XML 23 R9.htm IDEA: XBRL DOCUMENT

ACQUISITIONS

12 Months Ended

Dec. 31, 2020

2. ACQUISITIONS

On February 4, 2020, the Company completed its acquisition of GMB. As of the acquisition date, GMB merged into the Company and Grand Mountain Bank, GMB’s wholly owned bank subsidiary, merged into United Business Bank. The acquisition expanded the Company’s market share in Colorado with the addition of four branches located in Grand County, Colorado. In an all-cash transaction, the Company paid GMB shareholders $3.40 in cash in exchange for each share of GMB common stock representing an aggregate transaction value of approximately $13.9 million.

On October 21, 2019, the Company entered the Colorado market with its acquisition of TIG. As of the acquisition date, TIG merged into the Company and First State Bank of Colorado, TIG’s wholly owned banking subsidiary, merged into United Business Bank. The Company added seven branches throughout Colorado. The Company paid TIG shareholders an aggregate of 876,803 shares of its common stock and paid an aggregate cash consideration of $20.2 million. The total consideration transferred was $39.9 million.

On May 24, 2019, the Company completed its acquisition of UFC. As of the acquisition date, UFC merged into the Company and Uniti Bank, UFC’s wholly owned banking subsidiary, merged into United Business Bank. The acquisition increased the Company’s market share in California, through the addition of three branch offices located in Southern California. BayCom issued an aggregate of 1,115,006 shares of its common stock and paid aggregate cash consideration of $37.8 million. The total consideration transferred was $62.7 million.

On November 30, 2018, the Company acquired all of the assets and assumed all of the liabilities of Bethlehem Financial Corporation (“BFC”) and its wholly owned subsidiary, MyBank, under a Merger and Plan of Reorganization dated August 10, 2018.

The following table summarizes the fair value of the assets acquired and liabilities assumed at the acquisition date:


	GMB		TIG		UFC
	Acquisition		Acquisition		Acquisition
	Date		Date		Date
	February 4, 2020		October 21, 2019		May 24, 2019
Fair value of assets:
Cash and due from banks	$	5,454	$	6,146	$	6,392
Federal funds sold		—		55,955		22,080
Total cash and cash equivalents		5,454		62,101		28,472
Interest bearing deposits in banks		16,040		—		—
Investment securities available-for-sale		4,369		26,382		5,096
FHLB stock, at par		165		241		1,535
FRB stock, at par		—		792		—
Loans, net		98,410		137,183		276,719
Premises and equipment, net		3,879		3,480		463
OREO		—		42		76
Core deposit intangible		949		3,038		566
Deferred tax assets, net		728		308		234
Servicing asset		—		—		1,824
Interest receivable and other assets		929		2,079		3,033
Total assets acquired		130,923		235,646		318,018
Liabilities:
Deposits
Noninterest bearing		30,937		77,157		143,082
Interest bearing		87,210		125,597		122,704
Total Deposits		118,147		202,754		265,786

Junior subordinated debentures, net		1,575		—		—
Interest payable and other liabilities		687		2,014		1,386
Total liabilities assumed		120,409		204,768		267,172

Stock issued		—		19,711		24,887
Cash consideration		13,886		20,184		37,814
Goodwill	$	3,372	$	9,017	$	11,855

The following table presents the net assets acquired and the estimated fair value adjustments, which resulted in goodwill at the acquisition date:


	GMB		TIG		UFC
	Acquisition		Acquisition		Acquisition
	Date		Date		Date
	February 4, 2020		October 21, 2019		May 24, 2019
Book value of net assets acquired	$	10,348	$	29,164	$	47,445
Fair value adjustments:
Investments available-for-sale		(10)		(627)		—
Loans, net		484		382		4,617
Premises and equipment, net		(1,000)		180		—
Write-down on OREO		—		(18)		(32)
Core deposit intangible		949		3,038		566
Tax assets		(139)		(774)		(695)
Time deposits		(25)		(308)		(250)
Write-down on servicing assets		—		—		(805)
Junior subordinated debentures, net		(98)		—		—
Write-down other (assets) liabilities		5		(159)		—
Total purchase accounting adjustments		166		1,714		3,401
Fair value of net assets acquired		10,514		30,878		50,846
Price paid:
Common stock issued		—		19,711		24,887
Cash paid		13,886		20,184		37,814
Total price paid		13,886		39,895		62,701
Goodwill	$	3,372	$	9,017	$	11,855

Pro Forma Results of Operations (Unaudited)

The operating results of the Company in the consolidated statements of income include the operating results of BFC (November 30, 2018), UFC, TIG and GMB, since their respective acquisition dates. The following table represents the net interest income, net income, basic and diluted earnings per share, as if the mergers with BFC, UFC, TIG and GMB were effective January 1, 2020, 2019 and 2018, for the respective years in which each acquisition was closed. The unaudited pro forma information in the following table is intended for informational purposes only and is not necessarily indicative of future operating results or operating results that would have occurred had the mergers been completed at the beginning of each respective year. No assumptions have been applied to the pro forma results of operation regarding possible revenue enhancements, expense efficiencies or asset dispositions.

Unaudited pro forma net interest income, net income and earnings per share are presented below:


	December 31,		December 31,		December 31,
	2020		2019		2018
Net interest income	$	78,695	$	80,649	$	82,141
Net income		12,929		20,447		21,263
Basic earnings per share	$	1.08	$	1.74	$	2.19
Diluted earnings per share		1.08		1.74		2.19

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. The Company incurred third-party acquisition expenses in the consolidated statements of income for the periods indicated are as follows:


	December 31, 2020		December 31, 2019						December 31, 2018
	GMB Merger		TIG		Uniti		Total		BFC
Professional fees	$	369	$	403	$	535	$	938	$	130
Data processing		2,000		1,709		2,657		4,366		1,290
Severance expense		266		257		578		835		536
Other		383		115		365		480		369
Total	$	3,018	$	2,484	$	4,135	$	6,619	$	2,325