PCB Bancorp Reports Earnings of $8.6 million for Q1 2021 and Declares $0.10 Quarterly Cash Dividend

PCB Bancorp (the “Company”) (NASDAQ: PCB), the holding company of Pacific City Bank (the “Bank”), today reported net income of $8.6 million, or $0.55 per diluted common share for the first quarter of 2021, compared with $5.8 million, or $0.38 per diluted common share, for the previous quarter and $3.6 million, or $0.23 per diluted common share, for the year-ago quarter.

Q1 2021 Highlights

  • Net income totaled $8.6 million or $0.55 per diluted common share;
    • The Company recorded a provision (reversal) for loan losses of $(1.1) million for the current quarter compared with $2.1 million for the previous quarter and $2.9 million for the year-ago quarter.
    • Allowance for loan losses to total loans held-for-investment ratio was 1.51% at March 31, 2021 compared with 1.67% at December 31, 2020 and 1.15% at March 31, 2020. Excluding U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans, allowance for loan losses to total loans held-for-investment ratio was 1.74% and 1.83% at March 31, 2021 and December 31, 2020, respectively.
    • Net interest margin was 3.70% for the first quarter of 2021 compared with 3.64% for the previous quarter and 3.85% for the year-ago quarter.
  • Total assets were $2.05 billion at March 31, 2021, an increase of $127.8 million, or 6.6%, from $1.92 billion at December 31, 2020 and an increase of $250.7 million, or 13.9%, from $1.80 billion at March 31, 2020;
  • Loans held-for-investment, net of deferred costs (fees), were $1.69 billion at March 31, 2021, an increase of $102.3 million, or 6.5%, from $1.58 billion at December 31, 2020 and an increase of $234.9 million, or 16.2%, from $1.45 billion at March 31, 2020;
    • SBA PPP loans totaled $218.7 million and $135.7 million at March 31, 2021 and December 31, 2020, respectively. During the current quarter, the Company funded $104.3 million of SBA PPP loans.
    • Loans under modified terms related to COVID-19 totaled $19.8 million and $36.1 million at March 31, 2021 and December 31, 2020, respectively.
  • Total deposits were $1.75 billion at March 31, 2021, an increase of $158.9 million from $1.59 billion at December 31, 2020 and an increase of $276.3 million, or 18.7%, from $1.48 billion at March 31, 2020;
  • Announced a repurchase program on April 8, 2021 for the repurchase up to 5% of outstanding common stock, which represented 775,000 shares, through September 7, 2021; and
  • Declared a cash dividend of $0.10 per share on April 22, 2021. This represents the 25th consecutive quarterly dividend paid by PCB Bancorp.

“We are pleased to announce a record quarter driven by strong core income, positive credit trends and an improving economic outlook that resulted in a release of loan loss reserves,” said Henry Kim, President and Chief Executive Officer. “Our allowance to loan losses remain robust at 1.74% excluding SBA PPP loans and we continue to successfully reduce our cost of deposits resulting an expansion of net interest margin to 3.70% compared with 3.64% in the fourth quarter of 2020. This solid performance is the result of our dedicated team of people who reached out to the customers at the height of the pandemic to genuinely serve and to find solutions to their unprecedented situations.”

“Our 2021 first quarter results reflect our sound underwriting and our focus on relationship banking. We are well prepared to expand on this successful momentum as the economy continues to reopen and look forward to the remainder of this year.”

Financial Highlights (Unaudited)

($ in thousands, except per share data)

 

Three Months Ended

 

3/31/2021

 

12/31/2020

 

% Change

 

3/31/2020

 

% Change

Net income

 

$

8,560

 

 

 

$

5,787

 

 

47.9

 

%

 

$

3,572

 

 

139.6

 

%

Diluted earnings per common share

 

$

0.55

 

 

 

$

0.38

 

 

44.7

 

%

 

$

0.23

 

 

139.1

 

%

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

17,819

 

 

 

$

17,407

 

 

2.4

 

%

 

$

16,566

 

 

7.6

 

%

Provision (reversal) for loan losses

 

(1,147

)

 

 

2,142

 

 

(153.5

)

%

 

2,896

 

 

(139.6

)

%

Noninterest income

 

2,857

 

 

 

4,524

 

 

(36.8

)

%

 

2,026

 

 

41.0

 

%

Noninterest expense

 

9,669

 

 

 

11,550

 

 

(16.3

)

%

 

10,567

 

 

(8.5

)

%

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (1)

 

1.75

 

%

 

1.19

%

 

 

 

0.81

%

 

 

Return on average shareholders’ equity (1), (2)

 

14.66

 

%

 

9.92

%

 

 

 

6.35

%

 

 

Net interest margin (1)

 

3.70

 

%

 

3.64

%

 

 

 

3.85

%

 

 

Efficiency ratio (3)

 

46.76

 

%

 

52.67

%

 

 

 

56.84

%

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in thousands, except per share data)

 

3/31/2021

 

12/31/2020

 

% Change

 

3/31/2020

 

% Change

Total assets

 

$

2,050,672

 

 

$

1,922,853

 

 

6.6

%

 

$

1,799,937

 

 

13.9

%

Net loans held-for-investment

 

1,660,402

 

 

1,557,068

 

 

6.6

%

 

1,434,364

 

 

15.8

%

Total deposits

 

1,753,771

 

 

1,594,851

 

 

10.0

%

 

1,477,442

 

 

18.7

%

Book value per common share (2), (4)

 

$

15.53

 

 

$

15.19

 

 

2.2

%

 

$

14.58

 

 

6.5

%

Tier 1 leverage ratio (consolidated)

 

12.03

%

 

11.94

%

 

 

 

12.57

%

 

 

Total shareholders’ equity to total assets (2)

 

11.72

%

 

12.16

%

 

 

 

12.45

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Ratios are presented on an annualized basis.

(2)

The Company did not have any intangible equity components for the presented periods.

(3)

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

(4)

The ratios are calculated by dividing total shareholdersequity by the number of outstanding common shares.

COVID-19 Pandemic

The ongoing COVID-19 pandemic, and governmental and societal responses thereto, have had a severe impact on recent global economic and market conditions, including significant disruption of, and volatility in, financial markets; global supply chain disruptions; and the institution of social distancing and shelter-in-place requirements that have resulted in temporary closures of many businesses, lost revenues, and increased unemployment throughout the U.S., but also specifically in California, where most of the Company’s operations and a large majority of its customers are located.

Since the beginning of the crisis, the Company has taken a number of steps to protect the safety of its employees and to support its customers. The Company has enabled its staff to work remotely and established safety measures within its bank premises and branches for both employees and customers.

In order to support its customers, the Company has been in close contact with its customers, assessing the level of impact on their businesses, and putting a process in place to evaluate each client’s specific situation and provide relief programs where appropriate. SBA PPP loans totaled $218.7 million (2,249 loans) and loans under modified terms related to the COVID-19 pandemic totaled $19.8 million (18 loan customers) as of March 31, 2021. The Company had received SBA PPP forgiveness of $23.7 million for 440 SBA PPP loans as of March 31, 2021. On January 13, 2021, SBA began accepting applications for second draw PPP loans and the Company had funded $104.3 million (1,072 loans) as of March 31, 2021. The Company is accepting applications and will continue to receive applications as long as funding remains available.

In addition, the Company has been monitoring its liquidity and capital closely. As of March 31, 2021, the Company maintained $211.8 million, or 10.3% of total assets, of cash and cash equivalents and $540.1 million, or 26.3% of total assets, of available borrowing capacity. All regulatory capital ratios were also well above the regulatory well capitalized requirements as of March 31, 2021.

At this time, the Company cannot estimate the long term impact of the COVID-19 pandemic, but these conditions impacted and are expected to impact its business, results of operations, and financial condition negatively.

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)

 

3/31/2021

 

12/31/2020

 

% Change

 

3/31/2020

 

% Change

Interest income/expense on

 

 

 

 

 

 

 

 

 

 

Loans

 

$

18,744

 

 

$

18,929

 

 

(1.0

)

%

 

$

20,406

 

 

(8.1

)

%

Investment securities

 

360

 

 

429

 

 

(16.1

)

%

 

644

 

 

(44.1

)

%

Other interest-earning assets

 

154

 

 

150

 

 

2.7

 

%

 

610

 

 

(74.8

)

%

Total interest-earning assets

 

19,258

 

 

19,508

 

 

(1.3

)

%

 

21,660

 

 

(11.1

)

%

Interest-bearing deposits

 

1,311

 

 

1,958

 

 

(33.0

)

%

 

4,992

 

 

(73.7

)

%

Borrowings

 

128

 

 

143

 

 

(10.5

)

%

 

102

 

 

25.5

 

%

Total interest-bearing liabilities

 

1,439

 

 

2,101

 

 

(31.5

)

%

 

5,094

 

 

(71.8

)

%

Net interest income

 

$

17,819

 

 

$

17,407

 

 

2.4

 

%

 

$

16,566

 

 

7.6

 

%

Average balance of

 

 

 

 

 

 

 

 

 

 

Loans

 

$

1,641,634

 

 

$

1,592,705

 

 

3.1

 

%

 

$

1,454,727

 

 

12.8

 

%

Investment securities

 

123,851

 

 

123,785

 

 

0.1

 

%

 

118,502

 

 

4.5

 

%

Other interest-earning assets

 

189,153

 

 

187,592

 

 

0.8

 

%

 

158,793

 

 

19.1

 

%

Total interest-earning assets

 

$

1,954,638

 

 

$

1,904,082

 

 

2.7

 

%

 

$

1,732,022

 

 

12.9

 

%

Interest-bearing deposits

 

$

1,053,845

 

 

$

1,050,369

 

 

0.3

 

%

 

$

1,129,699

 

 

(6.7

)

%

Borrowings

 

75,556

 

 

91,467

 

 

(17.4

)

%

 

25,117

 

 

200.8

 

%

Total interest-bearing liabilities

 

$

1,129,401

 

 

$

1,141,836

 

 

(1.1

)

%

 

$

1,154,816

 

 

(2.2

)

%

Total funding (1)

 

$

1,736,477

 

 

$

1,691,758

 

 

2.6

 

%

 

$

1,524,334

 

 

13.9

 

%

Annualized average yield/cost of

 

 

 

 

 

 

 

 

 

 

Loans

 

4.63

%

 

4.73

%

 

 

 

5.64

%

 

 

Investment securities

 

1.18

%

 

1.38

%

 

 

 

2.19

%

 

 

Other interest-earning assets

 

0.33

%

 

0.32

%

 

 

 

1.55

%

 

 

Total interest-earning assets

 

4.00

%

 

4.08

%

 

 

 

5.03

%

 

 

Interest-bearing deposits

 

0.50

%

 

0.74

%

 

 

 

1.78

%

 

 

Borrowings

 

0.69

%

 

0.62

%

 

 

 

1.63

%

 

 

Total interest-bearing liabilities

 

0.52

%

 

0.73

%

 

 

 

1.77

%

 

 

Net interest margin

 

3.70

%

 

3.64

%

 

 

 

3.85

%

 

 

Cost of total funding (1)

 

0.34

%

 

0.49

%

 

 

 

1.34

%

 

 

Supplementary information

 

 

 

 

 

 

 

 

 

 

Net accretion of discount on loans

 

$

745

 

 

$

991

 

 

(24.8

)

%

 

$

858

 

 

(13.2

)

%

Net amortization of deferred loan fees (costs)

 

$

1,220

 

 

$

913

 

 

33.6

 

%

 

$

121

 

 

908.3

 

%

 

 

 

 

 

 

 

 

 

 

 

(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 decrease in average yield for the current quarter compared with the previous quarter was primarily due to an increase in SBA PPP loans and a decrease in net accretion of discount on loans, partially offset by an increase in net amortization of deferred loan fees from the increased SBA PPP loan production. The decrease in average yield for the current quarter compared with the year-ago quarter was primarily due to the increase in SBA PPP loans, partially offset by the increase in net amortization of deferred loan 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:

 

 

3/31/2021

 

12/31/2020

 

3/31/2020

 

 

% to Total

Loans

 

Weighted-

Average

Contractual

Rate

 

% to Total

Loans

 

Weighted-

Average

Contractual

Rate

 

% to Total

Loans

 

Weighted-

Average

Contractual

Rate

Fixed rate loans

 

36.3

%

 

3.44

%

 

31.7

%

 

3.86

%

 

30.2

%

 

5.19

%

Hybrid rate loans

 

19.3

%

 

4.77

%

 

20.8

%

 

4.82

%

 

14.6

%

 

5.01

%

Variable rate loans

 

44.4

%

 

4.04

%

 

47.5

%

 

4.06

%

 

55.2

%

 

4.41

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Securities. The decreases in average yield for the current quarter compared with the previous and year-ago quarters were primarily due to new investment securities purchased at lower market rates and an increase in premium amortization. During the current quarter and past 12-months period, the Company purchased investment securities of $20.2 million and $52.1 million, respectively.

Other Interest-Earning Assets. The decrease in average yield for the current quarter compared with the year-ago quarter was primarily due to the lower market rates. The increase in average balance for the current quarter compared with the year-ago quarter was primarily due to an increase in deposits and other borrowings as the Company maintains most of its cash at the Federal Reserve Bank account. For additional detail, please see the discussion for the current quarter in “Deposits” under the “Balance Sheet” discussion.

Interest-Bearing Deposits. The decreases in average cost for the current quarter compared with the previous and year-ago quarters were primarily due to the continuing decreases in market rates.

Borrowings. The increase in average cost for the current quarter compared with the previous quarter was primarily due to matured borrowings with lower interest rates during the current quarter. During the current quarter, a FHLB advance of $40.0 million with a rate of 0.59% matured. At March 31, 2021, the Company had a total outstanding FHLB advances of $40.0 million with a weighted-average rate of 0.76%.

Provision (reversal) for Loan Losses

Provision (reversal) for loan losses was $(1.1) million for the current quarter compared with $2.1 million for the previous quarter and $2.9 million for the year-ago quarter. The reversal for the current quarter was primarily due to improvement in historical loss factors and qualitative adjustment factors reflecting general economic condition. The Company recorded net charge-offs (recoveries) of $(151) thousand for the current quarter compared with $178 thousand for the previous quarter and $601 thousand for the year-ago quarter.

The following table presents allowance for loan losses to total loans held-for-investment ratio for the dates indicated:

($ in thousands)

 

3/31/2021

 

12/31/2020

 

3/31/2020

Total loans held-for-investment

 

$

1,685,916

 

 

$

1,583,578

 

 

$

1,451,038

 

Less: SBA PPP loans

 

218,709

 

 

135,654

 

 

 

Total loans held-for-investment, excluding SBA PPP loans

 

$

1,467,207

 

 

$

1,447,924

 

 

$

1,451,038

 

Allowance for loan losses

 

$

25,514

 

 

$

26,510

 

 

$

16,674

 

Allowance for loan losses to total loans held-for-investment

 

1.51

%

 

1.67

%

 

1.15

%

Allowance for loan losses to total loans held-for-investment, excluding SBA PPP loans

 

1.74

%

 

1.83

%

 

1.15

%

 

 

 

 

 

 

 

Noninterest Income

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

 

 

Three Months Ended

($ in thousands)

 

3/31/2021

 

12/31/2020

 

% Change

 

3/31/2020

 

% Change

Gain on sale of loans

 

$

1,322

 

 

$

3,483

 

 

(62.0

)

%

 

$

725

 

 

82.3

 

%

Service charges and fees on deposits

 

293

 

 

311

 

 

(5.8

)

%

 

390

 

 

(24.9

)

%

Loan servicing income

 

882

 

 

398

 

 

121.6

 

%

 

554

 

 

59.2

 

%

Other income

 

360

 

 

332

 

 

8.4

 

%

 

357

 

 

0.8

 

%

Total noninterest income

 

$

2,857

 

 

$

4,524

 

 

(36.8

)

%

 

$

2,026

 

 

41.0

 

%

 

 

 

 

 

 

 

 

 

 

 

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)

 

3/31/2021

 

12/31/2020

 

% Change

 

3/31/2020

 

% Change

Gain on sale of SBA loans

 

 

 

 

 

 

 

 

 

 

Sold loan balance

 

$

10,919

 

 

$

42,413

 

 

(74.3

)

%

 

$

11,715

 

 

(6.8

)

%

Premium received

 

1,309

 

 

4,441

 

 

(70.5

)

%

 

1,056

 

 

24.0

 

%

Gain recognized

 

1,195

 

 

3,197

 

 

(62.6

)

%

 

704

 

 

69.7

 

%

Gain on sale of residential property loans

 

 

 

 

 

 

 

 

 

 

Sold loan balance

 

$

8,279

 

 

$

27,139

 

 

(69.5

)

%

 

$

2,079

 

 

298.2

 

%

Gain recognized

 

127

 

 

286

 

 

(55.6

)

%

 

21

 

 

504.8

 

%

 

 

 

 

 

 

 

 

 

 

 

The decrease in gain on sale of SBA loans compared with the previous quarter was primarily due to a higher sales volume in the previous quarter from the SBA loans held-for-sale of $26.8 million at September 30, 2020. The decrease in gain on sale of residential property loans was primarily due to the sales of residential property loans held-for-sale of $4.0 million at September 30, 2020 and an increased origination resulted from a higher demand for refinancing from the lower market rates during the previous quarter.

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

 

 

Three Months Ended

($ in thousands)

 

3/31/2021

 

12/31/2020

 

% Change

 

3/31/2020

 

% Change

Loan servicing income

 

 

 

 

 

 

 

 

 

 

Servicing income received

 

$

1,273

 

 

 

$

961

 

 

 

32.5

 

%

 

$

1,158

 

 

 

9.9

 

%

Servicing assets amortization

 

(391

)

 

 

(563

)

 

 

(30.6

)

%

 

(604

)

 

 

(35.3

)

%

Loan servicing income

 

$

882

 

 

 

$

398

 

 

 

121.6

 

%

 

$

554

 

 

 

59.2

 

%

Underlying loans at end of period

 

$

492,981

 

 

 

$

498,795

 

 

 

(1.2

)

%

 

$

478,748

 

 

 

3.0

 

%

 

 

 

 

 

 

 

 

 

 

 

The Company services SBA loans and certain residential property loans that are sold to the secondary market. The increases for the current quarter compared with the previous and year-ago quarters were primarily due to an increase in servicing income received and a decrease in servicing asset amortization from a decrease in loan payoffs.

Noninterest Expense

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

 

 

Three Months Ended

($ in thousands)

 

3/31/2021

 

12/31/2020

 

% Change

 

3/31/2020

 

% Change

Salaries and employee benefits

 

$

6,182

 

 

$

7,397

 

 

(16.4

)

%

 

$

6,551

 

 

(5.6

)

%

Occupancy and equipment

 

1,371

 

 

1,424

 

 

(3.7

)

%

 

1,380

 

 

(0.7

)

%

Professional fees

 

494

 

 

625

 

 

(21.0

)

%

 

797

 

 

(38.0

)

%

Marketing and business promotion

 

138

 

 

440

 

 

(68.6

)

%

 

179

 

 

(22.9

)

%

Data processing

 

377

 

 

375

 

 

0.5

 

%

 

358

 

 

5.3

 

%

Director fees and expenses

 

138

 

 

146

 

 

(5.5

)

%

 

221

 

 

(37.6

)

%

Regulatory assessments

 

208

 

 

250

 

 

(16.8

)

%

 

219

 

 

(5.0

)

%

Other expenses

 

761

 

 

893

 

 

(14.8

)

%

 

862

 

 

(11.7

)

%

Total noninterest expense

 

$

9,669

 

 

$

11,550

 

 

(16.3

)

%

 

$

10,567

 

 

(8.5

)

%

 

 

 

 

 

 

 

 

 

 

 

Salaries and Employee Benefits. The decrease for the current quarter compared with the previous quarter was primarily due to direct loan origination cost of $750 thousand related to SBA PPP loan production, which offsets the recognition of salaries and benefits expense, and decreases in bonus accrual and other employee benefits during the current quarter. Compared with the year-ago quarter, the decrease was primarily due to the SBA PPP loan direct loan origination cost and a decrease in other employee benefits, partially offset by an increase in bonus accrual.

Professional Fees. The decrease for the current quarter compared with the previous quarter was primarily due to increased other professional fees during the previous quarter as a part of the year-end processes. Compared with the year-ago quarter, the decrease was primarily due to a decrease in expenses related to the Bank’s Bank Secrecy Act and Anti-Money Laundering (“BSA/AML”) compliance enhancements. The consent order related to the BSA/AML compliance was terminated on September 30, 2020.

Marketing and business promotion. The decrease for the current quarter compared with the previous quarter was primarily due to the year-end promotion during the previous quarter and a decrease in advertisement. The decrease for the current quarter compared with the year-ago quarter was primarily due to fewer marketing activities related to the COVID-19 pandemic.

Regulatory Assessments. The decreases for the current quarter compared with the previous and year-ago quarters were primarily due to a decrease in the assessment base as SBA PPP loans are excluded from the assessment base.

Balance Sheet (Unaudited)

Total assets were $2.05 billion at March 31, 2021, an increase of $127.8 million, or 6.6%, from $1.92 billion at December 31, 2020 and an increase of $250.7 million, or 13.9%, from $1.80 billion at March 31, 2020. The increase for the current quarter was primarily due to increases in loans held-for-investment, cash and cash equivalents, and investment securities. The increase in cash and cash equivalents for the current quarter was primarily due to an increase in deposits, partially offset by increases in loans held-for-investment and investment securities and a decrease in other borrowings.

Loans

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

($ in thousands)

 

3/31/2021

 

12/31/2020

 

% Change

 

3/31/2020

 

% Change

Real estate loans

 

 

 

 

 

 

 

 

 

 

Commercial property

 

$

922,536

 

 

$

880,736

 

 

4.7

 

%

 

$

812,484

 

 

13.5

 

%

Residential property

 

190,990

 

 

198,431

 

 

(3.7

)

%

 

227,492

 

 

(16.0

)

%

SBA property

 

125,989

 

 

126,570

 

 

(0.5

)

%

 

125,322

 

 

0.5

 

%

Construction

 

13,151

 

 

15,199

 

 

(13.5

)

%

 

19,178

 

 

(31.4

)

%

Commercial and industrial loans

 

 

 

 

 

 

 

 

 

 

Commercial term

 

80,361

 

 

87,250

 

 

(7.9

)

%

 

101,943

 

 

(21.2

)

%

Commercial lines of credit

 

91,970

 

 

96,087

 

 

(4.3

)

%

 

116,873

 

 

(21.3

)

%

SBA commercial term

 

21,078

 

 

21,878

 

 

(3.7

)

%

 

24,745

 

 

(14.8

)

%

SBA PPP

 

218,709

 

 

135,654

 

 

61.2

 

%

 

 

 

 

%

Other consumer loans

 

21,132

 

 

21,773

 

 

(2.9

)

%

 

23,001

 

 

(8.1

)

%

Loans held-for-investment

 

1,685,916

 

 

1,583,578

 

 

6.5

 

%

 

1,451,038

 

 

16.2

 

%

Loans held-for-sale

 

3,569

 

 

1,979

 

 

80.3

 

%

 

16,191

 

 

(78.0

)

%

Total loans

 

$

1,689,485

 

 

$

1,585,557

 

 

6.6

 

%

 

$

1,467,229

 

 

15.1

 

%

 

 

 

 

 

 

 

 

 

 

 

The increase in loans held-for-investment for the current quarter was primarily due to new funding of $190.4 million and advances on lines of credit of $27.8 million, partially offset by pay-downs and pay-offs of $115.4 million. SBA PPP loan production contributed significantly to the Company’s loan growth for the current quarter.

The increase in loans held-for-sale for the current quarter was primarily due to new funding of $20.4 million, partially offset by sales of $19.2 million.

The following table presents a composition of commitments to extend credit as of the dates indicated:

($ in thousands)

 

3/31/2021

 

12/31/2020

 

% Change

 

3/31/2020

 

% Change

Real estate loans

 

 

 

 

 

 

 

 

 

 

Commercial property

 

$

20,003

 

 

$

21,016

 

 

(4.8

)

%

 

$

14,393

 

 

39.0

 

%

SBA property

 

3,677

 

 

540

 

 

580.9

 

%

 

421

 

 

773.4

 

%

Construction

 

13,588

 

 

13,986

 

 

(2.8

)

%

 

17,761

 

 

(23.5

)

%

Commercial and industrial loans

 

 

 

 

 

 

 

 

 

 

Commercial term

 

1,000

 

 

1,000

 

 

 

%

 

1,034

 

 

(3.3

)

%

Commercial lines of credit

 

168,381

 

 

156,870

 

 

7.3

 

%

 

143,228

 

 

17.6

 

%

SBA commercial term

 

 

 

 

 

 

%

 

912

 

 

(100.0

)

%

Other consumer loans

 

96

 

 

84

 

 

14.3

 

%

 

38

 

 

152.6

 

%

Total commitments to extend credit

 

$

206,745

 

 

$

193,496

 

 

6.8

 

%

 

$

177,787

 

 

16.3

 

%

 

 

 

 

 

 

 

 

 

 

 

Credit Quality

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

($ in thousands)

 

3/31/2021

 

12/31/2020

 

% Change

 

3/31/2020

 

% Change

Nonaccrual loans

 

 

 

 

 

 

 

 

 

 

Real estate loans

 

 

 

 

 

 

 

 

 

��

Commercial property

 

$

 

 

$

524

 

 

(100.0

)

%

 

$

 

 

 

%

Residential property

 

 

 

189

 

 

(100.0

)

%

 

 

 

 

%

SBA property

 

841

 

 

885

 

 

(5.0

)

%

 

$

1,461

 

 

(42.4

)

%

Commercial and industrial loans

 

 

 

 

 

 

 

 

 

 

Commercial lines of credit

 

 

 

904

 

 

(100.0

)

%

 

2,182

 

 

(100.0

)

%

SBA commercial term

 

568

 

 

595

 

 

(4.5

)

%

 

430

 

 

32.1

 

%

Other consumer loans

 

52

 

 

66

 

 

(21.2

)

%

 

10

 

 

420.0

 

%

Total nonaccrual loans held-for-investment

 

1,461

 

 

3,163

 

 

(53.8

)

%

 

4,083

 

 

(64.2

)

%

Loans past due 90 days or more and still accruing

 

 

 

 

 

 

%

 

 

 

 

%

Non-performing loans (“NPLs”)

 

1,461

 

 

3,163

 

 

(53.8

)

%

 

4,083

 

 

(64.2

)

%

Other real estate owned (“OREO”)

 

2,336

 

 

1,401

 

 

66.7

 

%

 

376

 

 

521.3

 

%

Non-performing assets (“NPAs”)

 

$

3,797

 

 

$

4,564

 

 

(16.8

)

%

 

$

4,459

 

 

(14.8

)

%

Loans past due and still accruing

 

 

 

 

 

 

 

 

 

 

Past due 30 to 59 days

 

$

56

 

 

$

302

 

 

(81.5

)

%

 

$

1,584

 

 

(96.5

)

%

Past due 60 to 89 days

 

52

 

 

36

 

 

44.4

 

%

 

46

 

 

13.0

 

%

Past due 90 days or more

 

 

 

 

 

 

%

 

 

 

 

%

Total loans past due and still accruing

 

$

108

 

 

$

338

 

 

(68.0

)

%

 

$

1,630

 

 

(93.4

)

%

Troubled debt restructurings (“TDRs”)

 

 

 

 

 

 

 

 

 

Accruing TDRs

 

$

620

 

 

$

634

 

 

(2.2

)

%

 

$

679

 

 

(8.7

)

%

Nonaccrual TDRs

 

33

 

 

5

 

 

560.0

 

%

 

145

 

 

(77.2

)

%

Total TDRs

 

$

653

 

 

$

639

 

 

2.2

 

%

 

$

82

 

 

(20.8

)

%

Special mention loans

 

$

17,997

 

 

$

16,461

 

 

9.3

 

%

 

$

72

 

 

24,895.8

 

%

Classified assets

 

 

 

 

 

 

 

 

 

Classified loans

 

$

7,090

 

 

$

10,130

 

 

(30.0

)

%

 

$

6,519

 

 

8.8

 

%

OREO

 

2,336

 

 

1,401

 

 

66.7

 

%

 

376

 

 

521.3

 

%

Classified assets

 

$

9,426

 

 

$

11,531

 

 

(18.3

)

%

 

$

6,895

 

 

36.7

 

%

NPLs to loans held-for-investment

 

0.09

%

 

0.20

%

 

 

 

0.28

%

 

 

NPAs to total assets

 

0.19

%

 

0.24

%

 

 

 

0.25

%

 

 

Classified assets to total assets

 

0.46

%

 

0.60

%

 

 

 

0.38

%

 

 

 

 

 

 

 

 

 

 

 

 

 

The increase in special mention was primarily due to downgrades of loans under modified terms related to the COVID-19 pandemic. Loans that are granted modifications related to the COVID-19 pandemic in excess of 6 months, on a cumulative basis, are classified as special mention or classified.

Special mention loans included $16.4 million and $14.9 million of loans under modified terms related to the COVID-19 pandemic at March 31, 2021 and December 31, 2020, respectively. The special mention loans under modified terms related to the COVID-19 pandemic included 2 commercial property loans totaling $11.9 million, 4 commercial term loans totaling $4.3 million, and a SBA property loan of $252 thousand at March 31, 2021.

Classified loans included $1.2 million and $1.9 million of loans under modified terms related to the COVID-19 pandemic at March 31, 2021 and December 31, 2020, respectively.

Loan Modifications Related to the COVID-19 Pandemic

The Company provided modifications, including interest only payments or payment deferrals, to customers that were adversely affected by the COVID-19 pandemic. The loan modifications met all criteria under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Therefore, the modified loans were not considered TDRs. Total loans under modified terms related to the COVID-19 pandemic were $19.8 million at March 31, 2021, a decrease of $16.3 million, or 45.1%, from $36.1 million at December 31, 2020 and a decrease of $464.2 million, or 95.9%, from $484.0 million at June 30, 2020.

The following table presents a summary of loans under modified terms related to the COVID-19 pandemic by portfolio segment as of March 31, 2021:

 

 

Modification Type

 

 

 

Weighted-

Average

Contractual

Rate

 

Accrued

Interest

Receivable

($ in thousands)

 

Payment

Deferment

 

Interest Only

Payment

 

Total

 

 

Real estate loans

 

 

 

 

 

 

 

 

 

 

Commercial property

 

$

 

 

$

11,830

 

 

$

11,830

 

 

3.59

%

 

$

77

 

Residential property

 

349

 

 

 

 

349

 

 

3.25

%

 

5

 

SBA property

 

 

 

1,627

 

 

1,627

 

 

4.94

%

 

27

 

Commercial and industrial loans

 

 

 

 

 

 

 

 

 

 

Commercial term

 

 

 

5,506

 

 

5,506

 

 

3.88

%

 

92

 

SBA commercial term

 

 

 

513

 

 

513

 

 

5.50

%

 

3

 

Total

 

$

349

 

 

$

19,476

 

 

$

19,825

 

 

3.82

%

 

$

204

 

 

 

 

 

 

 

 

 

 

 

 

Investment Securities

Total investment securities were $127.1 million at March 31, 2021, an increase of $6.6 million, or 5.5%, from $120.5 million at December 31, 2020 and an increase of $8.8 million, or 7.5%, from $118.3 million at March 31, 2020.

The increase for the current quarter was primarily due to purchases of $20.2 million, partially offset by principal pay-downs and calls of $11.8 million and net premium amortization of $310 thousand.

On June 30, 2020, the Company transferred securities held-to-maturity to securities available-for-sale as a part of the Company’s liquidity management plan in response to the COVID-19 pandemic. The Company transferred all of securities held-to-maturity of $18.8 million to securities available-for-sale, which resulted in a pre-tax increase to accumulated other comprehensive income of $787 thousand.

Deposits

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

 

 

3/31/2021

 

12/31/2020

 

3/31/2020

($ in thousands)

 

Amount

 

% to Total

 

Amount

 

% to Total

 

Amount

 

% to Total

Noninterest-bearing demand deposits

 

$

715,719

 

 

40.8

%

 

$

538,009

 

 

33.7

%

 

$

394,084

 

 

26.7

%

Interest-bearing deposits

 

 

 

 

 

 

 

 

 

 

 

 

Savings

 

11,271

 

 

0.6

%

 

10,481

 

 

0.7

%

 

6,569

 

 

0.4

%

NOW

 

19,380

 

 

1.1

%

 

21,604

 

 

1.4

%

 

18,608

 

 

1.3

%

Retail money market accounts

 

381,704

 

 

21.7

%

 

351,739

 

 

22.0

%

 

338,850

 

 

22.9

%

Brokered money market accounts

 

4

 

 

0.1

%

 

25,002

 

 

1.6

%

 

10,006

 

 

0.7

%

Retail time deposits of

 

 

 

 

 

 

 

 

 

 

 

 

$250,000 or less

 

276,232

 

 

15.8

%

 

299,431

 

 

18.7

%

 

362,408

 

 

24.5

%

More than $250,000

 

166,845

 

 

9.5

%

 

168,683

 

 

10.6

%

 

176,970

 

 

12.0

%

Time deposits from internet rate service providers

 

17,616

 

 

1.0

%

 

24,902

 

 

1.6

%

 

5,447

 

 

0.4

%

State and brokered time deposits

 

165,000

 

 

9.4

%

 

155,000

 

 

9.7

%

 

164,500

 

 

11.1

%

Total interest-bearing deposits

 

1,038,052

 

 

59.2

%

 

1,056,842

 

 

66.3

%

 

1,083,358

 

 

73.3

%

Total deposits

 

$

1,753,771

 

 

100.0

%

 

$

1,594,851

 

 

100.0

%

 

$

1,477,442

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

The increase in noninterest-bearing demand deposits for the current year was primarily due to the overall liquid deposit market. During the current quarter, a total of $91.4 million of SBA PPP loans were funded through the Bank’s noninterest-bearing demand deposits and deposit customers also received $10.1 million of SBA Economic Injury Disaster Loans.

The decrease in retail time deposits for the current quarter was primarily due to matured and closed accounts of $195.6 million, partially offset by new accounts of $31.6 million and renewals of the matured accounts of $136.2 million.

Liquidity

The following table presents a summary of the Company’s liquidity position as of March 31, 2021:

($ in thousands)

 

3/31/2021

Cash and cash equivalents

 

$

211,780

 

Cash and cash equivalents to total assets

 

10.3

%

 

 

 

Available borrowing capacity

 

 

FHLB advances

 

$

440,705

 

Federal Reserve Discount Window

 

34,373

 

Overnight federal funds lines

 

65,000

 

Total

 

$

540,078

 

Total available borrowing capacity to total assets

 

26.3

%

 

 

 

Shareholders’ Equity

Shareholders’ equity was $240.3 million at March 31, 2021, an increase of $6.5 million, or 2.8%, from $233.8 million at December 31, 2020 and an increase of $16.1 million, or 7.2%, from $224.1 million at March 31, 2020. The increase for the current quarter was primarily due to net income, partially offset by a cash dividend declared on common stock of $1.5 million.

Capital Ratios

Based on changes to the Federal Reserve’s definition of a “Small Bank Holding Company” that increased the threshold to $3 billion in assets in August 2018, the Company is not currently subject to separate minimum capital measurements. At such time as the Company reaches the $3 billion asset level, it will again be subject to capital measurements independent of the Bank. For comparison purposes, the Company’s ratios are included in following discussion. The following table presents capital ratios for the Company and the Bank as of dates indicated:

 

 

3/31/2021

 

12/31/2020

 

3/31/2020

 

Well

Capitalized

Requirements

PCB Bancorp

 

 

 

 

 

 

 

 

Common tier 1 capital (to risk-weighted assets)

 

15.92

%

 

15.97

%

 

15.53

%

 

N/A

Total capital (to risk-weighted assets)

 

17.17

%

 

17.22

%

 

16.71

%

 

N/A

Tier 1 capital (to risk-weighted assets)

 

15.92

%

 

15.97

%

 

15.53

%

 

N/A

Tier 1 capital (to average assets)

 

12.03

%

 

11.94

%

 

12.57

%

 

N/A

Pacific City Bank

 

 

 

 

 

 

 

 

Common tier 1 capital (to risk-weighted assets)

 

15.62

%

 

15.70

%

 

15.28

%

 

6.5%

Total capital (to risk-weighted assets)

 

16.88

%

 

16.95

%

 

16.47

%

 

10.0%

Tier 1 capital (to risk-weighted assets)

 

15.62

%

 

15.70

%

 

15.28

%

 

8.0%

Tier 1 capital (to average assets)

 

11.81

%

 

11.74

%

 

12.37

%

 

5.0%

 

 

 

 

 

 

 

 

 

Declaration of Quarterly Cash Dividend

On April 22, 2021, the Company’s Board of Directors declared a quarterly cash dividend of $0.10 per common share. The dividend will be paid on or about May 14, 2021, to shareholders of record as of the close of business on May 7, 2021.

About PCB Bancorp

PCB Bancorp, formerly known as Pacific City Financial Corporation, is the bank holding company for Pacific City 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 our borrowers’ actual payment performance as loan deferrals related to the COVID-19 pandemic expire, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to the COVID-19 pandemic, including the potential adverse impact of loan modifications and payment deferrals implemented consistent with recent regulatory guidance, and the general economic uncertainty caused by the COVID-19 pandemic, and government and societal responses thereto. These and other important factors are detailed in various securities law filings made periodically by the Company, copies of which are available 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 we do 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)

 

 

3/31/2021

 

12/31/2020

 

% Change

 

3/31/2020

 

% Change

Assets

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

16,764

 

 

 

$

19,605

 

 

 

(14.5

)

%

 

$

14,880

 

 

 

12.7

 

%

Interest-bearing deposits in other financial institutions

 

195,016

 

 

 

174,493

 

 

 

11.8

 

%

 

174,039

 

 

 

12.1

 

%

Total cash and cash equivalents

 

211,780

 

 

 

194,098

 

 

 

9.1

 

%

 

188,919

 

 

 

12.1

 

%

Securities available-for-sale, at fair value

 

127,114

 

 

 

120,527

 

 

 

5.5

 

%

 

98,568

 

 

 

29.0

 

%

Securities held-to-maturity

 

 

 

 

 

 

 

 

%

 

19,711

 

 

 

(100.0

)

%

Total investment securities

 

127,114

 

 

 

120,527

 

 

 

5.5

 

%

 

118,279

 

 

 

7.5

 

%

Loans held-for-sale

 

3,569

 

 

 

1,979

 

 

 

80.3

 

%

 

16,191

 

 

 

(78.0

)

%

Loans held-for-investment, net of deferred loan costs (fees)

 

1,685,916

 

 

 

1,583,578

 

 

 

6.5

 

%

 

1,451,038

 

 

 

16.2

 

%

Allowance for loan losses

 

(25,514

)

 

 

(26,510

)

 

 

(3.8

)

%

 

(16,674

)

 

 

53.0

 

%

Net loans held-for-investment

 

1,660,402

 

 

 

1,557,068

 

 

 

6.6

 

%

 

1,434,364

 

 

 

15.8

 

%

Premises and equipment, net

 

3,774

 

 

 

4,048

 

 

 

(6.8

)

%

 

4,797

 

 

 

(21.3

)

%

Federal Home Loan Bank and other bank stock

 

8,447

 

 

 

8,447

 

 

 

 

%

 

8,345

 

 

 

1.2

 

%

Other real estate owned, net

 

2,336

 

 

 

1,401

 

 

 

66.7

 

%

 

376

 

 

 

521.3

 

%

Deferred tax assets, net

 

8,170

 

 

 

8,120

 

 

 

0.6

 

%

 

5,140

 

 

 

58.9

 

%

Servicing assets

 

6,253

 

 

 

6,400

 

 

 

(2.3

)

%

 

6,358

 

 

 

(1.7

)

%

Operating lease assets

 

7,145

 

 

 

7,616

 

 

 

(6.2

)

%

 

8,393

 

 

 

(14.9

)

%

Accrued interest receivable

 

7,523

 

 

 

9,334

 

 

 

(19.4

)

%

 

4,706

 

 

 

59.9

 

%

Other assets

 

4,159

 

 

 

3,815

 

 

 

9.0

 

%

 

4,069

 

 

 

2.2

 

%

Total assets

 

$

2,050,672

 

 

 

$

1,922,853

 

 

 

6.6

 

%

 

$

1,799,937

 

 

 

13.9

 

%

Liabilities

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

715,719

 

 

 

$

538,009

 

 

 

33.0

 

%

 

$

394,084

 

 

 

81.6

 

%

Savings, NOW and money market accounts

 

412,359

 

 

 

408,826

 

 

 

0.9

 

%

 

374,033

 

 

 

10.2

 

%

Time deposits of $250,000 or less

 

358,848

 

 

 

379,333

 

 

 

(5.4

)

%

 

442,355

 

 

 

(18.9

)

%

Time deposits of more than $250,000

 

266,845

 

 

 

268,683

 

 

 

(0.7

)

%

 

266,970

 

 

 

 

%

Total deposits

 

1,753,771

 

 

 

1,594,851

 

 

 

10.0

 

%

 

1,477,442

 

 

 

18.7

 

%

Federal Home Loan Bank advances

 

40,000

 

 

 

80,000

 

 

 

(50.0

)

%

 

80,000

 

 

 

(50.0

)

%

Operating lease liabilities

 

7,935

 

 

 

8,455

 

 

 

(6.2

)

%

 

9,349

 

 

 

(15.1

)

%

Accrued interest payable and other liabilities

 

8,703

 

 

 

5,759

 

 

 

51.1

 

%

 

9,021

 

 

 

(3.5

)

%

Total liabilities

 

1,810,409

 

 

 

1,689,065

 

 

 

7.2

 

%

 

1,575,812

 

 

 

14.9

 

%

Commitments and contingent liabilities

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

 

 

 

 

Common stock, no par value

 

164,698

 

 

 

164,140

 

 

 

0.3

 

%

 

163,532

 

 

 

0.7

 

%

Retained earnings

 

74,707

 

 

 

67,692

 

 

 

10.4

 

%

 

59,702

 

 

 

25.1

 

%

Accumulated other comprehensive income, net

 

858

 

 

 

1,956

 

 

 

(56.1

)

%

 

891

 

 

 

(3.7

)

%

Total shareholders’ equity

 

240,263

 

 

 

233,788

 

 

 

2.8

 

%

 

224,125

 

 

 

7.2

 

%

Total liabilities and shareholders’ equity

 

$

2,050,672

 

 

 

$

1,922,853

 

 

 

6.6

 

%

 

$

1,799,937

 

 

 

13.9

 

%

 

 

 

 

 

 

 

 

 

 

 

Outstanding common shares

 

15,468,242

 

 

 

15,385,878

 

 

 

 

 

15,370,086

 

 

 

 

Book value per common share (1)

 

$

15.53

 

 

 

$

15.19

 

 

 

 

 

$

14.58

 

 

 

 

Total loan to total deposit ratio

 

96.33

 

%

 

99.42

 

%

 

 

 

99.31

 

%

 

 

Noninterest-bearing deposits to total deposits

 

40.81

 

%

 

33.73

 

%

 

 

 

26.67

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(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.

PCB Bancorp and Subsidiary

Consolidated Statements of Income (Unaudited)

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

 

 

Three Months Ended

 

 

3/31/2021

 

12/31/2020

 

% Change

 

3/31/2020

 

% Change

Interest and dividend income

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

18,744

 

 

 

$

18,929

 

 

(1.0

)

%

 

$

20,406

 

 

(8.1

)

%

Investment securities

 

360

 

 

 

429

 

 

(16.1

)

%

 

644

 

 

(44.1

)

%

Other interest-earning assets

 

154

 

 

 

150

 

 

2.7

 

%

 

610

 

 

(74.8

)

%

Total interest income

 

19,258

 

 

 

19,508

 

 

(1.3

)

%

 

21,660

 

 

(11.1

)

%

Interest expense

 

 

 

 

 

 

 

 

 

 

Deposits

 

1,311

 

 

 

1,958

 

 

(33.0

)

%

 

4,992

 

 

(73.7

)

%

Other borrowings

 

128

 

 

 

143

 

 

(10.5

)

%

 

102

 

 

25.5

 

%

Total interest expense

 

1,439

 

 

 

2,101

 

 

(31.5

)

%

 

5,094

 

 

(71.8

)

%

Net interest income

 

17,819

 

 

 

17,407

 

 

2.4

 

%

 

16,566

 

 

7.6

 

%

Provision (reversal) for loan losses

 

(1,147

)

 

 

2,142

 

 

(153.5

)

%

 

2,896

 

 

(139.6

)

%

Net interest income after provision (reversal) for loan losses

 

18,966

 

 

 

15,265

 

 

24.2

 

%

 

13,670

 

 

38.7

 

%

Noninterest income

 

 

 

 

 

 

 

 

 

 

Gain on sale of loans

 

1,322

 

 

 

3,483

 

 

(62.0

)

%

 

725

 

 

82.3

 

%

Service charges and fees on deposits

 

293

 

 

 

311

 

 

(5.8

)

%

 

390

 

 

(24.9

)

%

Loan servicing income

 

882

 

 

 

398

 

 

121.6

 

%

 

554

 

 

59.2

 

%

Other income

 

360

 

 

 

332

 

 

8.4

 

%

 

357

 

 

0.8

 

%

Total noninterest income

 

2,857

 

 

 

4,524

 

 

(36.8

)

%

 

2,026

 

 

41.0

 

%

Noninterest expense

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

6,182

 

 

 

7,397

 

 

(16.4

)

%

 

6,551

 

 

(5.6

)

%

Occupancy and equipment

 

1,371

 

 

 

1,424

 

 

(3.7

)

%

 

1,380

 

 

(0.7

)

%

Professional fees

 

494

 

 

 

625

 

 

(21.0

)

%

 

797

 

 

(38.0

)

%

Marketing and business promotion

 

138

 

 

 

440

 

 

(68.6

)

%

 

179

 

 

(22.9

)

%

Data processing

 

377

 

 

 

375

 

 

0.5

 

%

 

358

 

 

5.3

 

%

Director fees and expenses

 

138

 

 

 

146

 

 

(5.5

)

%

 

221

 

 

(37.6

)

%

Regulatory assessments

 

208

 

 

 

250

 

 

(16.8

)

%

 

219

 

 

(5.0

)

%

Other expenses

 

761

 

 

 

893

 

 

(14.8

)

%

 

862

 

 

(11.7

)

%

Total noninterest expense

 

9,669

 

 

 

11,550

 

 

(16.3

)

%

 

10,567

 

 

(8.5

)

%

Income before income taxes

 

12,154

 

 

 

8,239

 

 

47.5

 

%

 

5,129

 

 

137.0

 

%

Income tax expense

 

3,594

 

 

 

2,452

 

 

46.6

 

%

 

1,557

 

 

130.8

 

%

Net income

 

$

8,560

 

 

 

$

5,787

 

 

47.9

 

%

 

$

3,572

 

 

139.6

 

%

Earnings per common share

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.55

 

 

 

$

0.38

 

 

 

 

$

0.23

 

 

 

Diluted

 

$

0.55

 

 

 

$

0.38

 

 

 

 

$

0.23

 

 

 

Average common shares

 

 

 

 

 

 

 

 

 

 

Basic

 

15,384,343

 

 

 

15,350,742

 

 

 

 

15,505,699

 

 

 

Diluted

 

15,533,608

 

 

 

15,392,355

 

 

 

 

15,700,144

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend paid per common share

 

$

0.10

 

 

 

$

0.10

 

 

 

 

$

0.10

 

 

 

Return on average assets (1)

 

1.75

 

%

 

1.19

%

 

 

 

0.81

%

 

 

Return on average shareholders’ equity (1), (2)

 

14.66

 

%

 

9.92

%

 

 

 

6.35

%

 

 

Efficiency ratio (3)

 

46.76

 

%

 

52.67

%

 

 

 

56.84

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Ratios are presented on an annualized basis.

(2)

The Company did not have any intangible equity components for the presented periods.

(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

 

 

3/31/2021

 

12/31/2020

 

3/31/2020

 

 

Average

Balance

 

Interest

Income/

Expense

 

Avg.

Yield/Rate

 

Average

Balance

 

Interest

Income/

Expense

 

Avg.

Yield/Rate

 

Average

Balance

 

Interest

Income/

Expense

 

Avg.

Yield/Rate

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans (1)

 

$

1,641,634

 

 

 

$

18,744

 

 

4.63

%

 

$

1,592,705

 

 

 

$

18,929

 

 

4.73

%

 

$

1,454,727

 

 

 

$

20,406

 

 

5.64

%

Mortgage-backed securities

 

81,486

 

 

 

215

 

 

1.07

%

 

76,787

 

 

 

275

 

 

1.42

%

 

57,503

 

 

 

329

 

 

2.30

%

Collateralized mortgage obligation

 

24,888

 

 

 

57

 

 

0.93

%

 

28,743

 

 

 

60

 

 

0.83

%

 

41,408

 

 

 

198

 

 

1.92

%

SBA loan pool securities

 

11,673

 

 

 

52

 

 

1.81

%

 

12,432

 

 

 

57

 

 

1.82

%

 

13,872

 

 

 

79

 

 

2.29

%

Municipal bonds (2)

 

5,804

 

 

 

36

 

 

2.52

%

 

5,823

 

 

 

37

 

 

2.53

%

 

5,719

 

 

 

38

 

 

2.67

%

Other interest-earning assets

 

189,153

 

 

 

154

 

 

0.33

%

 

187,592

 

 

 

150

 

 

0.32

%

 

158,793

 

 

 

610

 

 

1.55

%

Total interest-earning assets

 

1,954,638

 

 

 

19,258

 

 

4.00

%

 

1,904,082

 

 

 

19,508

 

 

4.08

%

 

1,732,022

 

 

 

21,660

 

 

5.03

%

Noninterest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

19,072

 

 

 

 

 

 

 

18,188

 

 

 

 

 

 

 

18,850

 

 

 

 

 

 

Allowance for loan losses

 

(26,870

)

 

 

 

 

 

 

(25,699

)

 

 

 

 

 

 

(14,399

)

 

 

 

 

 

Other assets

 

40,377

 

 

 

 

 

 

 

42,755

 

 

 

 

 

 

 

34,312

 

 

 

 

 

 

Total noninterest-earning assets

 

32,579

 

 

 

 

 

 

 

35,244

 

 

 

 

 

 

 

38,763

 

 

 

 

 

 

Total assets

 

$

1,987,217

 

 

 

 

 

 

 

$

1,939,326

 

 

 

 

 

 

 

$

1,770,785

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

$

407,623

 

 

 

333

 

 

0.33

%

 

$

383,507

 

 

 

327

 

 

0.34

%

 

$

364,604

 

 

 

1,119

 

 

1.23

%

Savings

 

10,609

 

 

 

1

 

 

0.04

%

 

11,037

 

 

 

1

 

 

0.04

%

 

6,614

 

 

 

3

 

 

0.18

%

Time deposits

 

635,613

 

 

 

977

 

 

0.62

%

 

655,825

 

 

 

1,630

 

 

0.99

%

 

758,481

 

 

 

3,870

 

 

2.05

%

Total interest-bearing deposits

 

1,053,845

 

 

 

1,311

 

 

0.50

%

 

1,050,369

 

 

 

1,958

 

 

0.74

%

 

1,129,699

 

 

 

4,992

 

 

1.78

%

Federal Home Loan Bank advances

 

75,556

 

 

 

128

 

 

0.69

%

 

91,467

 

 

 

143

 

 

0.62

%

 

25,117

 

 

 

102

 

 

1.63

%

Total interest-bearing liabilities

 

1,129,401

 

 

 

1,439

 

 

0.52

%

 

1,141,836

 

 

 

2,101

 

 

0.73

%

 

1,154,816

 

 

 

5,094

 

 

1.77

%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

607,076

 

 

 

 

 

 

 

549,922

 

 

 

 

 

 

 

369,518

 

 

 

 

 

 

Other liabilities

 

13,950

 

 

 

 

 

 

 

15,412

 

 

 

 

 

 

 

20,365

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

621,026

 

 

 

 

 

 

 

565,334

 

 

 

 

 

 

 

389,883

 

 

 

 

 

 

Total liabilities

 

1,750,427

 

 

 

 

 

 

 

1,707,170

 

 

 

 

 

 

 

1,544,699

 

 

 

 

 

 

Total shareholders’ equity

 

236,790

 

 

 

 

 

 

 

232,156

 

 

 

 

 

 

 

226,086

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

1,987,217

 

 

 

 

 

 

 

$

1,939,326

 

 

 

 

 

 

 

$

1,770,785

 

 

 

 

 

 

Net interest income

 

 

 

$

17,819

 

 

 

 

 

 

$

17,407

 

 

 

 

 

 

$

16,566

 

 

 

Net interest spread (3)

 

 

 

 

 

3.48

%

 

 

 

 

 

3.35

%

 

 

 

 

 

3.26

%

Net interest margin (4)

 

 

 

 

 

3.70

%

 

 

 

 

 

3.64

%

 

 

 

 

 

3.85

%

Total deposits

 

$

1,660,921

 

 

 

$

1,311

 

 

0.32

%

 

$

1,600,291

 

 

 

$

1,958

 

 

0.49

%

 

$

1,499,217

 

 

 

$

4,992

 

 

1.34

%

Total funding (5)

 

$

1,736,477

 

 

 

$

1,439

 

 

0.34

%

 

$

1,691,758

 

 

 

$

2,101

 

 

0.49

%

 

$

1,524,334

 

 

 

$

5,094

 

 

1.34

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Total loans include both loans held-for-sale and loans held-for-investment, net of deferred loan costs (fees).

(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.

 

Contacts

Timothy Chang

Executive Vice President & Chief Financial Officer

213-210-2000

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