PCB Bancorp Reports Earnings of $7.0 million for Q3 2022

PCB Bancorp (the “Company”) (NASDAQ: PCB), the holding company of PCB Bank (the “Bank”), today reported net income of $7.0 million, or $0.46 per diluted common share, for the third quarter of 2022, compared with $9.1 million, or $0.60 per diluted common share, for the previous quarter and $11.0 million, or $0.73 per diluted common share, for the year-ago quarter.

Q3 2022 Highlights

  • Net income totaled $7.0 million, or $0.46 per diluted common share, for the current quarter;
    • The Company recorded a provision (reversal) for loan losses of $3.8 million for the current quarter compared with $(109) thousand for the previous quarter and $(1.1) million for the year-ago quarter.
    • Allowance for loan losses (“Allowance”) to loans held-for-investment(1) ratio was 1.21% at September 30, 2022 compared with 1.15% at June 30, 2022, 1.29% at December 31, 2021 and 1.39% at September 30, 2021. Adjusted Allowance to loans held-for-investment ratio(2) was 1.21% at September 30, 2022 compared with 1.15% at June 30, 2022, 1.34% at December 31, 2021 and 1.48% at September 30, 2021.
    • Net interest income was $24.0 million for the current quarter compared with $21.4 million for the previous quarter and $20.2 million for the year-ago quarter. Net interest margin was 4.25% for the current quarter compared with 4.01% for the previous quarter and 3.93% for the year-ago quarter.
    • Gain on sale of loans was $1.4 million for the current quarter compared with $2.0 million for the previous quarter and $4.3 million for the year-ago quarter.
  • Total assets were $2.33 billion at September 30, 2022, a decrease of $17.5 million, or 0.7%, from $2.34 billion at June 30, 2022, but an increase of $177.3 million, or 8.2%, from $2.15 billion at December 31, 2021 and an increase of $222.4 million, or 10.6%, from $2.10 billion at September 30, 2021;
  • Loans held-for-investment were $1.96 billion at September 30, 2022, an increase of $126.2 million, or 6.9%, from $1.83 billion at June 30, 2022, an increase of $227.0 million, or 13.1%, from $1.73 billion at December 31, 2021, and an increase of $251.4 million, or 14.7%, from $1.71 billion at September 30, 2021;
  • Total deposits were $1.98 billion at September 30, 2022, a decrease of $19.5 million, or 1.0%, from $2.00 billion at June 30, 2022, but an increase of $111.0 million, or 5.9%, from $1.87 billion at December 31, 2021 and an increase of $145.4 million, or 7.9%, from $1.83 billion at September 30, 2021;
  • The Company announced a repurchase program on July 28, 2022 for the repurchase up to 5% of outstanding common stock. As of September 30, 2022, the Company repurchased and retired 119,941 shares of common stock for an aggregate cost of $2.2 million; and
  • The Bank changed its name from Pacific City Bank to PCB Bank and opened 2 new full-service branches in Dallas, Texas and Palisades Park, New Jersey.

“We are pleased to announce our continued solid financial performance for the third quarter of 2022,” stated Henry Kim, President and Chief Executive Officer. “We funded $172 million in loans held-for-investment during the third quarter, resulting in a loan balance increase of 6.9% quarter-over-quarter or 13.1% year-to-date. Compared with the second quarter of 2022, our net interest margin expanded 24 basis points to 4.25% and our net interest income increased 12.5% to $24.0 million for the third quarter. In keeping with our expansion strategic initiative to increase the value of our franchise, we successfully opened two new full-service branches in Dallas, Texas, and Palisades Park, New Jersey during the third quarter of 2022.”

“As we look ahead into the fourth quarter of this year, we will continue to remain opportunistic with our strong capital position and invest in our long-term franchise value by strategically expanding our footprint. We are on schedule to open one more full-service branch in Carrollton, Texas during the fourth quarter of this year,” concluded Kim.

-------------------------------------------------------------------------------------

(1)

Loans held-for-investment are presented net of deferred fees and costs in this press release.

(2)

Adjusted Allowance to loans held-for-investment ratio is a non-GAAP measure, which excludes U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans from loans held-for-investment. See “Non-GAAP Measures” for reconciliation of this measure to its most comparable GAAP measure.

Financial Highlights (Unaudited)

($ in thousands, except per share data)

 

Three Months Ended

 

Nine Months Ended

 

9/30/2022

 

6/30/2022

 

% Change

 

9/30/2021

 

% Change

 

9/30/2022

 

9/30/2021

 

% Change

Net income

 

$

6,953

 

 

$

9,092

 

 

(23.5

)%

 

$

11,023

 

 

(36.9

)%

 

$

26,285

 

 

$

29,427

 

 

(10.7

)%

Diluted earnings per common share

 

$

0.46

 

 

$

0.60

 

 

(23.3

)%

 

$

0.73

 

 

(37.0

)%

 

$

1.73

 

 

$

1.92

 

 

(9.9

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

24,023

 

 

$

21,351

 

 

12.5

%

 

$

20,227

 

 

18.8

%

 

$

65,367

 

 

$

57,042

 

 

14.6

%

Provision (reversal) for loan losses

 

 

3,753

 

 

 

(109

)

 

NM

 

 

 

(1,053

)

 

NM

 

 

 

2,453

 

 

 

(3,134

)

 

NM

 

Noninterest income

 

 

3,176

 

 

 

3,648

 

 

(12.9

)%

 

 

5,588

 

 

(43.2

)%

 

 

12,110

 

 

 

13,596

 

 

(10.9

)%

Noninterest expense

 

 

13,695

 

 

 

12,245

 

 

11.8

%

 

 

11,232

 

 

21.9

%

 

 

38,011

 

 

 

32,040

 

 

18.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (1)

 

 

1.19

%

 

 

1.65

%

 

 

 

 

2.11

%

 

 

 

 

1.58

%

 

 

1.94

%

 

 

Return on average shareholders’ equity (1)

 

 

8.16

%

 

 

12.48

%

 

 

 

 

17.98

%

 

 

 

 

11.84

%

 

 

16.40

%

 

 

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

 

 

10.25

%

 

 

13.85

%

 

 

 

 

17.98

%

 

 

 

 

13.31

%

 

 

16.40

%

 

 

Net interest margin (1)

 

 

4.25

%

 

 

4.01

%

 

 

 

 

3.93

%

 

 

 

 

4.05

%

 

 

3.82

%

 

 

Efficiency ratio (3)

 

 

50.35

%

 

 

48.98

%

 

 

 

 

43.51

%

 

 

 

 

49.06

%

 

 

45.36

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in thousands, except per share data)

 

9/30/2022

 

6/30/2022

 

% Change

 

12/31/2021

 

% Change

 

9/30/2021

 

% Change

Total assets

 

$

2,327,051

 

 

$

2,344,560

 

 

(0.7

)%

 

$

2,149,735

 

 

8.2

%

 

$

2,104,699

 

 

10.6

%

Net loans held-for-investment

 

 

1,935,476

 

 

 

1,811,939

 

 

6.8

%

 

 

1,709,824

 

 

13.2

%

 

 

1,684,071

 

 

14.9

%

Total deposits

 

 

1,978,098

 

 

 

1,997,607

 

 

(1.0

)%

 

 

1,867,134

 

 

5.9

%

 

 

1,832,666

 

 

7.9

%

Book value per common share (4)

 

$

22.40

 

 

$

22.36

 

 

 

 

$

17.24

 

 

 

 

$

16.68

 

 

 

TCE per common share (2)

 

$

17.75

 

 

$

17.73

 

 

 

 

$

17.24

 

 

 

 

$

16.68

 

 

 

Tier 1 leverage ratio (consolidated)

 

 

14.74

%

 

 

15.37

%

 

 

 

 

12.11

%

 

 

 

 

11.91

%

 

 

Total shareholders’ equity to total assets

 

 

14.30

%

 

 

14.26

%

 

 

 

 

11.92

%

 

 

 

 

11.76

%

 

 

TCE to total assets (2), (5)

 

 

11.33

%

 

 

11.31

%

 

 

 

 

11.92

%

 

 

 

 

11.76

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

Nine Months Ended

($ in thousands)

 

9/30/2022

 

6/30/2022

 

% Change

 

9/30/2021

 

% Change

 

9/30/2022

 

9/30/2021

 

% Change

Interest income/expense on

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

24,835

 

 

$

21,243

 

 

16.9

%

 

$

20,537

 

 

20.9

%

 

$

66,268

 

 

$

58,792

 

 

12.7

%

Investment securities

 

 

806

 

 

 

668

 

 

20.7

%

 

 

437

 

 

84.4

%

 

 

1,950

 

 

 

1,172

 

 

66.4

%

Other interest-earning assets

 

 

1,194

 

 

 

535

 

 

123.2

%

 

 

194

 

 

515.5

%

 

 

1,957

 

 

 

513

 

 

281.5

%

Total interest-earning assets

 

 

26,835

 

 

 

22,446

 

 

19.6

%

 

 

21,168

 

 

26.8

%

 

 

70,175

 

 

 

60,477

 

 

16.0

%

Interest-bearing deposits

 

 

2,798

 

 

 

1,041

 

 

168.8

%

 

 

885

 

 

216.2

%

 

 

4,689

 

 

 

3,196

 

 

46.7

%

Borrowings

 

 

14

 

 

 

54

 

 

(74.1

)%

 

 

56

 

 

(75.0

)%

 

 

119

 

 

 

239

 

 

(50.2

)%

Total interest-bearing liabilities

 

 

2,812

 

 

 

1,095

 

 

156.8

%

 

 

941

 

 

198.8

%

 

 

4,808

 

 

 

3,435

 

 

40.0

%

Net interest income

 

$

24,023

 

 

$

21,351

 

 

12.5

%

 

$

20,227

 

 

18.8

%

 

$

65,367

 

 

$

57,042

 

 

14.6

%

Average balance of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

1,905,366

 

 

$

1,804,368

 

 

5.6

%

 

$

1,715,106

 

 

11.1

%

 

$

1,828,187

 

 

$

1,683,084

 

 

8.6

%

Investment securities

 

 

137,363

 

 

 

135,324

 

 

1.5

%

 

 

136,874

 

 

0.4

%

 

 

132,023

 

 

 

131,039

 

 

0.8

%

Other interest-earning assets

 

 

200,367

 

 

 

195,633

 

 

2.4

%

 

 

188,137

 

 

6.5

%

 

 

198,311

 

 

 

180,663

 

 

9.8

%

Total interest-earning assets

 

$

2,243,096

 

 

$

2,135,325

 

 

5.0

%

 

$

2,040,117

 

 

9.9

%

 

$

2,158,521

 

 

$

1,994,786

 

 

8.2

%

Interest-bearing deposits

 

$

1,137,739

 

 

$

1,001,424

 

 

13.6

%

 

$

1,000,332

 

 

13.7

%

 

$

1,058,105

 

 

$

1,026,842

 

 

3.0

%

Borrowings

 

 

2,033

 

 

 

11,132

 

 

(81.7

)%

 

 

18,152

 

 

(88.8

)%

 

 

7,824

 

 

 

37,363

 

 

(79.1

)%

Total interest-bearing liabilities

 

$

1,139,772

 

 

$

1,012,556

 

 

12.6

%

 

$

1,018,484

 

 

11.9

%

 

$

1,065,929

 

 

$

1,064,205

 

 

0.2

%

Total funding (1)

 

$

1,965,134

 

 

$

1,902,247

 

 

3.3

%

 

$

1,812,649

 

 

8.4

%

 

$

1,917,766

 

 

$

1,772,005

 

 

8.2

%

Annualized average yield/cost of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

 

5.17

%

 

 

4.72

%

 

 

 

 

4.75

%

 

 

 

 

4.85

%

 

 

4.67

%

 

 

Investment securities

 

 

2.33

%

 

 

1.98

%

 

 

 

 

1.27

%

 

 

 

 

1.97

%

 

 

1.20

%

 

 

Other interest-earning assets

 

 

2.36

%

 

 

1.10

%

 

 

 

 

0.41

%

 

 

 

 

1.32

%

 

 

0.38

%

 

 

Total interest-earning assets

 

 

4.75

%

 

 

4.22

%

 

 

 

 

4.12

%

 

 

 

 

4.35

%

 

 

4.05

%

 

 

Interest-bearing deposits

 

 

0.98

%

 

 

0.42

%

 

 

 

 

0.35

%

 

 

 

 

0.59

%

 

 

0.42

%

 

 

Borrowings

 

 

2.73

%

 

 

1.95

%

 

 

 

 

1.22

%

 

 

 

 

2.03

%

 

 

0.86

%

 

 

Total interest-bearing liabilities

 

 

0.98

%

 

 

0.43

%

 

 

 

 

0.37

%

 

 

 

 

0.60

%

 

 

0.43

%

 

 

Net interest margin

 

 

4.25

%

 

 

4.01

%

 

 

 

 

3.93

%

 

 

 

 

4.05

%

 

 

3.82

%

 

 

Cost of total funding (1)

 

 

0.57

%

 

 

0.23

%

 

 

 

 

0.21

%

 

 

 

 

0.34

%

 

 

0.26

%

 

 

Supplementary information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net accretion of discount on loans

 

$

867

 

 

$

907

 

 

(4.4

)%

 

$

932

 

 

(7.0

)%

 

$

2,682

 

 

$

2,689

 

 

(0.3

)%

Net amortization of deferred loan fees

 

$

243

 

 

$

606

 

 

(59.9

)%

 

$

1,983

 

 

(87.7

)%

 

$

2,014

 

 

$

4,662

 

 

(56.8

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 increases in average yield for the current quarter and year-to-date period were primarily due to an increase in overall interest rates on loans from the rising interest rate environment, partially offset by a decrease in net amortization of deferred loan fees from the decreased amount of SBA PPP loan payoffs.

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:

 

 

9/30/2022

 

6/30/2022

 

12/31/2021

 

9/30/2021

 

 

% to Total

Loans

 

Weighted-

Average

Contractual

Rate

 

% to Total

Loans

 

Weighted-

Average

Contractual

Rate

 

% to Total

Loans

 

Weighted-

Average

Contractual

Rate

 

% to Total

Loans

 

Weighted-

Average

Contractual

Rate

Fixed rate loans

 

24.0%

 

4.43%

 

24.5%

 

4.35%

 

28.4%

 

3.98%

 

29.9%

 

3.86%

Hybrid rate loans

 

38.0%

 

4.23%

 

37.0%

 

4.11%

 

29.1%

 

4.16%

 

26.4%

 

4.28%

Variable rate loans

 

38.0%

 

6.75%

 

38.5%

 

5.12%

 

42.5%

 

3.95%

 

43.7%

 

3.96%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Securities. The increases in average yield for the current quarter and year-to-date period were primarily due to a decrease in net amortization of premiums on mortgage-backed securities and collateralized mortgage obligations and higher yield on newly purchased investment securities.

Other Interest-Earning Assets. The increases in average yield for the current quarter and year-to-date period were primarily due to an increased interest rate on cash held at the Federal Reserve Bank (“FRB”) account. The increases in average balance for the current quarter and year-to-date period compared with the same periods of 2021 were primarily due to an increase in average balance of deposits and the Emergency Capital Investment Program (“ECIP”) capital investment, partially offset by an increase in loans. The Company maintains most of its cash at the FRB account.

Interest-Bearing Deposits. The increases in average cost for the current quarter and year-to-date period were primarily due to an increase in market rates.

Provision (reversal) for Loan Losses

Provision (reversal) for loan losses was $3.8 million for the current quarter compared with $(109) thousand for the previous quarter and $(1.1) million for the year-ago quarter. For the current and previous year-to-date periods, provision (reversal) for loan losses was $2.5 million and $(3.1) million, respectively. The increase in provision for loan losses was primarily due to increases in gross loan balance, and qualitative adjustment factors related to current economic condition and increased charge-offs during the current quarter.

The Company recorded net charge-offs of $1.1 million for the current quarter compared with $18 thousand for the previous quarter and $29 thousand for the year-ago quarter. For the current and previous year-to-date periods, the Company recorded net charge-offs (recoveries) of $1.1 million and $(431) thousand, respectively.

Adjusted Allowance to loans held-for-investment ratio(1) was 1.21%, 1.15%, 1.34%, and 1.48% at September 30, 2022, June 30, 2022, December 31, 2021, and September 30, 2021, respectively.

-------------------------------------------------------------------------------------

(1)

Adjusted Allowance to loans held-for-investment ratio is a non-GAAP measure, which excludes SBA PPP loans from loans held-for-investment. See “Non-GAAP Measures” for reconciliation of this measure to its most comparable GAAP measure.

 

Noninterest Income

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

 

 

Three Months Ended

 

Nine Months Ended

($ in thousands)

 

9/30/2022

 

6/30/2022

 

% Change

 

9/30/2021

 

% Change

 

9/30/2022

 

9/30/2021

 

% Change

Gain on sale of loans

 

$

1,415

 

$

2,039

 

(30.6

)%

 

$

4,269

 

(66.9

)%

 

$

7,231

 

$

9,558

 

(24.3

)%

Service charges and fees on deposits

 

 

341

 

 

330

 

3.3

%

 

 

292

 

16.8

%

 

 

974

 

 

887

 

9.8

%

Loan servicing income

 

 

780

 

 

755

 

3.3

%

 

 

655

 

19.1

%

 

 

2,235

 

 

2,082

 

7.3

%

Bank-owned life insurance income

 

 

178

 

 

175

 

1.7

%

 

 

 

%

 

 

525

 

 

 

%

Other income

 

 

462

 

 

349

 

32.4

%

 

 

372

 

24.2

%

 

 

1,145

 

 

1,069

 

7.1

%

Total noninterest income

 

$

3,176

 

$

3,648

 

(12.9

)%

 

$

5,588

 

(43.2

)%

 

$

12,110

 

$

13,596

 

(10.9

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

Three Months Ended

 

Nine Months Ended

($ in thousands)

 

9/30/2022

 

6/30/2022

 

% Change

 

9/30/2021

 

% Change

 

9/30/2022

 

9/30/2021

 

% Change

Gain on sale of SBA loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sold loan balance

 

$

27,313

 

$

38,442

 

(29.0

)%

 

$

45,048

 

(39.4

)%

 

$

105,438

 

$

90,074

 

17.1

%

Premium received

 

 

2,036

 

 

2,600

 

(21.7

)%

 

 

4,879

 

(58.3

)%

 

 

8,842

 

 

10,360

 

(14.7

)%

Gain recognized

 

 

1,407

 

 

2,039

 

(31.0

)%

 

 

4,263

 

(67.0

)%

 

 

7,223

 

 

9,412

 

(23.3

)%

Gain on sale of residential property loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sold loan balance

 

$

858

 

$

 

%

 

$

301

 

185.0

%

 

$

858

 

$

9,823

 

(91.3

)%

Gain recognized

 

 

8

 

 

 

%

 

 

2

 

300.0

%

 

 

8

 

 

142

 

(94.4

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

Three Months Ended

 

Nine Months Ended

($ in thousands)

 

9/30/2022

 

6/30/2022

 

% Change

 

9/30/2021

 

% Change

 

9/30/2022

 

9/30/2021

 

% Change

Loan servicing income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Servicing income received

 

$

1,302

 

 

$

1,287

 

 

1.2

%

 

$

1,180

 

 

10.3

%

 

$

3,819

 

 

$

3,577

 

 

6.8

%

Servicing assets amortization

 

 

(522

)

 

 

(532

)

 

(1.9

)%

 

 

(525

)

 

(0.6

)%

 

 

(1,584

)

 

 

(1,495

)

 

6.0

%

Loan servicing income

 

$

780

 

 

$

755

 

 

3.3

%

 

$

655

 

 

19.1

%

 

$

2,235

 

 

$

2,082

 

 

7.3

%

Underlying loans at end of period

 

$

538,904

 

 

$

537,990

 

 

0.2

%

 

$

511,930

 

 

5.3

%

 

$

538,904

 

 

$

511,930

 

 

5.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

Noninterest Expense

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

 

 

Three Months Ended

 

Nine Months Ended

($ in thousands)

 

9/30/2022

 

6/30/2022

 

% Change

 

9/30/2021

 

% Change

 

9/30/2022

 

9/30/2021

 

% Change

Salaries and employee benefits

 

$

8,457

 

$

8,125

 

4.1

%

 

$

7,606

 

11.2

%

 

$

25,177

 

$

20,913

 

20.4

%

Occupancy and equipment

 

 

1,650

 

 

1,537

 

7.4

%

 

 

1,399

 

17.9

%

 

 

4,584

 

 

4,158

 

10.2

%

Professional fees

 

 

587

 

 

642

 

(8.6

)%

 

 

422

 

39.1

%

 

 

1,632

 

 

1,574

 

3.7

%

Marketing and business promotion

 

 

909

 

 

310

 

193.2

%

 

 

416

 

118.5

%

 

 

1,426

 

 

1,070

 

33.3

%

Data processing

 

 

427

 

 

441

 

(3.2

)%

 

 

391

 

9.2

%

 

 

1,272

 

 

1,164

 

9.3

%

Director fees and expenses

 

 

179

 

 

182

 

(1.6

)%

 

 

144

 

24.3

%

 

 

530

 

 

433

 

22.4

%

Regulatory assessments

 

 

150

 

 

147

 

2.0

%

 

 

12

 

1,150.0

%

 

 

438

 

 

399

 

9.8

%

Other expense

 

 

1,336

 

 

861

 

55.2

%

 

 

842

 

58.7

%

 

 

2,952

 

 

2,329

 

26.7

%

Total noninterest expense

 

$

13,695

 

$

12,245

 

11.8

%

 

$

11,232

 

21.9

%

 

$

38,011

 

$

32,040

 

18.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and Employee Benefits. The increases for the current quarter compared with the previous and year-ago quarters were primarily due to increases in salaries and other employee benefit expense from the increased number of employees, partially offset by a decrease in incentives tied to the sales of Loan Production Offices (“LPO”) originated SBA loans and an increase in loan origination cost, which offsets the recognition of salaries. The increase for the current year-to-date period compared with the previous year-to-date period was due to increases in salaries, other employee benefit expense, the incentives tied to sales of LPO originated SBA loans, and a decrease in loan origination cost.

Total loan origination cost included in salaries and employee benefits were $488 thousand, $461 thousand, and $421 thousand for the current, previous, and year-ago quarters, respectively, and $1.3 million and $1.8 million for the current and previous year-to-date periods, respectively. The Company recognized a higher loan origination cost for the previous year-to-date period primarily due to the SBA PPP loan production in the first quarter of 2021. The number of full-time equivalent employees was 274, 271, and 249 as of September 30, 2022, June 30, 2022, and September 30, 2021, respectively.

Occupancy and Equipment. The increases for the current quarter and year-to-date period were primarily due to new branch openings. The Company opened 2 new branches in Dallas, Texas and Palisades Park, New Jersey during the current quarter and plans to open one more branch in Carrollton, Texas during the fourth quarter of 2022.

Marketing and Business Promotion. The increases for the current quarter and year-to-date period were primarily due to increases in marketing activities and advertisement for the Bank's name change to PCB Bank, and new branch openings.

Director Fees and Expenses. The increases for the current quarter and year-to-date periods compared with the same periods of 2021 were primarily due to a new director appointed during the fourth quarter of 2021.

Regulatory Assessments. During the year-ago quarter, an adjustment was made for the assessment rate decrease.

Other Expense. The increases for the current quarter and year-to-date period were primarily due to an increase in office expense for the new branches and a legal settlement of $150 thousand for the current quarter.

Balance Sheet (Unaudited)

Total assets were $2.33 billion at September 30, 2022, a decrease of $17.5 million, or 0.7%, from $2.34 billion at June 30, 2022, but an increase of $177.3 million, or 8.2%, from $2.15 billion at December 31, 2021 and an increase of $222.4 million, or 10.6%, from $2.10 billion at September 30, 2021. The decrease for the current quarter was primarily due to decreases in cash and cash equivalents and securities available-for-sale, partially offset by increases in loans held-for-sale and loans held-for-investment. The increase for the current year-to-date period was primarily due to increases in loans held-for-investment and securities available-for-sale, partially offset by decreases in cash and cash equivalents and loans held-for-sale.

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)

 

9/30/2022

 

6/30/2022

 

% Change

 

12/31/2021

 

% Change

 

9/30/2021

 

% Change

Real estate loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial property

 

$

1,271,781

 

$

1,204,142

 

5.6

%

 

$

1,105,843

 

15.0

%

 

$

1,054,351

 

20.6

%

Residential property

 

 

297,506

 

 

258,259

 

15.2

%

 

 

209,485

 

42.0

%

 

 

201,635

 

47.5

%

SBA property

 

 

136,088

 

 

131,420

 

3.6

%

 

 

129,661

 

5.0

%

 

 

127,845

 

6.4

%

Construction

 

 

14,592

 

 

12,595

 

15.9

%

 

 

8,252

 

76.8

%

 

 

6,572

 

122.0

%

Commercial and industrial loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial term

 

 

80,225

 

 

73,885

 

8.6

%

 

 

73,438

 

9.2

%

 

 

74,390

 

7.8

%

Commercial lines of credit

 

 

117,960

 

 

111,916

 

5.4

%

 

 

100,936

 

16.9

%

 

 

101,456

 

16.3

%

SBA commercial term

 

 

16,542

 

 

16,985

 

(2.6

)%

 

 

17,640

 

(6.2

)%

 

 

18,338

 

(9.8

)%

SBA PPP

 

 

1,309

 

 

1,583

 

(17.3

)%

 

 

65,329

 

(98.0

)%

 

 

101,901

 

(98.7

)%

Other consumer loans

 

 

23,234

 

 

22,225

 

4.5

%

 

 

21,621

 

7.5

%

 

 

21,390

 

8.6

%

Loans held-for-investment

 

 

1,959,237

 

 

1,833,010

 

6.9

%

 

 

1,732,205

 

13.1

%

 

 

1,707,878

 

14.7

%

Loans held-for-sale

 

 

18,982

 

 

9,627

 

97.2

%

 

 

37,026

 

(48.7

)%

 

 

29,020

 

(34.6

)%

Total loans

 

$

1,978,219

 

$

1,842,637

 

7.4

%

 

$

1,769,231

 

11.8

%

 

$

1,736,898

 

13.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The increase in loans held-for-investment for the current quarter was primarily due to new funding of $171.9 million and advances on lines of credit of $42.0 million, partially offset by pay-downs and pay-offs of $86.6 million. The increase for the current year-to-date period was primarily due to new funding of $450.8 million and advances of lines of credit of $111.3 million, partially offset by pay-downs and pay-offs of $333.9 million. SBA PPP loans of $274 thousand and $64.0 million were paid off through regular payments or forgiveness from SBA during the current quarter and year-to-date period, respectively.

The increase in loans held-for-sale for the current quarter was primarily due to new funding of $37.1 million, partially offset by sales of $27.7 million. The decrease for the current year-to-date period was primarily due to sales of $105.8 million, partially offset by new funding of $88.2 million.

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

($ in thousands)

 

9/30/2022

 

6/30/2022

 

% Change

 

12/31/2021

 

% Change

 

9/30/2021

 

% Change

Real estate loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial property

 

$

18,400

 

$

20,425

 

(9.9

)%

 

$

20,194

 

(8.9

)%

 

$

17,873

 

2.9

%

SBA property

 

 

3,730

 

 

4,265

 

(12.5

)%

 

 

3,068

 

21.6

%

 

 

4,747

 

(21.4

)%

Construction

 

 

11,093

 

 

12,080

 

(8.2

)%

 

 

5,180

 

114.2

%

 

 

9,478

 

17.0

%

Commercial and industrial loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial term

 

 

2,027

 

 

2,347

 

(13.6

)%

 

 

1,097

 

84.8

%

 

 

1,455

 

39.3

%

Commercial lines of credit

 

 

254,738

 

 

218,850

 

16.4

%

 

 

169,000

 

50.7

%

 

 

156,411

 

62.9

%

SBA commercial term

 

 

572

 

 

383

 

49.3

%

 

 

149

 

283.9

%

 

 

245

 

133.5

%

Other consumer loans

 

 

847

 

 

1,086

 

(22.0

)%

 

 

595

 

42.4

%

 

 

130

 

551.5

%

Total commitments to extend credit

 

$

291,407

 

$

259,436

 

12.3

%

 

$

199,283

 

46.2

%

 

$

190,339

 

53.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

9/30/2022

 

6/30/2022

 

% Change

 

12/31/2021

 

% Change

 

9/30/2021

 

% Change

Nonaccrual loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial property

 

$

2,444

 

 

$

 

 

%

 

$

 

 

%

 

$

 

 

%

Residential property

 

 

372

 

 

 

450

 

 

(17.3

) %

 

 

 

 

%

 

 

 

 

%

SBA property

 

 

552

 

 

 

564

 

 

(2.1

) %

 

 

746

 

 

(26.0

)%

 

 

766

 

 

(27.9

)%

Commercial and industrial loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial term

 

 

3

 

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

Commercial lines of credit

 

 

4,000

 

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

SBA commercial term

 

 

 

 

 

185

 

 

(100.0

)%

 

 

213

 

 

(100.0

)%

 

 

314

 

 

(100.0

)%

Other consumer loans

 

 

25

 

 

 

24

 

 

4.2

%

 

 

35

 

 

(28.6

)%

 

 

33

 

 

(24.2

)%

Total nonaccrual loans held-for-investment

 

 

7,396

 

 

 

1,223

 

 

504.7

%

 

 

994

 

 

644.1

%

 

 

1,113

 

 

564.5

%

Loans past due 90 days or more and still accruing

 

 

 

 

 

 

 

%

 

 

 

 

%

 

 

3

 

 

(100.0

)%

Non-performing loans (“NPLs”)

 

 

7,396

 

 

 

1,223

 

 

504.7

%

 

 

994

 

 

644.1

%

 

 

1,116

 

 

562.7

%

Other real estate owned (“OREO”)

 

 

 

 

 

808

 

 

(100.0

)%

 

 

 

 

%

 

 

 

 

%

Non-performing assets (“NPAs”)

 

$

7,396

 

 

$

2,031

 

 

264.2

%

 

$

994

 

 

644.1

%

 

$

1,116

 

 

562.7

%

Loans past due and still accruing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Past due 30 to 59 days

 

$

215

 

 

$

682

 

 

(68.5

)%

 

$

549

 

 

(60.8

)%

 

$

292

 

 

(26.4

)%

Past due 60 to 89 days

 

 

195

 

 

 

 

 

%

 

 

5

 

 

3,800.0

%

 

 

 

 

%

Past due 90 days or more

 

 

 

 

 

 

 

%

 

 

 

 

%

 

 

3

 

 

(100.0

)%

Total loans past due and still accruing

 

$

410

 

 

$

682

 

 

(39.9

)%

 

 

554

 

 

(26.0

)%

 

$

295

 

 

39.0

%

Troubled debt restructurings (“TDRs”)

 

 

 

 

 

 

 

 

 

 

 

 

 

Accruing TDRs

 

$

542

 

 

$

555

 

 

(2.3

)%

 

$

576

 

 

(5.9

)%

 

$

589

 

 

(8.0

)%

Nonaccrual TDRs

 

 

7

 

 

 

10

 

 

(30.0

)%

 

 

17

 

 

(58.8

)%

 

 

26

 

 

(73.1

)%

Total TDRs

 

$

549

 

 

$

565

 

 

(2.8

)%

 

$

593

 

 

(7.4

)%

 

$

615

 

 

(10.7

)%

Special mention loans

 

$

5,986

 

 

$

6,313

 

 

(5.2

)%

 

$

18,092

 

 

(66.9

)%

 

$

17,315

 

 

(65.4

)%

Classified assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Classified loans

 

$

10,293

 

 

$

3,980

 

 

158.6

%

 

$

5,168

 

 

99.2

%

 

$

5,345

 

 

92.6

%

OREO

 

 

 

 

 

808

 

 

(100.0

)%

 

 

 

 

%

 

 

 

 

%

Classified assets

 

$

10,293

 

 

$

4,788

 

 

115.0

%

 

$

5,168

 

 

99.2

%

 

$

5,345

 

 

92.6

%

NPLs to loans held-for-investment

 

 

0.38

%

 

 

0.07

%

 

 

 

 

0.06

%

 

 

 

 

0.07

%

 

 

NPAs to total assets

 

 

0.32

%

 

 

0.09

%

 

 

 

 

0.05

%

 

 

 

 

0.05

%

 

 

Classified assets to total assets

 

 

0.44

%

 

 

0.20

%

 

 

 

 

0.24

%

 

 

 

 

0.25

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The decrease in special mention loans for the current year-to-date period was primarily due to improvements of 2 loans with an aggregated carrying value of $11.3 million at December 31, 2021. The increases in nonaccrual commercial property loans and commercial lines of credit, and classified loans for the current quarter were primarily due to downgrades of loans to a single credit relationship.

Investment Securities

Total investment securities were $129.4 million at September 30, 2022, a decrease of $9.7 million, or 6.95%, from $139.1 million at June 30, 2022 and a decrease of $3.7 million, or 2.8%, from $133.1 million at September 30, 2021, but an increase of $6.2 million, or 5.03%, from $123.2 million at December 31, 2021. The decrease for the current quarter was primarily due to principal pay-downs and calls of $6.4 million, a fair value decrease of $6.3 million, and net premium amortization of $75 thousand, partially offset by purchases of $3.1 million. The increase for the current year-to-date period was primarily due to purchases of $41.1 million, partially offset by principal pay-downs and calls of $18.8 million, a fair value decrease of $15.8 million, and net premium amortization of $307 thousand.

Deposits

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

 

 

9/30/2022

 

6/30/2022

 

12/31/2021

 

9/30/2021

($ in thousands)

 

Amount

 

% to

Total

 

Amount

 

% to

Total

 

Amount

 

% to

Total

 

Amount

 

% to

Total

Noninterest-bearing demand deposits

 

$

809,842

 

40.9

%

 

$

988,454

 

49.5

%

 

$

830,383

 

44.5

%

 

$

832,240

 

45.4

%

Interest-bearing deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings

 

 

13,028

 

0.7

%

 

 

14,686

 

0.7

%

 

 

16,299

 

0.9

%

 

 

13,294

 

0.7

%

NOW

 

 

17,550

 

0.9

%

 

 

18,881

 

0.9

%

 

 

20,185

 

1.1

%

 

 

20,461

 

1.1

%

Retail money market accounts

 

 

522,412

 

26.4

%

 

 

458,605

 

22.9

%

 

 

386,041

 

20.5

%

 

 

376,333

 

20.5

%

Brokered money market accounts

 

 

10,010

 

0.5

%

 

 

1

 

0.1

%

 

 

1

 

0.1

%

 

 

4

 

0.1

%

Retail time deposits of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$250,000 or less

 

 

236,864

 

12.0

%

 

 

235,956

 

11.8

%

 

 

256,956

 

13.8

%

 

 

262,207

 

14.3

%

More than $250,000

 

 

239,271

 

12.1

%

 

 

186,024

 

9.3

%

 

 

172,269

 

9.2

%

 

 

163,127

 

8.9

%

State and brokered time deposits

 

 

129,121

 

6.5

%

 

 

95,000

 

4.8

%

 

 

185,000

 

9.9

%

 

 

165,000

 

9.0

%

Total interest-bearing deposits

 

 

1,168,256

 

59.1

%

 

 

1,009,153

 

50.5

%

 

 

1,036,751

 

55.5

%

 

 

1,000,426

 

54.6

%

Total deposits

 

$

1,978,098

 

100.0

%

 

$

1,997,607

 

100.0

%

 

$

1,867,134

 

100.0

%

 

$

1,832,666

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The decrease in noninterest-bearing demand deposits for the current quarter was primarily due to strong deposit market competition and the migration of large amount of noninterest-bearing demand deposits to money market accounts and time deposits attributable to the rising market rates. To remain competitive in this rising interest rate environment, the Bank started to offer higher rates on deposit products to retain and attract new customers.

The increase in retail time deposits for the current quarter was primarily due to new accounts of $152.8 million, renewals of the matured accounts of $182.6 million and balance increases of $6.3 million, partially offset by matured and closed accounts of $287.7 million. The increase for the current year-to-date period was primarily due to new accounts of $252.2 million, renewals of the matured accounts of $480.2 million and balance increases of $15.8 million, partially offset by matured and closed accounts of $701.4 million.

Liquidity

The following table presents a summary of the Company’s liquidity position as of September 30, 2022:

($ in thousands)

 

9/30/2022

Cash and cash equivalents

 

$

154,038

 

Cash and cash equivalents to total assets

 

 

6.6

%

 

 

 

Available borrowing capacity

 

 

FHLB advances

 

$

586,125

 

Federal Reserve Discount Window

 

 

29,065

 

Overnight federal funds lines

 

 

65,000

 

Total

 

$

680,190

 

Total available borrowing capacity to total assets

 

 

29.2

%

 

 

 

Shareholders’ Equity

Shareholders’ equity was $332.7 million at September 30, 2022, a decrease of $1.7 million, or 0.5%, from $334.4 million at June 30, 2022, but an increase of $76.4 million, or 29.8%, from $256.3 million at December 31, 2021 and an increase of $85.1 million, or 34.4%, from $247.6 million at September 30, 2021. The decrease for the current quarter and year-to-date period were primarily due to cash dividends declared on common stock, an increase in accumulated other comprehensive loss, and repurchase of common stock, partially offset by net income. The increase for the current year-to-date period was primarily due to net income and issuance of preferred stock (as discussed below), partially offset by cash dividends declared on common stock, repurchase of common stock and an increase in accumulated other comprehensive loss. The Company declared cash dividends of $2.2 million and $6.7 million for the current quarter and year-to-date period, respectively.

Stock Repurchase

On April 8, 2021, the Company’s Board of Directors approved a repurchase program authorizing the repurchase of up to 5% of the Company’s outstanding common stock as of the date of the board meeting, which represented 775,000 shares, through September 7, 2021. The Company repurchased and retired 680,269 shares of common stock totaling $10.9 million at a weighted-average price of $15.99 per share under this program.

On July 28, 2022, the Company’s Board of Directors approved a repurchase program authorizing for the repurchase of up to 5% of the Company’s outstanding common stock as of the date of the board meeting, which represented 747,938 shares, through February 1, 2023. The Company repurchased and retired 119,941 shares of common stock at a weighted-average price of $18.75 per share, totaling $2.2 million under this repurchase program as of September 30, 2022.

Issuance of 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”). 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 up to 2%. After the tenth anniversary of the investment date, the dividend rate will be fixed based on average annual amount of lending in years 2 through 10.

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 the dates indicated:

 

 

9/30/2022

 

6/30/2022

 

12/31/2021

 

9/30/2021

 

Well

Capitalized

Requirements

PCB Bancorp

 

 

 

 

 

 

 

 

 

 

Common tier 1 capital (to risk-weighted assets)

 

13.69 %

 

14.44 %

 

14.79 %

 

15.07 %

 

N/A

Total capital (to risk-weighted assets)

 

18.34 %

 

19.25 %

 

16.04 %

 

16.32 %

 

N/A

Tier 1 capital (to risk-weighted assets)

 

17.14 %

 

18.11 %

 

14.79 %

 

15.07 %

 

N/A

Tier 1 capital (to average assets)

 

14.74 %

 

15.37 %

 

12.11 %

 

11.91 %

 

N/A

PCB Bank

 

 

 

 

 

 

 

 

 

 

Common tier 1 capital (to risk-weighted assets)

 

16.82 %

 

17.79 %

 

14.48 %

 

14.76 %

 

6.5 %

Total capital (to risk-weighted assets)

 

18.02 %

 

18.92 %

 

15.73 %

 

16.01 %

 

10.0 %

Tier 1 capital (to risk-weighted assets)

 

16.82 %

 

17.79 %

 

14.48 %

 

14.76 %

 

8.0 %

Tier 1 capital (to average assets)

 

14.47 %

 

15.09 %

 

11.85 %

 

11.66 %

 

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 general economic uncertainty in the United States and abroad, the impact of inflation, changes in interest rates (including actions taken by the Federal Reserve to address inflation), deposit flows, and real estate values, and their corresponding impact on our customers, and the network and data incident discovered on August 30, 2021. 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)

 

 

9/30/2022

 

6/30/2022

 

% Change

 

12/31/2021

 

% Change

 

9/30/2021

 

% Change

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

22,252

 

 

$

23,125

 

 

(3.8

)%

 

$

15,222

 

 

46.2

%

 

$

19,688

 

 

13.0

%

Interest-bearing deposits in other financial institutions

 

 

131,786

 

 

 

276,785

 

 

(52.4

)%

 

 

188,063

 

 

(29.9

)%

 

 

195,285

 

 

(32.5

)%

Total cash and cash equivalents

 

 

154,038

 

 

 

299,910

 

 

(48.6

)%

 

 

203,285

 

 

(24.2

)%

 

 

214,973

 

 

(28.3

)%

Securities available-for-sale, at fair value

 

 

129,401

 

 

 

139,067

 

 

(7.0

)%

 

 

123,198

 

 

5.0

%

 

 

133,102

 

 

(2.8

)%

Loans held-for-sale

 

 

18,982

 

 

 

9,627

 

 

97.2

%

 

 

37,026

 

 

(48.7

) %

 

 

29,020

 

 

(34.6

)%

Loans held-for-investment

 

 

1,959,237

 

 

 

1,833,010

 

 

6.9

%

 

 

1,732,205

 

 

13.1

%

 

 

1,707,878

 

 

14.7

%

Allowance for loan losses

 

 

(23,761

)

 

 

(21,071

)

 

12.8

%

 

 

(22,381

)

 

6.2

%

 

 

(23,807

)

 

(0.2

)%

Net loans held-for-investment

 

 

1,935,476

 

 

 

1,811,939

 

 

6.8

%

 

 

1,709,824

 

 

13.2

%

 

 

1,684,071

 

 

14.9

%

Premises and equipment, net

 

 

4,671

 

 

 

3,633

 

 

28.6

%

 

 

3,098

 

 

50.8

%

 

 

3,306

 

 

41.3

%

Federal Home Loan Bank and other bank stock

 

 

10,183

 

 

 

10,183

 

 

%

 

 

8,577

 

 

18.7

%

 

 

8,577

 

 

18.7

%

Other real estate owned, net

 

 

 

 

 

808

 

 

(100.0

)%

 

 

 

 

%

 

 

 

 

%

Bank-owned life insurance

 

 

29,883

 

 

 

29,705

 

 

0.6

%

 

 

29,358

 

 

1.8

%

 

 

 

 

%

Deferred tax assets, net

 

 

12,135

 

 

 

11,869

 

 

2.2

%

 

 

10,824

 

 

12.1

%

 

 

7,519

 

 

61.4

%

Servicing assets

 

 

7,627

 

 

 

7,716

 

 

(1.2

)%

 

 

7,269

 

 

4.9

%

 

 

7,009

 

 

8.8

%

Operating lease assets

 

 

6,897

 

 

 

6,512

 

 

5.9

%

 

 

6,786

 

 

1.6

%

 

 

7,164

 

 

(3.7

)%

Accrued interest receivable

 

 

6,070

 

 

 

5,212

 

 

16.5

%

 

 

5,368

 

 

13.1

%

 

 

5,494

 

 

10.5

%

Other assets

 

 

11,688

 

 

 

8,379

 

 

39.5

%

 

 

5,122

 

 

128.2

%

 

 

4,464

 

 

161.8

%

Total assets

 

$

2,327,051

 

 

$

2,344,560

 

 

(0.7

)%

 

$

2,149,735

 

 

8.2

%

 

$

2,104,699

 

 

10.6

%

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

809,842

 

 

$

988,454

 

 

(18.1

)%

 

$

830,383

 

 

(2.5

)%

 

$

832,240

 

 

(2.7

)%

Savings, NOW and money market accounts

 

 

563,000

 

 

 

492,173

 

 

14.4

%

 

 

422,526

 

 

33.2

%

 

 

410,092

 

 

37.3

%

Time deposits of $250,000 or less

 

 

305,985

 

 

 

270,956

 

 

12.9

%

 

 

341,956

 

 

(10.5

)%

 

 

327,207

 

 

(6.5

)%

Time deposits of more than $250,000

 

 

299,271

 

 

 

246,024

 

 

21.6

%

 

 

272,269

 

 

9.9

%

 

 

263,127

 

 

13.7

%

Total deposits

 

 

1,978,098

 

 

 

1,997,607

 

 

(1.0

)%

 

 

1,867,134

 

 

5.9

%

 

 

1,832,666

 

 

7.9

%

Federal Home Loan Bank advances

 

 

 

 

 

 

 

%

 

 

10,000

 

 

(100.0

)%

 

 

10,000

 

 

(100.0

)%

Operating lease liabilities

 

 

7,402

 

 

 

7,067

 

 

4.7

%

 

 

7,444

 

 

(0.6

)%

 

 

7,862

 

 

(5.9

)%

Accrued interest payable and other liabilities

 

 

8,832

 

 

 

5,511

 

 

60.3

%

 

 

8,871

 

 

(0.4

)%

 

 

6,573

 

 

34.4

%

Total liabilities

 

 

1,994,332

 

 

 

2,010,185

 

 

(0.8

)%

 

 

1,893,449

 

 

5.3

%

 

 

1,857,101

 

 

7.4

%

Commitments and contingent liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

69,141

 

 

 

69,141

 

 

%

 

 

 

 

%

 

 

 

 

%

Common stock

 

 

153,890

 

 

 

155,842

 

 

(1.3

)%

 

 

154,992

 

 

(0.7

)%

 

 

154,618

 

 

(0.5

)%

Retained earnings

 

 

120,699

 

 

 

115,992

 

 

4.1

%

 

 

101,140

 

 

19.3

%

 

 

92,248

 

 

30.8

%

Accumulated other comprehensive income (loss), net

 

 

(11,011

)

 

 

(6,600

)

 

66.8

%

 

 

154

 

 

NM

 

 

 

732

 

 

NM

 

Total shareholders’ equity

 

 

332,719

 

 

 

334,375

 

 

(0.5

)%

 

 

256,286

 

 

29.8

%

 

 

247,598

 

 

34.4

%

Total liabilities and shareholders’ equity

 

$

2,327,051

 

 

$

2,344,560

 

 

(0.7

)%

 

$

2,149,735

 

 

8.2

%

 

$

2,104,699

 

 

10.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding common shares

 

 

14,853,140

 

 

 

14,956,760

 

 

 

 

 

14,865,825

 

 

 

 

 

14,841,626

 

 

 

Book value per common share (1)

 

$

22.40

 

 

$

22.36

 

 

 

 

$

17.24

 

 

 

 

$

16.68

 

 

 

TCE per common share (2)

 

$

17.75

 

 

$

17.73

 

 

 

 

$

17.24

 

 

 

 

$

16.68

 

 

 

Total loan to total deposit ratio

 

 

100.01

%

 

 

92.24

%

 

 

 

 

94.76

%

 

 

 

 

94.77

%

 

 

Noninterest-bearing deposits to total deposits

 

 

40.94

%

 

 

49.48

%

 

 

 

 

44.47

%

 

 

 

 

45.41

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

Nine Months Ended

 

 

9/30/2022

 

6/30/2022

 

% Change

 

9/30/2021

 

% Change

 

9/30/2022

 

9/30/2021

 

% Change

Interest and dividend income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

24,835

 

 

$

21,243

 

 

16.9

%

 

$

20,537

 

 

20.9

%

 

$

66,268

 

 

$

58,792

 

 

12.7

%

Investment securities

 

 

806

 

 

 

668

 

 

20.7

%

 

 

437

 

 

84.4

%

 

 

1,950

 

 

 

1,172

 

 

66.4

%

Other interest-earning assets

 

 

1,194

 

 

 

535

 

 

123.2

%

 

 

194

 

 

515.5

%

 

 

1,957

 

 

 

513

 

 

281.5

%

Total interest income

 

 

26,835

 

 

 

22,446

 

 

19.6

%

 

 

21,168

 

 

26.8

%

 

 

70,175

 

 

 

60,477

 

 

16.0

%

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

2,798

 

 

 

1,041

 

 

168.8

%

 

 

885

 

 

216.2

%

 

 

4,689

 

 

 

3,196

 

 

46.7

%

Other borrowings

 

 

14

 

 

 

54

 

 

(74.1

)%

 

 

56

 

 

(75.0

)%

 

 

119

 

 

 

239

 

 

(50.2

)%

Total interest expense

 

 

2,812

 

 

 

1,095

 

 

156.8

%

 

 

941

 

 

198.8

%

 

 

4,808

 

 

 

3,435

 

 

40.0

%

Net interest income

 

 

24,023

 

 

 

21,351

 

 

12.5

%

 

 

20,227

 

 

18.8

%

 

 

65,367

 

 

 

57,042

 

 

14.6

%

Provision (reversal) for loan losses

 

 

3,753

 

 

 

(109

)

 

NM

 

 

 

(1,053

)

 

NM

 

 

 

2,453

 

 

 

(3,134

)

 

NM

 

Net interest income after provision (reversal) for loan losses

 

 

20,270

 

 

 

21,460

 

 

(5.5

)%

 

 

21,280

 

 

(4.7

)%

 

 

62,914

 

 

 

60,176

 

 

4.5

%

Noninterest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of loans

 

 

1,415

 

 

 

2,039

 

 

(30.6

)%

 

 

4,269

 

 

(66.9

)%

 

 

7,231

 

 

 

9,558

 

 

(24.3

)%

Service charges and fees on deposits

 

 

341

 

 

 

330

 

 

3.3

%

 

 

292

 

 

16.8

%

 

 

974

 

 

 

887

 

 

9.8

%

Loan servicing income

 

 

780

 

 

 

755

 

 

3.3

%

 

 

655

 

 

19.1

%

 

 

2,235

 

 

 

2,082

 

 

7.3

%

Bank-owned life insurance income

 

 

178

 

 

 

175

 

 

1.7

%

 

 

 

 

%

 

 

525

 

 

 

 

 

%

Other income

 

 

462

 

 

 

349

 

 

32.4

%

 

 

372

 

 

24.2

%

 

 

1,145

 

 

 

1,069

 

 

7.1

%

Total noninterest income

 

 

3,176

 

 

 

3,648

 

 

(12.9

)%

 

 

5,588

 

 

(43.2

)%

 

 

12,110

 

 

 

13,596

 

 

(10.9

)%

Noninterest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

8,457

 

 

 

8,125

 

 

4.1

%

 

 

7,606

 

 

11.2

%

 

 

25,177

 

 

 

20,913

 

 

20.4

%

Occupancy and equipment

 

 

1,650

 

 

 

1,537

 

 

7.4

%

 

 

1,399

 

 

17.9

%

 

 

4,584

 

 

 

4,158

 

 

10.2

%

Professional fees

 

 

587

 

 

 

642

 

 

(8.6

)%

 

 

422

 

 

39.1

%

 

 

1,632

 

 

 

1,574

 

 

3.7

%

Marketing and business promotion

 

 

909

 

 

 

310

 

 

193.2

%

 

 

416

 

 

118.5

%

 

 

1,426

 

 

 

1,070

 

 

33.3

%

Data processing

 

 

427

 

 

 

441

 

 

(3.2

)%

 

 

391

 

 

9.2

%

 

 

1,272

 

 

 

1,164

 

 

9.3

%

Director fees and expenses

 

 

179

 

 

 

182

 

 

(1.6

)%

 

 

144

 

 

24.3

%

 

 

530

 

 

 

433

 

 

22.4

%

Regulatory assessments

 

 

150

 

 

 

147

 

 

2.0

%

 

 

12

 

 

1,150.0

%

 

 

438

 

 

 

399

 

 

9.8

%

Other expense

 

 

1,336

 

 

 

861

 

 

55.2

%

 

 

842

 

 

58.7

%

 

 

2,952

 

 

 

2,329

 

 

26.7

%

Total noninterest expense

 

 

13,695

 

 

 

12,245

 

 

11.8

%

 

 

11,232

 

 

21.9

%

 

 

38,011

 

 

 

32,040

 

 

18.6

%

Income before income taxes

 

 

9,751

 

 

 

12,863

 

 

(24.2

)%

 

 

15,636

 

 

(37.6

)%

 

 

37,013

 

 

 

41,732

 

 

(11.3

)%

Income tax expense

 

 

2,798

 

 

 

3,771

 

 

(25.8

)%

 

 

4,613

 

 

(39.3

)%

 

 

10,728

 

 

 

12,305

 

 

(12.8

)%

Net income

 

$

6,953

 

 

$

9,092

 

 

(23.5

)%

 

$

11,023

 

 

(36.9

)%

 

$

26,285

 

 

$

29,427

 

 

(10.7

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.47

 

 

$

0.61

 

 

 

 

$

0.74

 

 

 

 

$

1.76

 

 

$

1.94

 

 

 

Diluted

 

$

0.46

 

 

$

0.60

 

 

 

 

$

0.73

 

 

 

 

$

1.73

 

 

$

1.92

 

 

 

Average common shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

14,877,879

 

 

 

14,883,768

 

 

 

 

 

14,779,707

 

 

 

 

 

14,869,997

 

 

 

15,090,989

 

 

 

Diluted

 

 

15,088,089

 

 

 

15,122,452

 

 

 

 

 

15,031,558

 

 

 

 

 

15,126,863

 

 

 

15,298,065

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend paid per common share

 

$

0.15

 

 

$

0.15

 

 

 

 

$

0.12

 

 

 

 

$

0.45

 

 

$

0.32

 

 

 

Return on average assets (1)

 

 

1.19

%

 

 

1.65

%

 

 

 

 

2.11

%

 

 

 

 

1.58

%

 

 

1.94

%

 

 

Return on average shareholders’ equity (1)

 

 

8.16

%

 

 

12.48

%

 

 

 

 

17.98

%

 

 

 

 

11.84

%

 

 

16.40

%

 

 

Return on average TCE (1), (2)

 

 

10.25

%

 

 

13.85

%

 

 

 

 

17.98

%

 

 

 

 

13.31

%

 

 

16.40

%

 

 

Efficiency ratio (3)

 

 

50.35

%

 

 

48.98

%

 

 

 

 

43.51

%

 

 

 

 

49.06

%

 

 

45.36

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

9/30/2022

 

6/30/2022

 

9/30/2021

 

 

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)

 

$

1,905,366

 

 

$

24,835

 

5.17

%

 

$

1,804,368

 

 

$

21,243

 

4.72

%

 

$

1,715,106

 

 

$

20,537

 

4.75

%

Mortgage-backed securities

 

 

93,546

 

 

 

518

 

2.20

%

 

 

88,032

 

 

 

416

 

1.90

%

 

 

95,908

 

 

 

278

 

1.15

%

Collateralized mortgage obligation

 

 

24,090

 

 

 

151

 

2.49

%

 

 

25,929

 

 

 

125

 

1.93

%

 

 

22,534

 

 

 

57

 

1.00

%

SBA loan pool securities

 

 

10,435

 

 

 

56

 

2.13

%

 

 

11,164

 

 

 

43

 

1.54

%

 

 

10,390

 

 

 

45

 

1.72

%

Municipal bonds (2)

 

 

4,491

 

 

 

34

 

3.00

%

 

 

5,347

 

 

 

37

 

2.78

%

 

 

5,759

 

 

 

36

 

2.48

%

Corporate bonds

 

 

4,801

 

 

 

47

 

3.88

%

 

 

4,852

 

 

 

47

 

3.89

%

 

 

2,283

 

 

 

21

 

3.65

%

Other interest-earning assets

 

 

200,367

 

 

 

1,194

 

2.36

%

 

 

195,633

 

 

 

535

 

1.10

%

 

 

188,137

 

 

 

194

 

0.41

%

Total interest-earning assets

 

 

2,243,096

 

 

 

26,835

 

4.75

%

 

 

2,135,325

 

 

 

22,446

 

4.22

%

 

 

2,040,117

 

 

 

21,168

 

4.12

%

Noninterest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

20,609

 

 

 

 

 

 

 

20,801

 

 

 

 

 

 

 

19,915

 

 

 

 

 

Allowance for loan losses

 

 

(21,117

)

 

 

 

 

 

 

(21,204

)

 

 

 

 

 

 

(24,854

)

 

 

 

 

Other assets

 

 

76,851

 

 

 

 

 

 

 

73,137

 

 

 

 

 

 

 

35,187

 

 

 

 

 

Total noninterest-earning assets

 

 

76,343

 

 

 

 

 

 

 

72,734

 

 

 

 

 

 

 

30,248

 

 

 

 

 

Total assets

 

$

2,319,439

 

 

 

 

 

 

$

2,208,059

 

 

 

 

 

 

$

2,070,365

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

$

577,975

 

 

 

1,375

 

0.94

%

 

$

464,829

 

 

 

430

 

0.37

%

 

$

387,661

 

 

 

291

 

0.30

%

Savings

 

 

14,990

 

 

 

2

 

0.05

%

 

 

14,989

 

 

 

2

 

0.05

%

 

 

12,806

 

 

 

2

 

0.06

%

Time deposits

 

 

544,774

 

 

 

1,421

 

1.03

%

 

 

521,606

 

 

 

609

 

0.47

%

 

 

599,865

 

 

 

592

 

0.39

%

Total interest-bearing deposits

 

 

1,137,739

 

 

 

2,798

 

0.98

%

 

 

1,001,424

 

 

 

1,041

 

0.42

%

 

 

1,000,332

 

 

 

885

 

0.35

%

Other borrowings

 

 

2,033

 

 

 

14

 

2.73

%

 

 

11,132

 

 

 

54

 

1.95

%

 

 

18,152

 

 

 

56

 

1.22

%

Total interest-bearing liabilities

 

 

1,139,772

 

 

 

2,812

 

0.98

%

 

 

1,012,556

 

 

 

1,095

 

0.43

%

 

 

1,018,484

 

 

 

941

 

0.37

%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

 

825,362

 

 

 

 

 

 

 

889,691

 

 

 

 

 

 

 

794,165

 

 

 

 

 

Other liabilities

 

 

16,057

 

 

 

 

 

 

 

13,677

 

 

 

 

 

 

 

14,531

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

841,419

 

 

 

 

 

 

 

903,368

 

 

 

 

 

 

 

808,696

 

 

 

 

 

Total liabilities

 

 

1,981,191

 

 

 

 

 

 

 

1,915,924

 

 

 

 

 

 

 

1,827,180

 

 

 

 

 

Total shareholders’ equity

 

 

338,248

 

 

 

 

 

 

 

292,135

 

 

 

 

 

 

 

243,185

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

2,319,439

 

 

 

 

 

 

$

2,208,059

 

 

 

 

 

 

$

2,070,365

 

 

 

 

 

Net interest income

 

 

 

$

24,023

 

 

 

 

 

$

21,351

 

 

 

 

 

$

20,227

 

 

Net interest spread (3)

 

 

 

 

 

3.77

%

 

 

 

 

 

3.79

%

 

 

 

 

 

3.75

%

Net interest margin (4)

 

 

 

 

 

4.25

%

 

 

 

 

 

4.01

%

 

 

 

 

 

3.93

%

Total deposits

 

$

1,963,101

 

 

$

2,798

 

0.57

%

 

$

1,891,115

 

 

$

1,041

 

0.22

%

 

$

1,794,497

 

 

$

885

 

0.20

%

Total funding (5)

 

$

1,965,134

 

 

$

2,812

 

0.57

%

 

$

1,902,247

 

 

$

1,095

 

0.23

%

 

$

1,812,649

 

 

$

941

 

0.21

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

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

(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

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

($ in thousands)

 

 

Nine Months Ended

 

 

9/30/2022

 

9/30/2021

 

 

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)

 

$

1,828,187

 

 

$

66,268

 

4.85

%

 

$

1,683,084

 

 

$

58,792

 

4.67

%

Mortgage-backed securities

 

 

88,634

 

 

 

1,241

 

1.87

%

 

 

90,095

 

 

 

726

 

1.08

%

Collateralized mortgage obligation

 

 

22,775

 

 

 

324

 

1.90

%

 

 

23,442

 

 

 

168

 

0.96

%

SBA loan pool securities

 

 

10,566

 

 

 

137

 

1.73

%

 

 

10,959

 

 

 

148

 

1.81

%

Municipal bonds (2)

 

 

5,152

 

 

 

107

 

2.78

%

 

 

5,774

 

 

 

109

 

2.52

%

Corporate bonds

 

 

4,896

 

 

 

141

 

3.85

%

 

 

769

 

 

 

21

 

3.65

%

Other interest-earning assets

 

 

198,311

 

 

 

1,957

 

1.32

%

 

 

180,663

 

 

 

513

 

0.38

%

Total interest-earning assets

 

 

2,158,521

 

 

 

70,175

 

4.35

%

 

 

1,994,786

 

 

 

60,477

 

4.05

%

Noninterest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

20,599

 

 

 

 

 

 

 

19,359

 

 

 

 

 

Allowance for loan losses

 

 

(21,561

)

 

 

 

 

 

 

(25,753

)

 

 

 

 

Other assets

 

 

72,563

 

 

 

 

 

 

 

37,371

 

 

 

 

 

Total noninterest-earning assets

 

 

71,601

 

 

 

 

 

 

 

30,977

 

 

 

 

 

Total assets

 

$

2,230,122

 

 

 

 

 

 

$

2,025,763

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

$

492,130

 

 

 

2,118

 

0.58

%

 

$

398,459

 

 

 

941

 

0.32

%

Savings

 

 

15,205

 

 

 

6

 

0.05

%

 

 

11,676

 

 

 

4

 

0.05

%

Time deposits

 

 

550,770

 

 

 

2,565

 

0.62

%

 

 

616,707

 

 

 

2,251

 

0.49

%

Total interest-bearing deposits

 

 

1,058,105

 

 

 

4,689

 

0.59

%

 

 

1,026,842

 

 

 

3,196

 

0.42

%

Other borrowings

 

 

7,824

 

 

 

119

 

2.03

%

 

 

37,363

 

 

 

239

 

0.86

%

Total interest-bearing liabilities

 

 

1,065,929

 

 

 

4,808

 

0.60

%

 

 

1,064,205

 

 

 

3,435

 

0.43

%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

 

851,837

 

 

 

 

 

 

 

707,800

 

 

 

 

 

Other liabilities

 

 

15,485

 

 

 

 

 

 

 

13,925

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

867,322

 

 

 

 

 

 

 

721,725

 

 

 

 

 

Total liabilities

 

 

1,933,251

 

 

 

 

 

 

 

1,785,930

 

 

 

 

 

Total shareholders’ equity

 

 

296,871

 

 

 

 

 

 

 

239,833

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

2,230,122

 

 

 

 

 

 

$

2,025,763

 

 

 

 

 

Net interest income

 

 

 

$

65,367

 

 

 

 

 

$

57,042

 

 

Net interest spread (3)

 

 

 

 

 

3.75

%

 

 

 

 

 

3.62

%

Net interest margin (4)

 

 

 

 

 

4.05

%

 

 

 

 

 

3.82

%

Total deposits

 

$

1,909,942

 

 

$

4,689

 

0.33

%

 

$

1,734,642

 

 

$

3,196

 

0.25

%

Total funding (5)

 

$

1,917,766

 

 

$

4,808

 

0.34

%

 

$

1,772,005

 

 

$

3,435

 

0.26

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

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

(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)

Adjusted allowance for loan losses to loans held-for-investment ratio

Adjusted Allowance to loans held-for-investment ratio is calculated by removing SBA PPP loans from loans held-for-investment from the Allowance to loans held-for-investment ratio calculation. The SBA launched the PPP to provide a direct incentive for small businesses to keep their workers on the payroll in response to the COVID-19 pandemic. The SBA guarantees 100% of the PPP loans made to eligible borrowers, and the loans are eligible to be forgiven if certain conditions are met, at which point the SBA will make payments to the Bank for the forgiven amounts. The SBA guarantee on PPP loans cannot be separated from the loan and therefore is not a separate unit of account. The Company considered the SBA guarantee in the Allowance evaluation and determined that it is not required to reserve an Allowance on SBA PPP loans. Management believes this non-GAAP measure enhances comparability to prior periods and provide supplemental information regarding the Company’s credit trends. This disclosure should not be viewed as a substitute for results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. The following tables provide reconciliations of the non-GAAP measure with financial measure defined by GAAP.

($ in thousands)

 

 

9/30/2022

 

6/30/2022

 

12/31/2021

 

9/30/2021

Loans held-for-investment

(a)

 

$

1,959,237

 

 

$

1,833,010

 

 

$

1,732,205

 

 

$

1,707,878

 

Less: SBA PPP loans

(b)

 

 

1,309

 

 

 

1,583

 

 

 

65,329

 

 

 

101,901

 

Loans held-for-investment, excluding SBA PPP loans

(c)=(a)-(b)

 

$

1,957,928

 

 

$

1,831,427

 

 

$

1,666,876

 

 

$

1,605,977

 

Allowance

(d)

 

$

23,761

 

 

$

21,071

 

 

$

22,381

 

 

$

23,807

 

Allowance to loans held-for-investment ratio

(d)/(a)

 

 

1.21

%

 

 

1.15

%

 

 

1.29

%

 

 

1.39

%

Adjusted Allowance to loans held-for-investment ratio

(d)/(c)

 

 

1.21

%

 

 

1.15

%

 

 

1.34

%

 

 

1.48

%

 

 

 

 

 

 

 

 

 

 

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 stockholders’ 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. This disclosure should not be viewed as a substitute for results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance 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

Nine Months Ended

 

 

9/30/2022

 

6/30/2022

 

9/30/2021

 

9/30/2022

 

9/30/2021

Average total shareholders' equity

(a)

 

$

338,248

 

 

$

292,135

 

 

$

243,185

 

 

$

296,871

 

 

$

239,833

 

Less: average preferred stock

(b)

 

 

69,141

 

 

 

28,872

 

 

 

 

 

 

32,924

 

 

 

 

Average TCE

(c)=(a)-(b)

 

$

269,107

 

 

$

263,263

 

 

$

243,185

 

 

$

263,947

 

 

$

239,833

 

Net income

(d)

 

$

6,953

 

 

$

9,092

 

 

$

11,023

 

 

$

26,285

 

 

$

29,427

 

Return on average shareholder's equity (1)

(d)/(a)

 

 

8.16

%

 

 

12.48

%

 

 

17.98

%

 

 

11.84

%

 

 

16.40

%

Return on average TCE (1)

(d)/(c)

 

 

10.25

%

 

 

13.85

%

 

 

17.98

%

 

 

13.31

%

 

 

16.40

%

 

 

 

 

 

 

 

 

 

 

 

 

(1) Annualized.

($ in thousands, except per share data)

 

 

9/30/2022

 

6/30/2022

 

12/31/2021

 

9/30/2021

Total shareholders' equity

(a)

 

$

332,719

 

 

$

334,375

 

 

$

256,286

 

 

$

247,598

 

Less: preferred stock

(b)

 

 

69,141

 

 

 

69,141

 

 

 

 

 

 

 

TCE

(c)=(a)-(b)

 

$

263,578

 

 

$

265,234

 

 

$

256,286

 

 

$

247,598

 

Outstanding common shares

(d)

 

 

14,853,140

 

 

 

14,956,760

 

 

 

14,865,825

 

 

 

14,841,626

 

Book value per common share

(a)/(d)

 

$

22.40

 

 

$

22.36

 

 

$

17.24

 

 

$

16.68

 

TCE per common share

(c)/(d)

 

$

17.75

 

 

$

17.73

 

 

$

17.24

 

 

$

16.68

 

Total assets

(e)

 

$

2,327,051

 

 

$

2,344,560

 

 

$

2,149,735

 

 

$

2,104,699

 

Total shareholders' equity to total assets

(a)/(e)

 

 

14.30

%

 

 

14.26

%

 

 

11.92

%

 

 

11.76

%

TCE to total assets

(c)/(e)

 

 

11.33

%

 

 

11.31

%

 

 

11.92

%

 

 

11.76

%

 

 

 

 

 

 

 

 

 

 

 

Contacts

Timothy Chang

Executive Vice President & Chief Financial Officer

213-210-2000

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