I'm LongbridgeAI, I can summarize articles.BayCom Corp (NASDAQ: BCML) reported Q3 2026 net interest income of $25.6 million, up 9.2% from $23.4 million a year earlier, while diluted EPS fell to $0.10 from $0.46. Net interest margin expanded 43 basis points to 4.11%, but a $6.8 million securities-sale loss and a $589,000 preferred-equity loss reduced net income to $1.1 million. Loans and deposits grew sequentially, while credit indicators were mixed.
Core Earnings Results
Spread income improved, but the benefit did not fully reach the bottom line because noninterest income turned negative. Compared with Q2 2026, net income recovered from a $7.0 million loss as noninterest expense declined by $9.5 million, the credit-loss provision fell by $4.4 million, and net interest income increased by $1.8 million. Those gains were partly offset by a $7.3 million sequential deterioration in noninterest income.
Year over year, the decline in earnings primarily reflected the securities repositioning loss and higher operating expenses. Increased net interest income and a lower credit-loss provision provided partial offsets.
| Metric | Q3 2026 | Q3 2025 | Year-Over-Year Change |
|---|---|---|---|
| Net interest income | $25.6 million | $23.4 million | +9.2% |
| Provision for credit losses | $0.8 million | $3.0 million | Down $2.1 million |
| Noninterest income | $(5.8) million | $2.2 million | Down $8.1 million |
| Noninterest expense | $17.7 million | $15.9 million | +10.7% |
| Net income | $1.1 million | $5.0 million | -78.0% |
| Diluted EPS | $0.10 | $0.46 | -78.3% |
| Net interest margin | 4.11% | 3.68% | +43 basis points |
Loan and Deposit Growth
Loans, net of deferred fees, increased by $77.2 million, or 3.7%, from the end of Q2 to approximately $2.2 billion. BayCom originated $146.2 million of new loans and purchased $51.8 million during the quarter, partly offset by $117.4 million of repayments.
Growth was concentrated in residential, multifamily, and commercial and industrial lending. Residential loans increased by approximately $47.1 million sequentially, multifamily loans rose by $30.1 million, and commercial and industrial loans increased by $24.2 million. In contrast, owner-occupied commercial real estate declined by $10.6 million and non-owner-occupied commercial real estate fell by $12.8 million.
Deposits increased by $122.3 million, or 5.6%, to $2.3 billion. Average noninterest-bearing deposits rose modestly from Q2 to $577.7 million, although they remained $39.8 million below the year-earlier level.
Profitability and Balance Sheet
Net interest margin increased from 3.95% in Q2 to 4.11%. The average yield on interest-earning assets rose by 18 basis points sequentially to 5.54%, while the average rate paid on interest-bearing liabilities increased only one basis point to 2.15%. The average loan yield reached 5.72%, up 12 basis points, as new loans were originated at higher rates.
The average cost of deposits was 1.57%, compared with 1.56% in Q2 and 1.74% a year earlier. Deposit interest expense increased sequentially because of higher average interest-bearing balances, particularly money market accounts, rather than a higher average rate on interest-bearing deposits.
Capital remained above regulatory thresholds for a well-capitalized bank. BayCom reported a Total Capital ratio of 14.52% and a Common Equity Tier 1 ratio of 13.39%. Its non-GAAP Tangible Common Equity ratio was 11.17%.
Strategic Repositioning Cut Current EPS While Raising Asset Yields
BayCom sold $106.8 million of available-for-sale securities with an average yield of approximately 3.79%, recognizing a $6.8 million pre-tax loss. It then purchased $109.3 million of securities at a weighted average yield of 5.01%, raising the yield on the redeployed balances by 122 basis points and shortening portfolio duration.
The company also sold $7.8 million of preferred equity securities to reduce future earnings volatility. Those sales, together with negative market performance, produced a $589,000 quarterly loss. Management estimated that the securities, preferred-equity, BOLI, and staffing actions collectively reduced Q3 earnings by approximately $0.50 per share.
The immediate trade-off was lower reported income in exchange for a higher prospective asset yield and a reduced interest-rate risk profile. Management expects the bond portfolio and BOLI restructuring costs to be recovered within approximately three years. After-tax unrealized losses on available-for-sale securities in accumulated other comprehensive income declined to $6.3 million from $8.1 million at the end of Q2.
Recent Insider Transactions
The detailed transaction history provided lists four purchases during the quarter and six stock grants dated July 1, 2026. The purchases totaled $461,368, while the grants were recorded at zero value; the latest ten records contained no sales.
| Date | Insider | Role | Transaction | Ownership | Value |
|---|---|---|---|---|---|
| Aug. 21, 2026 | Robert G. LaVerne | Director | Purchase at $29.85 | Direct | $29,850 |
| Aug. 20, 2026 | Robert G. LaVerne | Director | Purchase at $29.95 | Direct | $29,950 |
| Aug. 10, 2026 | Christopher F. Baron | CEO | Purchase at $30.39 | Direct | $250,718 |
| July 31, 2026 | Michael J. Perdue | Director | Purchase at $30.17 | Indirect | $150,850 |
| July 1, 2026 | Robert G. LaVerne | Director | Stock award | Direct | $0 |
| July 1, 2026 | Syvia L. Magid | Director | Stock award | Direct | $0 |
| July 1, 2026 | William J. Black | Officer and Director | Stock award | Direct | $0 |
| July 1, 2026 | Dennis Henry Guida Jr. | Director | Stock award | Direct | $0 |
| July 1, 2026 | Bhupen B. Amin | Director | Stock award | Direct | $0 |
| July 1, 2026 | Christopher F. Baron | CEO | Stock award | Direct | $0 |
A separate six-month summary from the same source displayed zero purchases, creating a discrepancy with the detailed transaction history.
Risks Investors Need to Watch
- Early-stage delinquencies increased: Loans 30–89 days past due rose to $12.4 million from $2.2 million in Q2. The increase primarily involved four commercial real estate loans totaling $10.5 million, including an $8.5 million hotel-secured loan.
- Nonaccrual loans moved higher: Nonaccrual loans increased to $10.5 million from $9.1 million, mainly because of a new $3.3 million commercial real estate loan. The nonperforming-loan ratio rose to 0.52% from 0.47%, although classified assets declined 11.1% to $31.7 million and quarterly net charge-offs were only $13,000.
- Operating costs remain above last year: Noninterest expense increased 10.7% year over year, reflecting higher wages, employee insurance claims, stock compensation, and professional and legal costs.
- Deposit pricing could pressure future margins: The cost of deposits increased only one basis point sequentially, but management cited competitive pressure and a September Federal Reserve rate increase. Faster funding-cost growth could limit the benefit from higher asset yields.
Summary
BayCom’s Q3 banking fundamentals improved through loan and deposit growth, higher asset yields, and a wider net interest margin. Reported earnings nevertheless declined sharply from the prior year because management recognized substantial losses while repositioning securities and reducing preferred-equity exposure. The main issues to monitor are whether the 122-basis-point yield improvement translates into sustained net interest income, whether higher commercial real estate delinquencies require additional reserves, and whether operating and deposit costs remain controlled.
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