the periods ending as indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial Construction Commercial ​ ​ ​ ​ ​ and industrial ​ and land ​ real estate ​ Residential ​ Consumer ​ Total December 31, 2022 ​ ​ ​ ​ ​ ​ Allowance for loan losses: ​ ​ ​ ​ ​ ​ Beginning balance ​ $ 3,261 ​ $ 175 ​ $ 12,709 ​ $ 1,536 ​ $ 19 ​ $ 17,700 Charge-offs ​ ( 3,643 ) ​ — ​ ( 1 ) ​ ( 6 ) ​ ( 6 ) ​ ( 3,656 ) Recoveries ​ 409 ​ — ​ — ​ 6 ​ — ​ 415 Provision for (reversal of) loan losses ​ 2,858 ​ ( 107 ) ​ 1,477 ​ 206 ​ 7 ​ 4,441 Ending balance ​ $ 2,885 ​ $ 68 ​ $ 14,185 ​ $ 1,742 ​ $ 20 ​ $ 18,900 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for loan losses by methodology: ​ ​ ​ ​ ​ ​ ​ Loans individually evaluated for impairment ​ $ 687 ​ $ — ​ $ 259 ​ $ 222 ​ $ — ​ $ 1,168 Loans collectively evaluated for impairment ​ 2,198 ​ 68 ​ 13,908 ​ 1,520 ​ 20 ​ 17,714 PCI loans ​ — ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans receivable by methodology: ​ ​ ​ ​ ​ ​ ​ Individually evaluated for impairment ​ $ 878 ​ $ — ​ $ 11,965 ​ $ 2,205 ​ $ — ​ $ 15,048 Collectively evaluated for impairment ​ 183,643 ​ 9,109 ​ 1,672,714 ​ 107,722 ​ 4,183 ​ 1,977,371 PCI loans ​ 4,017 ​ 4,054 ​ 20,037 ​ 679 ​ — ​ 28,787 Total loans ​ $ 188,538 ​ $ 13,163 ​ $ 1,704,716 ​ $ 110,606 ​ $ 4,183 ​ $ 2,021,206 ​ 107 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial Construction Commercial ​ ​ ​ ​ ​ and industrial ​ and land ​ real estate ​ Residential ​ Consumer ​ Total December 31, 2021 ​ ​ ​ ​ ​ ​ Allowance for loan losses: ​ ​ ​ ​ ​ ​ Beginning balance ​ $ 4,042 ​ $ 378 ​ $ 11,211 ​ $ 1,856 ​ $ 13 ​ $ 17,500 Charge-offs ​ ( 232 ) ​ — ​ ( 44 ) ​ — ​ ( 5 ) ​ ( 281 ) Recoveries ​ 11 ​ 4 ​ — ​ — ​ — ​ 15 (Reversal of) provision for loan losses ​ $ ( 560 ) ​ ( 207 ) ​ 1,542 ​ ( 320 ) ​ 11 ​ 466 Ending balance ​ ​ 3,261 ​ $ 175 ​ $ 12,709 ​ $ 1,536 ​ $ 19 ​ $ 17,700 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for loan losses by methodology: ​ ​ ​ ​ ​ ​ ​ Loans individually evaluated for impairment ​ $ 681 ​ $ — ​ $ 224 ​ $ 25 ​ $ — ​ $ 930 Loans collectively evaluated for impairment ​ 2,580 ​ ​ 175 ​ ​ 12,485 ​ ​ 1,511 ​ ​ 19 ​ 16,770 PCI loans ​ — ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans receivable by methodology: ​ ​ ​ ​ ​ ​ ​ Individually evaluated for impairment ​ $ 793 ​ $ 1,587 ​ $ 5,277 ​ $ 36 ​ $ — ​ $ 7,693 Collectively evaluated for impairment ​ 229,078 ​ 11,784 ​ 1,284,261 ​ 116,620 ​ 5,138 ​ 1,646,881 PCI loans ​ 306 ​ — ​ 10,146 ​ 1,767 ​ — ​ 12,219 Total loans ​ $ 230,177 ​ $ 13,371 ​ $ 1,299,684 ​ $ 118,423 ​ $ 5,138 ​ $ 1,666,793 ​ As part of the acquisition of PEB, the Company acquired certain small business loans to borrowers qualified under the California Capital Access Program for Small Business, a state guaranteed loan program sponsored by the California Pollution Control Financing Authority (“CalCAP”). PEB ceased originating loans under this loan program in 2017. Under this loan program, the borrower, CalCAP and the participating lender contributed funds to a loss reserve account that is held in a demand deposit account at the participating lender. 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. The participating lender must return recoveries from the borrower, less expenses, to the loan loss reserve account. The funds in the loss reserve account are the property of CalCAP, however, in the event that the participating lender leaves the program any excess funds, after all loans have been repaid or unenrolled from the program by the participating lender and provided there are no pending claims for reimbursement, are distributed to CalCAP and the participating lender based on their respective contributions to the loss reserve account. Funds contributed by the participating lender to the loss reserve account are treated as a receivable from CalCAP and evaluated for impairment quarterly. As of December 31, 2022, the Company had $ 26.3 million of loans enrolled in this loan program. The Company had a loss reserve account of $ 13.7 million as of December 31, 2022. In addition, as successor to PEB, the Company was approved by the CalCAP, in partnership with the California Air Resources Board, to originate loans to California truckers in the On-Road Heavy-Duty Vehicle Air Quality Loan Program. Under this loan program, CalCAP solely contributes funds to a loss reserve account that is held in a demand deposit account at the participating lender. Losses are managed in the same manner as described above. The funds are the property of CalCAP and are payable upon termination of the program. When the loss reserve account balance exceeds the total associated loan balance, the excess is to be remitted to CalCAP. The Company has originated $ 5.1 million of loans under this program during the year ended December 31, 2022. As of December 31, 2022, the Company had $ 26.2 million of loans enrolled in this program. The Company had a loss reserve account of $ 6.2 million as of December 31, 2022. ​ 108 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) 6. PREMISES AND EQUIPMENT Premises and equipment consisted of the following at the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2022 ​ 2021 Premises owned ​ $ 11,120 ​ $ 11,015 Leasehold improvements ​ 2,259 ​ 2,608 Furniture, fixtures and equipment ​ 6,760 ​ 6,201 Less accumulated depreciation and amortization ​ ( 6,861 ) ​ ( 5,454 ) Total premises and equipment, net ​ $ 13,278 ​ $ 14,370 ​ ​ Depreciation and amortization included in occupancy and equipment expense totaled $ 2.0 million for both years ended December 31, 2022 and December 31, 2021, compared to $ 1.9 million for the year ended December 31, 2020. 7. LEASES The Company owned 15 of its banking branches and leased the remaining 19 branches under noncancelable operating leases as of December 31, 2022. These leases expire on various dates through 2030. The Company’s leases often have an option to renew one or more times, at the Company’s discretion, following the expiration of the initial term. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability. The Company uses the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. ​ The below maturity schedule represents the undiscounted lease payments for the five-year period and thereafter as of December 31, 2022: ​ ​ ​ ​ ​ Year ending December 31, ​ ​ ​ 2023 ​ $ 3,877 2024 ​ 4,003 2025 ​ 3,181 2026 ​ ​ 2,428 Thereafter ​ 5,474 Total undiscounted cash flows ​ ​ 18,963 Less: interest ​ ​ ( 1,825 ) Present value of lease payments ​ $ 17,138 ​ ​ ​ The following table presents the remaining weighted average lease term and discount rate at the date indicated: ​ ​ ​ ​ ​ ​ December 31, 2022 Weighted-average remaining lease term 5.4 years Weighted-average discount rate 3.12 % ​ ​ Rental expense included in occupancy and equipment on the consolidated statements of income totaled $ 4.1 million, $ 3.4 million and $ 3.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. 109 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) 8. OTHER REAL ESTATE OWNED Other real estate owned as of the dates indicated consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2022 ​ 2021 Land ​ $ 21 ​ $ 21 Total ​ $ 21 ​ $ 21 ​ As of December 31, 2022, there were two residential mortgage loans in the process of foreclosure totaling $ 248,000 , compared to two residential mortgage loans in the process of foreclosure totaling $ 1.0 million at December 31, 2021. ​ 9. GOODWILL AND INTANGIBLE ASSETS Goodwill Changes in the Company’s goodwill for the periods indicated are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2022 ​ 2021 Balance at beginning of period ​ $ 38,838 ​ $ 38,838 Acquired goodwill ​ — ​ — Impairment ​ — ​ — Balance at end of period ​ $ 38,838 ​ $ 38,838 ​ Impairment exists when a reporting unit’s fair value is less than its carrying amount, including goodwill. Due to the adverse and unknown economic impacts resulting from the COVID-19 pandemic, the Company performed a goodwill impairment qualitative assessment during each quarter of 2022 and 2021 to determine if it is not more likely than not that the fair value of the Company’s reporting unit exceeded its carrying value, including goodwill. ​ As of December 31, 2022 the Company’s qualitative assessment which considered the Company’s continued profitability, positive equity, average community bank merger deal values realized during 2022, net interest margin, allowance for loan loss, and the continued growth in its core deposit portfolio, the Company concluded that the goodwill of the Company’s reporting unit, the Bank, is not more likely than not to be impaired. ​ Core Deposit Intangible Changes in the Company’s core deposit intangible for the periods indicated were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2022 ​ 2021 Balance at beginning of period ​ $ 6,489 ​ $ 8,302 Additions ​ 756 ​ — Less amortization ​ ( 2,044 ) ​ ( 1,813 ) Balance at end of period ​ $ 5,201 ​ $ 6,489 ​ 110 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) Estimated annual amortization at December 31, 2022 is as follows: ​ ​ ​ ​ ​ Year ending December 31, ​ ​ ​ 2023 ​ $ 1,286 2024 ​ 1,222 2025 ​ 948 2026 ​ ​ 455 Thereafter ​ 1,290 Total ​ $ 5,201 ​ ​ 10. INTEREST RECEIVABLE AND OTHER ASSETS The Company’s other assets at the dates indicated consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2022 ​ 2021 Tax assets, net ​ $ 18,762 ​ $ 10,573 Accrued interest receivable ​ 7,659 ​ 5,929 Investment in Small Business Investment Company ("SBIC") fund ​ 4,389 ​ 4,731 Investment in Community Reinvestment Act fund ​ ​ 2,000 ​ ​ — Prepaid assets ​ 1,568 ​ 1,598 Servicing assets ​ 2,092 ​ 1,947 Investment in Low Income Housing Tax Credit ("LIHTC") partnerships, net ​ 2,675 ​ 3,129 Investment in statutory trusts ​ 493 ​ 484 CalCAP reserve receivable ​ ​ 4,023 ​ ​ — Other assets ​ 1,871 ​ 1,469 Total ​ $ 45,532 ​ $ 29,860 ​ ​ 11. DEPOSITS The Company’s deposits consisted of the following at the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2022 ​ 2021 Demand deposits ​ $ 773,274 ​ $ 710,137 NOW accounts and savings ​ 441,064 ​ 484,847 Money market ​ 577,792 ​ 568,094 Time deposits ​ 293,349 ​ 222,161 Total ​ $ 2,085,479 ​ $ 1,985,239 ​ 111 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) At December 31, 2022, aggregate annual maturities of time deposits are as follows: ​ ​ ​ ​ ​ Year ending December 31, ​ 2023 ​ $ 221,365 2024 ​ 29,703 2025 ​ 36,608 2026 ​ 1,091 2027 ​ 4,582 Total ​ $ 293,349 ​ Interest expense, net of early withdrawal penalty, recognized on interest bearing deposits at the dates indicated consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, December 31, ​ ​ 2022 ​ 2021 ​ 2020 NOW accounts and savings ​ $ 499 ​ $ 452 ​ $ 417 Money market ​ 3,238 ​ 2,266 ​ 2,721 Time deposits ​ 2,536 ​ 2,157 ​ 3,816 Total ​ $ 6,273 ​ $ 4,875 ​ $ 6,954 ​ ​ 12. OTHER BORROWINGS The Company has an approved secured borrowing facility with the FHLB for up to 25 % of total assets for a term not to exceed five years under a blanket lien of certain types of loans. At both December 31, 2022 and December 31, 2021, the Company had no FHLB advances outstanding. In addition to the availability of liquidity from the FHLB, during 2022 the Bank maintained a short-term borrowing line of credit with the Federal Reserve Bank (“FRB”) of San Francisco based on PPP loans pledged as collateral. This line was closed in 2022, with no FRB borrowings outstanding at both December 31, 2022 and December 31, 2021. The Company has Federal Funds lines with four correspondent banks. Cumulative available commitments totaled $ 65.0 million at both December 31, 2022 and December 31, 2021. There are no amounts outstanding under these facilities at both December 31, 2022 and December 31, 2021. ​ 13. JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES The Company acquired the BFC Trust in the acquisition of BFC. The BFC Trust was formed in Delaware with capital of $ 93,000 for the sole purpose of issuing trust preferred securities fully and unconditionally guaranteed by BFC. The BFC Trust issued Floating Rate Capital Trust Pass-Through Securities (“BFC Trust Preferred Securities”), with a liquidation value of $ 1,000 per security, for gross proceeds of $ 3.1 million prior to the BFC acquisition and the liability was assumed during the acquisition. The entire proceeds of the issuance were invested by the BFC Trust in $ 3.1 million of Floating Rate Junior Subordinated Deferrable Interest Debentures issued by BFC, with identical maturities, repricing and payment terms as the BFC Trust Preferred Securities. The subordinated debentures have a variable interest rate based on the three months LIBOR plus 2.75 %, with quarterly repricing. The debentures are redeemable by the Company subject to prior approval from the Federal Reserve on any March 15, June 15, September 15, or December 15. The redemption price is par plus accrued and unpaid interest, except in the case of redemption under special event which is defined in the debenture. The BFC Trust Preferred Securities are subject to mandatory redemption to the extent of any early redemption of the subordinated debentures or upon its maturity on June 17, 2034. 112 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) The Company acquired the FULB Trust in the acquisition of FULB. The FULB Trust was formed in Delaware with capital of $ 192,000 for the sole purpose of issuing trust preferred securities fully and unconditionally guaranteed by FULB. The FULB Trust issued 6,200 Floating Rate Capital Trust Pass-Through Securities (“FULB Trust Preferred Securities”), with a liquidation value of $ 1,000 per security, for gross proceeds of $ 6.2 million prior to the FULB acquisition and the liability was assumed during the acquisition. The entire proceeds of the issuance were invested by the FULB Trust in $ 6.4 million of Floating Rate Junior Subordinated Deferrable Interest Debentures issued by FULB, with identical maturities, repricing and payment terms as the FULB Trust Preferred Securities. The subordinated debentures have a variable interest rate based on the three months LIBOR plus 2.5 %, with quarterly repricing. The debentures are redeemable by the Company subject to prior approval from the Federal Reserve, on any March 15, June 15, September 15, or December 15. The redemption price is par plus accrued and unpaid interest, except in the case of redemption under special event which is defined in the debenture. The FULB Trust Preferred Securities are subject to mandatory redemption to the extent of any early redemption of the subordinated debentures or upon its maturity on September 15, 2034. Holders of the trust preferred securities issued by the Trusts are entitled to a cumulative cash distribution on the liquidation amount of $ 1,000 per security. Each of the Trusts has the option to defer payment of the distributions for a period of up to five years, as long as the Company is not in default of the payment of interest on the subordinated debentures. The trust preferred securities were sold and issued in private transactions pursuant to an exemption from registration under the Securities Act of 1933, as amended. The Company has guaranteed, on a subordinated basis, distributions and other payments due on the trust preferred securities. The following is a summary of the contractual terms of the subordinated debentures due to the Trusts at the date indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 Subordinated debenture Gross Mark to market Net Interest rate Effective rate BFC Trust ​ $ 3,093 ​ $ ( 290 ) ​ $ 2,803 7.49 % 5.14 % FULB Trust ​ 6,392 ​ ( 711 ) ​ 5,681 7.27 % 5.27 % Total ​ $ 9,485 ​ $ ( 1,001 ) ​ $ 8,484 7.34 % 5.23 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2021 Subordinated debenture Gross Mark to Market Net Interest rate Effective Rate BFC Trust ​ $ 3,093 ​ $ ( 312 ) ​ $ 2,781 2.97 % 2.95 % FULB Trust ​ ​ 6,392 ​ ( 770 ) ​ 5,622 2.70 % 2.70 % Total ​ $ 9,485 ​ $ ( 1,082 ) ​ $ 8,403 2.79 % 2.78 % ​ ​ 14. SUBORDINATED DEBT On August 6, 2020, the Company issued and sold $ 65.0 million aggregate principal amount of 5.25 % Fixed-to-Floating Rate Subordinated Notes due 2030 (the “Notes”) at a public offering price equal to 100 % of the aggregate principal amount of the Notes. 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. 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. The Company, at its option, may redeem the Notes, in whole or in part, on any interest payment date on or after September 15, 2025, without a premium. At December 31, 2022 and December 31, 2021, the Company had outstanding subordinate debt, net of costs to issue, totaling $ 63.7 million and $ 63.5 million, respectively. 113 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) 15. INCOME TAXES Income tax expense for the dates indicated consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 2020 Current income tax expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal ​ $ 5,990 ​ $ 5,122 ​ $ 3,718 State ​ 3,638 ​ 2,572 ​ 2,487 Total current tax expense ​ ​ 9,628 ​ ​ 7,694 ​ ​ 6,205 Deferred income tax expense (benefit): ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal ​ ​ 455 ​ ​ ( 95 ) ​ ​ ( 895 ) State ​ ​ ( 59 ) ​ ​ 190 ​ ​ ( 807 ) Total deferred tax expense (benefit) ​ ​ 396 ​ ​ 95 ​ ​ ( 1,702 ) Total income tax expense ​ $ 10,024 ​ $ 7,789 ​ $ 4,503 ​ Income tax expense results in effective tax rates that differ from the statutory federal income tax rate for the years indicated as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 December 31, 2021 ​ December 31, 2020 ​ Amount Rate% Amount Rate% Amount Rate% Federal statutory tax rate ​ $ 7,772 21.00 % $ 5,981 21.00 % $ 3,828 21.00 % State statutory tax rate, net of federal effective tax rate ​ 2,827 7.64 ​ 2,182 7.66 ​ 1,327 7.28 ​ Tax exempt interest ​ ( 94 ) ( 0.25 ) ​ ( 80 ) ( 0.28 ) ​ ( 81 ) ( 0.44 ) ​ Bank owned life insurance ​ ( 124 ) ( 0.34 ) ​ ( 140 ) ( 0.49 ) ​ ( 137 ) ( 0.75 ) ​ Acquisition expenses ​ 94 0.25 ​ — — ​ 67 0.37 ​ Other ​ ( 451 ) ( 1.22 ) ​ ( 154 ) ( 0.54 ) ​ ( 501 ) ( 2.75 ) ​ Total income tax expense ​ $ 10,024 27.08 % $ 7,789 27.35 % $ 4,503 24.70 % ​ The Company is subject to US federal income tax as well as state income tax in multiple states, most notably California, Colorado and New Mexico. Federal income tax returns for the years ended on or after December 31, 2019 are open to audit by the federal authorities and, with limited exception, state income tax returns for the years ended on or after December 31, 2018 are open to audit by state authorities. 114 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) Deferred tax assets at the dates indicated, included as a component of interest receivable and other assets in the consolidated balance sheets consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2022 ​ 2021 Deferred tax assets ​ ​ Net operating loss carryforward ​ $ 3,945 ​ $ 3,262 Salary continuation plan ​ 1,400 ​ 1,263 Allowance for loan losses ​ 5,469 ​ 5,090 Stock based compensation ​ 355 ​ 390 Lease liability ​ 4,959 ​ 4,128 Other liabilities ​ ​ 459 ​ ​ 401 Unrealized loss on AFS securities ​ 5,998 ​ — Other ​ 1,547 ​ 1,055 Total deferred tax assets ​ 24,132 ​ 15,589 Deferred tax liabilities ​ ​ Mark to market adjustment ​ ( 1,506 ) ​ ( 1,623 ) ROU assets ​ ( 4,794 ) ​ ( 3,488 ) FHLB stock dividend ​ ( 248 ) ​ ( 244 ) Unrealized gain on AFS securities ​ — ​ ( 875 ) Other ​ ( 2,072 ) ​ ( 1,360 ) Total deferred tax liability ​ ( 8,620 ) ​ ( 7,590 ) Deferred tax assets, net ​ $ 15,512 ​ $ 7,999 ​ The utilization of the net operating losses (“NOLs”) is subject to an annual limit pursuant to Section 382 of the Internal Revenue Code. The amount of the annual limitations for Federal and California Franchise Tax purpose is $ 1.1 million and if not fully utilized, the NOLs will begin to expire in 2028. Based upon the level of historical taxable income and projections for future taxable income over the periods during which the deferred tax assets are expected to be deductible, Management believes it is more likely than not we will realize the benefit of the remaining deferred tax assets. Accordingly, no valuation allowance has been established as of December 31, 2022 or 2021. At December 31, 2022, Federal, California and Colorado NOLs included in the deferred tax asset totaled $ 13.1 million, $ 4.5 million and $ 4.0 million, respectively. During the years ended December 31, 2022, 2021 and 2020, the Company did no t recognize any interest and penalties. The Company had no unrecognized tax benefits as of December 31, 2022 and 2021. 115 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) 16. COMMITMENTS AND CONTINGENCIES Lending and Letter of Credit Commitments In the normal course of business, the Company enters into various commitments to extend credit which are not reflected in the financial statements. These commitments consist of the undisbursed balance on personal, and commercial lines, including commercial real estate secured lines of credit, and of the undisbursed funds on construction and development loans. The Company also issues standby letter of credit commitments, primarily for the third party performance obligations of clients. The following table presents a summary of commitments described above as of the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2022 ​ 2021 Commitments to extend credit ​ $ 96,774 ​ $ 100,686 Standby letters of credit ​ 768 ​ 3,453 Total commitments ​ $ 97,542 ​ $ 104,139 ​ Commitments generally have fixed expiration dates or other termination clauses. The actual liquidity needs or the credit risk that the Company will experience will be lower than the contractual amount of commitments to extend credit because a significant portion of these commitments are expected to expire without being drawn upon. The commitments are generally variable rate and include unfunded home equity lines of credit, commercial real estate construction where disbursement is made over the course of construction, commercial revolving lines of credit, and unsecured personal lines of credit. The Company’s outstanding loan commitments are made using the same underwriting standards as comparable outstanding loans. The reserve associated with these commitments included in interest payable and other liabilities on the consolidated balance sheets was $ 315,000 at both December 31, 2022 and December 31, 2021. Commercial Real Estate Concentrations At December 31, 2022 and 2021, in management’s judgment, a concentration of loans existed in commercial real estate related loans. The Company’s commercial real estate loans are secured by owner-occupied and non-owner occupied commercial real estate and multifamily properties. Although management believes that loans within these concentrations have no more than the normal risk of collectability, a decline in the performance of the economy in general or a decline in real estate value in the Company’s primary market areas in particular, could have an adverse impact on collectability. Other Assets The Company has commitments to fund Low Income Housing Tax Credit Partnerships (“LIHTC”) and a Small Business Investment Company (“SBIC”). At December 31, 2022, the remaining commitments to the LIHTC and SBIC were approximately $ 2.1 million and $ 122,000 , respectively. At December 31, 2021, the remaining commitment to the LIHTC and SBIC were $ 2.3 million and $ 122,000 , respectively. Deposits At December 31, 2022, approximately $ 215.1 million, or 11.0 %, of the Company’s deposits are derived from the top ten depositors. At December 31, 2021, approximately $ 198.6 million, or 10.0 %, of the Company’s deposits are derived from the top ten depositors. 116 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) Local Agency Deposits In the normal course of business, the Company accepts deposits from local agencies. The Company is required to provide collateral for certain local agency deposits in the states of California, Colorado, New Mexico and Washington. As of December 31, 2022 and December 31, 2021, the FHLB issued letters of credit on behalf of the Company totaling $ 40.6 million and $ 42.0 million, respectively, as collateral for local agency deposits. ​ 17. EMPLOYEE BENEFIT PLANS 401(k) Plan Effective January 1, 2005, the Company adopted a qualified 401(k) profit sharing plan (the “401(k) Plan”) that covers substantially all full-time employees. The 401(k) Plan permits voluntary contributions by participants and provides for voluntary matching contributions by the Company after 90 days of employment. For the years ended December 31, 2022, 2021 and 2020, the Company made contributions to the plan of $ 801,000 , $ 570,000 and $ 642,000 respectively. Salary Continuation Plan In 2014, the Company established a salary continuation plan for one of its executive officers. In 2017, the Company extended coverage to two additional executive officers. Under the agreements, the Company provides the executive, or their designated beneficiaries, with annual benefits for fifteen years after retirement or death. The contributions are based on the executive’s performance related to Company’s financial performance. These benefits are substantially equivalent to those available under insurance policies purchased by the Company on the life of the executives. At December 31, 2022, approximately $ 1.2 million of the salary continuation plan was related to plans assumed through the Company’s acquisitions. There are no further requirements to fund these plans. The expense recognized included in salaries and benefits expense in the consolidated statements of income under the salary continuation agreements defined above totaled $ 648,000 , $ 594,000 and $ 577,000 for the years ended December 31, 2022, 2021 and 2020, respectively. 18. EQUITY INCENTIVE PLANS 2017 Omnibus Equity Incentive Plan The Company’s shareholders approved the Omnibus Equity Incentive Plan (“2017 Plan”) in November 2017. The 2017 Plan provides for the awarding by the Company’s Board of Directors of equity incentive awards to employees and non-employee directors. An equity incentive award may be an option, stock appreciation rights, restricted stock units, stock award, other stock-based award or performance award granted under the 2017 Plan. Factors considered by the Board in awarding equity incentives to officers and employees include the performance of the Company, the employee’s or officer’s job performance, the importance of his or her position, and his or her contribution to the organization’s goals for the award period. Subject to adjustment as provided in the 2017 Plan, the maximum number of shares of common stock that may be delivered pursuant to awards granted under the 2017 Plan is 450,000 . The 2017 Plan provides for an annual restricted stock grant limits to officers, employees and directors. The annual stock grant limit per person for officers and employees is the lessor of 50,000 shares or a value of $ 2.0 million, and per person for directors the maximum is 25,000 shares. All unvested restricted shares outstanding vest in the event of a change in control of the Company. Awarded shares of restricted stock vest over (i) a one-year period following the date of grant, in the case of the non-employee directors, and (ii) a three-year or five-year period following the date of grant, with the initial vesting occurring on the one-year anniversary of the date of grant, in the case of the executive officers. 117 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) 2014 Omnibus Equity Incentive Plan In 2014, shareholders approved an Omnibus Equity Incentive Plan (the “2014 Plan”). A total of 148,962 equity incentive awards have been granted under the 2014 Plan. The awards are shares of restricted stock and have a vesting period of one to five years . No future equity awards will be made from the 2014 Plan. The Company recognizes compensation expense for the restricted stock awards based on the fair value of the shares at the award date. For the years ended December 31, 2022, 2021 and 2020, total compensation expense for these plans was $ 1.0 million, $ 1.4 million and $ 1.5 million, respectively. As of December 31, 2022, there was $ 959,000 of total unrecognized compensation cost related to non-vested shares granted as restricted stock awards. The cost is expected to be recognized over the remaining weighted-average vesting period of approximately two years . The following table provides the restricted stock grant activity for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2021 ​ ​ ​ Weighted-average ​ Weighted-average ​ ​ ​ ​ grant date ​ ​ ​ grant date ​ ​ Shares ​ fair value ​ Shares ​ fair value Non-vested at January 1, 139,275 ​ $ 16.29 ​ 204,515 ​ $ 17.71 ​ Granted 33,091 ​ 19.49 ​ 36,415 ​ 16.17 ​ Vested ( 72,635 ) ​ 17.01 ​ ( 98,963 ) ​ 16.28 ​ Forfeited ​ ( 1,854 ) ​ ​ 18.34 ​ ( 2,692 ) ​ ​ 18.45 ​ Non-Vested, at December 31, 97,877 ​ $ 16.80 ​ 139,275 ​ $ 16.29 ​ ​ ​ 19. REGULATORY MATTERS Dividends The Company’s ability to pay cash dividends is dependent on dividends or other capital distributions paid to it by the Bank, and is also limited by state corporation law. Generally, under California law a California corporation may pay dividends to its shareholders if the corporation’s retained earnings equal at least the amount of the proposed distribution plus the preferential dividend arrears amount (if any) of the corporation, or if immediately after the distribution, the value of the corporation’s assets would equal or exceed its total liabilities plus the preferential dividend arrears amount (if any). Dividends from the Bank to the Company are restricted under California law to the lesser of the Bank’s retained earnings or the Bank’s net income for the latest three fiscal years, less dividends previously declared during that period or, with the approval of the DFPI, to the greater of the retained earnings of the Bank, the net income of the Bank for its last fiscal year, or the net income of the Bank for its current fiscal year. During the years ended December 31, 2022, the Bank paid $ 2.7 million of dividends to the Company. The Bank did no t pay any dividend to the Company in 2021. Regulatory Capital The Company is a bank holding company subject to capital adequacy requirements of the Federal Reserve under the Bank Holding Company Act of 1956, as amended, and the regulations of the Federal Reserve, except that, pursuant to the Economic Growth, Regulatory Relief and Consumer Protection Act, effective August 30, 2018, a bank holding company with consolidated assets of less than $3 billion is generally not subject to the Federal Reserve’s capital regulations. 118 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) Under the capital regulations, the minimum capital ratios are: (1) a common equity Tier 1 capital ratio (“CET1 capital”) of 4.5% of risk-weighted assets; (2) a Tier 1 capital ratio of 6.0% of risk-weighted assets (“Tier 1 capital”); (3) a total risk-based capital ratio of 8.0% of risk-weighted assets; and (4) a leverage ratio (the ratio of Tier 1 capital to average total consolidated assets) of 4.0%. CET1 capital generally consists of common stock, retained earnings, accumulated other comprehensive income (“AOCI”) unless an institution elects to exclude AOCI from regulatory capital, and certain minority interests (all of which are subject to applicable regulatory adjustments and deductions). Tier 1 capital generally consists of CET1 capital and noncumulative perpetual preferred stock. Tier 2 capital generally consists of other preferred stock and subordinated debt which meet certain conditions, plus an amount of the allowance for loan and lease losses up to 1.25% of assets. Total capital is the sum of Tier 1 and Tier 2 capital. The Bank is subject to various regulatory capital requirements administered by the Federal Reserve. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines of the regulatory framework for prompt corrective action, the Bank must meet specific capital adequacy guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices and until August 30, 2018, the Company was subject to similar capital regulations. The Bank’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies. Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of Tier 1 capital to total average assets (as defined), and minimum ratios of Tier 1 capital (as defined) and CET1 capital to risk-weighted assets (as defined). Management reviews capital ratios on a regular basis to ensure that capital exceeds the prescribed regulatory minimums and is adequate to meet our anticipated future needs. As of December 31, 2022, the most recent regulatory notifications from the Federal Reserve categorized the Bank as “Well Capitalized” under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes would have changed the category. 119 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) The following is a summary of actual capital amounts and ratios as of the dates indicated, for the Company (assuming it was subject to regulatory capital requirements) and the Bank compared to the requirements for minimum capital adequacy and classification as Well Capitalized: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2022 ​ As of December 31, 2021 ​ Amount Ratio Amount Ratio ​ ​ (Dollars in thousands) ​ Leverage Ratio ​ ​ ​ BayCom Corp ​ $ 286,688 11.91 % $ 213,787 9.60 % Minimum requirement for "Well Capitalized" ​ 120,395 5.00 % 111,349 5.00 % Minimum regulatory requirement ​ 96,316 4.00 % 89,079 4.00 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ United Business Bank ​ 336,667 13.64 % $ 250,624 10.87 % Minimum requirement for "Well Capitalized" ​ 123,402 5.00 % 115,295 5.00 % Minimum regulatory requirement ​ 98,722 4.00 % 92,236 4.00 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Equity Tier 1 Ratio ​ ​ ​ BayCom Corp ​ 286,688 13.84 % $ 213,787 12.31 % Minimum requirement for "Well Capitalized" ​ 134,648 6.50 % 112,856 6.50 % Minimum regulatory requirement ​ 93,218 4.50 % 78,131 4.50 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ United Business Bank ​ 336,667 ​ 16.42 % 250,624 ​ 14.60 % Minimum requirement for "Well Capitalized" ​ 133,242 6.50 % 111,543 6.50 % Minimum regulatory requirement ​ 92,245 4.50 % 77,222 4.50 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tier 1 Risk-Based Capital Ratio ​ ​ ​ BayCom Corp ​ 296,173 ​ 14.30 % 223,272 ​ 12.86 % Minimum requirement for "Well Capitalized" ​ 165,721 8.00 % 138,900 8.00 % Minimum regulatory requirement ​ 124,291 6.00 % 104,175 6.00 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ United Business Bank ​ 336,667 ​ 16.42 % 250,624 ​ 14.60 % Minimum requirement for "Well Capitalized" ​ 163,991 8.00 % 137,283 8.00 % Minimum regulatory requirement ​ 122,993 6.00 % 102,962 6.00 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Risk-Based Capital Ratio ​ ​ ​ BayCom Corp ​ 380,388 ​ 18.36 % 306,287 ​ 17.64 % Minimum requirement for “Well Capitalized” ​ 207,151 10.00 % 173,625 10.00 % Minimum regulatory requirement ​ 165,721 8.00 % 138,900 8.00 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ United Business Bank ​ 355,882 ​ 17.36 % 268,639 ​ 15.65 % Minimum requirement for "Well Capitalized" ​ 204,988 10.00 % 171,604 10.00 % Minimum regulatory requirement ​ 163,991 8.00 % 137,283 8.00 % ​ In addition to the minimum CET1 capital, Tier 1 capital, leverage ratio and total capital ratios, the Bank must maintain 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 in order to avoid limitations on paying dividends, repurchasing shares, and paying discretionary bonuses. ​ 120 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) 20. RELATED PARTY TRANSACTIONS In the ordinary course of business, the Company may enter into transactions with related parties, including Directors, shareholders, officers and their associates. These transactions are on substantially the same terms, including rates and collateral, as loans to unrelated parties and do not involve more than normal risk of collection. The following is a summary of the aggregate loan activity involving related party borrowers for the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ ​ 2022 ​ 2021 Beginning of the year ​ ​ $ 33,581 ​ $ 16,017 Disbursements ​ ​ 8,187 ​ 18,438 Amounts paid ​ ​ ( 3,492 ) ​ ( 874 ) End of year ​ ​ $ 38,276 ​ $ 33,581 Undisbursed commitments to related parties ​ ​ $ 2,468 ​ $ 5,679 ​ At December 31, 2022 and 2021, the Company had deposits with directors, officers and their associates which totaled approximately $ 32.7 million and $ 39.8 million, respectively. ​ 21. OTHER EXPENSES For the dates indicated, other expenses consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, December 31, ​ ​ 2022 ​ 2021 ​ 2020 Professional fees ​ $ 2,775 ​ $ 2,123 ​ $ 2,573 Core deposit premium amortization ​ 2,044 ​ 1,813 ​ 1,832 Marketing and promotions ​ 955 ​ 656 ​ 731 Stationery and supplies ​ 352 ​ 361 ​ 548 Insurance (including FDIC premiums) ​ 951 ​ 840 ​ 589 Communication and postage ​ 937 ​ 784 ​ 652 Loan default related expense ​ 254 ​ 89 ​ 350 Director fees ​ 366 ​ 325 ​ 324 Bank service charges ​ 162 ​ 256 ​ 178 Courier expense ​ 745 ​ 662 ​ 670 Other ​ 561 ​ 510 ​ 821 Total ​ $ 10,102 ​ $ 8,419 ​ $ 9,268 ​ The Company expenses marketing and promotions costs as they are incurred. Advertising expense included in marketing and promotions totaled $ 71,000 for both the years ended December 31, 2022 and 2021, compared to $ 194,000 for the year ended December 31, 2020. ​ 121 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) 22. FAIR VALUE MEASUREMENTS ASC Topic 820, “Fair Value Measurement,” defines fair value, establishes a framework for measuring fair value including a three-level valuation hierarchy, and expands disclosures about fair value measurements. Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date reflecting assumptions that a market participant would use when pricing an asset or liability. The hierarchy uses three levels of inputs to measure the fair value of assets and liabilities as follows: Level 1 — Quoted prices (unadjusted) for identical assets or liabilities in active markets that the reporting entity has the ability to access at the measurement date. Level 2 — Observable prices in active markets for similar assets and liabilities; prices for identical or similar assets or liabilities in markets that are not active; directly observable market inputs for substantially the full term of the asset and liability; market inputs that are not directly observable but are derived from or corroborated by observable market data. Level 3 — Unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. We use fair value to measure certain assets and liabilities on a recurring basis, primarily securities available-for-sale. For assets measured at the lower of cost or fair value, the fair value measurement criteria may or may not be met during a reporting period and such measurements are therefore considered “nonrecurring” for purposes of disclosing our fair value measurements. Fair value is used on a nonrecurring basis to adjust carrying values for impaired loans and other real estate owned and also to record impairment on certain assets, such as goodwill, core deposit intangible, and other long-lived assets. In certain cases, the inputs used to measure fair value may fall into different levels of the hierarchy. In such cases, the lowest level of inputs that is significant to the measurement is used for to determine the hierarch for the entire asset or liability. Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincides with our quarterly valuation process. There were no transfers between levels during 2022 and 2021. The following assets are measured at fair value on a recurring basis at the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Level 1 Level 2 Level 3 December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Government Agencies ​ $ 1,505 ​ $ — ​ $ 1,505 ​ $ — Preferred equity securities ​ ​ 13,757 ​ ​ 13,757 ​ ​ — ​ ​ — Municipal securities ​ 19,557 ​ — ​ 19,557 ​ — Mortgage-backed securities ​ 33,010 ​ — ​ 33,010 ​ — Collateralized mortgage obligations ​ 25,424 ​ — ​ 25,424 ​ — SBA securities ​ 4,305 ​ — ​ 4,305 ​ — Corporate bonds ​ 70,203 ​ — ​ 70,203 ​ — Total ​ $ 167,761 ​ $ 13,757 ​ $ 154,004 ​ $ — ​ 122 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Level 1 Level 2 Level 3 December 31, 2021 ​ ​ ​ ​ U.S. Government Agencies ​ $ 1,914 ​ $ — ​ $ 1,914 ​ $ — Preferred equity securities ​ ​ 18,777 ​ ​ 18,777 ​ ​ — ​ ​ — Municipal securities ​ 24,123 ​ — ​ 24,123 ​ — Mortgage-backed securities ​ 34,692 ​ — ​ 34,692 ​ — Collateralized mortgage obligations ​ 27,506 ​ — ​ 27,506 ​ — SBA securities ​ 6,088 ​ — ​ 6,088 ​ — Corporate bonds ​ 61,335 ​ — ​ 61,335 ​ — Total ​ $ 174,435 ​ $ 18,777 ​ $ 155,658 ​ $ — ​ The following assets are measured at fair value on a nonrecurring basis as of the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Level 1 Level 2 Level 3 December 31, 2022 ​ ​ ​ ​ Performing impaired loans ​ $ 759 ​ $ — ​ $ — ​ $ 759 Nonperforming impaired loans ​ 15,223 ​ — ​ — ​ 15,223 OREO ​ 21 ​ — ​ — ​ 21 Total ​ $ 16,003 ​ $ — ​ $ — ​ $ 16,003 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Level 1 Level 2 Level 3 December 31, 2021 ​ ​ ​ ​ Performing impaired loans ​ $ 805 ​ $ — ​ $ — ​ $ 805 Nonperforming impaired loans ​ 6,888 ​ — ​ — ​ 6,888 OREO ​ 21 ​ — ​ — ​ 21 Total ​ $ 7,714 ​ $ — ​ $ — ​ $ 7,714 ​ The Company does not record loans at fair value on a recurring basis. However, from time to time, a loan may be considered impaired and an allowance for loan losses is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. The fair value of impaired loans is estimated using one of several methods, including collateral value, market value of similar debt, enterprise and liquidation value and discounted cash flows. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. When the fair value of the collateral is based on an observable market price or a current appraised value which uses substantially observable data, the Company records the impaired loan as nonrecurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value or the appraised value contains a significant assumption and there is no observable market price, the Company records the impaired loan as nonrecurring Level 3. The Company records OREO at fair value on a nonrecurring basis based on the collateral value of the property. When the fair value of the collateral is based on an observable market price or a current appraised value which uses substantially observable data, the Company records the OREO as nonrecurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value or the appraised value contains a significant assumption, and there is no observable market price, the Company records the impaired loan as nonrecurring Level 3. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Management also incorporates assumptions regarding market trends or other relevant factors and selling and commission costs ranging from 5% to 10%. Such adjustments and assumptions are typically significant and result in a Level 3 classification of the inputs for determining fair value. 123 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) 23. FAIR VALUE OF FINANCIAL INSTRUMENTS The following methods and assumptions were used to estimate the fair value disclosure for financial instruments: Cash and cash equivalents — Cash and cash equivalents include cash and due from banks and Fed funds sold, and are valued at their carrying amounts because of the short-term nature of these instruments. Interest bearing deposits in banks — Interest bearing deposits in banks are valued based on quoted interest rates for comparable instruments with similar remaining maturities. Investment securities — The fair value of available-for-sale securities are based on quoted market prices, where available. If quoted market prices are not available, fair values are estimated using quoted market prices for similar securities and indications of value provides by brokers. Investment in FHLB and FRB Stock — The carrying value of the FHLB and FRB stock approximates the fair value because the stock is redeemable at par. Loans held for sale — Since the loans designated by the Company as available-for-sale are typically sold shortly after making the decision to sell them, realized gains and losses are usually recognized within the same period and fluctuations in fair value are thus not relevant for reporting purposes. If the available-for-sale loans stay on our books for an extended period of time, the fair value of those loans is determined using quoted secondary-market prices. Loans —Loans with variable interest rates are valued at the current carrying value, because these loans are regularly adjusted to market rates. The fair value of fixed rate with remaining maturities in excess of one year is estimated by discounting the future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings for the same remaining maturities. The allowance for loan losses is considered to be a reasonable estimate of the loan discount related to credit risk. Interest receivable and payable — The accrued interest receivable and payable balance approximates its fair value. Deposits — The fair value of noninterest bearing deposits, interest bearing transaction accounts and savings accounts is the amount payable on demand at the reporting date. The fair value of time deposits is estimated by discounting the future cash flows using current rates offered for deposits of similar remaining maturities. Other borrowings — The fair value is estimated by discounting the future cash flows using current rates offered for similar borrowings. The discount rate is equal to the market rate of currently offered similar products. This is an adjustable rate borrowing and adjusts to market on a quarterly basis. Junior Subordinated Deferrable Interest Debentures — The fair value of junior subordinated deferrable interest debentures is determined based on rates and/or discounted cash flow analysis using interest rates offered in inactive markets for instruments of a similar maturity and structure resulting in a Level 3 classification. The debenture carried at the current carrying value, because the debentures regularly adjusted to market rates. Subordinated Debt — The fair value of subordinated debt is determined based on rates and/or discounted cash flow analysis using interest rates offered in inactive markets for instruments of a similar maturity and structure resulting in a Level 2 classification. Undisbursed loan commitments and standby letters of credit — The fair value of the off-balance sheet items is based on discounted cash flows of expected funding. 124 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) The carrying amounts and fair values of the Company’s financial instruments at the dates indicated are presented below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Carrying ​ Fair ​ Fair value measurements ​ amount value Level 1 Level 2 Level 3 December 31, 2022 ​ ​ ​ ​ ​ Financial assets: ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 176,815 ​ $ 176,815 ​ $ 176,815 ​ $ — ​ $ — Time deposits in banks ​ 2,241 ​ 2,241 ​ 2,241 ​ — ​ — Investment securities available-for-sale ​ 167,761 ​ 167,761 ​ 13,757 ​ 154,004 ​ — Investment in FHLB and FRB Stock ​ 20,281 ​ 20,281 ​ 20,281 ​ — ​ — Loans held for sale ​ 2,380 ​ 2,380 ​ — ​ 2,380 ​ — Loans, net ​ 2,002,224 ​ 1,940,480 ​ — ​ — ​ 1,940,480 Accrued interest receivable ​ 7,659 ​ 7,659 ​ — ​ 7,659 ​ — Financial liabilities: ​ ​ ​ ​ ​ Deposits ​ 2,085,479 ​ 2,087,265 ​ — ​ 2,087,265 ​ — Junior subordinated deferrable interest debentures, net ​ ​ 8,484 ​ ​ 7,739 ​ ​ — ​ ​ — ​ ​ 7,739 Subordinated debt, net ​ ​ 63,711 ​ 63,711 ​ — ​ ​ 63,711 ​ ​ — Accrued interest payable ​ 1,413 ​ 1,413 ​ — ​ 1,413 ​ — Off-balance sheet liabilities: ​ ​ ​ ​ ​ ​ Undisbursed loan commitments, lines of credit, standby letters of credit ​ 97,542 ​ 97,227 ​ — ​ — ​ 97,227 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Carrying ​ Fair ​ Fair value measurements ​ amount value Level 1 Level 2 Level 3 December 31, 2021 ​ ​ ​ ​ ​ Financial assets: ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 379,687 ​ $ 379,687 ​ $ 379,687 ​ $ — ​ $ — Time deposits in banks ​ 3,585 ​ 3,585 ​ 3,585 ​ — ​ — Investment securities available-for-sale ​ 174,435 ​ 174,435 ​ 18,777 ​ 155,658 ​ — Investment in FHLB and FRB Stock ​ 16,035 ​ 16,035 ​ 16,035 ​ — ​ — Loans held for sale ​ 6,470 ​ 6,470 ​ — ​ 6,470 ​ — Loans, net ​ 1,647,190 ​ 1,659,811 ​ — ​ — ​ 1,659,811 Accrued interest receivable ​ 5,929 ​ 5,929 ​ — ​ 5,929 ​ — Financial liabilities: ​ ​ ​ ​ ​ Deposits ​ 1,985,239 ​ 1,986,651 ​ — ​ 1,986,651 ​ — Junior subordinated deferrable interest debentures, net ​ 8,403 ​ 8,612 ​ — ​ — ​ 8,612 Subordinated debt, net ​ 63,542 ​ 63,542 ​ — ​ 63,542 ​ — Accrued interest payable ​ 1,180 ​ 1,180 ​ — ​ 1,180 ​ — Off-balance sheet liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Undisbursed loan commitments, lines of credit, standby letters of credit ​ 104,139 ​ 103,824 ​ — ​ — ​ 103,824 ​ ​ 125 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) 24. PARENT COMPANY ONLY BAYCOM CORP BALANCE SHEETS December 31, 2022 and 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 ASSETS ​ ​ Cash and due from banks ​ $ 3,837 ​ $ 15,879 Investment securities available-for-sale ​ 13,757 ​ 18,777 Investment in bank subsidiary ​ 370,384 ​ 299,126 Interest receivable and other assets ​ 3,108 ​ 1,845 Total assets ​ $ 391,086 ​ $ 335,627 LIABILITIES AND SHAREHOLDERS' EQUITY ​ ​ Junior subordinated deferrable interest debentures, net ​ $ 8,484 ​ $ 8,403 Subordinated debt, net ​ ​ 63,711 ​ ​ 63,542 Interest payable and other liabilities ​ ​ 1,742 ​ ​ 1,075 Total liabilities ​ 73,937 ​ 73,020 Shareholders' equity ​ ​ Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding at both December 31, 2022 and 2021 ​ — ​ — Common stock, no par value; 100,000,000 shares authorized; 12,838,462 and 10,680,386 shares issued and outstanding at December 31, 2022 and 2021, respectively ​ 204,301 ​ 157,098 Additional paid in capital ​ 287 ​ 287 Accumulated other comprehensive income, net of tax ​ ( 14,818 ) ​ 2,166 Retained earnings ​ 127,379 ​ 103,056 Total shareholders' equity ​ 317,149 ​ 262,607 Total liabilities and shareholders' equity ​ $ 391,086 ​ $ 335,627 ​ ​ 126 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) BAYCOM CORP STATEMENTS OF INCOME For the years ended December 31, 2022, 2021 and 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 Income: ​ ​ ​ ​ Interest income ​ $ 813 ​ $ 624 ​ $ 75 Earnings from bank subsidiary ​ 29,378 ​ 23,071 ​ 15,216 Dividends from statutory trusts ​ 8 ​ ​ 4 ​ 6 Gain on sale of securities ​ ​ — ​ 41 ​ — Total income ​ 30,199 ​ 23,740 ​ 15,297 Expense: ​ ​ ​ Subordinated debt ​ 3,582 ​ 3,582 ​ 1,405 Junior subordinate debt ​ 496 ​ 344 ​ 503 Total Interest expense ​ 4,078 ​ 3,927 ​ 1,908 Noninterest expense ​ 184 ​ 157 ​ 363 Total expense ​ 4,262 ​ 4,084 ​ 2,271 Income before provision for income taxes ​ 25,937 ​ 19,656 ​ 13,026 Income tax benefit ​ ( 1,050 ) ​ ( 1,035 ) ​ ( 700 ) Net income ​ $ 26,987 ​ $ 20,691 ​ $ 13,726 ​ 127 Table of Contents BAYCOM CORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands, except for share and per share data) BAYCOM CORP STATEMENTS OF CASH FLOWS For the years ended December 31, 2022, 2021 and 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 Cash flows from operating activities: ​ ​ ​ ​ Net income ​ $ 26,987 ​ $ 20,691 ​ $ 13,726 Adjustments to reconcile net income to net cash provided by (used in) operating activities: ​ ​ ​ Income from bank subsidiary ​ ( 29,683 ) ​ ( 23,376 ) ​ ( 15,429 ) Dividend from bank subsidiary ​ 10,000 ​ — ​ 18,740 Gain on sale of securities ​ ​ — ​ ​ ( 41 ) ​ ​ — Income tax benefit ​ ( 1,050 ) ​ ( 1,035 ) ​ ( 700 ) Accretion of premiums/discounts on investment securities ​ ​ 162 ​ ​ 40 ​ ​ — Accretion on junior subordinated debentures ​ 250 ​ 251 ​ 80 Stock-based compensation expense ​ 6 ​ 7 ​ 7 Increase in deferred tax asset ​ ​ 1,127 ​ ​ — ​ ​ — Increase (decrease) in interest receivable and other assets ​ 40 ​ ( 230 ) ​ 2,825 Increase in interest payable and other liabilities ​ 24 ​ 3 ​ 996 Net cash provided by (used in) operating activities ​ 7,863 ​ ( 3,690 ) ​ 20,245 Cash flows from investing activities: ​ ​ ​ Capital contribution to subsidiary ​ ( 1,280 ) ​ ( 1,400 ) ​ ( 2,654 ) Purchase from sale of investment securities ​ — ​ ( 21,356 ) ​ — Proceeds from the sales of investment securities ​ ​ 63 ​ ​ 3,026 ​ ​ ​ Net cash received (paid) for acquisitions ​ 275 ​ — ​ ( 13,886 ) Net cash used in investing activities ​ ( 942 ) ​ ( 19,730 ) ​ ( 16,540 ) Cash flows from financing activities: ​ ​ ​ Repayment of junior subordinated debentures ​ ​ — ​ ​ — ​ ​ ( 1,575 ) Proceeds from issuance of subordinated debt, net ​ ​ — ​ ​ — ​ ​ 63,372 Increase in other borrowings ​ — ​ — ​ 6,000 Repayment of other borrowings ​ — ​ — ​ ( 6,000 ) Restricted stock issued ​ 1,016 ​ 1,400 ​ 1,449 Repurchase of common stock ​ ( 17,959 ) ​ ( 11,551 ) ​ ( 18,257 ) Cash dividends paid on common stock ​ ​ ( 2,020 ) ​ ​ — ​ ​ — Net cash (used in) provided by financing activities ​ ( 18,963 ) ​ ( 10,151 ) ​ 44,989 (Decrease) increase in cash and cash equivalents ​ ( 12,042 ) ​ ( 33,571 ) ​ 48,694 Cash and cash equivalents at beginning of period ​ 15,879 ​ 49,450 ​ 756 Cash and cash equivalents at end of period ​ $ 3,837 ​ $ 15,879 ​ $ 49,450 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental disclosure of cash flow information: ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-cash investing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in unrealized (loss) gain on available-for-sale securities, net of tax ​ ​ ( 16,984 ) ​ ​ 531 ​ ​ — Cash dividends declared on common stock not yet paid ​ ​ 644 ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquisition: ​ ​ ​ ​ ​ ​ ​ ​ ​ Common stock issued ​ ​ 64,140 ​ ​ — ​ ​ — ​ ​ ​ ​ 128 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. ​ Item 9(A). Controls and Procedures. (a) Evaluation of Disclosure Controls and Procedures: An evaluation of the disclosure controls and procedures as defined in Rule 13a 15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) was conducted as of December 31, 2022 under the supervision and with the participation of the Company’s Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and several other members of the Company’s senior management. In designing and evaluating the Company’s disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. The Company’s CEO and CFO concluded that based on their evaluation at December 31, 2022, the Company’s disclosure controls and procedures were effective in ensuring that information we are required to disclose in the reports we file or submit under the Exchange Act is (1) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and (2) accumulated and communicated to the Company’s management, including its CEO and CFO, as appropriate to allow timely decisions regarding required disclosure, specified in the SEC’s rules and forms. (b) Internal Control over Financial Reporting: The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance to the Company’s management and board of directors regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements. A control procedure, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Also, because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Additionally, in designing disclosure controls and procedures, our management was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. As a result of these inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Furthermore, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. 129 Table of Contents Our management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on our assessment, we concluded that, as of December 31, 2022, the Company’s internal control over financial reporting was effective based on those criteria. (c) Changes in Internal Controls over Financial Reporting There were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2022, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting. This annual report does not include an attestation report of the Company’s registered public accounting firm. We are an “emerging growth company,” as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. As a result, for the year ended December 31, 2022 we were not required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. ​ Item 9B. Other Information None. ​ Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections Not applicable. ​ ​ PART III Item 10. Directors, Executive Officers, and Corporate Governance Directors and Executive Officers Information concerning the Company’s directors is incorporated herein by reference from the Proxy Statement, a copy of which will be filed with the SEC not later than 120 days after the close of the fiscal year. Information concerning the executive officers of the Company is contained under the heading “Executive Officers” under Part I, Item 1 of this Form 10-K and is incorporated herein by reference. Code of Ethics We have adopted a code of business conduct and ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, and person performing similar functions, and to all of our other employees and our directors. You may obtain a copy of the code of business conduct and ethics free of charge by writing to the Corporate Secretary of BayCom Corp, 500 Ygnacio Valley Road, Suite 200, Walnut Creek, California, 94596, or by calling 925-476-1800. In addition, the code of business conduct and ethics is available on our website at www.unitedbusinessbank.com under “About Us — Investor Information.” 130 Table of Contents Corporate Governance Nomination Procedures . There have been no material changes to the procedures by which shareholders may recommend nominees to BayCom’s Board of Directors. Audit Committee Matters and Audit Committee Financial Expert . The Board of Directors of BayCom has a standing Audit Committee, which has been established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee operates under a formal written charter adopted by the Board of Directors. The members of that committee currently consist of Directors Kendall, Chaudhary and Laverne, each of whom was considered independent under Nasdaq listing standards. The Board of Directors has determined that Mr. Chaudhary is an “audit committee financial expert” as defined in applicable SEC rules. All members of the Audit Committee (i) are independent as defined under Rule 4200(a)(15) of the Nasdaq Marketplace Rules; (ii) meet the criteria for independence set forth in SEC Rule 10A-3(b)(1); (iii) have not participated in the preparation of the financial statements of the Company or any of its current subsidiaries at any time during the past three years; and (iv) are able to read and understand fundamental financial statements, including our balance sheet, income statement, and cash flow statement. Additional information concerning the Audit Committee is incorporated herein by reference from the Proxy Statement (except for information contained under the heading "Report of the Audit Committee"), a copy of which will be filed with the SEC not later than 120 days after the close of the fiscal year. ​ Item 11. Executive Compensation Information concerning executive compensation is incorporated herein by reference from the Proxy Statement, a copy of which will be filed with the SEC not later than 120 days after the close of the fiscal year. ​ Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information concerning security ownership of certain beneficial owners and management is incorporated herein by reference from the Proxy Statement, a copy of which will be filed with the SEC not later than 120 days after the close of the fiscal year. The Company is not aware of any arrangements, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date result in a change in control of the Company. The following table sets forth information as of December 31, 2022 with respect to the Company’s equity compensation plans, all of which were approved by the Company’s shareholders: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of securities ​ ​ Number of securities to ​ Weighted-average ​ remaining available for ​ ​ be issued upon exercise ​ exercise price of ​ future issuance under ​ ​ of outstanding options, ​ outstanding options, ​ equity compensation Plan category warrants, and rights warrants, and rights plans (1) ​ ​ ​ ​ ​ ​ ​ ​ Equity compensation plans approved by security holders ​ — ​ $ — ​ 86,085 Equity compensation plans not approved by security holders ​ — ​ ​ — ​ — Total ​ — ​ $ — ​ 86,085 (1) All of the shares reported are available for future issuance other than upon the exercise of an option, warrant, or right. ​ 131 Table of Contents Item 13. Certain Relationships and Related Transactions, and Director Independence Information concerning certain relationships and related transactions, our independent directors and our audit and nominating committee charters is incorporated herein by reference from the Proxy Statement, a copy of which will be filed with the SEC not later than 120 days after the close of the fiscal year. ​ Item 14. Principal Accountant Fees and Services Information concerning principal accountant fees and services is incorporated herein by reference from the Proxy Statement, a copy of which will be filed with the SEC not later than 120 days after the close of the fiscal year. ​ PART IV Item 15. Exhibits and Financial Statement Schedules (a) The following documents are filed as a part of this Form 10-K: (1) Financial Statements: The Consolidated Financial Statements are included in Part II. “Item. 8 Financial Statements and Supplementary Data”. (2) Financial Statements Schedules: All schedules are omitted because they are not required or applicable, or the required information is shown in the Consolidated Financial Statements or Notes. (3) Exhibits: Included in schedule below. ​ Exhibit Number Description ​ ​ ​ 3.1 ​ Articles of Incorporation of BayCom Corp (1) ​ ​ ​ 3.2 ​ Amended and Restated Bylaws of BayCom Corp (2) ​ ​ ​ 4.1 ​ Form of common stock certificate of BayCom Corp (1) ​ ​ ​ 4.2 ​ Description of BayCom Corp’s Securities (3) ​ ​ ​ 4.3 ​ Indenture, date August 6, 2020, between BayCom Corp and Wilmington Trust, National Association, as Trustee (4) ​ ​ ​ 4.4 ​ First Supplemental Indenture, dated August 6, 2020, between BayCom Corp and Wilmington Trust, National Association, as Trustee (4) ​ 4.5 ​ Form of 5.25% Fixed-to-Floating Rate Subordinated Note due 2030 (included in Exhibit 4.2) (4) ​ ​ ​ 10.1+ ​ Amended and Restated Employment Agreement, dated March 5, 2021, among BayCom Corp, United Business Bank and George Guarini (5) ​ ​ ​ 10.2+ ​ Amended and Restated Employment Agreement, dated March 5, 2021, among BayCom Corp, United Business Bank and Janet King (5) ​ ​ ​ 10.3+ ​ Amended and Restated Employment Agreement, dated March 5, 2021, among BayCom Corp, United Business Bank and Keary Colwell (5) ​ ​ ​ 132 Table of Contents 10.4+ ​ Amended and Restated Executive Supplemental Compensation Agreement, dated February 20, 2018, between United Business Bank and George J. Guarini (1) ​ ​ ​ 10.5+ ​ Amended and Restated Executive Supplemental Compensation Agreement, dated February 20, 2018, between United Business Bank and Janet King (1) ​ 10.6+ ​ Amended and Restated Executive Supplemental Compensation Agreement, dated February 20, 2018, between United Business Bank and Keary Colwell. (1) ​ 10.7+ ​ ​ Amended and Restated Joint Beneficiary Agreement between United Business Bank and George Guarini (1) ​ ​ ​ 10.8+ ​ Bay Commercial Bank 2014 Equity Incentive Plan (1) ​ ​ ​ 10.9+ ​ Form of Restricted Stock Award Agreement under the Bay Commercial Bank 2014 Equity Incentive Plan (1) ​ ​ ​ 10.10+ ​ BayCom Corp Amended and Restated 2017 Omnibus Equity Incentive Plan (1) ​ ​ ​ 10.11+ ​ Form of Restricted Stock Award Agreement under the BayCom Corp Amended and Restated 2017 Omnibus Equity Incentive Plan (1) ​ ​ ​ 10.12+ ​ Form of Non-Qualified Stock Option Agreement under the BayCom Corp Amended and Restated 2017 Omnibus Equity Incentive Plan (1) ​ ​ ​ 10.13+ ​ Form of Incentive Stock Option Agreement under the BayCom Corp Amended and Restated 2017 Omnibus Equity Incentive Plan (1) ​ ​ ​ 10.14+ ​ Form of Restricted Stock Unit Agreement under the BayCom Corp Amended and Restated 2017 Omnibus Equity Incentive Plan ( 1) ​ ​ ​ 10.15+ ​ Joint Beneficiary Agreement between United Business Bank and Janet King (1) ​ ​ ​ 10.16+ ​ Joint Beneficiary Agreement between United Business Bank and Keary Colwell (1) ​ ​ ​ 10.17+ ​ Joint Beneficiary Agreement between United Business Bank and Mary Therese Curley (6) ​ ​ ​ 10.18+ ​ Summary of Annual Incentive Bonus program (7) ​ ​ ​ 14 ​ Code of Business Conduct and Ethics (8) ​ ​ ​ 21 ​ Subsidiaries of the Registrant (9) ​ ​ ​ 23.1 ​ Consent of Moss Adams LLP ​ ​ ​ 24 ​ Power of Attorney (set forth on signature page). ​ ​ ​ 31.1 ​ Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. ​ ​ ​ 31.2 ​ Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. ​ ​ ​ 32 ​ Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 . ​ ​ ​ 101 ​ The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 formatted in Extensible Business Reporting Language (XBRL): (1) Condensed 133 Table of Contents Consolidated Balance Sheets; (2) Condensed Consolidated Statements of Income; (3) Condensed Consolidated Statements of Comprehensive Income; (4) Condensed Consolidated Statements of Changes in Shareholders’ Equity; (5) Condensed Consolidated Statements of Cash Flows; and (6) Notes to Consolidated Financial Statements. ​ 104 ​ Cover Page Interactive Data File - (formatted as Inline XBRL and contained in Exhibit 101) +Indicates management contract or compensatory plan or arrangement. (1) Incorporated herein by reference to the Registration Statement on Form S-1 filed on April 11, 2018 (File No. 333-224236). (2) Incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed with the SEC on June 17, 2020 (File No. 001-38483). (3) Incorporated herein by reference to Exhibit 4.2 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019 (File No. 001-38433). (4) Incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed with the SEC on August 10, 2020 (File No. 001-38483). (5) Incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed with the SEC on March 9, 2021 (File No. 001-38483). (6) Incorporated herein by reference to Exhibit 10.17 to the Registrant’s Quarterly Report on Form 10-Q for the ended June 30, 2018, filed on August 14, 2018 (File No. 001-38433). (7) Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the ended March 31, 2021, filed on May 13, 2021 (File No. 001-38433). ​ (8) Registrant elects to satisfy Regulation S-K §229.406(c) by posting its Code of Ethics on its website at www.unitedbusinessbank.com in the section titled About Us — Investor Information. ​ (9) Incorporated herein by reference to Exhibit 21 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019 (File No. 001-38433). ​ Item 16. Form 10-K Summary None. ​ 134 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ​ BAYCOM CORP Date: March 30, 2023 ​ By: /s/ George J. Guarini ​ ​ ​ George J. Guarini ​ ​ ​ President and Chief Executive Officer ​ KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of George J. Guarini and Keary L. Colwell his or her true and lawful attorney- in-fact and agent, with full power of substitution and re-substitution, for him/her and in his/her name, place and stead, in any and all capacities, to sign any amendment to BayCom Corp’s Annual Report on Form 10-K for the year ended December 31, 2022, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto each said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming said attorney-in-fact and agent or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. /s/ George J. Guarini Date: March 30, 2023 George J. Guarini, President, Chief Executive Officer and Director ​ ​ (Principal Executive Officer) ​ ​ ​ ​ /s/ Lloyd W. Kendall Date: March 30, 2023 Lloyd W. Kendall, Chairman of the Board and Director ​ ​ ​ ​ /s/ James S. Camp Date: March 30, 2023 James S. Camp, Director ​ ​ ​ ​ /s/ Harpreet S. Chaudhary Date: March 30, 2023 Harpreet S. Chaudhary, Director ​ ​ ​ ​ /s/ Rocco Davis Date: March 30, 2023 Rocco Davis, Director ​ ​ ​ ​ /s/ Robert G. Laverne Date: March 30, 2023 Robert G. Laverne, MD, Director ​ ​ ​ ​ /s/ Syvia L. Magid Date: March 30, 2023 Syvia L. Magid, Director ​ ​ ​ ​ ​ ​ ​ /s/ Janet L. King Date: March 30, 2023 Janet L. King, Senior Executive Vice President, Chief Operating Officer and Director ​ ​ ​ ​ /s/ Keary L. Colwell Date: March 30, 2023 Keary L. Colwell, Senior Executive Vice President, Chief Financial ​ ​ Officer, Secretary and Director (Principal Financial and Accounting Officer) ​ ​ ​ ​ ​ ​ 135