BayCom Q3 profit rebounds sequentially on lower expenses

Overview

• U.S. bank holding company reported Q3 net income up from prior quarter, but down yr/yr

• Company completed strategic repositioning of securities, resulting in losses but improved future yield

• Q3 net interest margin expanded to 4.11%, loans and deposits grew

Outlook

• Company expects repositioned securities portfolio to improve yield by 122 basis points going forward

• BayCom anticipates recouping repositioning costs within about three years

Result Drivers

• SECURITIES REPOSITIONING - Co sold $106.8 mln of investment securities at a $6.8 mln loss, redeploying proceeds into higher-yielding, shorter-duration assets to improve future profitability and interest rate risk profile

• PREFERRED EQUITY SALES - Co sold $7.8 mln of preferred equity securities to reduce earnings volatility, resulting in a $589,000 net loss

• STAFFING REALIGNMENT - Co incurred $192,000 in severance expense from staffing realignment actions aimed at improving operating efficiency

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy."

• Wall Street's median 12-month price target for BayCom Corp is $32.00, about 2.8% above its October 21 closing price of $31.13

• The stock recently traded at 13 times the next 12-month earnings vs. a P/E of 12 three months ago

Reuters Recommended Reads

• Oct 19 - Western Alliance Bancorp Q3 revenue slightly beats estimates, profit rises on wider interest margin

• Oct 20 - KeyCorp Q3 revenue rises 8% to record, profit up 24%

• Oct 20 - QCR Holdings Q3 adjusted EPS beats analyst estimates

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)