Market Overview

BayCom Corp Reports 2018 Fourth Quarter Earnings of $2.6 Million and $14.5 Million for the Year Ended December 31, 2018

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BayCom Corp (the "Company") (NASDAQ: BCML),
the holding company for United Business Bank (the "Bank"), announced
earnings of $2.6 million, or $0.24 per diluted share, for the fourth
quarter of 2018 compared to a loss of $839,000, or $(0.12) per diluted
share, for the fourth quarter of 2017, and earnings of $3.5 million, or
$0.31 per diluted share, for the third quarter of 2018. The fourth
quarter of 2018 included a $3.1 million increase in non-interest expense
compared to the prior quarter resulting primarily from $2.3 million in
merger related expenses incurred in connection with our acquisition of
Bethlehem Financial Corporation ("BFC") and, its wholly owned bank
subsidiary, MyBank in November 2018 (the "BFC Acquisition") offset by an
increase in net interest income by $874,000, lower provision for
allowance for loan loses by $817,000 and lower income tax expense by
$468,000. The impact of merger related expenses was $0.15 per share for
the quarter ended December 31, 2018 compared to $0.11 per share for the
quarter ended December 31, 2017. The Company had net income of $14.5
million, or $1.50 per diluted common share, for the year ended December
31, 2018, compared to $5.3 million, or $0.81 per diluted common share,
for the year ended December 31, 2017. Net income for the three months
and year ended December 31, 2017 included a $2.7 million charge due to
the revaluation of deferred tax assets as a result of the enactment of
the Tax Cuts and Jobs Act (the "Tax Act") in December 2017 with no
comparable charge in 2018.

Acquisition of Bethlehem Financial Corporation

On November 30, 2018, the Company completed the BFC Acquisition. As of
the acquisition date, BFC was merged with and into the Company and
MyBank was merged with and into United Business Bank. The BFC
Acquisition was accounted for using the acquisition method of accounting.

Pursuant to the terms of the merger agreement, BFC shareholders received
$62.00 in cash in exchange for each share of BFC common stock for total
consideration paid of $23.5 million. As of November 30, BFC had
estimated total assets of $157.8 million, gross loans receivable of
$75.4 million and total deposits of $135.5 million.

Proposed Acquisition of Uniti Financial
Corporation

On December 7, 2018, the Company entered into a definitive agreement
(the "Agreement") with Uniti Financial Corporation ("UFC"),
headquartered in Buena Park, California, pursuant to which UFC will be
merged with and into BayCom Corp, and immediately thereafter UFC's bank
subsidiary, Uniti Bank, will be merged with and into United Business
Bank. Uniti serves the Los Angeles and Orange County communities in
southern California through three branches. Under the terms of the
Agreement, UFC shareholders will receive $2.30 in cash and $1.69 in
Company common stock for each share of UFC common stock or approximately
$63.9 million in aggregate.

In the event the Agreement is terminated under certain specified
circumstances in connection with a competing transaction, UFC will be
required to pay the Company a termination fee of $1.5 million in cash.
The proposed transaction is subject to customary requirements and
approvals from regulatory authorities and shareholders of UFC. The
merger is expected to close in the second quarter of 2019.

George J. Guarini, President and Chief Executive Officer of the Company
stated, "2018 has been another transformational year for us. We closed
our initial public offering in May 2018 and completed our sixth merger
in November 2018, which added five branches and expanded our presence
and density in the Albuquerque metropolitan area and nearby communities.
We continue to believe in our focus on growth through strategic
acquisitions as it permits us to diversify our loan portfolio with
seasoned loans, expand our market areas and retain local lending
personnel and credit administration personnel to manage client
relationships. We believe our overall credit quality metrics remain
strong because of this approach."

Mr. Guarini continued, "Our pending Uniti Bank acquisition is expected
to close in the second quarter of 2019 and we continue to actively look
for new opportunities to expand our geographical market reach, build
market penetration, and add value for our clients and increase earnings
per share for our shareholders."

Fourth Quarter and Year End Performance Highlights:

  • Assets increased to $1.48 billion at December 31, 2018 compared to
    $1.25 billion at December 31, 2017 and compared to $1.34 billion at
    September 30, 2018 due primarily to the BFC Merger and organic loan
    growth.
  • Net interest margin was 4.12% for the current quarter, compared to
    4.06% in the preceding quarter and 3.96% in the fourth quarter a year
    ago;
  • Loans, net of allowance for loan losses and deferred fees, grew to
    $970.2 million at December 31, 2018, from $896.4 million at September
    30, 2018 and $886.9 million at December 31, 2017;
  • Deposits increased $127.0 million or 11.2%, to $1.26 billion at
    December 31, 2018 compared to $1.13 billion at September 30, 2018,
    including non-interest bearing deposits increasing $48.7 million and
    were $1.10 billion at December 31, 2017. Non-interest bearing deposits
    represented 31.6% of total deposits at December 31, 2018 compared to
    30.9% at September 30, 2018 and 29.6% at December 31, 2017;
  • Non-accrual loans decreased to $3.1 million or 0.32% of total loans as
    of December 31, 2018, compared to $5.2 million or 0.58% of total loans
    as of September 30, 2018 and were $179,000 or 0.02% of total loans at
    December 31, 2017.
  • The Bank remains a "well-capitalized" institution for regulatory
    capital purposes at December 31, 2018.

Earnings

Net interest income increased to $13.9 million for the fourth quarter of
2018 compared to $13.0 million in the preceding quarter and $11.8
million in the same quarter a year ago. These increases in net interest
income were primarily due to an increase in average interest earning
assets largely related to the BFC Acquisition in November 2018, the
Plaza Bank acquisition in November 2017, and, to a lesser extent, the
net proceeds received from the issuance of common stock in our initial
public offering in the second quarter of 2018. Average interest earning
assets increased $155.2 million or 13.1% for the three months ended
December 31, 2018 compared to the same period in 2017, largely due to
the BFC Acquisition. Interest income on loans for the quarters ended
December 31, 2018 and December 31, 2017 included $892,000 and $983,000,
respectively, in accretion of purchase accounting fair value adjustments
on acquired loans including the recognition of revenue from purchase
credit impaired loans in excess of discounts, compared to $948,000 for
the quarter ended September 30, 2018. The net discount on these
purchased loans was $7.5 million, $8.7 million, and $6.3 million at
December 31, 2018, December 31, 2017 and September 30, 2018,
respectively.

The Company's net interest margin was 4.12% for the fourth quarter of
2018 compared to 3.96% for the fourth quarter a year ago, and 4.06% for
the preceding quarter. The increase in net interest margin during the
fourth quarter of 2018 compared to the same quarter a year earlier is
the result of a higher yield on loans and investments primarily due to
higher market rates. Net interest margin is enhanced by the amortization
of acquisition accounting discounts on loans acquired in acquisitions.
Accretion of acquisition accounting discounts on loans and the
recognition of revenue from purchase credit impaired loans in excess of
discounts increased our net interest margin by 26 basis points, 30 basis
points and 33 basis points during the fourth quarter of 2018, fourth
quarter of 2017, and the third quarter of 2018, respectively. Our
average yield on loans for the fourth quarter of 2018 was 5.38% compared
to 5.28% for the same quarter last year and 5.24% for the third quarter
of 2018. Our average cost of funds for the fourth quarter of 2018 was
0.68%, up from 0.60% for the fourth quarter of 2017 and was 0.64% for
the third quarter of 2018. Increases in the cost of funds reflecting
higher market rates were offset partially by increases in noninterest
bearing deposit average balances.

Non-interest income for the fourth quarter of 2018 totaled $1.6 million
compared to $1.4 million in the same quarter in 2017, and $1.6 million
in the previous quarter. The increase in non-interest income compared to
the same quarter last year was primarily due to increases in loan fee
income, and other fees and service charges partially offset by a
decrease in other income.

Non-interest expense for the fourth quarter of 2018 totaled $11.5
million, an increase of $2.1 million, or 22.0%, compared to $9.4 million
for the fourth quarter of 2017, and increased $3.1 million, or 36.3%,
compared to $8.4 million for the third quarter of 2018. Non-interest
expenses for the fourth quarter of 2018 compared to same period last
year increased primarily due to increases in data processing expense,
and in salary and benefits related to the BFC Acquisition as well as an
increase in the number of employees from the Plaza Bank acquisition in
November 2017, and to a lesser extent in professional fees to ensure
compliance with various public company requirements. Total non-interest
expenses for the fourth quarter 2018 included $2.3 million in merger
related expenses compared to $1.2 million in the same quarter in 2017.

The Company's income tax provision was $1.2 million for the quarter
ended December 31, 2018, compared to $1.6 million for the quarter ended
September 30, 2018, and $4.6 million for the quarter ended December 31,
2017. The lower income tax provision in the fourth quarter of 2018
compared to the prior quarter was primarily due to lower pretax income.
The primary reason for the lower income tax provision in the year ended
December 31, 2018 compared to last year , was the reduction in the
federal corporate income tax rate from 35% to 21% in 2018 due to the Tax
Act partially offset by higher taxable income in 2018 compared to 2017.
In addition, during the quarter ended December 31, 2017, the Company
recorded a charge of $2.7 million through its federal income tax
provision relating to changes to the Company's net deferred tax
asset valuation as a result of the Tax Act's reduction in the federal
corporate income tax rate.

Loans and Credit Quality

Loans, net of deferred fees, increased $84.3 million, or 9.5%, to $975.3
million at December 31, 2018, from $891.1 million at December 31, 2017
and increased $73.5 million, or 8.1%, as compared to $901.9 million at
September 30, 2018. The increase in loans from the comparable period in
2017 and from the previous quarter was primarily due to the BFC
Acquisition. Loan originations for quarter ended December 31, 2018
totaled $28.0 million compared to $31.5 million during the fourth
quarter of 2017 and $32.7 million during the third quarter 2018. Loan
originations in the fourth quarter of 2018 were spread throughout our
markets with the majority focused in Alameda, Contra Costa, and Santa
Clara Counties in California and King County in Washington, with
commercial and residential real estate secured loans accounting for the
majority of the originations during the quarter.

Non-accrual loans totaled $3.1 million or 0.32% of total loans at
December 31, 2018, compared to $179,000, or 0.02% of total loans, at
December 31, 2017 and $5.2 million, or 0.58% of total loans, at
September 30, 2018. The increase in non-accrual loans from a year ago
related to the migration of several unrelated loans totaling $3.0
million to non-accrual status including one loan totaling $1.9 million
to a long-standing borrower of the Bank. At December 31, 2018 and
September 30, 2018, $2.3 million of our non-accrual loans were
guaranteed by government agencies. At December 31, 2018, accruing loans
past due 30 to 89 days totaled $3.4 million compared to none at December
31, 2017 and $1.4 million at September 30, 2018. The past due 30 to 89
days at December 31, 2018 related to three loans totaling $913,000 that
were in the process of renewal and nine loans totaling $2.5 million
which were delinquent as to payments. At December 31, 2018 and 2017,
there were no accruing loans past due more than 90 compared to $1.4
million at September 30, 2018.

At December 31, 2018, our allowance for loan losses was $5.1 million, or
0.53% of total loans, compared to $4.2 million, or 0.47% of total loans,
at December 31, 2017 and $5.5 million, or 0.61% of total loans, at
September 30, 2018. The allowance for loan losses plus the discount
recorded on acquired loans totaled $12.7 million, representing 1.29% of
total loans at December 31, 2018 compared to $12.9 million or 1.48% of
total loans at December 31, 2017 and $11.8 million or 1.30% of total
loans at September 30, 2018. Included in the carrying value of loans are
net discounts on acquired loans as they are carried at their estimated
fair value on the date on which they were acquired. As of December 31,
2018, acquired loans, net of their discounts, totaled $392.8 million
compared to $399.1 million at December 31, 2017 and $343.9 million at
September 30, 2018. The provision for loan losses recorded in the fourth
quarter of 2018 totaled $264,000 compared to $117,000 for the same
quarter in 2017 and $1.1 million for the third quarter of 2018. At
December 31, 2018, our allowance for loan losses specific reserves
decreased to $10,000 compared to $13,000 at December 31, 2017 and
$685,000 at September 30, 2018. Net charge-offs in the fourth quarter
2018 totaled $624,000 compared to a net recovery of $23,000 during the
same quarter in 2017 and $182,000 in the previous quarter.

Deposits and Borrowings

Deposits totaled $1.26 billion at December 31, 2018, compared to $1.10
billion at December 31, 2017 and $1.13 billion at September 30, 2018.
The increase in deposits from the same quarter a year ago was primarily
attributable to the $135.4 million of deposits acquired in connection
with the BFC Acquisition in November 2018. Non-interest bearing deposits
totaled $398.0 million, or 31.6% of total deposits, at December 31, 2018
compared to $327.3 million, or 29.6% of total deposits, at December 31,
2017, and $349.3 million, or 30.9% of total deposits, at September 30,
2018.

At December 31, 2018, borrowings totaled $8.2 million compared to $11.4
million at December 31, 2017 and $5.4 million at September 30, 2018.
During the second quarter 2018, we repaid $6.0 million in long-term
secured borrowings out of the net proceeds from our initial public
offering. Our borrowings at December 31, 2018 relate to junior
subordinated debentures assumed in connection with our acquisition of
First ULB Corp. in April 2017 and the BFC Acquisition in November 2018.

Shareholders' Equity

Total shareholders' equity increased to $200.8 million at December 31,
2018 from $118.6 million at December 31, 2017, and $197.3 million at
September 30, 2018. The increase in shareholders' equity during 2018
compared to 2017 also included, in addition to net income, the common
stock issued in our initial public offering of $66.0 million, net of
expenses and underwriting commissions.

About BayCom Corp

The Company, through its wholly owned operating subsidiary, United
Business Bank, offers a full-range of loans, including SBA, FSA and USDA
guaranteed loans, and deposit products and services to businesses and
its affiliates in California, Washington and New Mexico. The Bank also
offers business escrow services and facilitates tax free exchanges
through its Bankers Exchange Division. The Bank is an Equal Housing
Lender and a member of FDIC. The Company is traded on the NASDAQ under
the symbol "BCML". For more information, go to www.unitedbusinessbank.com.

Forward-Looking Statements

This release, as well as other public or shareholder communications
released by the Company, may contain forward-looking statements,
including, but not limited to, (i) statements regarding the financial
condition, results of operations and business of the Company,
(ii) statements about the Company's plans, objectives, expectations and
intentions and other statements that are not historical facts and
(iii) other statements identified by the words or phrases "will likely
result," "are expected to," "will continue," "is anticipated,"
"estimate," "project," "intends" or similar expressions that are
intended to identify "forward-looking statements", within the meaning of
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements are not historical facts but instead are based on current
beliefs and expectations of the Company's management and are inherently
subject to significant business, economic and competitive uncertainties
and contingencies, many of which are beyond the Company's control. In
addition, these forward-looking statements are subject to assumptions
with respect to future business strategies and decisions that are
subject to change.

The following factors, among others, could cause actual results to
differ materially from the anticipated results or other expectations
expressed in the forward-looking statements: expected revenues, cost
savings, synergies and other benefits from the proposed merger of the
Company and UFC and the recent merger of the Company and BFC might not
be realized within the expected time frames or at all and costs or
difficulties relating to integration matters, including but not limited
to customer and employee retention, might be greater than expected; the
requisite shareholder and regulatory approvals and other closing
conditions for the UFC Merger may be delayed or may not be obtained or
the merger agreement may be terminated; business disruption may occur
following or in connection with the UFC Merger; the Company's or UFC's
businesses may experience disruptions due to transaction-related
uncertainty or other factors making it more difficult to maintain
relationships with employees, customers, other business partners or
governmental entities; the possibility that the proposed merger is more
expensive to complete than anticipated, including as a result of
unexpected factors or events; the diversion of managements' attention
from ongoing business operations and opportunities as a result of the
UFC Merger or otherwise; future acquisitions by the Company of other
depository institutions or lines of business; changes in general
economic conditions and conditions within the securities market;
legislative and regulatory changes; fluctuations in interest rates; the
risks of lending and investing activities, including changes in the
level and direction of loan delinquencies and write-offs and changes in
estimates of the adequacy of the allowance for loan losses; the
Company's ability to access cost-effective funding; fluctuations in real
estate values and both residential and commercial real estate market
conditions; demand for loans and deposits in the Company's market area;
increased competitive pressures; changes in management's business
strategies; and other factors described from time to time in the
Company's filings with the Securities and Exchange Commission ("SEC"),
including our prospectus filed with the Securities and Exchange
Commission pursuant to Rule 424(b) of the Securities Act on May 4, 2018,
Quarterly Reports on Form 10-Q and other filings with the SEC that are
available on our website at
www.unitedbusinessbank.com
and on the SEC's website at
www.sec.gov.

The factors listed above could materially affect the Company's
financial performance and could cause the Company's actual results for
future periods to differ materially from any opinions or statements
expressed with respect to future periods in any current statements.

The Company does not undertake - and specifically declines any
obligation - to publicly release the result of any revisions which may
be made to any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events. When considering
forward-looking statements, you should keep in mind these risks and
uncertainties. You should not place undue reliance on any
forward-looking statement, which speaks only as of the date made.

                     
BAYCOM CORP
STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(Dollars in thousands, except earnings per share data)
Three months ended Full Year
December 31, September 30, December 31, December 31, December 31,

2018

2018

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