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 ) 77 ​ ​ Consolidated Financial Statements ​ ​ ​ Consolidated Balance Sheets – December 31, 2023 and 2022 80 ​ ​ Consolidated Statements of Income – Years Ended December 31, 2023, 2022 and 2021 81 ​ ​ Consolidated Statements of Comprehensive Income – Years Ended December 31, 2023, 2022 and 2021 82 ​ ​ Consolidated Statements of Changes in Shareholders’ Equity – Years ended December 31, 2023, 2022 and 2021 83 ​ ​ Consolidated Statements of Cash Flows – Years Ended December 31, 2023, 2022, and 2021 84 ​ ​ Notes to Consolidated Financial Statements 86 ​ ​ ​ 76 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of BayCom Corp Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of BayCom Corp and Subsidiary (the “Company”) as of December 31, 2023 and 2022 , the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023 , and the related notes (collectively referred to as the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2023 , based on criteria established in Internal Control – Integrated Framework ( 2013 ) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2023 and 2022 , and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 , in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023 , based on criteria established in Internal Control – Integrated Framework ( 2013 ) issued by COSO. Change in Accounting Principle As discussed in Notes 1 and 5 to the consolidated financial statements, the Company has changed its method of accounting for credit losses due to the adoption of Accounting Standards Update No. 2016-13, Financial Instruments – Credit Losses . Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting . Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting 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 audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. 77 Table of Contents Our audits of the consolidated financial statements 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. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) 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. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matter The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which it relates. Allowance for Credit Losses for Loans and Leases As described in Notes 1 and 5 to the consolidated financial statements, the Company adopted Accounting Standards Update No. 2016-13 Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , as of January 1, 2023, using the modified retrospective method. Upon adoption, the Company recorded a decrease to retained earnings of $491,000, net of taxes, for the cumulative effect of adopting Topic 326. The Company’s allowance for credit losses was $22 million as of December 31, 2023, and is estimated using relevant information, from both internal and external sources, related to past events, current conditions, and reasonable and supportable forecasts. We identified the elections and key assumptions involved in the adoption of Topic 326, as well as the estimation of qualitative internal and external risk factors and the application of forecasted economic conditions within the calculation of the allowance for credit losses as a critical audit matter. The principal considerations for our determination of the allowance for credit losses as a critical audit matter is the subjectivity and significant judgment required by management in the determination of these elections and key assumptions. Auditing management’s judgements regarding the 78 Table of Contents reasonable and supportable forecast and qualitative internal and external risk factors involved significant audit effort, including a high degree of subjectivity and judgment when performing the audit procedures and evaluating the results of those procedures. The primary procedures we performed to address this critical audit matter included: ● Testing the design, implementation and operating effectiveness of controls relating to management’s initial adoption of Topic 326 and the calculation of the allowance for credit losses on loans, including controls related to model development and validation and the evaluation of the qualitative internal and external risk factors. ​ ● Evaluating the appropriateness of the Company’s elections and key assumptions involved in the adoption of Topic 326. ​ ● Evaluating the reasonableness of the significant assumptions used by management as well as the relevance and reliability of the data used by management related to the qualitative internal and external risk factors. ​ ● Evaluating the reasonableness of the significant assumptions used by management as well as the relevance and reliability of the data used by management related to the forecasted economic conditions. ​ ● Tested the mathematical accuracy of the allowance for credit losses by reperforming or independently calculating significant elements of the estimate, as well as testing completeness and accuracy of the underlying data and model inputs used in the calculation. ​ /s/ Moss Adams LLP ​ Sacramento, California March 15, 2024 We have served as the Company’s auditor since 2018. ​ 79 Table of Contents ​ Error! 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BAYCOM CORP AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS December 31, 2023 and 2022 (In thousands, except for share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2023 2022 ​ ​ ​ ​ ​ (As Restated) ASSETS ​ ​ Cash due from banks ​ $ 17,901 ​ $ 26,980 Federal funds sold and interest-bearing balances in banks ​ 289,638 ​ 149,835 Cash and cash equivalents ​ ​ 307,539 ​ 176,815 Time deposits in banks ​ ​ 1,245 ​ 2,241 Investment securities available-for-sale ("AFS"), at fair value, net of allowance for credit losses of $ 0 at both December 31, 2023 and December 31, 2022 ​ ​ 163,152 ​ 154,004 Equity securities ​ ​ 12,585 ​ ​ 13,757 Federal Home Loan Bank ("FHLB") stock, at par ​ ​ 11,313 ​ 10,679 Federal Reserve Bank ("FRB") stock, at par ​ ​ 9,626 ​ 9,602 Loans held for sale ​ ​ — ​ 2,380 Loans, net of allowance for credit losses of $ 22,000 at December 31, 2023 and $ 18,900 at December 31, 2022 ​ ​ 1,905,829 ​ 2,002,224 Premises and equipment, net ​ ​ 13,734 ​ 13,278 Other real estate owned ("OREO") ​ ​ — ​ 21 Core deposit intangible, net ​ ​ 3,915 ​ 5,201 Cash surrender value of bank owned life insurance ("BOLI") policies, net ​ ​ 22,867 ​ 22,193 Right-of-use assets ("ROU"), net ​ ​ 13,939 ​ ​ 16,569 Goodwill ​ ​ 38,838 ​ 38,838 Interest receivable and other assets ​ ​ 47,378 ​ 45,532 Total assets ​ $ 2,551,960 ​ $ 2,513,334 LIABILITIES AND SHAREHOLDERS’ EQUITY ​ ​ ​ ​ ​ Noninterest and interest bearing deposits ​ $ 2,132,750 ​ $ 2,085,479 Junior subordinated deferrable interest debentures, net ​ 8,565 ​ 8,484 Subordinated debt, net ​ ​ 63,881 ​ ​ 63,711 Salary continuation plan ​ 4,552 ​ 4,840 Lease liabilities ​ 14,752 ​ 17,138 Interest payable and other liabilities ​ 14,591 ​ 16,533 Total liabilities ​ 2,239,091 ​ 2,196,185 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, 2023 and December 31, 2022 ​ — ​ — Common stock, no par value; 100,000,000 shares authorized; 11,551,271 and 12,838,462 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively ​ 180,913 ​ 204,301 Additional paid in capital ​ 287 ​ 287 Accumulated other comprehensive loss, net of tax ​ ( 14,592 ) ​ ( 11,561 ) Retained earnings ​ 146,261 ​ 124,122 Total shareholders’ equity ​ 312,869 ​ 317,149 Total liabilities and shareholders’ equity ​ $ 2,551,960 ​ $ 2,513,334 ​ The accompanying notes are an integral part of the consolidated financial statements. 80 Table of Contents BAYCOM CORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME For the years ended December 31, 2023, 2022 and 2021 (In thousands, except for share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 ​ ​ ​ ​ ​ ​ (As Restated) ​ ​ ​ Interest income: ​ ​ ​ Loans, including fees ​ $ 106,316 ​ $ 95,722 ​ $ 76,099 Investment securities ​ 6,993 ​ 6,085 ​ 3,893 Fed funds sold and interest-bearing balances in banks ​ ​ 11,589 ​ ​ 4,025 ​ ​ 665 FHLB dividends ​ 862 ​ 684 ​ 494 FRB dividends ​ 577 ​ 549 ​ 458 Total interest and dividend income ​ 126,337 ​ 107,065 ​ 81,609 Interest expense: ​ ​ ​ Deposits ​ 24,040 ​ 6,273 ​ 4,875 Subordinated debt ​ ​ 3,582 ​ ​ 3,582 ​ ​ 3,582 Junior subordinated deferrable interest debentures ​ 841 ​ 496 ​ 345 Total interest expense ​ 28,463 ​ 10,351 ​ 8,802 Net interest income ​ 97,874 ​ 96,714 ​ 72,807 Provision for credit losses ​ 2,015 ​ 4,441 ​ 466 Net interest income after provision for credit losses ​ 95,859 ​ 92,273 ​ 72,341 Noninterest income: ​ ​ ​ Gain on sale of loans ​ 508 ​ 2,747 ​ 4,795 Loss on equity securities ​ ​ ( 1,141 ) ​ ​ ( 4,573 ) ​ ​ — Service charges and other fees ​ 3,570 ​ 3,107 ​ 2,403 Loan servicing and other loan fees ​ 1,879 ​ 2,176 ​ 1,833 Income (loss) on investment in Small Business Investment Company (“SBIC”) fund ​ 1,097 ​ ( 70 ) ​ 1,274 Bargain purchase gain ​ ​ — ​ ​ 1,665 ​ ​ — Other income and fees ​ 1,064 ​ 1,048 ​ 963 Total noninterest income ​ 6,977 ​ 6,100 ​ 11,268 Noninterest expense: ​ ​ ​ Salaries and employee benefits ​ 41,001 ​ 40,480 ​ 33,761 Occupancy and equipment ​ 8,158 ​ 8,384 ​ 7,384 Data processing ​ 6,622 ​ 6,969 ​ 5,565 Other expense ​ 8,897 ​ 10,102 ​ 8,419 Total noninterest expense ​ 64,678 ​ 65,935 ​ 55,129 Income before provision for income taxes ​ 38,158 ​ 32,438 ​ 28,480 Provision for income taxes ​ 10,733 ​ 8,708 ​ 7,789 Net income ​ $ 27,425 ​ $ 23,730 ​ $ 20,691 Earnings per common share: ​ ​ ​ Basic earnings per common share ​ $ 2.27 ​ $ 1.81 ​ $ 1.90 Weighted average common shares outstanding ​ 12,074,198 ​ 13,124,179 ​ 10,882,344 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted earnings per common share ​ $ 2.27 ​ $ 1.81 ​ $ 1.90 Weighted average common shares outstanding ​ 12,074,198 ​ 13,124,179 ​ 10,882,344 ​ The accompanying notes are an integral part of the consolidated financial statements. ​ 81 Table of Contents BAYCOM CORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the years ended December 31, 2023, 2022 and 2021 (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 ​ ​ ​ ​ ​ ​ (As Restated) ​ ​ ​ Net income ​ $ 27,425 ​ $ 23,730 ​ $ 20,691 Other comprehensive loss: ​ ​ ​ Change in unrealized loss on available-for-sale securities ​ ( 4,255 ) ​ ( 19,275 ) ​ ( 740 ) Deferred tax benefit ​ 1,224 ​ 5,548 ​ 209 Other comprehensive loss, net of tax ​ ( 3,031 ) ​ ( 13,727 ) ​ ( 531 ) Total comprehensive income ​ $ 24,394 ​ $ 10,003 ​ $ 20,160 ​ The accompanying notes are an integral part of the consolidated financial statements. ​ 82 Table of Contents BAYCOM CORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY For the years ended December 31, 2023, 2022 and 2021 (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, 2021 ​ 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 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 23,730 ​ ​ 23,730 Other comprehensive loss, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 13,727 ) ​ ​ ​ ​ ​ ( 13,727 ) Restricted stock granted ​ 33,091 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — Restricted stock forfeited ​ ( 1,854 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — Issuance of common shares to acquire Pacific Enterprise Bancorp ​ 3,032,579 ​ ​ 64,140 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 64,140 Cash dividends of $ 0.20 per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 2,664 ) ​ ​ ( 2,664 ) Stock based compensation ​ ​ ​ ​ 1,022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,022 Repurchase of shares ​ ( 905,740 ) ​ ​ ( 17,959 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 17,959 ) Balance, December 31, 2022 (As Restated) ​ 12,838,462 ​ $ 204,301 ​ $ 287 ​ $ ( 11,561 ) ​ $ 124,122 ​ $ 317,149 Net income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 27,425 ​ ​ 27,425 Other comprehensive loss, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 3,031 ) ​ ​ ​ ​ ​ ( 3,031 ) Cumulative change from adoption of ASU 2016-13, net of tax ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 491 ) ​ ​ ( 491 ) Restricted stock granted ​ 41,849 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — Cash dividends of $ 0.40 per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 4,795 ) ​ ​ ( 4,795 ) Stock based compensation ​ ​ ​ ​ 726 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 726 Repurchase of shares ​ ( 1,329,040 ) ​ ​ ( 24,114 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 24,114 ) Balance, December 31, 2023 ​ 11,551,271 ​ $ 180,913 ​ $ 287 ​ $ ( 14,592 ) ​ $ 146,261 ​ $ 312,869 ​ ​ ​ 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 For the years ended December 31, 2023, 2022 and 2021 (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ December 31, ​ ​ 2023 2022 ​ 2021 ​ ​ ​ ​ ​ (As Restated) ​ ​ ​ ​ Cash flows from operating activities: ​ ​ ​ ​ Net income ​ $ 27,425 ​ $ 23,730 ​ $ 20,691 ​ Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ Provision for credit losses ​ 2,015 ​ 4,441 ​ 466 ​ Deferred tax expense (benefit) ​ 1 ​ ( 1,712 ) ​ 117 ​ Accretion on acquired loans ​ ( 876 ) ​ ( 375 ) ​ ( 1,262 ) ​ Gain on sale of loans ​ ( 508 ) ​ ( 2,747 ) ​ ( 4,795 ) ​ Gain on sale of securities ​ ​ — ​ ​ — ​ ​ ( 41 ) ​ Proceeds from sale of loans ​ 9,585 ​ 42,515 ​ 45,846 ​ Loans originated for sale ​ ( 7,202 ) ​ ( 33,957 ) ​ ( 54,577 ) ​ Loss on sale of premises, net ​ ​ — ​ ​ — ​ ​ ( 12 ) ​ Loss (gain) on sale of OREO ​ 21 ​ — ​ ( 15 ) ​ Bargain purchase gain ​ — ​ ( 1,665 ) ​ — ​ Accretion on junior subordinated debentures ​ 81 ​ 81 ​ 251 ​ Increase in cash surrender value of life insurance policies ​ ( 674 ) ​ ( 603 ) ​ ( 680 ) ​ Amortization/accretion of premiums/discounts on investment securities, net ​ 340 ​ 592 ​ 499 ​ Loss on equity securities ​ ​ 1,141 ​ ​ 4,573 ​ ​ — ​ Depreciation and amortization ​ 1,677 ​ 1,975 ​ 2,043 ​ Core deposit intangible amortization ​ 1,286 ​ 2,044 ​ 1,813 ​ Stock based compensation expense ​ 726 ​ 1,022 ​ 1,407 ​ Decrease in deferred loan origination fees, net ​ ( 138 ) ​ ( 1,821 ) ​ ( 1,944 ) ​ Net change in interest receivable and other assets ​ 1,753 ​ ( 2,342 ) ​ ( 2,553 ) ​ (Decrease) increase in salary continuation plan, net ​ ( 288 ) ​ 447 ​ 384 ​ Net change in interest payable and other liabilities ​ ( 5,563 ) ​ 3,414 ​ 2,791 ​ Net cash provided by operating activities ​ 30,802 ​ 39,612 ​ 10,429 ​ Cash flows from investing activities: ​ ​ ​ ​ Proceeds from maturities of interest bearing deposits in banks ​ 996 ​ 1,344 ​ 4,133 ​ Purchase of investment securities AFS ​ ( 25,267 ) ​ ( 28,878 ) ​ ( 91,024 ) ​ Proceeds from maturities, repayments and calls of investment securities AFS ​ 11,555 ​ 11,052 ​ 27,955 ​ Proceeds from sales of investment securities AFS ​ — ​ 63 ​ 3,026 ​ Purchase of FHLB stock ​ ( 634 ) ​ — ​ ( 648 ) ​ Purchase of FRB stock ​ ( 24 ) ​ ( 1,010 ) ​ ( 45 ) ​ Decrease (increase) in loans, net ​ 95,899 ​ 53,789 ​ ( 2,918 ) ​ Proceeds from sale of premises ​ ​ — ​ ​ — ​ ​ 46 ​ Proceeds from sale of OREO ​ — ​ — ​ 422 ​ Purchase of equipment and leasehold improvements, net ​ ( 2,123 ) ​ ( 843 ) ​ ( 1,309 ) ​ Net cash received for acquisitions ​ — ​ 18,423 ​ — ​ Net cash provided by (used in) investing activities ​ 80,402 ​ 53,940 ​ ( 60,362 ) ​ ​ The accompanying notes are an integral part of the consolidated financial statements. 84 Table of Contents BAYCOM CORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS – (continued) For the years ended December 31, 2023, 2022 and 2021 (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ December 31, ​ 2023 2022 2021 ​ ​ ​ ​ ​ (As Restated) ​ ​ ​ Cash flows from financing activities: ​ ​ ​ (Decrease) increase in noninterest and interest bearing deposits in banks, net ​ ( 136,624 ) ​ ( 30,954 ) ​ 168,389 Increase (decrease) in time deposits, net ​ 183,895 ​ ( 245,491 ) ​ ( 21,547 ) Repayment of Federal Home Loan Bank borrowings ​ ​ — ​ ​ — ​ ​ ( 5,000 ) Repurchase of common stock ​ ( 24,114 ) ​ ( 17,959 ) ​ ( 11,551 ) Dividends paid on common stock ​ ​ ( 3,637 ) ​ ​ ( 2,020 ) ​ ​ — Net cash provided by (used in) financing activities ​ 19,520 ​ ( 296,424 ) ​ 130,291 Increase (decrease) in cash and cash equivalents ​ 130,724 ​ ( 202,872 ) ​ 80,358 Cash and cash equivalents at beginning of period ​ 176,815 ​ 379,687 ​ 299,329 Cash and cash equivalents at end of period ​ $ 307,539 ​ $ 176,815 ​ $ 379,687 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental disclosure of cash flow information: ​ ​ ​ Cash paid during the year for: ​ ​ ​ Interest expense ​ $ 26,961 ​ $ 10,246 ​ $ 9,013 Income taxes paid, net ​ ​ 12,151 ​ 7,648 ​ 7,100 Recognition of ROU assets ​ ​ 644 ​ ​ 3,256 ​ ​ 645 Recognition of lease liability ​ ​ 638 ​ ​ 3,261 ​ ​ 652 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-cash investing and financing activities: ​ ​ ​ Change in unrealized loss on available-for-sale securities, net of tax ​ $ ( 3,031 ) ​ $ ( 13,727 ) ​ $ ( 531 ) Cash dividends declared on common stock not yet paid ​ ​ ( 1,158 ) ​ ​ ( 644 ) ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquisition: ​ ​ ​ Assets acquired, net of cash received ​ $ — ​ $ 440,785 ​ $ — Liabilities assumed ​ — ​ 380,055 ​ — Common stock issued ​ — ​ 64,140 ​ — ​ The accompanying notes are an integral part of the consolidated financial statements. ​ ​ 85 Table of Contents 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 35 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, Garden Grove, Waterloo, Irvine, California, and Las Vegas, Nevada, 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 “Grantor 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 Grantor Trusts were acquired through acquisitions. 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. The accounting and reporting policies of the Company conform to U.S. GAAP, general practice, and regulatory guidance within the banking industry. All material intercompany transactions and accounts have been eliminated in consolidation. For financial reporting purposes, the Grantor 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 Grantor Trusts are reflected as liabilities on the Company’s consolidated balance sheets. The accounting 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 credit losses on loans. Actual results could differ from these estimates. Amounts presented in the consolidated financial statements and footnote tables are rounded and presented to the nearest thousands of dollars except per share amounts. If the amounts are above $1.0 million, they are rounded one decimal point, and if they are above $1.0 billion, they are rounded two decimal points. Business Combinations We apply the acquisition method of accounting for business combinations. Under the acquisition method, the acquiring entity in a business combination recognizes all the identifiable assets acquired and liabilities assumed at their acquisition date fair values. Management utilizes prevailing valuation techniques appropriate for the asset or liability being measured in determining these fair values. Any excess of the purchase price over amounts allocated to assets acquired, including identifiable intangible assets, and liabilities assumed is recorded as goodwill. Where amounts allocated to assets acquired and liabilities assumed is greater than the purchase price, a bargain purchase gain is recognized. Acquisition related costs are expensed as incurred unless they are directly attributable to the issuance of the Company’s common stock in a business combination. The acquired assets and assumed liabilities, both tangible and intangible for all acquisitions 86 Table of Contents 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. 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 . 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, 2023 and 2022, $ 166.3 million and $ 176.8 million in reserve balances were required, respectively. As of December 31, 2023 and 2022, the Company had cash deposits at other financial institutions in excess of Federal Deposit Insurance Corporation (“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, 2023 and December 31, 2022, the Company did not hold interest bearing money market accounts in these financial institutions. Interest Bearing Time Deposits in Banks The Company invests in certificates of time deposits with other banks. At December 31, 2023 and 2022, the certificates of time deposits with other banks totaled $ 1.2 million and $ 2.2 million, with a yield of 2.64 % and 2.77 %, respectively. These deposits do not exceed FDIC limits and mature between one and three years . Investment Debt Securities Available-for-Sale Investment debt securities AFS 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 AFS 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 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). 87 Table of Contents Allowance for Credit Losses for Investment Debt Securities Available-For-Sale Prior to the adoption of ASU 2016-13, declines in the fair value of securities below their cost deemed to be other-than-temporary impairment ("OTTI") were reflected in operations as realized losses. Upon adoption of ASU 2016-13, for investment debt securities available-for-sale in a loss position, the Company evaluates whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or noncredit-related factors. 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. In making this assessment, management considers the length of time and the extent to which fair value is less than amortized cost, the nature of the security, the underlying collateral, and the financial condition and prospects of the issuer, among other factors. This assessment also 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. Any impairment that is not credit related is recognized in other comprehensive income, net of applicable taxes. Credit-related impairment is recognized as an allowance for credit losses on the balance sheet, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings. Changes in the allowance for available-for-sale securities are recorded as provision for (or reversal of) credit loss. However, if the uncollectibility of an available-for-sale security is confirmed or if the Company intends to sell an impaired available-for-sale debt security or more likely than not will be required to sell such a security before recovering its amortized cost basis, the entire impairment amount is recognized in earnings with a corresponding adjustment to the security's amortized cost basis. ​ Investment Equity Securities Equity securities include marketable preferred stock. These securities are carried at estimated fair value with changes in unrealized holding gains and losses reported as part of non-interest income on the consolidated statement of income. Gains and losses on the sale of equity 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. 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 credit 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. 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. 88 Table of Contents 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. Loans Purchased and Acquired From time to time, the Company may purchase whole-loans including multi-family residential, single-family residential and commercial and industrial loans both inside and outside its markets, to augment our loan portfolio. 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. Discounts or premiums on purchased loans are accreted or amortized to interest income using the effective interest method or straight-line method over the remaining period to contractual maturity. The Company adopted ASC 326 using the prospective transition approach for financial assets purchased with credit deterioration (“PCD”) that were previously classified as purchase credit impaired (“PCI”) and accounted for under ASC 310-30. In accordance with the Standard, management did not reassess whether PCI assets met the criteria of PCD assets as of the date of adoption. The remaining noncredit discount (based on the adjusted amortized costs basis) will be accreted into interest income at the effective interest rate as of adoption. An allowance for credit losses is established as of the acquisition date or upon the adoption of CECL for loans previously classified as acquired impaired, as PCD loans are no longer recorded net of a credit-related acquisition adjustment. ​ Acquired PCD loans ​ The Company has purchased loans, some of which have experienced more than insignificant credit deterioration since origination. PCD assets are assets acquired at a discount that is due, in part, to credit quality deterioration since origination which may be determined through observation of missed payments, downgrade in risk rating, deterioration of a borrower's financial trends or other observable factors including subjectivity utilized by management. PCD assets are initially recorded at fair value, by taking the sum of the present value of expected future cash flows and an allowance for credit losses, at acquisition. The allowance for credit losses for PCD assets is recorded through a gross-up of reserves on the consolidated balance sheets. An allowance for credit losses is determined using the same methodology as other loans held for investment. The sum of the loan’s purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or premium, which is amortized into interest income over the life of the loan. Subsequent to acquisition, the allowance for credit losses for PCD loans will generally follow the same forward-looking estimation, provision, and charge-off process as non-PCD acquired and originated loans. Subsequent changes to the allowance for credit losses are recorded through credit loss expense. Acquired non-PCD loans Acquired non-PCD loans under business combinations are accounted for under ASC Subtopic 310-20, Receivables Nonrefundable Fees and Other Costs ("ASC 310-20"). The difference between the fair value and unpaid principal balance of the loan at the acquisition date is amortized or accreted to interest income over the life of the loan. While credit discounts are included in the determination of the fair value from non-PCD loans, since these discounts are expected to be accreted over the life of the loans, they cannot be used to offset the allowance for credit losses that must be 89 Table of Contents recorded at the acquisition date. As a result, an allowance for credit losses is determined at the acquisition date using the same methodology as other loans held for investment and is recognized as a provision for credit losses in the consolidated statement of operations. Any subsequent deterioration (improvement) in credit quality is recognized by recording a provision for (recapture of) credit losses. 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 $ 663,000 and $ 2.2 million were deferred as loan origination costs for the years ended December 31, 2023 and 2022, respectively. Allowance for Credit Losses on Loans The Company measures credit losses under ASU 2016-03 Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaced the incurred loss methodology, and is referred to as the current expected credit loss, or CECL, methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized costs, including loan receivables. Allowance for credit losses at December 31, 2023 is estimated under CECL whereas at December 31, 2022, the allowance for loan losses is estimated under the incurred loss methodology. The allowance for credit losses is the combination of the allowance for credit losses for loans and the reserve for unfunded loan commitments. The allowance for credit losses for loans is reported as a reduction of the amortized cost basis of loans, while the reserve for unfunded loan commitments is included within "Interest payable and other liabilities" on the consolidated balance sheets. The amortized cost basis of loans does not include accrued interest receivable, which is included in "Interest receivable and other assets" on the consolidated balance sheets. The "Provision for credit losses" on the consolidated statements of income (loss) is a combination of the provision for credit losses for loans, unfunded loan commitments, and investment securities available-for-sale. ​ The allowance for credit losses on loans is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes uncollectibility of loan is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged off and expected to be charged off. Periodically, the Company charges current earnings with provisions for estimated probable losses of loans receivable. Regardless of the determination that a charge-off is appropriate for financial accounting purposes, the Company manages its loan portfolio by continually monitoring, where possible, a borrower's ability to pay through the collection of financial information, delinquency status, borrower discussion and the encouragement to repay in accordance with the original contract or modified terms, if appropriate. Management estimates the allowance using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. The CECL model utilizes a discounted cash flow ("DCF") method to measure the expected credit losses on loans collectively evaluated that are sub-segmented by loan pools with similar credit risk characteristics, which generally correspond to federal regulatory reporting codes (i.e., Call Report codes), with PCD assets pooled separately by similar loan pools to evaluate and measure the allowance for credit losses. In its loss forecasting framework, the Company incorporates forward-looking information through the use Federal Reserve Economic Data, more specifically macroeconomic forecasts such as national unemployment rates and national gross domestic product. 90 Table of Contents A loan may be considered to be placed on nonaccrual 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 nonaccrual. Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the collective evaluation. When management determines that foreclosure is probable, expected credit losses are based on the fair value of the collateral, adjusted for undiscounted selling costs as appropriate. When the discounted cash flow method is used to determine the allowance for credit losses, management does not adjust the effective interest rate used to discount expected cash flows to incorporate expected prepayments, or the loan’s obtainable market price. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies: management has a reasonable expectation at the reporting date that a loan modification will be executed with an individual borrower, or the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancellable by the Company. ​ 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. ​ 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. See Note 5 of the Notes to Consolidated Financial Statements for loan risk rating definitions. ​ PCD assets are assets acquired at a discount that is due, in part, to credit quality deterioration since origination which may be determined through observation of missed payments, downgrade in risk rating, deterioration of a borrower's financial trends or other observable factors including subjectivity utilized by management. PCD assets are initially recorded at fair value, by taking the sum of the present value of expected future cash flows and an allowance for credit losses, at acquisition. The allowance for credit losses for PCD assets is recorded through a gross-up of reserves on the consolidated balance sheets, while the allowance for acquired non-PCD assets, such as loans, is recorded through the provision for credit losses on the consolidated statements of income, consistent with originated loans. Subsequent to acquisition, the allowance for credit losses for PCD loans will generally follow the same forward-looking estimation, provision, and charge-off process as non-PCD acquired and originated loans. ​ For additional information regarding CECL, see “Critical Accounting Estimates” in “Item 7- Management’s Discussion and Analysis of Financial Condition and Results of Operations. ​ Reserve for Unfunded Commitments ​ The reserve for unfunded commitments is established through a provision for credit losses-unfunded commitments, the changes of which are recorded in provision for credit losses and the reserve amount is included within "Interest payable and other liabilities" on the consolidated balance sheets. 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 91 Table of Contents related unfunded commitments, and current economic conditions that may affect the borrower’s or depositor’s ability to pay. ​ Modifications for Financial Difficulty ​ The adoption of ASU 2022-02 on January 1, 2023 eliminated the recognition and measurement of trouble debt restructuring (“TDRs”) and enhanced the disclosures for modifications to loans related to borrowers experiencing financial difficulties. Modified loans and leases are reviewed to determine if the modification was done for borrowers experiencing financial difficulty. The concessions may be granted in various forms, including a reduction in the stated interest rate, reduction in the loan balance or accrued interest, extension of the maturity date, or a combination of these. The Company measures any loss on the modified loan to a borrower experiencing financial difficulty in accordance with the guidance concerning individually evaluated loans set forth above. Additionally, modified loans to borrowers experiencing financial difficulties are generally placed on nonaccrual status at the time of restructuring. 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 OREO acquired through, or in lieu of, foreclosure is held-for-sale and initially recorded at fair value, less selling expenses. At transfer, any write-downs to fair value are charged to the allowance for credit 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. 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 (“ROU”) assets 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 ROU 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 they were not considered in 92 Table of Contents 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. is reviewed for impairment annually, or between annual assessments if a triggering event occurs or circumstances change that would more likely than not result in the fair value of a reporting unit below its carrying amount. We make a qualitative assessment whether it is more likely than not that the fair value of a reporting unit where goodwill is assigned is less than its carrying amount. Such indicators may include, among others: a significant adverse change in legal factors or in the general business climate; significant decline in the Company’s stock price and market capitalization; unanticipated competition; and an adverse action or assessment by a regulator. Any adverse changes in these factors could have a significant impact on the recoverability of goodwill and could have a material impact on our financial condition and results of operations. 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 three to ten years . The Company performed its annual impairment analysis and determined no impairment existed as of December 31, 2023. Bank Owned Life Insurance BOLI policies are maintained 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. 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 In connection with the sale of the Company’s SBA loans, the Company recognizes servicing assets when servicing rights are retained. 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. All servicing assets and liabilities are initially measured at fair value. 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 for impairment, 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 serviced for others totaled $ 216.6 million and $ 272.8 million as of December 31, 2023 and 2022, respectively. Servicing assets, included in interest receivable and other assets in the consolidated statements of financial condition, totaled $ 1.3 million and $ 2.1 million as of December 31, 2023 and 2022, respectively. There were no servicing 93 Table of Contents liabilities, included in interest payable and other liabilities on the consolidated balance sheets at both December 31, 2023 and December 31, 2022. 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 2023, the Company sold $ 7.2 million of SBA loans (guaranteed portion) in the secondary market, all of which settled by end of year 2023. During 2022, the Company sold $ 34.0 million of SBA loans (guaranteed portion) the secondary market, all of which settled by end of year 2022. 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 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. Income Taxes The Company and the Bank file a United States consolidated federal income tax return and file state income tax returns, most notably 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. A valuation allowance is established to reduce the deferred tax asset to the level at which it is “more likely than not” that the tax asset or benefits will be realized. Realization of tax benefits of deductible temporary differences and operating loss carry forwards depends on having sufficient taxable income of an appropriate character within the carry forward periods. The determination, recognition, and measurement of deferred tax assets and the requirement for a related valuation allowance is based on estimated future taxable income. The Company recognizes that the tax effects from an uncertain tax position can be recognized in the financial statements only if, based on its merits, the position is more likely than not to be sustained on audit by the taxing authorities. Accrued interest and penalties related to unrecognized tax benefits in tax expense. Revenue Recognition The Company records revenue from contracts with clients in accordance with ASC 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 94 Table of Contents 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, 2023 and December 31, 2022, the Company did not have any significant contract balances. The following are descriptions of revenues within the scope of ASC 606. 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 monthly. The performance obligation is satisfied and the fees are recognized monthly 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 2023 and 2022. 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. 95 Table of Contents Earnings per Share Earnings per share (“EPS”) is computed using the two-class method. Basic EPS is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period, excluding any participating securities. Participating securities include unvested restricted shares. Unvested restricted shares are considered participating securities because holders of these securities receive non-forfeitable dividends at the same rate as the holders of the Company’s common stock. Diluted EPS is computed by dividing net income available to common stockholders adjusted for reallocation of undistributed earnings of unvested restricted shares by the weighted average number of common shares determined for the basic EPS plus the dilutive effect of common stock equivalents using the treasury stock method based on the average market price for the period. Therefore, under the two-class method the difference in EPS is not significant for these participating securities. Repurchase of Common Stock In April 2023, the Company’s Board of Directors approved the Company’s seventh stock repurchase program, which was completed in August 2023, authorizing the repurchase of up to 619,000 shares, or approximately 5.0 % , of the Company’s outstanding common stock over a one year period. In August 2023, the Company’s Board of Directors approved the Company’s eighth stock repurchase program, authorizing the repurchase of up to 588,000 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, 2023, 359,752 shares of Company common stock remained available for future purchases under the August 2023 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 debt 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 Adopted in 2023 On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13 Financial Instruments — Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments , which replaces the incurred loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in certain leases. In addition, ASU 2016-13 made changes to the accounting for available for sale debt securities. One such change requires increases or decreases in credit losses to be presented as an allowance rather than as a write-down on available for sale debt securities, based on management's intent to sell the security or likelihood the Company will be required to sell the security, before recovery of the amortized cost basis. The Company adopted ASU 2016-13 using the modified retrospective method for all financial assets measured at amortized cost and off-balance sheet credit exposures. Results for the reporting periods beginning on and after January 1, 2023 are 96 Table of Contents presented under ASU 2016-13 while prior period amounts continue to be reported in accordance with previously applicable generally accepted accounting principles in the United States (“GAAP”). The Company adopted ASU 2016-13 using the prospective transition approach for financial assets PCD that were previously classified as purchase credit impaired (“PCI”) and accounted for under ASC 310-30. In accordance with ASU 2016-13, management did not reassess whether PCI assets met the criteria of PCD assets as of the date of adoption. The remaining noncredit discount (based on the adjusted amortized costs basis) will be accreted into interest income at the effective interest rate as of adoption. The Company recognized an increase in the allowance for credit loss on loans totaling $ 1.5 million (which included a reclassification of the net credit discounts on acquired PCI loans to the allowance for credit losses of $ 845,000 ) and an increase to the allowance for credit losses on unfunded commitments of $ 45,000 , as a cumulative effect adjustment from change in accounting policies, with a corresponding after-tax decrease to opening retained earnings of $ 491,000 . ​ On January 1, 2023, the Company adopted ASU 2022-02 Financial Instruments — Credit Losses: Troubled Debt Restructurings and Vintage Disclosures . ASU 2022-02 eliminates the recognition measurement guidance for troubled debt restructured ("TDR") loans, and instead requires an entity to evaluate whether a modification represents a new loan or a continuation of an existing loan in accordance with ASC Topic 310-20, Receivables - Nonrefundable Fees and Other Costs . On a prospective basis, entities are subject to new disclosure requirements covering modifications of receivables to borrowers experiencing financial difficulty. In addition, ASU 2022-02 requires that an entity include in its vintage disclosures the current period-gross loan charge-offs by year of origination for financing receivables and net investment in leases within the scope of Subtopic 326-20. The Company adopted ASU 2022-02 on January 1, 2023 using a prospective transition method, and has thus far observed no material impact to deferred fees and costs and the related timing of net interest income recognition as a result of adoption. ​ Recent Accounting Guidance Not Yet Effective In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-04, Reference Rate Reform (Topic 848) . The amendments in this ASU are elective and provide optional guidance for a limited period of time to ease the potential burden of accounting for, or recognizing the effects of, reference rate reform. The amendments in this ASU provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offer Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The amendments in this ASU may be elected through December 31, 2024 (as amended by ASU No. 2022-06 discussed below). An entity may elect the amendments in this update for an interim period with adoption methods varying based on transaction type. We have not elected to apply amendments at this time and will assess the applicability of this ASU to us as we continue to monitor guidance for reference rate reform from FASB and its impact on our financial condition and results of operations. The Company does not expect the adoption of ASU 2020-04 to have a material impact on its consolidated financial statements. ​ In December 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848. The objective of the guidance in Topic 848 was to provide temporary relief during the transition period, as noted in the discussion of ASU 2020-04 above, under which the sunset provision was based on an expectation that the LIBOR would cease being published after December 31, 2021. In March 2021, the UK Financial Conduct Authority announced that the intended cessation date of certain tenors of USD LIBOR would be June 30, 2023, which is beyond the current sunset date of Topic 848. Therefore, this amendment deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. 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. ​ 97 Table of Contents Restatement of Previously Issued Consolidated Financial Statements ​ On July 18, 2023, the audit committee of the Company’s board of directors concluded that the Company’s previously issued unaudited interim consolidated financial statements for the period ended March 31, 2023 and the consolidated financial statements for the year ended December 31, 2022, as well as for the unaudited interim periods included in that fiscal year (collectively, “Restated Periods”), should no longer be relied upon because of errors related to the accounting for unrealized losses on preferred equity securities that resulted in material misstatements of noninterest income and accumulated other comprehensive income. ​ At the time of its purchase of the preferred equity securities for investment purposes, the Company inappropriately accounted for them as available-for-sale debt securities under Accounting Standards Codification (“ASC”) Topic 320 – Investments-Debt Securities . As such, the changes in the fair value of these securities were not recorded as part of net income but rather as a component of shareholders’ equity (in accumulated other comprehensive income, net of tax). However, as a result of subsequent research and third-party consultation, the Company determined that the securities should instead have been accounted for under ASC Topic 321 – Investments-Equity Securities . The result of this change in classification of the preferred equity securities is that the change in the fair value of the securities each quarter should have been recorded in noninterest income on the consolidated statements of income. ​ On July 25, 2023, the Company filed amendments to its Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2023, September 30, 2022, June 30, 2022, and March 31, 2022, and its Form 10-K for the year ended December 31, 2022, (the “Original Reports”) with the Securities and Exchange Commission (“SEC”), to reflect the restatement of the Company’s consolidated financial statements for the Restated Periods (the “Amended Form 10-Qs” and the “Amended Form 10-K,” collectively, the “Amended Reports”). ​ As disclosed in the Original Reports, the Company recorded the change, net of taxes, in the fair value of preferred equity securities as part of other comprehensive loss, net of taxes, under ASC Topic 320 – Investments-Debt Securities rather than as part of non-interest income under ASC Topic 321 – Investments-Equity Securities . In addition, various footnotes in the Amended Reports reflect the effects of these restatements. ​ For additional information on the effects of the restatement, see Note 2 Restatement of Consolidated Financial Statements in the Notes to Consolidated Financial Statements contained in the Amended Form 10-K and Note 3. Restatement of the Consolidated Financial Statements in the Notes to Condensed Consolidated Financial Statements contained in each of the Amended Form 10-Qs. ​ ​ 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. 98 Table of Contents 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 ​ ​ ​ 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 ​ ​ ​ 99 Table of Contents Pro Forma Results of Operations (Unaudited) The operating results of the Company in the consolidated statements of income include the operating results of PEB since its acquisition date. The following table presents the net interest income, net income, basic and diluted earnings per share as if the merger with PEB was effective January 1, 2022, for the year in which the 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 PEB merger been completed at the beginning of the 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, ​ ​ ​ ​ ​ 2023 ​ 2022 (As Restated) ​ ​ ​ Net interest income ​ ​ $ 97,874 ​ $ 97,566 ​ ​ ​ Net income ​ ​ 27,425 ​ 20,992 ​ ​ ​ Basic earnings per share ​ ​ $ 2.27 ​ $ 1.56 ​ ​ ​ Diluted earnings per share ​ ​ ​ 2.27 ​ ​ 1.56 ​ ​ ​ ​ ​ 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. 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 2023 and 2021. The Company incurred third-party acquisition expenses in the consolidated statements of income for the year ended December 31, 2022, as follows: ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ PEB Severance expense ​ $ 556 Occupancy expense ​ ​ 375 Data processing ​ 1,073 Professional fees ​ 724 Other expenses ​ 347 Total ​ $ 3,075 ​ ​ ​ 3. INVESTMENT SECURITIES The amortized cost, gross unrealized gains and losses, and estimated fair value of securities classified as AFS at the dates indicated are summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Gross ​ ​ ​ ​ ​ Amortized ​ unrealized ​ unrealized ​ Estimated ​ ​ cost ​ gains ​ losses ​ fair value December 31, 2023 ​ ​ ​ ​ ​ ​ Municipal securities ​ $ 21,910 ​ $ 75 ​ $ ( 1,158 ) ​ $ 20,827 Mortgage-backed securities ​ 41,048 ​ 194 ​ ( 3,641 ) ​ 37,601 Collateralized mortgage obligations ​ 35,019 ​ 256 ​ ( 2,299 ) ​ 32,976 SBA securities ​ 5,280 ​ 49 ​ ( 77 ) ​ 5,252 Corporate bonds ​ 80,383 ​ 7 ​ ( 13,894 ) ​ 66,496 Total ​ $ 183,640 ​ $ 581 ​ $ ( 21,069 ) ​ $ 163,152 ​ ​ 100 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Gross ​ ​ ​ ​ ​ Amortized ​ unrealized ​ unrealized ​ Estimated ​ ​ cost ​ gains ​ losses ​ fair value December 31, 2022 (As Restated) ​ ​ ​ ​ ​ ​ U.S. Government Agencies ​ $ 1,505 ​ $ — ​ $ — ​ $ 1,505 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 ​ $ 170,237 ​ $ 200 ​ $ ( 16,433 ) ​ $ 154,004 ​ Amortized cost and fair values exclude accrued interest receivable of $ 1.2 million at both December 31, 2023 and 2022, which is included in interest receivable and other assets in the consolidated balance sheets. ​ For the year ended December 31, 2023, the Company sold no securities AFS, sold one security AFS for a minimal net realized gain for the year ended December 31, 2022 and sold $ 3.0 million in securities AFS for net realized gains of $ 41,000 for the year ended December 31, 2021. The amortized cost and estimated fair value of securities AFS 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, 2023 ​ December 31, 2022 ​ Amortized Estimated Amortized Estimated ​ ​ cost ​ fair value ​ cost ​ fair value ​ ​ ​ ​ ​ ​ ​ ​ (As Restated) ​ (As Restated) Securities AFS ​ ​ ​ ​ Due in one year or less ​ $ 6,397 ​ $ 6,338 ​ $ 4,994 ​ $ 4,960 Due after one through five years ​ 15,909 ​ 14,206 ​ 18,892 ​ 17,925 Due after five years through ten years ​ 102,430 ​ 87,867 ​ 95,071 ​ 85,482 Due after ten years ​ 58,904 ​ 54,741 ​ 51,280 ​ 45,637 Total ​ $ 183,640 ​ $ 163,152 ​ $ 170,237 ​ $ 154,004 ​ At December 31, 2023 and 2022, there were no securities pledged. ​ The estimated fair value and gross unrealized losses for securities AFS 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, 2023 ​ ​ ​ ​ ​ ​ ​ Municipal securities ​ $ 2,483 ​ $ ( 28 ) ​ $ 13,975 ​ $ ( 1,130 ) ​ $ 16,458 ​ $ ( 1,158 ) Mortgage-backed securities ​ ​ 1,369 ​ ​ ( 30 ) ​ ​ 26,435 ​ ​ ( 3,611 ) ​ ​ 27,804 ​ ​ ( 3,641 ) Collateralized mortgage obligations ​ 1,496 ​ ​ ( 8 ) ​ ​ 20,713 ​ ​ ( 2,291 ) ​ 22,209 ​ ( 2,299 ) SBA securities ​ — ​ ​ — ​ ​ 1,610 ​ ​ ( 77 ) ​ 1,610 ​ ( 77 ) Corporate bonds ​ — ​ ​ — ​ ​ 65,505 ​ ​ ( 13,894 ) ​ 65,505 ​ ( 13,894 ) Total ​ $ 5,348 ​ $ ( 66 ) ​ $ 128,238 ​ $ ( 21,003 ) ​ $ 133,586 ​ $ ( 21,069 ) ​ 101 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 (As Restated) ​ ​ ​ ​ ​ ​ ​ Municipal securities ​ $ 1,147 ​ $ ( 8 ) ​ $ 16,843 ​ $ ( 1,536 ) ​ $ 17,990 ​ $ ( 1,544 ) Mortgage-backed securities ​ — ​ — ​ 31,291 ​ ( 4,212 ) ​ 31,291 ​ ( 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 ​ $ 3,431 ​ $ ( 34 ) ​ $ 137,487 ​ $ ( 16,399 ) ​ $ 140,918 ​ $ ( 16,433 ) ​ At December 31, 2023, the Company held 334 investment securities, of which 297 were in an unrealized loss position for more than twelve months and 22 were in an unrealized loss position for less than twelve months. At December 31, 2022, the Company held 333 investment securities, of which 102 were in an unrealized loss position for more than twelve months and 174 were in an unrealized loss position for less than twelve months. 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. Allowance for credit losses on investment debt securities available-for-sale The securities that were in an unrealized loss position as of December 31, 2023, were evaluated to determine whether the decline in fair value below the amortized cost basis resulted from a credit loss or changes in required yields by investors in these types of securities, among other factors. This assessment first 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. In making this assessment, management considers the nature of the security and any related government guarantees, any changes to the rating of the security by a rating agency, creditworthiness of the issuers/guarantors, the underlying collateral, the financial conditions and prospects of the issuer, and any adverse conditions specifically related to the security among other factors. As of December 31, 2023, the Company expects to recover the amortized cost basis of its securities, has no present intent to sell any investment securities with unrealized losses, it is more likely than not that we will not be required to sell securities with unrealized losses before recovery of their amortized cost and the decline in fair value is largely attributed to changes in interest rates and other market conditions. The issuers of these securities continue to make timely principal and interest payments. No allowances for credit losses have been recognized on investment debt securities available-for-sale in an unrealized loss position, as management does not believe any of the securities are impaired due to reasons of credit quality at December 31, 2023. Equity Securities ​ The Company recognized a net loss on equity securities of $ 1.1 million, $ 4.6 million, and zero for the years ended December 31, 2023, 2022 and 2021, respectively, due to a decrease in fair value of the equity securities. Equity securities were $ 12.6 million and $ 13.8 million as of December 31, 2023 and 2022, respectively. ​ 102 Table of Contents 4. LOANS The Company’s loan portfolio at the dates indicated is summarized below: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2023 ​ 2022 Commercial and industrial (1) ​ $ 162,889 ​ $ 188,538 Construction and land ​ 9,559 ​ 13,163 Commercial real estate ​ 1,668,585 ​ 1,704,716 Residential ​ 86,002 ​ 110,606 Consumer ​ 738 ​ 4,183 Total loans ​ 1,927,773 ​ 2,021,206 Net deferred loan costs (fees) ​ 56 ​ ( 82 ) Allowance for credit losses (2) ​ ( 22,000 ) ​ ( 18,900 ) Net loans ​ $ 1,905,829 ​ $ 2,002,224 ​ (1) Includes $ 3.8 million and $ 11.1 million of SBA PPP loans as of December 31, 2023 and December 31, 2022, respectively. (2) Allowance for credit losses at December 31, 2023 is estimated under CECL whereas at December 31, 2022, the allowance for loan losses is estimated under the incurred loss methodology. Net loans exclude accrued interest receivable of $ 6.7 million and $ 6.2 million at December 31, 2023 and December 31, 2022, respectively, which is included in interest receivable and other assets in the consolidated balance sheets. For the years ended December 31, 2023 and 2022, the recorded investment in individually evaluated loans on nonaccrual were $ 13.0 million and $ 14.3 million, respectively. Interest foregone on nonaccrual loans was approximately $ 871,000 and $ 580,000 for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, the Company had floating or variable rate loans totaling $ 1.2 billion and $ 1.3 billion, respectively. As of December 31, 2023, a total of $ 985.1 million have interest rate floors, of which $ 866.6 million, were at their floors. 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, 2023 and 2022, purchased loans outstanding totaled $ 137.9 million and $ 134.5 million respectively. At December 31, 2023, no purchase premiums remained on the purchased loans compared to $ 10,000 at December 31, 2022. At December 31, 2023 and 2022, none of the purchased loans were past due 30 days or more. These loans are reserved for under the Company’s general allowance component and at December 31, 2023 and 2022, the Company has allocated approximately $ 2.5 million and $ 1.3 million, respectively, of the allowance for credit losses to the purchased loans. 103 Table of Contents The Company’s total individually evaluated loans, including nonaccrual loans, modified loans to borrowers experiencing financial difficulty and accreting PCD 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, 2023 ​ ​ ​ ​ ​ ​ ​ Recorded investment in loans individually evaluated: ​ ​ ​ ​ ​ ​ With no specific allowance recorded ​ $ 273 ​ $ 366 ​ $ 1,298 ​ $ 1,349 ​ $ — ​ $ 3,286 With a specific allowance recorded ​ 1,799 ​ — ​ 7,745 ​ 147 ​ — ​ 9,691 Total recorded investment in loans individually evaluated ​ $ 2,072 ​ $ 366 ​ $ 9,043 ​ $ 1,496 ​ $ — ​ $ 12,977 Specific allowance on loans individually evaluated ​ $ 1,423 ​ $ — ​ $ 3,008 ​ $ 2 ​ $ — ​ $ 4,433 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ ​ ​ ​ Recorded investment in loans individually evaluated: ​ ​ ​ ​ ​ ​ 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 loans individually evaluated ​ $ 878 ​ $ — ​ $ 11,965 ​ $ 2,205 ​ $ — ​ $ 15,048 Specific allowance on loans individually evaluated ​ $ 687 ​ $ — ​ $ 259 ​ $ 222 ​ $ — ​ $ 1,168 ​ From time to time, the Company may extend, restructure, or otherwise modify the terms of existing loans, on a case-by-case basis, to remain competitive and retain certain customers, as well as assist other customers who may be experiencing financial difficulties. Prior to 2023, a modified loan was classified as a TDR if the borrower was experiencing financial difficulties and a concession was made at the time of the modification. TDR loans were generally placed on nonaccrual status at the time of restructuring. These loans were returned to accrual status after the borrower demonstrated performance with the modified terms for a sustained period of time (generally six months ) and the capacity to continue to perform in accordance with the modified terms of the restructured debt. Effective January 1, 2023, the Company adopted ASU No. 2022-02, which eliminated the accounting guidance for TDR loans while enhancing disclosure requirements for certain loan modifications by creditors when a borrower is experiencing financial difficulty. The Company adopted ASU No. 2022-02 using the prospective transition method. At the date of adoption, the Company was no longer required to utilize a loan-level discounted cash flow approach for determining the allowance for certain modified loans previously classified as TDR loans. The allowance for credit losses on a modified loan did not change as a result of adopting this standard as the Company elected to not change how it measured credit losses on modified loans to borrowers experiencing financial difficulties. During the year ended December 31, 2023, there were no modifications of loans to borrowers experiencing financial difficulty. During the year ended December 31, 2022, there were four total modifications of loans to borrowers experiencing financial difficulty, consisting of two commercial real estate loans, one residential real estate loan, and one commercial and industrial loan, respectively which totaled $ 6.5 million. The type of modification for the four loans were a term extension, with no change to the pre-modification and post modification amortized cost balances. 104 Table of Contents A summary of modified loans to borrowers experiencing financial difficulty by type of concession and type of loan, as of the dates indicated, is set forth below (number of loans not in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Rate Term Rate & term ​ ​ ​ % of Total ​ ​ loans ​ modification ​ modification ​ modification ​ Total ​ loans outstanding December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial 2 ​ $ — ​ $ 125 ​ $ — ​ $ 125 ​ ​ 0.08 % Construction and land — ​ — ​ — ​ — ​ — ​ — ​ Commercial real estate 4 ​ — ​ 3,400 ​ — ​ 3,400 ​ 0.20 ​ Residential 1 ​ — ​ ​ 778 ​ — ​ 778 ​ 0.90 ​ Consumer — ​ — ​ — ​ — ​ — ​ — ​ Total 7 ​ $ — ​ $ 4,303 ​ $ — ​ $ 4,303 ​ ​ 0.22 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Rate Term Rate & term ​ ​ ​ % of Total ​ ​ loans ​ modification ​ modification ​ modification ​ Total ​ loans outstanding December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial 2 ​ $ — ​ $ 19 ​ $ — ​ $ 19 ​ ​ 0.01 % Construction and land — ​ — ​ — ​ — ​ — ​ — ​ Commercial real estate 6 ​ — ​ 5,265 ​ — ​ 5,265 ​ 0.31 ​ Residential 2 ​ — ​ 975 ​ — ​ 975 ​ 0.88 ​ Consumer — ​ — ​ — ​ — ​ — ​ — ​ Total 10 ​ $ — ​ $ 6,259 ​ $ — ​ $ 6,259 ​ ​ 0.31 % ​ For the year ended December 31, 2023, the Company recorded no charge-offs for modified loans to borrowers experiencing financial difficulty. During the year ended December 31, 2022, the Company recorded a $ 3.2 million charge-off related to one modified loan to a borrower experiencing financial difficulty. As of December 31, 2023 and December 31, 2022, individually evaluated modified loans to borrowers experiencing financial difficulty had a related allowance of $ 1.3 million and $ 393,000 , respectively. As of December 31, 2023 and December 31, 2022, none and $ 759,000 of modified loans to borrowers experiencing financial difficulty were performing in accordance with their modified terms, respectively. Accruing modified loans to borrowers experiencing financial difficulty are included in the loans individually evaluated as part of the calculation of the allowance for credit losses for loans. Risk Rating System The Company evaluates and assigns a risk grade to each loan based on certain criteria to assess the credit quality of the 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. Pass loans include 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 loan 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 is a temporary rating, pending the occurrence of an event that would cause the risk rating either to improve or to be downgraded. 105 Table of Contents 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. Substandard 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; ● 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, based on 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 credit losses. Revolving loans that are converted to term loans are treated as new originations in the tables below and are presented by year of initial origination. During the years ended December 31, 2023, and 2022, $ 7.1 million and $ 3.1 million of revolving loans were converted to term loans, respectively. ​ ​ 106 Table of Contents The following tables present a summary of loans by type, internally assigned risk grade, year of origination and current period gross charge-offs at the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving ​ ​ ​ ​ ​ Term loans - amortized cost by origination year ​ loans ​ ​ ​ ​ 2023 ​ 2022 ​ 2021 ​ 2020 ​ 2019 ​ Prior ​ amortized cost ​ Total December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 26,055 ​ $ 25,039 ​ $ 19,294 ​ $ 22,831 ​ $ 26,008 ​ $ 17,357 ​ $ 17,754 ​ $ 154,338 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,323 ​ ​ 932 ​ ​ 1,926 ​ ​ 1,831 ​ ​ 6,012 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ 156 ​ ​ 320 ​ ​ 1,039 ​ ​ 1,024 ​ ​ 2,539 Total commercial and industrial ​ $ 26,055 ​ $ 25,039 ​ $ 19,294 ​ $ 24,310 ​ $ 27,260 ​ $ 20,322 ​ $ 20,609 ​ $ 162,889 YTD gross charge-offs ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 27 ​ $ 436 ​ $ — ​ $ 463 Construction and land: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 1,217 ​ $ 6,040 ​ $ — ​ $ 1,177 ​ $ 109 ​ $ 650 ​ $ — ​ $ 9,193 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ 366 ​ ​ — ​ ​ — ​ ​ — ​ ​ 366 Total construction and land ​ $ 1,217 ​ $ 6,040 ​ $ — ​ $ 1,543 ​ $ 109 ​ $ 650 ​ $ — ​ $ 9,559 Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 80,576 ​ $ 397,319 ​ $ 377,165 ​ $ 140,265 ​ $ 180,859 ​ $ 370,887 ​ $ 9,405 ​ $ 1,556,476 Special mention ​ ​ — ​ ​ 10,348 ​ ​ 1,894 ​ ​ 17,001 ​ ​ 15,101 ​ ​ 41,482 ​ ​ — ​ ​ 85,826 Substandard ​ ​ — ​ ​ 158 ​ ​ 946 ​ ​ — ​ ​ 11,579 ​ ​ 13,600 ​ ​ — ​ ​ 26,283 Total commercial real estate ​ $ 80,576 ​ $ 407,825 ​ $ 380,005 ​ $ 157,266 ​ $ 207,539 ​ $ 425,969 ​ $ 9,405 ​ $ 1,668,585 Residential: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ — ​ $ — ​ $ 2,432 ​ $ 4,319 ​ $ 7,986 ​ $ 36,814 ​ $ 32,420 ​ $ 83,971 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 437 ​ ​ — ​ ​ — ​ ​ 437 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,594 ​ ​ — ​ ​ 1,594 Total residential ​ $ — ​ $ — ​ $ 2,432 ​ $ 4,319 ​ $ 8,423 ​ $ 38,408 ​ $ 32,420 ​ $ 86,002 YTD gross charge-offs ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 172 ​ $ 3 ​ $ 175 Consumer: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 65 ​ $ 67 ​ $ — ​ $ 6 ​ $ 18 ​ $ 69 ​ $ 494 ​ $ 719 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 19 ​ ​ — ​ ​ — ​ ​ 19 Total consumer ​ $ 65 ​ $ 67 ​ $ — ​ $ 6 ​ $ 37 ​ $ 69 ​ $ 494 ​ $ 738 YTD gross charge-offs ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 5 ​ $ 5 Total loans outstanding ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk ratings ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 107,913 ​ $ 428,465 ​ $ 398,891 ​ $ 168,598 ​ $ 214,980 ​ $ 425,777 ​ $ 60,073 ​ $ 1,804,697 Special mention ​ ​ — ​ ​ 10,348 ​ ​ 1,894 ​ ​ 18,324 ​ ​ 16,470 ​ ​ 43,408 ​ ​ 1,831 ​ ​ 92,275 Substandard ​ ​ — ​ ​ 158 ​ ​ 946 ​ ​ 522 ​ ​ 11,918 ​ ​ 16,233 ​ ​ 1,024 ​ ​ 30,801 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Total loans outstanding ​ $ 107,913 ​ $ 438,971 ​ $ 401,731 ​ $ 187,444 ​ $ 243,368 ​ $ 485,418 ​ $ 62,928 ​ $ 1,927,773 YTD gross charge-offs ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 27 ​ $ 608 ​ $ 8 ​ $ 643 ​ ​ 107 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving ​ ​ ​ ​ ​ Term loans - amortized cost by origination year ​ loans ​ ​ ​ ​ 2022 ​ 2021 ​ 2020 ​ 2019 ​ 2018 ​ Prior ​ amortized cost ​ Total December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 31,599 ​ $ 34,584 ​ $ 35,173 ​ $ 30,632 ​ $ 4,731 ​ $ 25,147 ​ $ 19,962 ​ $ 181,828 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ 863 ​ ​ 1,149 ​ ​ 1,866 ​ ​ 1,467 ​ ​ 5,345 Substandard ​ ​ — ​ ​ — ​ ​ 40 ​ ​ 166 ​ ​ 388 ​ ​ 762 ​ ​ 9 ​ ​ 1,365 Total commercial and industrial ​ $ 31,599 ​ $ 34,584 ​ $ 35,213 ​ $ 31,661 ​ $ 6,268 ​ $ 27,775 ​ $ 21,438 ​ $ 188,538 Construction and land: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 1,381 ​ $ 533 ​ $ 1,586 ​ $ 557 ​ $ 4,363 ​ $ 4,681 ​ $ — ​ $ 13,101 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 62 ​ ​ — ​ ​ — ​ ​ 62 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Total construction and land ​ $ 1,381 ​ $ 533 ​ $ 1,586 ​ $ 557 ​ $ 4,425 ​ $ 4,681 ​ $ — ​ $ 13,163 Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 409,014 ​ $ 392,449 ​ $ 159,744 ​ $ 201,561 ​ $ 110,143 ​ $ 355,795 ​ $ 992 ​ $ 1,629,698 Special mention ​ ​ — ​ ​ — ​ ​ 3,591 ​ ​ 17,210 ​ ​ 7,919 ​ ​ 29,561 ​ ​ — ​ ​ 58,281 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ 5,184 ​ ​ 241 ​ ​ 11,312 ​ ​ — ​ ​ 16,737 Total commercial real estate ​ $ 409,014 ​ $ 392,449 ​ $ 163,335 ​ $ 223,955 ​ $ 118,303 ​ $ 396,668 ​ $ 992 ​ $ 1,704,716 Residential: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 423 ​ $ 4,536 ​ $ 6,343 ​ $ 10,229 ​ $ 14,537 ​ $ 37,170 ​ $ 34,889 ​ $ 108,127 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ 244 ​ ​ — ​ ​ — ​ ​ 3 ​ ​ 247 Substandard ​ ​ — ​ ​ — ​ ​ 203 ​ ​ — ​ ​ 1,184 ​ ​ 845 ​ ​ — ​ ​ 2,232 Total residential ​ $ 423 ​ $ 4,536 ​ $ 6,546 ​ $ 10,473 ​ $ 15,721 ​ $ 38,015 ​ $ 34,892 ​ $ 110,606 Consumer: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 539 ​ $ 10 ​ $ 1,691 ​ $ 61 ​ $ 40 ​ $ 131 ​ $ 1,690 ​ $ 4,162 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ 21 ​ ​ — ​ ​ — ​ ​ — ​ ​ 21 Total consumer ​ $ 539 ​ $ 10 ​ $ 1,691 ​ $ 82 ​ $ 40 ​ $ 131 ​ $ 1,690 ​ $ 4,183 YTD gross charge-offs ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 12 ​ $ 12 ​ $ — ​ ​ 24 Total loans outstanding ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk ratings ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 442,956 ​ $ 432,112 ​ $ 204,536 ​ $ 243,040 ​ $ 133,816 ​ $ 422,924 ​ $ 57,532 ​ $ 1,936,916 Special mention ​ ​ — ​ ​ — ​ ​ 3,590 ​ ​ 18,317 ​ ​ 9,130 ​ ​ 31,428 ​ ​ 1,470 ​ ​ 63,935 Substandard ​ ​ — ​ ​ — ​ ​ 243 ​ ​ 5,371 ​ ​ 1,814 ​ ​ 12,918 ​ ​ 9 ​ ​ 20,355 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Total loans outstanding ​ $ 442,956 ​ $ 432,112 ​ $ 208,369 ​ $ 266,728 ​ $ 144,760 ​ $ 467,270 ​ $ 59,011 ​ $ 2,021,206 YTD gross charge-offs ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 12 ​ $ 12 ​ $ — ​ $ 24 ​ ​ 108 Table of Contents The following tables provide 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 ​ PCD loans ​ receivable ​ accruing December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ $ 803 ​ $ 146 ​ $ 1,782 ​ $ 2,731 ​ $ 159,960 ​ $ 198 ​ $ 162,889 ​ $ — Construction and land ​ 97 ​ — ​ 366 ​ 463 ​ 9,071 ​ 25 ​ 9,559 ​ — Commercial real estate ​ 2,908 ​ 1,702 ​ 7,793 ​ 12,403 ​ 1,631,129 ​ 25,053 ​ 1,668,585 ​ — Residential ​ 55 ​ — ​ ​ — ​ 55 ​ 85,500 ​ 447 ​ 86,002 ​ — Consumer ​ — ​ — ​ — ​ — ​ 738 ​ — ​ 738 ​ — Total ​ $ 3,863 ​ $ 1,848 ​ $ 9,941 ​ $ 15,652 ​ $ 1,886,398 ​ $ 25,723 ​ $ 1,927,773 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ PCD loans ​ receivable ​ accruing December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ $ 471 ​ $ 81 ​ $ 858 ​ $ 1,410 ​ $ 183,111 ​ $ 4,017 ​ $ 188,538 ​ $ — Construction and land ​ — ​ — ​ — ​ — ​ 9,109 ​ 4,054 ​ 13,163 ​ — Commercial real estate ​ 1,064 ​ 2,213 ​ 7,075 ​ 10,352 ​ 1,674,327 ​ 20,037 ​ 1,704,716 ​ 934 Residential ​ 101 ​ 3 ​ 847 ​ 951 ​ 108,976 ​ 679 ​ 110,606 ​ — Consumer ​ — ​ — ​ — ​ — ​ 4,183 ​ — ​ 4,183 ​ — Total ​ $ 1,636 ​ $ 2,297 ​ $ 8,780 ​ $ 12,713 ​ $ 1,979,706 ​ $ 28,787 ​ $ 2,021,206 ​ $ 934 ​ Nonaccrual loans totaled $ 13.0 million and $ 14.3 million at December 31, 2023 and December 31, 2022, respectively. Nonaccrual loans guaranteed by a government agency, which reduces the Company’s credit exposure, were $ 740,000 at December 31, 2023 compared to $ 839,000 at December 31, 2022. At December 31, 2023, nonaccrual loans included $ 927,000 of loans 30-89 days past due and $ 2.1 million of loans less than 30 days past due. At December 31, 2022, nonaccrual loans included $ 2.5 million of loans 30-89 days past due and $ 4.0 million of loans less than 30 days past due. At December 31, 2023, nonaccrual loans 30-89 days past due of $ 927,000 was comprised of five loans and the $ 2.1 million of loans less than 30 days past due was comprised of 16 loans. All these loans were placed on nonaccrual due to concerns over the financial condition of the borrowers. There were no loans that were 90 days or more past due and still accruing at December 31, 2023 compared to one such loan at December 31, 2022, which had a balance of $ 934,000 as of that date. Interest foregone on nonaccrual loans was approximately $ 871,000 for the year ended December 31, 2023 compared to $ 580,000 for the year ended December 31, 2022. ​ Purchased Credit Deteriorated Loans The Company adopted ASC 326 using the prospective transition approach for financial assets purchased with credit deterioration that were previously classified as purchase credit impaired (“PCI”) and accounted for under ASC 310-30. The unpaid principal balance and carrying value of the Company’s PCI loans at the years indicated are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ Unpaid ​ ​ ​ ​ principal ​ Carrying ​ ​ ​ balance ​ value ​ Commercial and industrial ​ $ 4,864 ​ $ 4,017 ​ Construction and land ​ 4,299 ​ 4,054 ​ Commercial real estate ​ 21,649 ​ ​ 20,037 ​ Residential ​ 829 ​ 679 ​ Total ​ $ 31,641 ​ $ 28,787 ​ ​ 109 Table of Contents 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 and no allowance for loan losses for PCI loans during the years ended December 31, 2022 and 2021, respectively. ​ 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 ​ ​ Pledged Loans Our FHLB line of credit is secured under terms of a blanket collateral agreement by a pledge of certain qualifying loans with unpaid principal balances of $ 1.14 billion and $ 940.7 million at December 31, 2023 and 2022, respectively. For additional information, see Note 12, Other Borrowings. ​ 5. ALLOWANCE FOR CREDIT LOSSES FOR LOANS The following tables summarize the Company’s allowance for credit losses for loans, reserve for unfunded commitments, and loan balances individually and collectively evaluated by type of loan as of or for the year ended December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ Construction ​ Commercial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reserve for ​ and industrial and land real estate Residential Consumer Total unfunded commitments December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for credit losses: ​ ​ ​ ​ ​ ​ ​ Beginning balance ​ $ 2,885 ​ $ 68 ​ $ 14,185 ​ $ 1,742 ​ $ 20 ​ $ 18,900 ​ $ 315 Impact of CECL adoption ​ ​ 1,366 ​ ​ 402 ​ ​ 2 ​ ​ ( 302 ) ​ ​ 32 ​ ​ 1,500 ​ ​ 45 Charge-offs ​ ( 463 ) ​ — ​ — ​ ( 175 ) ​ ( 5 ) ​ ( 643 ) ​ — Recoveries ​ 85 ​ — ​ 2 ​ ​ 1 ​ 5 ​ 93 ​ — Provision for (reversal of) credit losses ​ 343 ​ ​ ( 172 ) ​ ​ 2,309 ​ ​ ( 287 ) ​ ​ ( 43 ) ​ 2,150 ​ ​ ( 135 ) Ending balance ​ $ 4,216 ​ $ 298 ​ $ 16,498 ​ $ 979 ​ $ 9 ​ $ 22,000 ​ $ 225 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for credit losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans individually evaluated ​ $ 1,423 ​ $ — ​ $ 3,008 ​ $ 2 ​ $ — ​ $ 4,433 ​ ​ ​ Loans collectively evaluated ​ 2,793 ​ 298 ​ 13,002 ​ 970 ​ 9 ​ 17,072 ​ ​ ​ PCD loans ​ — ​ — ​ 488 ​ 7 ​ — ​ 495 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans receivable: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Individually evaluated ​ $ 2,072 ​ $ 366 ​ $ 9,043 ​ $ 1,496 ​ $ — ​ $ 12,977 ​ ​ ​ Collectively evaluated ​ 160,619 ​ 9,168 ​ 1,634,489 ​ 84,059 ​ 738 ​ 1,889,073 ​ ​ ​ PCD loans ​ 198 ​ 25 ​ 25,053 ​ 447 ​ — ​ 25,723 ​ ​ ​ Total loans ​ $ 162,889 ​ $ 9,559 ​ $ 1,668,585 ​ $ 86,002 ​ $ 738 ​ $ 1,927,773 ​ ​ ​ 110 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for loan losses: ​ ​ ​ ​ ​ ​ Loans individually evaluated ​ $ 687 ​ $ — ​ $ 259 ​ $ 222 ​ $ — ​ $ 1,168 Loans collectively evaluated ​ 2,198 ​ 68 ​ 13,908 ​ 1,520 ​ 20 ​ 17,714 PCD loans ​ — ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans receivable: ​ ​ ​ ​ ​ ​ Individually evaluated ​ $ 878 ​ $ — ​ $ 11,965 ​ $ 2,205 ​ $ — ​ $ 15,048 Collectively evaluated ​ 183,643 ​ 9,109 ​ 1,672,714 ​ 107,722 ​ 4,183 ​ 1,977,371 PCD 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 ​ For the year ended December 31, 2023, the provision for credit losses was primarily due to a $ 3.3 million increase in reserves for individually evaluated loans, $ 550,000 of net loan charge-offs during the year and an additional reserve taken on a loan to a Trust, as discussed below. The increase in specific reserves included one commercial real estate loan and one multifamily loan. Based on updated appraisals received during the fourth quarter of 2023, the underlying collateral values of these loans experienced declines due to property specific factors and conditions . The change in the provision was partially offset by a decrease in the quantitative reserve primarily due to improvements in forecasted economic conditions, specifically, national gross domestic product and national unemployment indicators utilized to estimate credit losses over the next four quarters, as compared to those used in estimating the allowance for credit losses on loans at adoption, and to a lesser extent a decrease in outstanding loan balances. There was an adjustment to the determined risk level for the effect of other external factors such as legal and regulatory requirements on the level of estimated credit losses in the portfolio qualitative factor during the year ended December 31, 2023. ​ During the third quarter of 2023, the Company determined that a certificate of deposit-secured line of credit loan made to a revocable living trust (the “Trust” or the “Borrower”) with an outstanding balance of approximately $ 1.0 million as of December 31, 2023 was placed on nonaccrual as a result of the sole trustee and beneficiary of the Trust filing for personal bankruptcy in July 2023. At June 30, 2023, the loan had an outstanding balance of $ 5.0 million and was secured by a $ 4.0 million certificate of deposit held at the Bank. An additional $ 1.0 million in cash collateral securing the loan had previously been released by the Bank into a third-party escrow account at the request of the Borrower to be used as a refundable retainer in connection with a separate transaction by the Borrower. The loan matured on July 16, 2023, and the Bank received notification that the sole trustee and beneficiary of the Trust filed for personal bankruptcy on July 18, 2023. After receiving this notification, the Bank used the $ 4.0 million certificate of deposit held at the Bank to offset amounts owed on the loan and contacted the third-party escrow agent for the return of the additional $ 1.0 million of collateral. The Bank was advised by the escrow agent that the previously escrowed funds had been released by the escrow agent, which was done without the Bank’s consent and contrary to the written escrow instructions. The Bank has initiated legal action against the Borrower, the Borrower’s related parties and the escrow agent to recover the previously escrowed collateral. The results of the legal action and the Bank’s ability to recover the previously escrowed collateral are currently uncertain. The loan was fully reserved for at December 31, 2023. ​ ​ ​ ​ ​ 111 Table of Contents The following table summarizes the amortized cost basis of individually evaluated collateral-dependent nonaccrual loans by loan and collateral type at December 31, 2023 and December 31, 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Retail and ​ ​ ​ Convalescent ​ ​ ​ ​ ​ A/R and ​ ​ ​ Allowance for ​ Office Multifamily facility Other ​ SFR 1-4 Equipment Total Credit/Loan Losses December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial $ — ​ $ — ​ $ — ​ $ 1,021 ​ $ — ​ $ 1,052 ​ $ 2,073 ​ $ 1,423 Construction and land ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 366 ​ ​ — ​ ​ 366 ​ ​ — Commercial real estate ​ ​ 224 ​ 5,305 ​ 2,213 ​ 1,300 ​ — ​ — ​ 9,042 ​ 3,008 Residential ​ — ​ — ​ ​ — ​ ​ — ​ ​ 1,496 ​ — ​ ​ 1,496 ​ 2 Consumer ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Total ​ $ 224 ​ $ 5,305 ​ $ 2,213 ​ $ 2,321 ​ $ 1,862 ​ $ 1,052 ​ $ 12,977 ​ $ 4,433 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 878 ​ $ 878 ​ $ 687 Construction and land ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Commercial real estate ​ ​ 389 ​ 5,351 ​ 3,577 ​ 1,889 ​ — ​ — ​ 11,206 ​ 259 Residential ​ — ​ — ​ ​ — ​ ​ — ​ ​ 2,205 ​ — ​ ​ 2,205 ​ 222 Consumer ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Total ​ $ 389 ​ $ 5,351 ​ $ 3,577 ​ $ 1,889 ​ $ 2,205 ​ $ 878 ​ $ 14,289 ​ $ 1,168 ​ The following table shows the amortized cost and allowance for credit losses for loans on nonaccrual status as of December 31, 2023 and the amortized cost and allowance for loan losses for loans on nonaccrual status as of December 31, 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2023 ​ As of December 31, 2022 ​ ​ Nonaccrual ​ Nonaccrual ​ ​ ​ Nonaccrual ​ Nonaccrual ​ ​ ​ ​ with no allowance ​ with allowance ​ Total ​ with no allowance ​ with allowance ​ Total ​ for credit losses for credit losses nonaccrual for loan losses for loan losses nonaccrual Commercial and industrial $ 272 ​ $ 1,800 ​ $ 2,072 ​ $ — ​ $ 878 ​ $ 878 Construction and land ​ ​ 366 ​ ​ — ​ ​ 366 ​ ​ — ​ ​ — ​ ​ — Commercial real estate ​ ​ 1,295 ​ 7,748 ​ ​ 9,043 ​ 10,734 ​ 472 ​ 11,206 Residential ​ 1,349 ​ 147 ​ ​ 1,496 ​ ​ 1,991 ​ ​ 214 ​ 2,205 Consumer ​ — ​ — ​ ​ — ​ — ​ — ​ — Total ​ $ 3,282 ​ $ 9,695 ​ $ 12,977 ​ $ 12,725 ​ $ 1,564 ​ $ 14,289 ​ Interest income recognized on nonaccrual loans was $ 208,000 for the year ended December 31, 2023, and $ 149,000 for the year ended December 31, 2022. ​ 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, 2023, the Company had $ 19.4 million of loans enrolled in this loan program. The Company had a loss reserve account of $ 13.7 million as of December 31, 2023. 112 Table of Contents In addition, as successor to PEB, the Company was approved by 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 handled 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 originated $ 4.5 million of loans under this program during the year ended December 31, 2023. As of December 31, 2023, the Company had $ 17.7 million of loans enrolled in this program and a loss reserve account of $ 6.2 million. ​ ​ 6. PREMISES AND EQUIPMENT Premises and equipment consisted of the following at the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2023 ​ 2022 Premises owned ​ $ 11,233 ​ $ 11,120 Leasehold improvements ​ 3,082 ​ 2,259 Furniture, fixtures and equipment ​ 7,948 ​ 6,760 Less accumulated depreciation and amortization ​ ( 8,529 ) ​ ( 6,861 ) Total premises and equipment, net ​ $ 13,734 ​ $ 13,278 ​ Depreciation and amortization included in occupancy and equipment expense totaled $ 1.7 million for year ended December 31, 2023, compared to $ 2.0 million for both years ended December 31, 2022 and 2021. 7. LEASES The Company owned 15 of its banking branches and leased the remaining 20 branches under noncancelable operating leases as of December 31, 2023. 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, 2023: ​ ​ ​ ​ ​ Year ending December 31, ​ ​ ​ 2024 ​ $ 3,937 2025 ​ 3,364 2026 ​ 2,672 2027 ​ ​ 2,193 Thereafter ​ 3,935 Total undiscounted cash flows ​ ​ 16,101 Less: interest ​ ​ ( 1,349 ) Present value of lease payments ​ $ 14,752 ​ ​ ​ The following table presents the remaining weighted average lease term and discount rate at the date indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ December 31, 2022 Weighted-average remaining lease term 4.8 years ​ 5.4 years Weighted-average discount rate 3.4 % ​ 3.1 % ​ ​ 113 Table of Contents The following table presents certain information related to the operating lease costs included in occupancy and equipment expense on the consolidated statements of income for the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, December 31, ​ ​ 2023 ​ 2022 ​ 2021 Operating lease cost ​ $ 3,870 ​ $ 3,825 ​ $ 3,270 Short-term lease cost ​ 112 ​ 299 ​ — Variable lease cost ​ — ​ 17 ​ 100 Less: Sublease income ​ ( 83 ) ​ ( 88 ) ​ ( 87 ) Total operating lease cost, net ​ $ 3,899 ​ $ 4,053 ​ $ 3,283 ​ ​ ​ ​ 8. OTHER REAL ESTATE OWNED Other real estate owned as of the dates indicated consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2023 ​ 2022 Land ​ $ — ​ $ 21 Total ​ $ — ​ $ 21 ​ As of December 31, 2023, there were no foreclosure, compared to two residential mortgage loans in the process of foreclosure totaling $ 248,000 at December 31, 2022. ​ 9. GOODWILL AND INTANGIBLE ASSETS Goodwill The Company’s goodwill balance was $ 38.8 million at both December 31, 2023 and 2022. There were no changes in the Company’s goodwill for the years ended December 31, 2023 and 2022. ​ As of December 31, 2023 the Company’s qualitative assessment which considered the Company’s continued profitability, positive equity, average community bank merger deal values realized during 2023, net interest margin, allowance for credit 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, 2023 ​ December 31, 2022 Balance at beginning of period ​ $ 5,201 ​ $ 6,489 Additions ​ — ​ 756 Less amortization ​ ( 1,286 ) ​ ( 2,044 ) Balance at end of period ​ $ 3,915 ​ $ 5,201 ​ 114 Table of Contents Estimated annual amortization at December 31, 2023 is as follows: ​ ​ ​ ​ ​ Year ending December 31, ​ ​ ​ 2024 ​ $ 1,222 2025 ​ 948 2026 ​ 455 2027 ​ ​ 455 Thereafter ​ 835 Total ​ $ 3,915 ​ ​ 10. INTEREST RECEIVABLE AND OTHER ASSETS The Company’s other assets at the dates indicated consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2023 ​ 2022 Tax assets, net ​ $ 19,480 ​ $ 18,762 Accrued interest receivable ​ 8,423 ​ 7,659 Investment in SBIC fund ​ 3,969 ​ 4,389 Investment in CRA fund ​ ​ 2,000 ​ ​ 2,000 Prepaid assets ​ 2,023 ​ 1,568 Servicing assets ​ 1,269 ​ 2,092 Investment in Low Income Housing Tax Credit ("LIHTC") partnerships, net ​ 3,480 ​ 2,675 Investment in statutory trusts ​ 511 ​ 493 CalCAP reserve receivable ​ ​ 4,023 ​ ​ 4,023 Other assets ​ 2,200 ​ 1,871 Total ​ $ 47,378 ​ $ 45,532 ​ ​ 11. DEPOSITS The Company’s deposits consisted of the following at the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2023 ​ 2022 Demand deposits ​ $ 646,278 ​ $ 773,274 NOW accounts and savings ​ 385,162 ​ 441,064 Money market ​ 624,066 ​ 577,792 Time deposits ​ 477,244 ​ 293,349 Total ​ $ 2,132,750 ​ $ 2,085,479 ​ 115 Table of Contents Included in time deposits above are brokered deposits of $ 43.6 million and $ 43.9 million as of December 31, 2023 and 2022, respectively. At December 31, 2023, aggregate annual maturities of time deposits are as follows: ​ ​ ​ ​ ​ Year ending December 31, ​ 2024 ​ $ 372,733 2025 ​ 90,168 2026 ​ 7,055 2027 ​ 5,461 2028 ​ 1,827 Total ​ $ 477,244 ​ 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, ​ ​ 2023 ​ 2022 ​ 2021 NOW accounts and savings ​ $ 426 ​ $ 499 ​ $ 452 Money market ​ 10,238 ​ 3,238 ​ 2,266 Time deposits ​ 13,376 ​ 2,536 ​ 2,157 Total ​ $ 24,040 ​ $ 6,273 ​ $ 4,875 ​ ​ 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, 2023 and December 31, 2022, 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 FRB of San Francisco based on PPP loans pledged as collateral. This line was closed in 2023, with no FRB borrowings outstanding at both December 31, 2023 and December 31, 2022. The Company has Federal Funds lines with four correspondent banks. Cumulative available commitments totaled $ 65.0 million at both December 31, 2023 and December 31, 2022. There are no amounts outstanding under these facilities at both December 31, 2023 and December 31, 2022. ​ 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 SOFR plus 2.75 %, with quarterly repricing. The debentures are redeemable by the Company subject to prior approval from the Federal Reserve on 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. 116 Table of Contents 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 SOFR 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 Grantor Trusts are entitled to a cumulative cash distribution on the liquidation amount of $ 1,000 per security. Each of the Grantor 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 acquired debentures were recorded on the Company’s books at their fair values on the acquisition date. The related fair value discounts to face value of these debentures are amortized over the remaining period in which their values are fully allowed to be included in the Company's capital ratio calculations using the effective interest method. The following is a summary of the contractual terms of the subordinated debentures due to the Grantor Trusts at the date indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 Subordinated debenture Gross Fair value discount Net Interest rate Effective rate BFC Trust ​ $ 3,093 ​ $ ( 268 ) ​ $ 2,825 8.39 % 8.74 % FULB Trust ​ 6,392 ​ ( 652 ) ​ 5,740 8.15 % 8.75 % Total ​ $ 9,485 ​ $ ( 920 ) ​ $ 8,565 8.23 % 8.75 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 Subordinated debenture Gross Fair value discount 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 % ​ ​ 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, 2023 and December 31, 2022, the Company had outstanding subordinate debt, net of costs to issue, totaling $ 63.9 million and $ 63.7 million, respectively. 117 Table of Contents 15. INCOME TAXES Income tax expense for the dates indicated consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 2021 ​ ​ ​ ​ ​ ​ (As Restated) ​ ​ ​ Current income tax expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal ​ $ 7,021 ​ $ 5,990 ​ $ 5,122 State ​ 3,711 ​ 3,638 ​ 2,572 Total current tax expense ​ ​ 10,732 ​ ​ 9,628 ​ ​ 7,694 Deferred income tax expense (benefit): ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal ​ ​ ( 206 ) ​ ​ ( 402 ) ​ ​ ( 95 ) State ​ ​ 207 ​ ​ ( 518 ) ​ ​ 190 Total deferred tax expense (benefit) ​ ​ 1 ​ ​ ( 920 ) ​ ​ 95 Total income tax expense ​ $ 10,733 ​ $ 8,708 ​ $ 7,789 ​ 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, 2023 December 31, 2022 ​ December 31, 2021 ​ Amount Rate% Amount Rate% Amount Rate% ​ ​ ​ ​ ​ ​ ​ ​ (As Restated) ​ (As Restated) ​ ​ ​ ​ ​ ​ Federal statutory tax rate ​ $ 8,013 21.00 % $ 6,812 21.00 % $ 5,981 21.00 % State statutory tax rate, net of federal effective tax rate ​ 3,095 8.10 ​ 2,465 7.60 ​ 2,182 7.66 ​ Tax exempt interest ​ ( 76 ) ( 0.20 ) ​ ( 94 ) ( 0.29 ) ​ ( 80 ) ( 0.28 ) ​ BOLI ​ ( 140 ) ( 0.40 ) ​ ( 124 ) ( 0.38 ) ​ ( 140 ) ( 0.49 ) ​ Acquisition expenses ​ — — ​ 94 0.29 ​ — — ​ Other ​ ( 159 ) ( 0.40 ) ​ ( 445 ) ( 1.37 ) ​ ( 154 ) ( 0.54 ) ​ Total income tax expense ​ $ 10,733 28.10 % $ 8,708 26.85 % $ 7,789 27.35 % ​ The Company is subject to US federal income tax as well as state income tax in multiple states, most notably in California, Colorado and New Mexico. Federal income tax returns for the years ended on or after December 31, 2020 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, 2019 are open to audit by state authorities. 118 Table of Contents 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, ​ ​ 2023 ​ 2022 ​ ​ ​ ​ ​ ​ (As Restated) Deferred tax assets ​ ​ Net operating loss carryforward ​ $ 3,191 ​ $ 3,945 Salary continuation plan ​ 1,453 ​ 1,400 Allowance for credit losses ​ 6,450 ​ 5,469 Stock based compensation ​ 153 ​ 355 Lease liability ​ 4,237 ​ 4,959 Other liabilities ​ ​ — ​ ​ 459 Unrealized loss on AFS securities ​ 5,885 ​ 4,682 Unrealized loss on equity securities ​ ​ 1,642 ​ ​ 1,316 Other ​ 1,265 ​ 1,547 Total deferred tax assets ​ 24,276 ​ 24,132 Deferred tax liabilities ​ ​ Core deposit intangible ​ ( 1,125 ) ​ ( 1,506 ) ROU assets ​ ( 4,004 ) ​ ( 4,794 ) FHLB stock dividend ​ ( 246 ) ​ ( 248 ) Partnership investments ​ ​ ( 973 ) ​ ​ ( 974 ) Deferred loan costs and other ​ ( 1,204 ) ​ ( 1,098 ) Total deferred tax liability ​ ( 7,552 ) ​ ( 8,620 ) Deferred tax assets, net ​ $ 16,724 ​ $ 15,512 ​ 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, 2023 or 2022. At December 31, 2023, Federal, California and Colorado NOLs included in the deferred tax asset totaled $ 11.0 million, $ 9.2 million and $ 2.3 million, respectively. During the years ended December 31, 2023, 2022 and 2021, the Company did no t recognize any interest and penalties. The Company had no unrecognized tax benefits as of December 31, 2023 and 2022. 119 Table of Contents 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, ​ ​ 2023 ​ 2022 Commitments to extend credit ​ $ 76,531 ​ $ 96,774 Standby letters of credit ​ 846 ​ 768 Total commitments ​ $ 77,377 ​ $ 97,542 ​ 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 $ 225,000 at December 31, 2023, compared to $ 315,000 at December 31, 2022. Commercial Real Estate Concentrations At December 31, 2023 and 2022, 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 investments in LIHTC partnerships and a SBIC fund. At December 31, 2023, the remaining commitments to the LIHTC partnerships and SBIC fund were approximately $ 5.7 million and $ 122,000 , respectively. At December 31, 2022, the remaining commitment to the LIHTC partnerships and SBIC fund were $ 2.1 million and $ 122,000 , respectively. Deposits At December 31, 2023, approximately $ 246.0 million, or 11.5 %, of the Company’s deposits are derived from the top ten depositors. At December 31, 2022, approximately $ 215.1 million, or 11.0 %, of the Company’s deposits are derived from the top ten depositors. 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. 120 Table of Contents As both of December 31, 2023 and 2022, the FHLB issued letters of credit on behalf of the Company totaling $ 40.6 million, 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, 2023, 2022 and 2021, the Company made contributions to the plan of $ 964,000 , $ 801,000 and $ 570,000 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, as amended, 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, 2023 and 2022, approximately $ 1.0 million and $ 1.2 million, respectively, of the salary continuation plan was related to plans assumed through the Company’s acquisitions. There are no further requirements to fund these plans. In 2023, the Company did not recognize any expense included in salaries and benefits expense in the consolidated statements of income under the aforementioned salary continuation agreements due to be not able to meet the performance matrix, compared to $ 648,000 and $ 594,000 for the years ended December 31, 2022 and 2021, 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. Holders of restricted stock awards receive non-forfeitable dividends at the same rate as common stockholders and they both share equally in undistributed earnings. 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, 2023, 2022 and 2021, total compensation expense for these plans was $ 726,000 , $ 1.0 million and $ 1.4 million, respectively. 121 Table of Contents As of December 31, 2023, there was $ 996,000 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 four years . The following table provides the restricted stock grant activity for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ ​ ​ Weighted-average ​ Weighted-average ​ ​ ​ ​ grant date ​ ​ ​ grant date ​ ​ Shares ​ fair value ​ Shares ​ fair value Non-vested at January 1, 97,877 ​ $ 16.80 ​ 139,275 ​ $ 16.29 ​ Granted 41,849 ​ 18.24 ​ 33,091 ​ 19.49 ​ Vested ( 58,361 ) ​ 15.78 ​ ( 72,635 ) ​ 17.01 ​ Forfeited ​ — ​ ​ — ​ ( 1,854 ) ​ ​ 18.34 ​ Non-Vested, at December 31, 81,365 ​ $ 18.27 ​ 97,877 ​ $ 16.80 ​ ​ ​ 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, 2023 and 2022 the Bank paid $ 40.0 million and $ 10.0 million of dividends to the Company, respectively. 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. 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. 122 Table of Contents 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, 2023, 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. 123 Table of Contents 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, 2023 ​ As of December 31, 2022 ​ Amount Ratio Amount Ratio ​ ​ ​ ​ ​ ​ ​ ​ (As Restated) ​ (As Restated) ​ ​ ​ (Dollars in thousands) ​ Leverage Ratio ​ ​ ​ BayCom Corp ​ $ 282,402 11.56 % $ 283,431 11.79 % Minimum requirement for "Well Capitalized" ​ 122,135 5.00 % 120,193 5.00 % Minimum regulatory requirement ​ 97,708 4.00 % 96,154 4.00 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ United Business Bank ​ 328,303 13.08 % ​ 336,667 13.64 % Minimum requirement for "Well Capitalized" ​ 125,479 5.00 % 123,402 5.00 % Minimum regulatory requirement ​ 100,383 4.00 % 98,722 4.00 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Equity Tier 1 Ratio ​ ​ ​ BayCom Corp ​ 282,402 14.41 % ​ 283,431 13.68 % Minimum requirement for "Well Capitalized" ​ 127,400 6.50 % 134,648 6.50 % Minimum regulatory requirement ​ 88,200 4.50 % 93,218 4.50 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ United Business Bank ​ 328,303 ​ 16.94 % 336,667 ​ 16.42 % Minimum requirement for "Well Capitalized" ​ 125,987 6.50 % 133,242 6.50 % Minimum regulatory requirement ​ 87,222 4.50 % 92,245 4.50 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tier 1 Risk-Based Capital Ratio ​ ​ ​ BayCom Corp ​ 291,887 ​ 14.89 % 292,916 ​ 14.14 % Minimum requirement for "Well Capitalized" ​ 156,800 8.00 % 165,721 8.00 % Minimum regulatory requirement ​ 117,600 6.00 % 124,291 6.00 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ United Business Bank ​ 328,303 ​ 16.94 % 336,667 ​ 16.42 % Minimum requirement for "Well Capitalized" ​ 155,062 8.00 % 163,991 8.00 % Minimum regulatory requirement ​ 116,296 6.00 % 122,993 6.00 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Risk-Based Capital Ratio ​ ​ ​ BayCom Corp ​ 379,112 ​ 19.34 % 377,131 ​ 18.21 % Minimum requirement for “Well Capitalized” ​ 196,000 10.00 % 207,151 10.00 % Minimum regulatory requirement ​ 156,800 8.00 % 165,721 8.00 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ United Business Bank ​ 350,528 ​ 18.08 % 355,882 ​ 17.36 % Minimum requirement for "Well Capitalized" ​ 193,827 10.00 % 204,988 10.00 % Minimum regulatory requirement ​ 155,062 8.00 % 163,991 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. ​ 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. 124 Table of Contents The following is a summary of the aggregate loan activity involving related party borrowers for the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2023 ​ 2022 Beginning of the year ​ $ 38,276 ​ $ 33,581 Disbursements ​ 1,611 ​ 8,187 Amounts paid ​ ( 10,044 ) ​ ( 3,492 ) End of year (1) ​ $ 29,843 ​ $ 38,276 Undisbursed commitments to related parties ​ $ 857 ​ $ 2,468 (1) Amounts include $ 8.5 million of outstanding loans to former directors who retired in 2023, for which the Bank no longer considers related parties as of December 31, 2023. ​ At December 31, 2023 and 2022, the Company had deposits with directors, officers and their associates which totaled approximately $ 26.3 million and $ 32.7 million, respectively. ​ 21. OTHER EXPENSES For the dates indicated, other expenses consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, December 31, ​ 2023 ​ 2022 ​ 2021 Professional fees $ 2,048 ​ $ 2,775 ​ $ 2,123 Core deposit premium amortization 1,286 ​ 2,044 ​ 1,813 Marketing and promotions 896 ​ 955 ​ 656 Stationery and supplies 328 ​ 352 ​ 361 Insurance (including FDIC premiums) 1,364 ​ 951 ​ 840 Communication and postage 927 ​ 937 ​ 784 Loan default related expense 402 ​ 254 ​ 89 Director fees and expenses 329 ​ 366 ​ 325 Bank service charges 66 ​ 162 ​ 256 Courier expense 751 ​ 745 ​ 662 Other 500 ​ 561 ​ 510 Total $ 8,897 ​ $ 10,102 ​ $ 8,419 ​ The Company expenses marketing and promotions costs as they are incurred. Advertising expense included in marketing and promotions totaled $ 48,000 for the year ended December 31, 2023, compared to $ 71,000 for both the years ended December 31, 2022 and 2021. ​ 125 Table of Contents 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 individually evaluated 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 2023 and 2022. The following assets are measured at fair value on a recurring basis at the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Estimated Fair Value Measurements ​ ​ Fair Value ​ Level 1 ​ Level 2 ​ Level 3 December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Municipal securities ​ $ 20,827 ​ $ — ​ $ 20,827 ​ $ — Mortgage-backed securities ​ 37,601 ​ — ​ 37,601 ​ — Collateralized mortgage obligations ​ 32,976 ​ — ​ 32,976 ​ — SBA securities ​ 5,252 ​ — ​ 5,252 ​ — Corporate bonds ​ 66,496 ​ — ​ 66,496 ​ — Equity securities ​ ​ 12,585 ​ ​ 12,585 ​ ​ — ​ ​ — Total ​ $ 175,737 ​ $ 12,585 ​ $ 163,152 ​ $ — ​ 126 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Estimated Fair Value Measurements ​ ​ Fair Value ​ Level 1 ​ Level 2 ​ Level 3 December 31, 2022 ​ ​ ​ ​ U.S. Government Agencies ​ $ 1,505 ​ $ — ​ $ 1,505 ​ $ — 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 ​ — Equity securities ​ ​ 13,757 ​ ​ 13,757 ​ ​ — ​ ​ — Total ​ $ 167,761 ​ $ 13,757 ​ $ 154,004 ​ $ — ​ The following assets are measured at fair value on a nonrecurring basis as of the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Estimated Fair Value Measurements ​ ​ Fair Value ​ Level 1 ​ Level 2 ​ Level 3 December 31, 2023 ​ ​ ​ ​ Individually evaluated loans (1) ​ $ 12,977 ​ $ — ​ $ — ​ $ 12,977 Total ​ $ 12,977 ​ $ — ​ $ — ​ $ 12,977 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Estimated Fair Value Measurements ​ ​ Fair Value ​ Level 1 ​ Level 2 ​ Level 3 December 31, 2022 ​ ​ ​ ​ Performing impaired loans (1) ​ $ 759 ​ $ — ​ $ — ​ $ 759 Nonperforming impaired loans ​ 15,223 ​ — ​ — ​ 15,223 OREO ​ 21 ​ — ​ — ​ 21 Total ​ $ 16,003 ​ $ — ​ $ — ​ $ 16,003 ​ (1) For each quarter the loan was outstanding in 2023, with the adoption of CECL, one performing modified loan to a borrower experiencing financial difficulty was individually evaluated in determining the estimated allowance for credit losses. ​ The Company does not record loans at fair value on a recurring basis. 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 placed on nonaccrual and individually evaluated. The fair value of individually evaluated 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 loans not requiring an allowance for credit losses 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 individually evaluated loan as nonrecurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is below the appraised value or the appraised value contains a significant assumption and there is no observable market price, the Company records the individually evaluated 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 below the appraised value or the appraised value contains a significant assumption, and there is no observable market price, the Company records the individually evaluated 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. 127 Table of Contents 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 bank, Federal funds sold and interest-bearing balances in banks, and are valued at their carrying amounts because of the short-term nature of these instruments. Time deposits in banks — Interest bearing time deposits in banks are valued based on quoted interest rates for comparable instruments with similar remaining maturities. Investment securities — The fair value of securities AFS 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. Equity securities — The fair value of equity 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 credit losses on loans 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. 128 Table of Contents 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. 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, 2023 ​ ​ ​ ​ ​ Financial assets: ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 307,539 ​ $ 307,539 ​ $ 307,539 ​ $ — ​ $ — Time deposits in banks ​ 1,245 ​ 1,245 ​ 1,245 ​ — ​ — Investment securities AFS ​ 163,152 ​ 163,152 ​ — ​ 163,152 ​ — Equity securities ​ ​ 12,585 ​ ​ 12,585 ​ ​ 12,585 ​ ​ — ​ ​ — Investment in FHLB and FRB Stock ​ 20,939 ​ 20,939 ​ — ​ 20,939 ​ — Loans held for sale ​ — ​ — ​ — ​ — ​ — Loans, net ​ 1,905,829 ​ 1,810,426 ​ — ​ — ​ 1,810,426 Accrued interest receivable ​ 8,423 ​ 8,423 ​ — ​ 8,423 ​ — Financial liabilities: ​ ​ ​ ​ ​ Deposits ​ 2,132,750 ​ 2,135,923 ​ — ​ 2,135,923 ​ — Junior subordinated deferrable interest debentures, net ​ ​ 8,565 ​ ​ 8,631 ​ ​ — ​ ​ — ​ ​ 8,631 Subordinated debt, net ​ ​ 63,881 ​ 63,881 ​ — ​ ​ 63,881 ​ ​ — Accrued interest payable ​ 3,054 ​ 3,054 ​ — ​ 3,054 ​ — Off-balance sheet liabilities: ​ ​ ​ ​ ​ ​ Undisbursed loan commitments, lines of credit, standby letters of credit ​ 77,377 ​ 77,152 ​ — ​ — ​ 77,152 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 AFS ​ 154,004 ​ 154,004 ​ — ​ 154,004 ​ — Equity securities ​ ​ 13,757 ​ ​ 13,757 ​ ​ 13,757 ​ ​ — ​ ​ — 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 ​ ​ 129 Table of Contents 24. PARENT COMPANY ONLY BAYCOM CORP BALANCE SHEETS December 31, 2023 and 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 ​ ​ ​ ​ ​ ​ (As Restated) ASSETS ​ ​ Cash and due from banks ​ $ 13,037 ​ $ 3,837 Equity securities ​ ​ 12,585 ​ ​ 13,757 Investment in bank subsidiary ​ 358,771 ​ 370,384 Interest receivable and other assets ​ 3,420 ​ 3,108 Total assets ​ $ 387,813 ​ $ 391,086 LIABILITIES AND SHAREHOLDERS' EQUITY ​ ​ Junior subordinated deferrable interest debentures, net ​ $ 8,565 ​ $ 8,484 Subordinated debt, net ​ ​ 63,881 ​ ​ 63,711 Interest payable and other liabilities ​ ​ 2,498 ​ ​ 1,742 Total liabilities ​ 74,944 ​ 73,937 Shareholders' equity ​ ​ Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding at both December 31, 2023 and 2022 ​ — ​ — Common stock, no par value; 100,000,000 shares authorized; 11,551,271 and 12,838,462 shares issued and outstanding at December 31, 2023 and 2022, respectively ​ 180,913 ​ 204,301 Additional paid in capital ​ 287 ​ 287 Accumulated other comprehensive loss, net of tax ​ ( 14,592 ) ​ ( 11,561 ) Retained earnings ​ 146,261 ​ 124,122 Total shareholders' equity ​ 312,869 ​ 317,149 Total liabilities and shareholders' equity ​ $ 387,813 ​ $ 391,086 ​ ​ 130 Table of Contents BAYCOM CORP STATEMENTS OF INCOME For the years ended December 31, 2023, 2022 and 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 ​ ​ ​ ​ ​ ​ (As Restated) ​ ​ ​ Income: ​ ​ ​ ​ Interest income ​ $ 1,019 ​ $ 813 ​ $ 624 Loss on equity securities ​ ​ ( 1,141 ) ​ ​ ( 4,573 ) ​ ​ — Earnings from bank subsidiary ​ ( 8,811 ) ​ 19,683 ​ 23,376 Dividends from bank subsidiary ​ ​ 40,000 ​ ​ 10,000 ​ ​ — Dividends from statutory trusts ​ 19 ​ ​ 8 ​ 4 Gain on sale of securities ​ ​ — ​ — ​ 41 Total income ​ 31,086 ​ 25,931 ​ 24,045 Expense: ​ ​ ​ Subordinated debt ​ 3,582 ​ 3,582 ​ 3,582 Junior subordinate debt ​ 830 ​ 496 ​ 344 Total Interest expense ​ 4,412 ​ 4,078 ​ 3,926 Noninterest expense ​ 714 ​ 489 ​ 462 Total expense ​ 5,126 ​ 4,567 ​ 4,388 Income before provision for income taxes ​ 25,960 ​ 21,364 ​ 19,657 Income tax benefit ​ ( 1,465 ) ​ ( 2,366 ) ​ ( 1,035 ) Net income ​ $ 27,425 ​ $ 23,730 ​ $ 20,692 ​ 131 Table of Contents BAYCOM CORP STATEMENTS OF CASH FLOWS For the years ended December 31, 2023, 2022 and 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 ​ ​ ​ ​ ​ ​ (As Restated) ​ ​ ​ Cash flows from operating activities: ​ ​ ​ ​ Net income ​ $ 27,425 ​ $ 23,730 ​ $ 20,692 Adjustments to reconcile net income to net cash provided by (used in) operating activities: ​ ​ ​ Income from bank subsidiary ​ ( 31,189 ) ​ ( 29,683 ) ​ ( 23,376 ) Dividend from bank subsidiary ​ 40,000 ​ 10,000 ​ — Gain on sale of securities ​ ​ — ​ ​ — ​ ​ ( 41 ) Income tax benefit ​ ( 1,465 ) ​ ( 2,366 ) ​ ( 1,035 ) Accretion of premiums/discounts on investment securities ​ ​ 31 ​ ​ 162 ​ ​ 40 Loss on equity securities ​ ​ 1,141 ​ ​ 4,573 ​ ​ — Accretion on junior subordinated debentures ​ 251 ​ 250 ​ 251 Stock-based compensation expense ​ 726 ​ 1,022 ​ 1,407 Increase (decrease) in deferred tax asset ​ ​ 329 ​ ​ ( 189 ) ​ ​ — Increase (decrease) in interest receivable and other assets ​ 1,314 ​ 1,356 ​ ( 230 ) (Decrease) increase in interest payable and other liabilities ​ ( 893 ) ​ 24 ​ 2 Net cash provided by (used in) operating activities ​ 37,670 ​ 8,879 ​ ( 2,290 ) Cash flows from investing activities: ​ ​ ​ Capital contribution to subsidiary ​ ( 719 ) ​ ( 1,217 ) ​ ( 1,400 ) Purchase of equity securities ​ ​ — ​ ​ — ​ ​ ( 18,330 ) Net cash received for acquisitions ​ — ​ 275 ​ — Net cash used in investing activities ​ ( 719 ) ​ ( 942 ) ​ ( 19,730 ) Cash flows from financing activities: ​ ​ ​ Repurchase of common stock ​ ( 24,114 ) ​ ( 17,959 ) ​ ( 11,551 ) Cash dividends paid on common stock ​ ​ ( 3,637 ) ​ ​ ( 2,020 ) ​ ​ — Net cash used in financing activities ​ ( 27,751 ) ​ ( 19,979 ) ​ ( 11,551 ) Increase (decrease) in cash and cash equivalents ​ 9,200 ​ ( 12,042 ) ​ ( 33,571 ) Cash and cash equivalents at beginning of period ​ 3,837 ​ 15,879 ​ 49,450 Cash and cash equivalents at end of period ​ $ 13,037 ​ $ 3,837 ​ $ 15,879 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental disclosure of cash flow information: ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-cash investing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in unrealized (loss) gain on securities AFS, net of tax ​ ​ ( 3,031 ) ​ ​ — ​ ​ 531 Cash dividends declared on common stock not yet paid ​ ​ ( 1,158 ) ​ ​ 644 ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquisition: ​ ​ ​ ​ ​ ​ ​ ​ ​ Common stock issued ​ ​ — ​ ​ 64,140 ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 132 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 Company’s 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, 2023 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, 2023, 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. Previously Disclosed Material Weakness in Internal Control Over Financial Reporting The Company disclosed in Part II, Item 9A – Controls and Procedures in its Annual Report on Form 10-K/A for the year ended December 31, 2022 and in Part I, Item 4 – Controls and Procedures in its Quarterly Report on Form 10-Q/A for the quarter ended March 31, 2023, that it had identified an error related to the accounting for unrealized losses on preferred equity securities that resulted in material misstatements of noninterest income and accumulated other comprehensive income. At the time of its purchase of the preferred equity securities for investment purposes, the Company inappropriately accounted for them as available for sale debt securities under ASC Topic 320 – Investments-Debt Securities. As such, the changes in the fair value of these securities were not recorded as part of net income but rather as a component of shareholders’ equity (in accumulated other comprehensive income, net of tax). However, as a result of subsequent research and third-party consultation, the Company determined that the securities should instead have been accounted for under ASC Topic 321 – Investments-Equity Securities . The result of this change in classification of the preferred equity securities was that the change in the fair value of the securities for the prior periods should have been recorded in noninterest income on the consolidated statements of income. The Company determined that this error constituted a “material weakness” in its internal control over financial reporting. In response to the identified material weakness, our management, with the oversight of the audit committee of our board of directors, dedicated additional resources, including additional employee training and engagement of third-party expertise, toward improving our internal control over financial reporting. During the quarter ended June 30, 2023, we redesigned and enhanced control activities related to investment security classification and review at the acquisition date. Upon the acquisition of securities in the third and fourth quarters of 2023, we implemented the redesigned and enhanced controls. We rigorously tested these controls, and through independent testing by internal audit, we confirmed their effective operation. We believe that with the implementation and successful testing of these redesigned and enhanced controls, the identified material weakness as of December 31, 2023, has been remediated, thereby strengthening our internal control over financial reporting. (b) Management’s Report on Internal Control Over Financial Reporting 133 Table of Contents The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rule 13a-15(f) under the Exchange Act. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. As of December 31, 2023, under the supervision and with the participation of the Company’s management, including the Company’s principal executive officer and principal financial officer, the Company assessed the effectiveness of its internal control over financial reporting based on the criteria for effective internal control over financial reporting established in “Internal Control — Integrated Framework (2013),” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management determined that the Company maintained effective internal control over financial reporting as of December 31, 2023. Moss Adams LLP, the independent registered public accounting firm that audited the Company’s Consolidated Financial Statements included in this Annual Report on Form 10-K, has also issued an audit report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023. The report, which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023, is included in the “Report of Independent Registered Public Accounting Firm” contained under “Item 8 – Financial Statements and Supplementary Data” of this Form 10-K. (c) Changes in Internal Controls over Financial Reporting There were no changes made to our internal control over financial reporting that occurred during the three months ended December 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ​ Item 9B. Other Information (a) Nothing to report. (b) During the quarter ended December 31, 2023, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Corporation adopted or terminated a “ Rule 10b5-1 trading arrangement” or “ non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K. 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. 134 Table of Contents Information concerning the executive officers of the Company is contained under the heading “Information About our Executive Officers” under Part I, Item 1 of this Form 10-K and is incorporated herein by reference. Delinquent Section 16(a) Reports ​ Information concerning the Company’s delinquent section 16(a) Reports 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. 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.” 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 (Chair), Davis, Laverne and Magid, 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. ​ 135 Table of Contents 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, 2023 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 ​ — ​ $ — ​ 44,236 Equity compensation plans not approved by security holders ​ — ​ ​ — ​ — Total ​ — ​ $ — ​ 44,236 (1) All of the shares reported are available for future issuance other than upon the exercise of an option, warrant, or right. ​ 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) ​ ​ ​ 136 Table of Contents 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+ ​ Amendment No. 1 dated January 17, 2024 to the Amended and Restated Employment Agreement, dated March 5, 2021, by among BayCom Corp, United Business Bank and George Guarini (6) ​ ​ ​ 10.3+ ​ Amended and Restated Employment Agreement, dated March 5, 2021, among BayCom Corp, United Business Bank and Janet King ⁽ ⁵ ⁾ ​ ​ ​ 10.4+ ​ Amendment No. 1 dated January 17, 2024 to the Amended and Restated Employment Agreement, dated March 5, 2021, by among BayCom Corp, United Business Bank and Janet King (6) ​ ​ ​ 10.5+ ​ Amended and Restated Employment Agreement, dated March 5, 2021, among BayCom Corp, United Business Bank and Keary Colwell ⁽ ⁵ ⁾ ​ ​ ​ 10.6+ ​ Amendment No. 1 to the Amended and Restated Employment Agreement, dated January 19, 2024, among BayCom Corp, United Business Bank and Keary Colwell (6) ​ ​ ​ 10.7+ ​ Amended and Restated Executive Supplemental Compensation Agreement, dated February 20, 2018, between United Business Bank and George J. Guarini (7) ​ ​ ​ 10.8+ ​ Amended and Restated Executive Supplemental Compensation Agreement, dated February 20, 2018, between United Business Bank and Janet King (1) ​ ​ ​ 10.9+ ​ Amended and Restated Executive Supplemental Compensation Agreement, dated February 20, 2018, between United Business Bank and Keary Colwell. (1) ​ ​ ​ 10.10+ ​ Amended and Restated Joint Beneficiary Agreement between United Business Bank and George Guarini (1) ​ ​ ​ 10.11+ ​ Amendment No. 1 to Amended and Restated Joint Beneficiary Agreement by and between United Business Bank and George J. Guarini, Dated June 20, 2023 ⁽ ⁷ ⁾ ​ ​ ​ 10.12+ ​ BayCom Corp Amended and Restated 2017 Omnibus Equity Incentive Plan (1) ​ ​ ​ 10.13+ ​ Form of Restricted Stock Award Agreement under the BayCom Corp Amended and Restated 2017 Omnibus Equity Incentive Plan (1) ​ ​ ​ 10.14+ ​ Form of Non-Qualified Stock Option Agreement under the BayCom Corp Amended and Restated 2017 Omnibus Equity Incentive Plan (1) ​ ​ ​ 10.15+ ​ Form of Incentive Stock Option Agreement under the BayCom Corp Amended and Restated 2017 Omnibus Equity Incentive Plan (1) 137 Table of Contents ​ ​ ​ 10.16+ ​ Form of Restricted Stock Unit Agreement under the BayCom Corp Amended and Restated 2017 Omnibus Equity Incentive Plan ( 1) ​ ​ ​ 10.17+ ​ Joint Beneficiary Agreement between United Business Bank and Janet King (1) ​ ​ ​ 10.18+ ​ Amendment No. 1 to Joint Beneficiary Agreement by and between United Business Bank and Janet King, dated June 20, 2023 ⁽ ⁷ ⁾ ​ ​ ​ 10.19+ ​ Joint Beneficiary Agreement between United Business Bank and Keary Colwell (1) ​ ​ ​ 10.20+ ​ Amendment No. 1 to Joint Beneficiary Agreement by and between United Business Bank and Keary Colwell, dated June 20, 2023 (7) ​ ​ ​ 10.21+ ​ Joint Beneficiary Agreement between United Business Bank and Mery Therese Curley ⁽ ⁸ ⁾ ​ ​ ​ 10.22+ ​ Summary of Annual Incentive Bonus program (9) ​ ​ ​ 14 ​ Code of Business Conduct and Ethics (10) ​ ​ ​ 21 ​ Subsidiaries of the Registrant (11) ​ ​ ​ 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 . ​ ​ ​ 97 ​ Policy relating to Recovery of Erroneously Awarded Compensation ​ ​ ​ 101 ​ The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 formatted in Extensible Business Reporting Language (XBRL): (1) Consolidated Balance Sheets; (2) Consolidated Statements of Income; (3) Consolidated Statements of Comprehensive Income; (4) Consolidated Statements of Changes in Shareholders’ Equity; (5) 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). 138 Table of Contents (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 the Registrant’s Current Report on Form 8-K filed with the SEC on January 19, 2024 (File No. 001-38483). (7) Incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed with the SEC on June 23, 2023 (File No. 001-38483). (8) 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). (9) 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). (10) 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. (11) 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. ​ 139 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 15, 2024 ​ 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, 2023, 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 15, 2024 George J. Guarini, President, Chief Executive Officer and Director ​ ​ (Principal Executive Officer) ​ ​ ​ ​ /s/ Lloyd W. Kendall Date: March 15, 2024 Lloyd W. Kendall, Chairman of the Board and Director ​ ​ ​ ​ /s/ James S. Camp Date: March 15, 2024 James S. Camp, Director ​ ​ ​ ​ /s/ Harpreet S. Chaudhary Date: March 15, 2024 Harpreet S. Chaudhary, Director ​ ​ ​ ​ /s/ Rocco Davis Date: March 15, 2024 Rocco Davis, Director ​ ​ ​ ​ /s/ Robert G. Laverne Date: March 15, 2024 Robert G. Laverne, MD, Director ​ ​ ​ ​ /s/ Syvia L. Magid Date: March 15, 2024 Syvia L. Magid, Director ​ ​ ​ ​ ​ ​ /s/ Janet L. King Date: March 15, 2024 Janet L. King, Senior Executive Vice President, Chief Operating Officer and Director ​ ​ ​ ​ /s/ Keary L. Colwell Date: March 15, 2024 Keary L. Colwell, Senior Executive Vice President, Chief Financial ​ ​ Officer, Chief Administrative Officer, Secretary and Director (Principal Financial and Accounting Officer) ​ ​ ​ ​ ​ ​ 140