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PCB Bancorp Reports Earnings of $4.7 million for Q1 2024

PCB Bancorp (the “Company”) (NASDAQ: PCB), the holding company of PCB Bank (the “Bank”), today reported net income of $4.7 million, or $0.33 per diluted common share, for the first quarter of 2024, compared with $5.9 million, or $0.41 per diluted common share, for the previous quarter and $10.3 million, or $0.70 per diluted common share, for the year-ago quarter.

Q1 2024 Highlights

  • Net income totaled $4.7 million, or $0.33 per diluted common share;
  • Recorded a provision (reversal) for credit losses of $1.1 million for the current quarter compared with $1.7 million for the previous quarter and $(2.8) million for the year-ago quarter;
  • Allowance for Credit Losses (“ACL”) on loans to loans held-for-investment ratio was 1.18% at March 31, 2024 compared with 1.19% at December 31, 2023 and 1.18% at March 31, 2023;
  • Net interest income was $21.0 million for the current quarter compared with $21.9 million for the previous quarter and $22.4 million for the year-ago quarter. Net interest margin was 3.10% for the current quarter compared with 3.40% for the previous quarter and 3.79% for the year-ago quarter;
  • Gain on sale of loans was $1.1 million for the current quarter compared with $803 thousand for the previous quarter and $1.3 million for the year-ago quarter;
  • Total assets were $2.85 billion at March 31, 2024, an increase of $64.8 million, or 2.3%, from $2.79 billion at December 31, 2023, and an increase of $353.8 million, or 14.1%, from $2.50 billion at March 31, 2023;
  • Loans held-for-investment were $2.40 billion at March 31, 2024, an increase of $74.5 million, or 3.2%, from $2.32 billion at December 31, 2023, and an increase of $305.5 million, or 14.6%, from $2.09 billion at March 31, 2023; and
  • Total deposits were $2.40 billion at March 31, 2024, an increase of $51.2 million, or 2.2%, from $2.35 billion at December 31, 2023, and an increase of $261.2 million, or 12.2%, from $2.14 billion at March 31, 2023.

“PCB continued to deliver strong first quarter results with momentum in loan and deposit growth stemming from our ongoing focus on relationship banking and strategic expansions, while maintaining very strong credit metrics,” said Henry Kim, President and Chief Executive Officer. “Currently, we are successfully undergoing our core system conversion that will enhance operational efficiency, functionality, and customer experience.”

“Our first quarter net income of $4.7 million included a total of $1.8 million in non-recurring expenses consisting of core conversion charges of $1.0 million and a SBA recovery demand of $815 thousand. During the quarter loan balance increased 3.1% to $2.4 billion, deposit balance increased 2.2% to $2.4 billion, and we continued to maintain robust ACL to loans ratio of 1.18%, and non-performing assets and classified assets to total assets ratios of 0.17% and 0.27%, respectively. The persistently higher interest rate environment and its effect on our funding costs resulted in further compression in our net interest margin during the quarter. However, we feel that our funding costs have peaked in the first quarter and our net interest margin is at near the bottom.”

Mr. Kim added, “As we look ahead for the rest of the year, PCB continues to be well positioned to deliver solid financial results with strong balance sheet growth and maintain sound asset quality with robust capital levels that are above our peers to operate in uncertain economic circumstances.”

Financial Highlights (Unaudited)

($ in thousands, except per share data)

 

Three Months Ended

 

3/31/2024

 

12/31/2023

 

% Change

 

3/31/2023

 

% Change

Net income

 

$

4,685

 

 

$

5,908

 

 

(20.7)%

 

$

10,297

 

 

(54.5)%

Diluted earnings per common share

 

$

0.33

 

 

$

0.41

 

 

(19.5)%

 

$

0.70

 

 

(52.9)%

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

20,999

 

 

$

21,924

 

 

(4.2)%

 

$

22,414

 

 

(6.3)%

Provision (reversal) for credit losses

 

 

1,090

 

 

 

1,698

 

 

(35.8)%

 

 

(2,778

)

 

NM

Noninterest income

 

 

2,945

 

 

 

2,503

 

 

17.7%

 

 

3,021

 

 

(2.5)%

Noninterest expense

 

 

16,352

 

 

 

14,469

 

 

13.0%

 

 

13,754

 

 

18.9%

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (1)

 

 

0.67

%

 

 

0.89

%

 

 

 

 

1.69

%

 

 

Return on average shareholders’ equity (1)

 

 

5.39

%

 

 

6.82

%

 

 

 

 

12.46

%

 

 

Return on average tangible common equity (“TCE”) (1),(2)

 

 

6.72

%

 

 

8.54

%

 

 

 

 

15.70

%

 

 

Net interest margin (1)

 

 

3.10

%

 

 

3.40

%

 

 

 

 

3.79

%

 

 

Efficiency ratio (3)

 

 

68.29

%

 

 

59.23

%

 

 

 

 

54.08

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in thousands, except per share data)

 

3/31/2024

 

12/31/2023

 

% Change

 

3/31/2023

 

% Change

Total assets

 

$

2,854,292

 

 

$

2,789,506

 

 

2.3%

 

$

2,500,524

 

 

14.1%

Net loans held-for-investment

 

 

2,369,632

 

 

 

2,295,919

 

 

3.2%

 

 

2,067,748

 

 

14.6%

Total deposits

 

 

2,402,840

 

 

 

2,351,612

 

 

2.2%

 

 

2,141,689

 

 

12.2%

Book value per common share (4)

 

$

24.54

 

 

$

24.46

 

 

 

 

$

23.56

 

 

 

TCE per common share (2)

 

$

19.69

 

 

$

19.62

 

 

 

 

$

18.72

 

 

 

Tier 1 leverage ratio (consolidated)

 

 

12.73

%

 

 

13.43

%

 

 

 

 

13.90

%

 

 

Total shareholders’ equity to total assets

 

 

12.26

%

 

 

12.51

%

 

 

 

 

13.47

%

 

 

TCE to total assets (2), (5)

 

 

9.84

%

 

 

10.03

%

 

 

 

 

10.71

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

 

Ratios are presented on an annualized basis.

(2)

 

Non-GAAP. See “Non-GAAP Measures” for reconciliation of this measure to its most comparable GAAP measure.

(3)

 

Calculated by dividing noninterest expense by the sum of net interest income and noninterest income.

(4)

 

Calculated by dividing total shareholdersequity by the number of outstanding common shares.

(5)

 

The Company did not have any intangible asset component for the presented periods.

Result of Operations (Unaudited)

Net Interest Income and Net Interest Margin

The following table presents the components of net interest income for the periods indicated:

 

 

Three Months Ended

($ in thousands)

 

3/31/2024

 

12/31/2023

 

% Change

 

3/31/2023

 

% Change

Interest income/expense on

 

 

 

 

 

 

 

 

 

 

Loans

 

$

39,251

 

 

$

37,189

 

 

5.5%

 

$

31,229

 

 

25.7%

Investment securities

 

 

1,246

 

 

 

1,271

 

 

(2.0)%

 

 

1,102

 

 

13.1%

Other interest-earning assets

 

 

3,058

 

 

 

2,491

 

 

22.8%

 

 

2,205

 

 

38.7%

Total interest-earning assets

 

 

43,555

 

 

 

40,951

 

 

6.4%

 

 

34,536

 

 

26.1%

Interest-bearing deposits

 

 

21,967

 

 

 

18,728

 

 

17.3%

 

 

11,913

 

 

84.4%

Borrowings

 

 

589

 

 

 

299

 

 

97.0%

 

 

209

 

 

181.8%

Total interest-bearing liabilities

 

 

22,556

 

 

 

19,027

 

 

18.5%

 

 

12,122

 

 

86.1%

Net interest income

 

$

20,999

 

 

$

21,924

 

 

(4.2)%

 

$

22,414

 

 

(6.3)%

Average balance of

 

 

 

 

 

 

 

 

 

 

Loans

 

$

2,370,027

 

 

$

2,242,457

 

 

5.7%

 

$

2,072,415

 

 

14.4%

Investment securities

 

 

140,459

 

 

 

139,227

 

 

0.9%

 

 

142,079

 

 

(1.1)%

Other interest-earning assets

 

 

217,002

 

 

 

175,336

 

 

23.8%

 

 

186,809

 

 

16.2%

Total interest-earning assets

 

$

2,727,488

 

 

$

2,557,020

 

 

6.7%

 

$

2,401,303

 

 

13.6%

Interest-bearing deposits

 

$

1,827,209

 

 

$

1,650,132

 

 

10.7%

 

$

1,410,812

 

 

29.5%

Borrowings

 

 

42,187

 

 

 

21,000

 

 

100.9%

 

 

15,811

 

 

166.8%

Total interest-bearing liabilities

 

$

1,869,396

 

 

$

1,671,132

 

 

11.9%

 

$

1,426,623

 

 

31.0%

Total funding (1)

 

$

2,412,207

 

 

$

2,249,026

 

 

7.3%

 

$

2,114,198

 

 

14.1%

Annualized average yield/cost of

 

 

 

 

 

 

 

 

 

Loans

 

 

6.66

%

 

 

6.58

%

 

 

 

 

6.11

%

 

 

Investment securities

 

 

3.57

%

 

 

3.62

%

 

 

 

 

3.15

%

 

 

Other interest-earning assets

 

 

5.67

%

 

 

5.64

%

 

 

 

 

4.79

%

 

 

Total interest-earning assets

 

 

6.42

%

 

 

6.35

%

 

 

 

 

5.83

%

 

 

Interest-bearing deposits

 

 

4.84

%

 

 

4.50

%

 

 

 

 

3.42

%

 

 

Borrowings

 

 

5.62

%

 

 

5.65

%

 

 

 

 

5.36

%

 

 

Total interest-bearing liabilities

 

 

4.85

%

 

 

4.52

%

 

 

 

 

3.45

%

 

 

Net interest margin

 

 

3.10

%

 

 

3.40

%

 

 

 

 

3.79

%

 

 

Cost of total funding (1)

 

 

3.76

%

 

 

3.36

%

 

 

 

 

2.33

%

 

 

Supplementary information

 

 

 

 

 

 

 

 

 

 

Net accretion of discount on loans

 

$

573

 

 

$

806

 

 

(28.9)%

 

$

671

 

 

(14.6)%

Net amortization of deferred loan fees

 

$

334

 

 

$

449

 

 

(25.6)%

 

$

175

 

 

90.9%

 

 

 

 

 

 

 

 

 

 

 

(1)

 

Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.

Loans. The increase in average yield for the current quarter was primarily due to increases in overall interest rates on loans, partially offset by decreases in accretion of discount on loans and prepayment fees.

The following table presents a composition of total loans by interest rate type accompanied with the weighted-average contractual rates as of the dates indicated:

 

 

3/31/2024

 

12/31/2023

 

3/31/2023

 

 

% to Total

Loans

 

Weighted-

Average

Contractual

Rate

 

% to Total

Loans

 

Weighted-

Average

Contractual

Rate

 

% to Total

Loans

 

Weighted-

Average

Contractual

Rate

Fixed rate loans

 

20.0%

 

4.92%

 

21.2%

 

4.86%

 

23.4%

 

4.64%

Hybrid rate loans

 

38.6%

 

5.01%

 

39.0%

 

4.93%

 

39.0%

 

4.51%

Variable rate loans

 

41.4%

 

8.46%

 

39.8%

 

8.51%

 

37.6%

 

8.26%

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Securities. The decrease in average yield for the current quarter compared with the previous quarter was primarily due to a decrease in average balance of net unrealized losses on investment securities. The increase for the current quarter compared with the year-ago quarter was primarily due to higher yield on newly purchased investment securities.

Other Interest-Earning Assets. The increase in average yield for the current quarter was primarily due to increases in interest rate on cash held at the Federal Reserve Bank and dividends received on Federal Home Loan Bank stock.

Interest-Bearing Deposits. The increase in average cost for the current quarter was primarily due to an increase in market rates.

Provision (Reversal) for Credit Losses

The following table presents a composition of provision (reversal) for credit losses for the periods indicated:

 

 

Three Months Ended

($ in thousands)

 

3/31/2024

 

12/31/2023

 

% Change

 

3/31/2023

 

% Change

Provision (reversal) for credit losses on loans

 

$

922

 

$

1,935

 

 

(52.4)%

 

$

(2,417

)

 

(138.1)%

Provision (reversal) for credit losses on off-balance sheet credit exposure

 

 

168

 

 

(237

)

 

(170.9)%

 

 

(361

)

 

NM

Total provision (reversal) for credit losses

 

$

1,090

 

$

1,698

 

 

(35.8)%

 

$

(2,778

)

 

(139.2)%

 

 

 

 

 

 

 

 

 

 

 

The provision for credit losses on loans for the current quarter was primarily due to an increase in loan held-for-investment.

Noninterest Income

The following table presents the components of noninterest income for the periods indicated:

 

 

Three Months Ended

($ in thousands)

 

3/31/2024

 

12/31/2023

 

% Change

 

3/31/2023

 

% Change

Gain on sale of loans

 

$

1,078

 

$

803

 

34.2%

 

$

1,309

 

(17.6)%

Service charges and fees on deposits

 

 

378

 

 

391

 

(3.3)%

 

 

344

 

9.9%

Loan servicing income

 

 

919

 

 

751

 

22.4%

 

 

860

 

6.9%

Bank-owned life insurance income

 

 

228

 

 

202

 

12.9%

 

 

180

 

26.7%

Other income

 

 

342

 

 

356

 

(3.9)%

 

 

328

 

4.3%

Total noninterest income

 

$

2,945

 

$

2,503

 

17.7%

 

$

3,021

 

(2.5)%

 

 

 

 

 

 

 

 

 

 

 

Gain on Sale of Loans. The following table presents information on gain on sale of loans for the periods indicated:

 

 

Three Months Ended

($ in thousands)

 

3/31/2024

 

12/31/2023

 

% Change

 

3/31/2023

 

% Change

Gain on sale of SBA loans

 

 

 

 

 

 

 

 

 

 

Sold loan balance

 

$

19,414

 

$

20,751

 

(6.4)%

 

$

27,133

 

(28.4)%

Premium received

 

 

1,596

 

 

1,250

 

27.7%

 

 

2,041

 

(21.8)%

Gain recognized

 

 

1,078

 

 

803

 

34.2%

 

 

1,309

 

(17.6)%

 

 

 

 

 

 

 

 

 

 

 

Loan Servicing Income. The following table presents information on loan servicing income for the periods indicated:

 

 

Three Months Ended

($ in thousands)

 

3/31/2024

 

12/31/2023

 

% Change

 

3/31/2023

 

% Change

Loan servicing income

 

 

 

 

 

 

 

 

 

 

Servicing income received

 

$

1,293

 

 

$

1,290

 

 

0.2%

 

$

1,284

 

 

0.7%

Servicing assets amortization

 

 

(374

)

 

 

(539

)

 

(30.6)%

 

 

(424

)

 

(11.8)%

Loan servicing income

 

$

919

 

 

$

751

 

 

22.4%

 

$

860

 

 

6.9%

Underlying loans at end of period

 

$

540,039

 

 

$

532,231

 

 

1.5%

 

$

540,502

 

 

(0.1)%

 

 

 

 

 

 

 

 

 

 

 

The Company services SBA loans and certain residential property loans sold to the secondary market.

Noninterest Expense

The following table presents the components of noninterest expense for the periods indicated:

 

 

Three Months Ended

($ in thousands)

 

3/31/2024

 

12/31/2023

 

% Change

 

3/31/2023

 

% Change

Salaries and employee benefits

 

$

9,218

 

$

8,397

 

9.8%

 

$

8,928

 

3.2%

Occupancy and equipment

 

 

2,358

 

 

2,145

 

9.9%

 

 

1,896

 

24.4%

Professional fees

 

 

1,084

 

 

898

 

20.7%

 

 

732

 

48.1%

Marketing and business promotion

 

 

319

 

 

772

 

(58.7)%

 

 

372

 

(14.2)%

Data processing

 

 

402

 

 

393

 

2.3%

 

 

412

 

(2.4)%

Director fees and expenses

 

 

232

 

 

207

 

12.1%

 

 

180

 

28.9%

Regulatory assessments

 

 

298

 

 

285

 

4.6%

 

 

155

 

92.3%

Other expense

 

 

2,441

 

 

1,372

 

77.9%

 

 

1,079

 

126.2%

Total noninterest expense

 

$

16,352

 

$

14,469

 

13.0%

 

$

13,754

 

18.9%

 

 

 

 

 

 

 

 

 

 

 

Salaries and Employee Benefits. The increase for the current quarter compared with the previous quarter was primarily due to increases in vacation accrual and other employee benefits. The increase for the current quarter compared with the year-ago quarter was primarily due to increases in salaries and incentives tied to sales of SBA loans originated at loan production offices, partially offset by decreases in bonus and vacation accruals. The number of full-time equivalent employees was 272, 270 and 276 as of March 31, 2024, December 31, 2023 and March 31, 2023, respectively.

Occupancy and Equipment. The increase for the current quarter was primarily due to an expansion of headquarters location in the second half of 2023 and the preparation of a relocation of a regional office and two branches into one location in Orange County, California.

Professional Fees. The increase for the current quarter was primarily due to increases in professional fees related to a core system conversion that was completed in April 2024.

Marketing and Business Promotion. The decrease for the current quarter compared with the previous quarter was primarily due to the Company’s 20th anniversary celebration during the previous quarter.

Other Expense. The increase for the current quarter was primarily due to a termination charge for the legacy core system of $508 thousand and an expense of $815 thousand for a reimbursement for an SBA loan guarantee previously paid by the SBA on a loan originated in 2014 that subsequently defaulted and was ultimately determined to be ineligible for the SBA guaranty. The Company retained the legal services of a law firm specializing on matters equivalent to our recovery demand for SBA to reconsider all the evidences in order for us to recoup it ranging from partial to full amount.

Balance Sheet (Unaudited)

Total assets were $2.85 billion at March 31, 2024, an increase of $64.8 million, or 2.3%, from $2.79 billion at December 31, 2023, and an increase of $353.8 million, or 14.1%, from $2.50 billion at March 31, 2023. The increase for the current quarter was primarily due to increases in loans held-for-investment.

Loans

The following table presents a composition of total loans (includes both loans held-for-sale and loans held-for-investment) as of the dates indicated:

($ in thousands)

 

3/31/2024

 

12/31/2023

 

% Change

 

3/31/2023

 

% Change

Commercial real estate:

 

 

 

 

 

 

 

 

 

 

Commercial property

 

$

874,300

 

$

855,270

 

2.2%

 

$

780,282

 

12.0%

Business property

 

 

578,903

 

 

558,772

 

3.6%

 

 

521,965

 

10.9%

Multifamily

 

 

131,742

 

 

132,500

 

(0.6)%

 

 

127,012

 

3.7%

Construction

 

 

29,212

 

 

24,843

 

17.6%

 

 

15,930

 

83.4%

Total commercial real estate

 

 

1,614,157

 

 

1,571,385

 

2.7%

 

 

1,445,189

 

11.7%

Commercial and industrial

 

 

371,934

 

 

342,002

 

8.8%

 

 

267,674

 

39.0%

Consumer:

 

 

 

 

 

 

 

 

 

 

Residential mortgage

 

 

389,888

 

 

389,420

 

0.1%

 

 

356,967

 

9.2%

Other consumer

 

 

21,985

 

 

20,645

 

6.5%

 

 

22,612

 

(2.8)%

Total consumer

 

 

411,873

 

 

410,065

 

0.4%

 

 

379,579

 

8.5%

Loans held-for-investment

 

 

2,397,964

 

 

2,323,452

 

3.2%

 

 

2,092,442

 

14.6%

Loans held-for-sale

 

 

3,256

 

 

5,155

 

(36.8)%

 

 

14,352

 

(77.3)%

Total loans

 

$

2,401,220

 

$

2,328,607

 

3.1%

 

$

2,106,794

 

14.0%

 

 

 

 

 

 

 

 

 

 

 

SBA loans included in:

 

 

 

 

 

 

 

 

 

 

Loans held-for-investment

 

$

148,316

 

$

145,603

 

1.9%

 

$

144,106

 

2.9%

Loans held-for-sale

 

$

3,256

 

$

5,155

 

(36.8)%

 

$

14,352

 

(77.3)%

 

 

 

 

 

 

 

 

 

 

 

The increase in loans held-for-investment for the current quarter was primarily due to new funding and advances on lines of credit of $468.6 million, partially offset by pay-downs and pay-offs of $393.9 million. The decrease in loans held-for-sale for the current quarter was primarily due to sales of $19.4 million, and pay-downs and pay-offs of $1.6 million, partially offset by new funding of $19.1 million.

The following table presents a composition of off-balance sheet credit exposure as of the dates indicated:

($ in thousands)

 

3/31/2024

 

12/31/2023

 

% Change

 

3/31/2023

 

% Change

Commercial property

 

$

8,687

 

$

11,634

 

(25.3)%

 

$

6,811

 

27.5%

Business property

 

 

10,196

 

 

9,899

 

3.0%

 

 

12,307

 

(17.2)%

Multifamily

 

 

1,800

 

 

1,800

 

—%

 

 

4,500

 

(60.0)%

Construction

 

 

22,895

 

 

23,739

 

(3.6)%

 

 

16,563

 

38.2%

Commercial and industrial

 

 

384,034

 

 

351,025

 

9.4%

 

 

279,543

 

37.4%

Other consumer

 

 

992

 

 

3,421

 

(71.0)%

 

 

399

 

148.6%

Total commitments to extend credit

 

 

428,604

 

 

401,518

 

6.7%

 

 

320,123

 

33.9%

Letters of credit

 

 

6,558

 

 

6,583

 

(0.4)%

 

 

5,400

 

21.4%

Total off-balance sheet credit exposure

 

$

435,162

 

$

408,101

 

6.6%

 

$

325,523

 

33.7%

 

 

 

 

 

 

 

 

 

 

 

Credit Quality

The following table presents a summary of non-performing loans and assets, and classified assets as of the dates indicated:

($ in thousands)

 

3/31/2024

 

12/31/2023

 

% Change

 

3/31/2023

 

% Change

Nonaccrual loans

 

 

 

 

 

 

 

 

 

 

Commercial real estate:

 

 

 

 

 

 

 

 

 

 

Commercial property

 

$

932

 

 

$

958

 

 

(2.7)%

 

$

 

 

NM

Business property

 

 

3,455

 

 

 

2,865

 

 

20.6%

 

 

2,904

 

 

19.0%

Total commercial real estate

 

 

4,387

 

 

 

3,823

 

 

14.8%

 

 

2,904

 

 

51.1%

Commercial and industrial

 

 

111

 

 

 

68

 

 

63.2%

 

 

11

 

 

909.1%

Consumer:

 

 

 

 

 

 

 

 

 

 

Residential mortgage

 

 

436

 

 

 

 

 

NM

 

 

 

 

NM

Other consumer

 

 

6

 

 

 

25

 

 

(76.0)%

 

 

45

 

 

(86.7)%

Total consumer

 

 

442

 

 

 

25

 

 

1,668.0%

 

 

45

 

 

882.2%

Total nonaccrual loans held-for-investment

 

 

4,940

 

 

 

3,916

 

 

26.1%

 

 

2,960

 

 

66.9%

Loans past due 90 days or more and still accruing

 

 

 

 

 

 

 

—%

 

 

 

 

—%

Non-performing loans (“NPLs”)

 

 

4,940

 

 

 

3,916

 

 

26.1%

 

 

2,960

 

 

66.9%

Other real estate owned (“OREO”)

 

 

 

 

 

2,558

 

 

(100.0)%

 

 

 

 

—%

Non-performing assets (“NPAs”)

 

$

4,940

 

 

$

6,474

 

 

(23.7)%

 

$

2,960

 

 

66.9%

Loans past due and still accruing

 

 

 

 

 

 

 

 

 

 

Past due 30 to 59 days

 

$

3,412

 

 

$

1,394

 

 

144.8%

 

$

779

 

 

338.0%

Past due 60 to 89 days

 

 

1,103

 

 

 

34

 

 

3,144.1%

 

 

13

 

 

8,384.6%

Past due 90 days or more

 

 

 

 

 

 

 

—%

 

 

 

 

—%

Total loans past due and still accruing

 

$

4,515

 

 

$

1,428

 

 

216.2%

 

$

792

 

 

470.1%

Special mention loans

 

$

1,101

 

 

$

5,156

 

 

(78.6)%

 

$

5,527

 

 

(80.1)%

Classified assets

 

 

 

 

 

 

 

 

 

Classified loans held-for-investment

 

$

7,771

 

 

$

7,000

 

 

11.0%

 

$

6,060

 

 

28.2%

OREO

 

 

 

 

 

2,558

 

 

(100.0)%

 

 

 

 

—%

Classified assets

 

$

7,771

 

 

$

9,558

 

 

(18.7)%

 

$

6,060

 

 

28.2%

NPLs to loans held-for-investment

 

 

0.21

%

 

 

0.17

%

 

 

 

 

0.14

%

 

 

NPAs to total assets

 

 

0.17

%

 

 

0.23

%

 

 

 

 

0.12

%

 

 

Classified assets to total assets

 

 

0.27

%

 

 

0.34

%

 

 

 

 

0.24

%

 

 

 

 

 

 

 

 

 

 

 

 

 

During the previous quarter, the Company recognized an OREO of $2.6 million by transferring a SBA 7(a) loan, of which its guaranteed portion was previously sold. The Company’s exposure was 25% of the OREO and the SBA was entitled to 75% of the sale price upon the sale of property. The Company sold the property and recognized a gain of $13 thousand during the current quarter.

Allowance for Credit Losses

The following table presents activities in ACL for the periods indicated:

 

 

Three Months Ended

($ in thousands)

 

3/31/2024

 

12/31/2023

 

% Change

 

3/31/2023

 

% Change

ACL on loans

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

27,533

 

 

$

25,599

 

 

7.6%

 

$

24,942

 

 

10.4%

Impact of ASC 326 adoption

 

 

 

 

 

 

 

NM

 

 

1,067

 

 

NM

Charge-offs

 

 

(185

)

 

 

(13

)

 

1,323.1%

 

 

 

 

NM

Recoveries

 

 

62

 

 

 

12

 

 

416.7%

 

 

1,102

 

 

(94.4)%

Provision (reversal) for credit losses on loans

 

 

922

 

 

 

1,935

 

 

(52.4)%

 

 

(2,417

)

 

NM

Balance at end of period

 

$

28,332

 

 

$

27,533

 

 

2.9%

 

$

24,694

 

 

14.7%

Percentage to loans held-for-investment at end of period

 

 

1.18

%

 

 

1.19

%

 

 

 

 

1.18

%

 

 

ACL on off-balance sheet credit exposure

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

1,277

 

 

$

1,514

 

 

(15.7)%

 

$

299

 

 

327.1%

Impact of ASC 326 adoption

 

 

 

 

 

 

 

NM

 

 

1,607

 

 

NM

Provision (reversal) for credit losses on off-balance sheet credit exposure

 

 

168

 

 

 

(237

)

 

NM

 

 

(361

)

 

NM

Balance at end of period

 

$

1,445

 

 

$

1,277

 

 

13.2%

 

$

1,545

 

 

(6.5)%

 

 

 

 

 

 

 

 

 

 

 

On January 1, 2023, the Company adopted the provisions of ASC 326 through the application of the modified retrospective transition approach. The initial adjustment to the ACL reflects the expected lifetime credit losses associated with the composition of financial assets within the scope of ASC 326 as of January 1, 2023, as well as management’s current expectation of future economic conditions. The Company recorded a net decrease of $1.9 million to the beginning balance of retained earnings as of January 1, 2023 for the cumulative effect adjustment, reflecting an initial adjustment to the ACL on loans of $1.1 million and the ACL on off-balance sheet credit exposures of $1.6 million, net of related deferred tax assets arising from temporary differences of $788 thousand.

Investment Securities

Total investment securities were $138.2 million at March 31, 2024, a decrease of $5.2 million, or 3.6%, from $143.3 million at December 31, 2023, and a decrease of $6.5 million, or 4.5%, from $144.7 million at March 31, 2023. The decrease for the current quarter was primarily due to a fair value decrease of $1.6 million, principal pay-downs of $3.5 million and net premium amortization of $41 thousand.

Deposits

The following table presents the Company’s deposit mix as of the dates indicated:

 

 

3/31/2024

 

12/31/2023

 

3/31/2023

($ in thousands)

 

Amount

 

% to

Total

 

Amount

 

% to

Total

 

Amount

 

% to

Total

Noninterest-bearing demand deposits

 

$

538,380

 

22.4%

 

$

594,673

 

25.3%

 

$

653,970

 

30.5%

Interest-bearing deposits

 

 

 

 

 

 

 

 

 

 

 

 

Savings

 

 

6,153

 

0.3%

 

 

6,846

 

0.3%

 

 

7,584

 

0.4%

NOW

 

 

16,232

 

0.7%

 

 

16,825

 

0.7%

 

 

15,696

 

0.7%

Retail money market accounts

 

 

461,221

 

19.0%

 

 

397,531

 

16.8%

 

 

436,906

 

20.3%

Brokered money market accounts

 

 

1

 

0.1%

 

 

1

 

0.1%

 

 

1

 

0.1%

Retail time deposits of

 

 

 

 

 

 

 

 

 

 

 

 

$250,000 or less

 

 

471,528

 

19.6%

 

 

456,293

 

19.4%

 

 

356,049

 

16.6%

More than $250,000

 

 

549,550

 

22.9%

 

 

515,702

 

21.9%

 

 

454,464

 

21.3%

State and brokered time deposits

 

 

359,775

 

15.0%

 

 

363,741

 

15.5%

 

 

217,019

 

10.1%

Total interest-bearing deposits

 

 

1,864,460

 

77.6%

 

 

1,756,939

 

74.7%

 

 

1,487,719

 

69.5%

Total deposits

 

$

2,402,840

 

100.0%

 

$

2,351,612

 

100.0%

 

$

2,141,689

 

100.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated total deposits not covered by deposit insurance

 

$

1,017,696

 

42.4%

 

$

947,294

 

40.3%

 

$

1,019,689

 

47.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

Total retail deposits were $2.04 billion at March 31, 2024, an increase of $55.2 million, or 2.8%, from $1.99 billion at December 31, 2023, and an increase of $118.4 million, or 6.2%, from $1.92 billion at March 31, 2023.

The decrease in noninterest-bearing demand deposits was primarily due to strong deposit market competition and the migration to interest-bearing deposits. To retain existing and attract new customers, the Bank offers competitive rates on deposit products.

The increase in retail time deposits for the current quarter was primarily due to new accounts of $123.2 million, renewals of the matured accounts of $259.1 million and balance increases of $8.7 million, partially offset by matured and closed accounts of $341.9 million.

Liquidity

The following table presents a summary of the Company’s liquidity position as of March 31, 2024:

($ in thousands)

 

3/31/2024

 

12/31/2023

 

% Change

Cash and cash equivalents

 

$

239,791

 

 

$

242,342

 

 

(1.1)%

Cash and cash equivalents to total assets

 

 

8.4

%

 

 

8.7

%

 

 

 

 

 

 

 

 

 

Available borrowing capacity

 

 

 

 

 

 

FHLB advances

 

$

642,726

 

 

$

602,976

 

 

6.6%

Federal Reserve Discount Window

 

 

574,245

 

 

 

528,893

 

 

8.6%

Overnight federal funds lines

 

 

65,000

 

 

 

65,000

 

 

—%

Total

 

$

1,281,971

 

 

$

1,196,869

 

 

7.1%

Total available borrowing capacity to total assets

 

 

44.9

%

 

 

42.9

%

 

 

 

 

 

 

 

 

 

Shareholders’ Equity

Shareholders’ equity was $350.0 million at March 31, 2024, an increase of $1.1 million, or 0.3%, from $348.9 million at December 31, 2023, and an increase of $13.2 million, or 3.9%, from $336.8 million at March 31, 2023. The increase for the current quarter was primarily due to net income, partially offset by an increase in other comprehensive loss of $1.2 million and cash dividends declared on common stock of $2.6 million.

Stock Repurchases

In 2023, the Company repurchased and retired 512,657 shares of common stock at a weighted-average price of $17.22, totaling $8.8 million. The Company did not repurchase any shares of common stock during the current quarter. As of March 31, 2024, the Company is authorized to purchase 592,724 additional shares under the 2023 stock repurchase program, which expires on August 2, 2024.

Preferred Stock Under the Emergency Capital Investment Program

On May 24, 2022, the Company issued 69,141 shares of Senior Non-Cumulative Perpetual Preferred Stock, Series C, liquidation preference of $1,000 per share (“Series C Preferred Stock”) for the capital investment of $69.1 million from the U.S. Treasury under the Emergency Capital Investment Program (“ECIP”). The ECIP investment is treated as tier 1 capital for regulatory capital purposes.

The Series C Preferred Stock bears no dividend for the first 24 months following the investment date. Thereafter, the dividend rate will be adjusted based on the lending growth criteria listed in the terms of the ECIP investment with an annual dividend rate of up to 2%. After the tenth anniversary of the investment date, the dividend rate will be fixed based on the average annual amount of lending in years 2 through 10.

The Company expects to pay the initial quarterly dividend at an annualized dividend rate of 2% beginning in the second quarter of 2024.

Capital Ratios

Based on the Federal Reserve’s Small Bank Holding Company policy, the Company is not currently subject to consolidated minimum capital measurements. At such time as the Company reaches the $3 billion asset level, it will be subject to consolidated capital requirements independent of the Bank. For comparison purposes, the Company’s capital ratios are included in following table, which presents capital ratios for the Company and the Bank as of the dates indicated:

 

 

3/31/2024

 

12/31/2023

 

3/31/2023

 

Well

Capitalized

Requirements

PCB Bancorp

 

 

 

 

 

 

 

 

Common tier 1 capital (to risk-weighted assets)

 

11.88%

 

12.23%

 

13.09%

 

N/A

Total capital (to risk-weighted assets)

 

15.93%

 

16.39%

 

17.61%

 

N/A

Tier 1 capital (to risk-weighted assets)

 

14.71%

 

15.16%

 

16.37%

 

N/A

Tier 1 capital (to average assets)

 

12.73%

 

13.43%

 

13.90%

 

N/A

PCB Bank

 

 

 

 

 

 

 

 

Common tier 1 capital (to risk-weighted assets)

 

14.37%

 

14.85%

 

16.03%

 

6.5%

Total capital (to risk-weighted assets)

 

15.59%

 

16.07%

 

17.27%

 

10.0%

Tier 1 capital (to risk-weighted assets)

 

14.37%

 

14.85%

 

16.03%

 

8.0%

Tier 1 capital (to average assets)

 

12.44%

 

13.16%

 

13.62%

 

5.0%

 

 

 

 

 

 

 

 

 

About PCB Bancorp

PCB Bancorp is the bank holding company for PCB Bank, a California state chartered bank, offering a full suite of commercial banking services to small to medium-sized businesses, individuals and professionals, primarily in Southern California, and predominantly in Korean-American and other minority communities.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan,” or words or phases of similar meaning. We caution that the forward-looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control, including but not limited to the health of the national and local economies including the impact to the Company and its customers resulting from changes to, and the level of, inflation and interest rates; the Company’s ability to maintain and grow its deposit base; loan demand and continued portfolio performance; the impact of adverse developments at other banks, including bank failures, that impact general sentiment regarding the stability and liquidity of banks that could affect the Company’s liquidity, financial performance and stock price; changes to valuations of the Company’s assets and liabilities including the allowance for credit losses, earning assets, and intangible assets; changes to the availability of liquidity sources including borrowing lines and the ability to pledge or sell certain assets; the Company's ability to attract and retain skilled employees; customers' service expectations; cyber security risks; the Company's ability to successfully deploy new technology; acquisitions and branch and loan production office expansions; operational risks including the ability to detect and prevent errors and fraud; the effectiveness of the Company’s enterprise risk management framework; costs related to litigation; changes in laws, rules, regulations, or interpretations to which the Company is subject; the effects of severe weather events, pandemics, other public health crises, acts of war or terrorism, and other external events on our business. These and other important factors are detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and other filings the Company makes with the SEC, which are available at the SEC’s Internet site (http://www.sec.gov) or from the Company without charge. Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise, except as required by law.

PCB Bancorp and Subsidiary

Consolidated Balance Sheets (Unaudited)

($ in thousands, except share and per share data)

 

 

 

3/31/2024

 

12/31/2023

 

% Change

 

3/31/2023

 

% Change

Assets

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

29,432

 

 

$

26,518

 

 

11.0%

 

$

25,801

 

 

14.1%

Interest-bearing deposits in other financial institutions

 

 

210,359

 

 

 

215,824

 

 

(2.5)%

 

 

164,718

 

 

27.7%

Total cash and cash equivalents

 

 

239,791

 

 

 

242,342

 

 

(1.1)%

 

 

190,519

 

 

25.9%

Securities available-for-sale, at fair value

 

 

138,170

 

 

 

143,323

 

 

(3.6)%

 

 

144,665

 

 

(4.5)%

Loans held-for-sale

 

 

3,256

 

 

 

5,155

 

 

(36.8)%

 

 

14,352

 

 

(77.3)%

Loans held-for-investment

 

 

2,397,964

 

 

 

2,323,452

 

 

3.2%

 

 

2,092,442

 

 

14.6%

Allowance for credit losses on loans

 

 

(28,332

)

 

 

(27,533

)

 

2.9%

 

 

(24,694

)

 

14.7%

Net loans held-for-investment

 

 

2,369,632

 

 

 

2,295,919

 

 

3.2%

 

 

2,067,748

 

 

14.6%

Premises and equipment, net

 

 

8,892

 

 

 

5,999

 

 

48.2%

 

 

6,473

 

 

37.4%

Federal Home Loan Bank and other bank stock

 

 

12,716

 

 

 

12,716

 

 

—%

 

 

10,183

 

 

24.9%

Other real estate owned, net

 

 

 

 

 

2,558

 

 

(100.0)%

 

 

 

 

—%

Bank-owned life insurance

 

 

31,045

 

 

 

30,817

 

 

0.7%

 

 

30,244

 

 

2.6%

Deferred tax assets, net

 

 

 

 

 

 

 

—%

 

 

3,753

 

 

(100.0)%

Servicing assets

 

 

6,544

 

 

 

6,666

 

 

(1.8)%

 

 

7,345

 

 

(10.9)%

Operating lease assets

 

 

18,255

 

 

 

18,913

 

 

(3.5)%

 

 

5,854

 

 

211.8%

Accrued interest receivable

 

 

10,394

 

 

 

9,468

 

 

9.8%

 

 

7,998

 

 

30.0%

Other assets

 

 

15,597

 

 

 

15,630

 

 

(0.2)%

 

 

11,390

 

 

36.9%

Total assets

 

$

2,854,292

 

 

$

2,789,506

 

 

2.3%

 

$

2,500,524

 

 

14.1%

Liabilities

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

538,380

 

 

$

594,673

 

 

(9.5)%

 

$

653,970

 

 

(17.7)%

Savings, NOW and money market accounts

 

 

483,607

 

 

 

421,203

 

 

14.8%

 

 

460,187

 

 

5.1%

Time deposits of $250,000 or less

 

 

771,303

 

 

 

760,034

 

 

1.5%

 

 

513,068

 

 

50.3%

Time deposits of more than $250,000

 

 

609,550

 

 

 

575,702

 

 

5.9%

 

 

514,464

 

 

18.5%

Total deposits

 

 

2,402,840

 

 

 

2,351,612

 

 

2.2%

 

 

2,141,689

 

 

12.2%

Federal Home Loan Bank advances

 

 

50,000

 

 

 

39,000

 

 

28.2%

 

 

 

 

NM

Deferred tax liabilities, net

 

 

266

 

 

 

876

 

 

(69.6)%

 

 

 

 

NM

Operating lease liabilities

 

 

19,555

 

 

 

20,137

 

 

(2.9)%

 

 

6,238

 

 

213.5%

Accrued interest payable and other liabilities

 

 

31,626

 

 

 

29,009

 

 

9.0%

 

 

15,767

 

 

100.6%

Total liabilities

 

 

2,504,287

 

 

 

2,440,634

 

 

2.6%

 

 

2,163,694

 

 

15.7%

Commitments and contingent liabilities

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

69,141

 

 

 

69,141

 

 

—%

 

 

69,141

 

 

—%

Common stock

 

 

142,734

 

 

 

142,563

 

 

0.1%

 

 

143,356

 

 

(0.4)%

Retained earnings

 

 

148,209

 

 

 

146,092

 

 

1.4%

 

 

133,415

 

 

11.1%

Accumulated other comprehensive loss, net

 

 

(10,079

)

 

 

(8,924

)

 

12.9%

 

 

(9,082

)

 

11.0%

Total shareholders’ equity

 

 

350,005

 

 

 

348,872

 

 

0.3%

 

 

336,830

 

 

3.9%

Total liabilities and shareholders’ equity

 

$

2,854,292

 

 

$

2,789,506

 

 

2.3%

 

$

2,500,524

 

 

14.1%

 

 

 

 

 

 

 

 

 

 

 

Outstanding common shares

 

 

14,263,791

 

 

 

14,260,440

 

 

 

 

 

14,297,870

 

 

 

Book value per common share (1)

 

$

24.54

 

 

$

24.46

 

 

 

 

$

23.56

 

 

 

TCE per common share (2)

 

$

19.69

 

 

$

19.62

 

 

 

 

$

18.72

 

 

 

Total loan to total deposit ratio

 

 

99.93

%

 

 

99.02

%

 

 

 

 

98.37

%

 

 

Noninterest-bearing deposits to total deposits

 

 

22.41

%

 

 

25.29

%

 

 

 

 

30.54

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

 

The ratios are calculated by dividing total shareholders equity by the number of outstanding common shares. The Company did not have any intangible equity components for the presented periods.

(2)

 

Non-GAAP. See “Non-GAAP Measures” for reconciliation of this measure to its most comparable GAAP measure.

PCB Bancorp and Subsidiary

Consolidated Statements of Income (Unaudited)

($ in thousands, except share and per share data)

 

 

 

Three Months Ended

 

 

3/31/2024

 

12/31/2023

 

% Change

 

3/31/2023

 

% Change

Interest and dividend income

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

39,251

 

 

$

37,189

 

 

5.5%

 

$

31,229

 

 

25.7%

Investment securities

 

 

1,246

 

 

 

1,271

 

 

(2.0)%

 

 

1,102

 

 

13.1%

Other interest-earning assets

 

 

3,058

 

 

 

2,491

 

 

22.8%

 

 

2,205

 

 

38.7%

Total interest income

 

 

43,555

 

 

 

40,951

 

 

6.4%

 

 

34,536

 

 

26.1%

Interest expense

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

21,967

 

 

 

18,728

 

 

17.3%

 

 

11,913

 

 

84.4%

Other borrowings

 

 

589

 

 

 

299

 

 

97.0%

 

 

209

 

 

181.8%

Total interest expense

 

 

22,556

 

 

 

19,027

 

 

18.5%

 

 

12,122

 

 

86.1%

Net interest income

 

 

20,999

 

 

 

21,924

 

 

(4.2)%

 

 

22,414

 

 

(6.3)%

Provision (reversal) for credit losses

 

 

1,090

 

 

 

1,698

 

 

(35.8)%

 

 

(2,778

)

 

NM

Net interest income after provision (reversal) for credit losses

 

 

19,909

 

 

 

20,226

 

 

(1.6)%

 

 

25,192

 

 

(21.0)%

Noninterest income

 

 

 

 

 

 

 

 

 

 

Gain on sale of loans

 

 

1,078

 

 

 

803

 

 

34.2%

 

 

1,309

 

 

(17.6)%

Service charges and fees on deposits

 

 

378

 

 

 

391

 

 

(3.3)%

 

 

344

 

 

9.9%

Loan servicing income

 

 

919

 

 

 

751

 

 

22.4%

 

 

860

 

 

6.9%

Bank-owned life insurance income

 

 

228

 

 

 

202

 

 

12.9%

 

 

180

 

 

26.7%

Other income

 

 

342

 

 

 

356

 

 

(3.9)%

 

 

328

 

 

4.3%

Total noninterest income

 

 

2,945

 

 

 

2,503

 

 

17.7%

 

 

3,021

 

 

(2.5)%

Noninterest expense

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

9,218

 

 

 

8,397

 

 

9.8%

 

 

8,928

 

 

3.2%

Occupancy and equipment

 

 

2,358

 

 

 

2,145

 

 

9.9%

 

 

1,896

 

 

24.4%

Professional fees

 

 

1,084

 

 

 

898

 

 

20.7%

 

 

732

 

 

48.1%

Marketing and business promotion

 

 

319

 

 

 

772

 

 

(58.7)%

 

 

372

 

 

(14.2)%

Data processing

 

 

402

 

 

 

393

 

 

2.3%

 

 

412

 

 

(2.4)%

Director fees and expenses

 

 

232

 

 

 

207

 

 

12.1%

 

 

180

 

 

28.9%

Regulatory assessments

 

 

298

 

 

 

285

 

 

4.6%

 

 

155

 

 

92.3%

Other expense

 

 

2,441

 

 

 

1,372

 

 

77.9%

 

 

1,079

 

 

126.2%

Total noninterest expense

 

 

16,352

 

 

 

14,469

 

 

13.0%

 

 

13,754

 

 

18.9%

Income before income taxes

 

 

6,502

 

 

 

8,260

 

 

(21.3)%

 

 

14,459

 

 

(55.0)%

Income tax expense

 

 

1,817

 

 

 

2,352

 

 

(22.7)%

 

 

4,162

 

 

(56.3)%

Net income

 

$

4,685

 

 

$

5,908

 

 

(20.7)%

 

$

10,297

 

 

(54.5)%

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.33

 

 

$

0.41

 

 

 

 

$

0.71

 

 

 

Diluted

 

$

0.33

 

 

$

0.41

 

 

 

 

$

0.70

 

 

 

Average common shares

 

 

 

 

 

 

 

 

 

 

Basic

 

 

14,235,419

 

 

 

14,223,831

 

 

 

 

 

14,419,155

 

 

 

Diluted

 

 

14,330,204

 

 

 

14,316,581

 

 

 

 

 

14,574,929

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend paid per common share

 

$

0.18

 

 

$

0.18

 

 

 

 

$

0.15

 

 

 

Return on average assets (1)

 

 

0.67

%

 

 

0.89

%

 

 

 

 

1.69

%

 

 

Return on average shareholders’ equity (1)

 

 

5.39

%

 

 

6.82

%

 

 

 

 

12.46

%

 

 

Return on average TCE (1), (2)

 

 

6.72

%

 

 

8.54

%

 

 

 

 

15.70

%

 

 

Efficiency ratio (3)

 

 

68.29

%

 

 

59.23

%

 

 

 

 

54.08

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

 

Ratios are presented on an annualized basis.

(2)

 

Non-GAAP. See “Non-GAAP Measures” for reconciliation of this measure to its most comparable GAAP measure.

(3)

 

The ratios are calculated by dividing noninterest expense by the sum of net interest income and noninterest income.

PCB Bancorp and Subsidiary

Average Balance, Average Yield, and Average Rate (Unaudited)

($ in thousands)

 

 

 

Three Months Ended

 

 

3/31/2024

 

12/31/2023

 

3/31/2023

 

 

Average

Balance

 

Interest

Income/

Expense

 

Avg.

Yield/

Rate(6)

 

Average

Balance

 

Interest

Income/

Expense

 

Avg.

Yield/

Rate(6)

 

Average

Balance

 

Interest

Income/

Expense

 

Avg.

Yield/

Rate(6)

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans (1)

 

$

2,370,027

 

 

$

39,251

 

6.66%

 

$

2,242,457

 

 

$

37,189

 

6.58%

 

$

2,072,415

 

 

$

31,229

 

6.11%

Mortgage-backed securities

 

 

101,852

 

 

 

839

 

3.31%

 

 

100,500

 

 

 

855

 

3.38%

 

 

97,578

 

 

 

683

 

2.84%

Collateralized mortgage obligation

 

 

23,763

 

 

 

254

 

4.30%

 

 

23,970

 

 

 

259

 

4.29%

 

 

26,743

 

 

 

256

 

3.88%

SBA loan pool securities

 

 

7,317

 

 

 

78

 

4.29%

 

 

7,453

 

 

 

81

 

4.31%

 

 

9,027

 

 

 

82

 

3.68%

Municipal bonds (2)

 

 

3,300

 

 

 

28

 

3.41%

 

 

3,110

 

 

 

29

 

3.70%

 

 

4,221

 

 

 

34

 

3.27%

Corporate bonds

 

 

4,227

 

 

 

47

 

4.47%

 

 

4,194

 

 

 

47

 

4.45%

 

 

4,510

 

 

 

47

 

4.23%

Other interest-earning assets

 

 

217,002

 

 

 

3,058

 

5.67%

 

 

175,336

 

 

 

2,491

 

5.64%

 

 

186,809

 

 

 

2,205

 

4.79%

Total interest-earning assets

 

 

2,727,488

 

 

 

43,555

 

6.42%

 

 

2,557,020

 

 

 

40,951

 

6.35%

 

 

2,401,303

 

 

 

34,536

 

5.83%

Noninterest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

21,365

 

 

 

 

 

 

 

23,034

 

 

 

 

 

 

 

21,155

 

 

 

 

 

ACL on loans

 

 

(27,577

)

 

 

 

 

 

 

(25,663

)

 

 

 

 

 

 

(26,757

)

 

 

 

 

Other assets

 

 

88,532

 

 

 

 

 

 

 

87,759

 

 

 

 

 

 

 

75,175

 

 

 

 

 

Total noninterest-earning assets

 

 

82,320

 

 

 

 

 

 

 

85,130

 

 

 

 

 

 

 

69,573

 

 

 

 

 

Total assets

 

$

2,809,808

 

 

 

 

 

 

$

2,642,150

 

 

 

 

 

 

$

2,470,876

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

$

453,801

 

 

 

4,665

 

4.13%

 

$

450,408

 

 

 

4,418

 

3.89%

 

$

485,962

 

 

 

3,445

 

2.87%

Savings

 

 

6,196

 

 

 

4

 

0.26%

 

 

6,947

 

 

 

4

 

0.23%

 

 

8,099

 

 

 

5

 

0.25%

Time deposits

 

 

1,367,212

 

 

 

17,298

 

5.09%

 

 

1,192,777

 

 

 

14,306

 

4.76%

 

 

916,751

 

 

 

8,463

 

3.74%

Total interest-bearing deposits

 

 

1,827,209

 

 

 

21,967

 

4.84%

 

 

1,650,132

 

 

 

18,728

 

4.50%

 

��

1,410,812

 

 

 

11,913

 

3.42%

Other borrowings

 

 

42,187

 

 

 

589

 

5.62%

 

 

21,000

 

 

 

299

 

5.65%

 

 

15,811

 

 

 

209

 

5.36%

Total interest-bearing liabilities

 

 

1,869,396

 

 

 

22,556

 

4.85%

 

 

1,671,132

 

 

 

19,027

 

4.52%

 

 

1,426,623

 

 

 

12,122

 

3.45%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

 

542,811

 

 

 

 

 

 

 

577,894

 

 

 

 

 

 

 

687,575

 

 

 

 

 

Other liabilities

 

 

47,957

 

 

 

 

 

 

 

49,389

 

 

 

 

 

 

 

21,509

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

590,768

 

 

 

 

 

 

 

627,283

 

 

 

 

 

 

 

709,084

 

 

 

 

 

Total liabilities

 

 

2,460,164

 

 

 

 

 

 

 

2,298,415

 

 

 

 

 

 

 

2,135,707

 

 

 

 

 

Total shareholders’ equity

 

 

349,644

 

 

 

 

 

 

 

343,735

 

 

 

 

 

 

 

335,169

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

2,809,808

 

 

 

 

 

 

$

2,642,150

 

 

 

 

 

 

$

2,470,876

 

 

 

 

 

Net interest income

 

 

 

$

20,999

 

 

 

 

 

$

21,924

 

 

 

 

 

$

22,414

 

 

Net interest spread (3)

 

 

 

 

 

1.57%

 

 

 

 

 

1.83%

 

 

 

 

 

2.38%

Net interest margin (4)

 

 

 

 

 

3.10%

 

 

 

 

 

3.40%

 

 

 

 

 

3.79%

Total deposits

 

$

2,370,020

 

 

$

21,967

 

3.73%

 

$

2,228,026

 

 

$

18,728

 

3.33%

 

$

2,098,387

 

 

$

11,913

 

2.30%

Total funding (5)

 

$

2,412,207

 

 

$

22,556

 

3.76%

 

$

2,249,026

 

 

$

19,027

 

3.36%

 

$

2,114,198

 

 

$

12,122

 

2.33%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

 

Total loans include both loans held-for-sale and loans held-for-investment.

(2)

 

The yield on municipal bonds has not been computed on a tax-equivalent basis.

(3)

 

Net interest spread is calculated by subtracting average rate on interest-bearing liabilities from average yield on interest-earning assets.

(4)

 

Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets.

(5)

 

Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.

(6)

 

Annualized.

PCB Bancorp and Subsidiary

Non-GAAP Measures

($ in thousands)

Return on average tangible common equity, tangible common equity per common share and tangible common equity to total assets ratios

The Company's TCE is calculated by subtracting preferred stock from shareholders’ equity. The Company does not have any intangible assets for the presented periods. Return on average TCE, TCE per common share, and TCE to total assets constitute supplemental financial information determined by methods other than in accordance with GAAP. These non-GAAP measures are used by management in its analysis of the Company's performance. These non-GAAP measures should not be viewed as substitutes for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP measures that may be presented by other companies. The following tables provide reconciliations of the non-GAAP measures with financial measures defined by GAAP.

($ in thousands)

 

 

Three Months Ended

 

 

3/31/2024

 

12/31/2023

 

3/31/2023

Average total shareholders' equity

(a)

 

$

349,644

 

 

$

343,735

 

 

$

335,169

 

Less: average preferred stock

(b)

 

 

69,141

 

 

 

69,141

 

 

 

69,141

 

Average TCE

(c)=(a)-(b)

 

$

280,503

 

 

$

274,594

 

 

$

266,028

 

Net income

(d)

 

$

4,685

 

 

$

5,908

 

 

$

10,297

 

Return on average shareholder's equity (1)

(d)/(a)

 

 

5.39

%

 

 

6.82

%

 

 

12.46

%

Return on average TCE (1)

(d)/(c)

 

 

6.72

%

 

 

8.54

%

 

 

15.70

%

 

 

 

 

 

 

 

 

(1) Annualized.

 

($ in thousands, except per share data)

 

 

3/31/2024

 

12/31/2023

 

3/31/2023

Total shareholders' equity

(a)

 

$

350,005

 

 

$

348,872

 

 

$

336,830

 

Less: preferred stock

(b)

 

 

69,141

 

 

 

69,141

 

 

 

69,141

 

TCE

(c)=(a)-(b)

 

$

280,864

 

 

$

279,731

 

 

$

267,689

 

Outstanding common shares

(d)

 

 

14,263,791

 

 

 

14,260,440

 

 

 

14,297,870

 

Book value per common share

(a)/(d)

 

$

24.54

 

 

$

24.46

 

 

$

23.56

 

TCE per common share

(c)/(d)

 

$

19.69

 

 

$

19.62

 

 

$

18.72

 

Total assets

(e)

 

$

2,854,292

 

 

$

2,789,506

 

 

$

2,500,524

 

Total shareholders' equity to total assets

(a)/(e)

 

 

12.26

%

 

 

12.51

%

 

 

13.47

%

TCE to total assets

(c)/(e)

 

 

9.84

%

 

 

10.03

%

 

 

10.71

%

 

 

 

 

 

 

 

 

 

Contacts

Timothy Chang

Executive Vice President & Chief Financial Officer

213-210-2000

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