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PCB Bancorp Reports Earnings of $9.1 million for Q2 2022 and Announces Name Change of its Subsidiary, Pacific City Bank, to PCB Bank

PCB Bancorp (the “Company”) (NASDAQ: PCB), the holding company of Pacific City Bank (the “Bank”), today reported net income of $9.1 million, or $0.60 per diluted common share, for the second quarter of 2022, compared with $10.2 million, or $0.67 per diluted common share, for the previous quarter and $9.8 million, or $0.64 per diluted common share, for the year-ago quarter.

The Company also announced that the Bank will change its name to PCB Bank, effective August 25, 2022. In addition, the Company introduced a new logo, which will also be utilized by the Bank after its name change.

Q2 2022 Highlights

  • Net income totaled $9.1 million, or $0.60 per diluted common share, for the current quarter;
    • The Company recorded a reversal for loan losses of $109 thousand for the current quarter compared with $1.2 million for the previous quarter and $934 thousand for the year-ago quarter.
    • Allowance for loan losses (“Allowance”) to loans held-for-investment(1) ratio was 1.15% at June 30, 2022 compared with 1.22% at March 31, 2022, 1.29% at December 31, 2021 and 1.45% at June 30, 2021. Adjusted Allowance to loans held-for-investment ratio(2) was 1.15% at June 30, 2022 compared with 1.23% at March 31, 2022, 1.34% at December 31, 2021 and 1.62% at June 30, 2021.
    • Net interest income was $21.4 million for the current quarter compared with $20.0 million for the previous quarter and $19.0 million for the year-ago quarter. Net interest margin was 4.01% for the current quarter compared with 3.87% for the previous quarter and 3.83% for the year-ago quarter.
    • Gain on sale of loans was $2.0 million for the current quarter compared with $3.8 million for the previous quarter and $4.0 million for the year-ago quarter.
  • Total assets were $2.34 billion at June 30, 2022, an increase of $144.8 million, or 6.6%, from $2.20 billion at March 31, 2022, an increase of $194.8 million, or 9.1%, from $2.15 billion at December 31, 2021, and an increase of $284.6 million, or 13.8%, from $2.06 billion at June 30, 2021;
  • Loans held-for-investment were $1.83 billion at June 30, 2022, an increase of $90.1 million, or 5.2%, from $1.74 billion at March 31, 2022, an increase of $100.8 million, or 5.8%, from $1.73 billion at December 31, 2021, and an increase of $113.4 million, or 6.6%, from $1.72 billion at June 30, 2021;
    • SBA PPP loans totaled $1.6 million, $22.9 million, $65.3 million, and $181.0 million at June 30, 2022, March 31, 2022, December 31, 2021, and June 30, 2021, respectively.
    • The Company had no loans under modified terms related to COVID-19 at June 30, 2022, March 31, 2022, and December 31, 2021. Loans under modified terms related to the COVID-19 pandemic totaled $16.2 million at June 30, 2021.
  • Total deposits were $2.00 billion at June 30, 2022, an increase of $87.2 million, or 4.6%, from $1.91 billion at March 31, 2022, an increase of $130.5 million, or 7.0%, from $1.87 billion at December 31, 2021, and an increase of $200.0 million, or 11.1%, from $1.80 billion at June 30, 2021; and
  • On May 24, 2022, the Company issued 69,141 shares of preferred stock in exchange for a capital investment of $69.1 million from the U.S. Department of Treasury (the “Treasury”) under the Emergency Capital Investment Program (“ECIP”).

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

(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.

“We are pleased with another solid financial performance for the second quarter of 2022,” stated Henry Kim, President and Chief Executive Officer. “We continued to maintain an asset-sensitive balance sheet and executed another quarterly performance of a well-balanced deposit and loan growth combined with a record net interest income.”

“During the second quarter of 2022, our deposits increased at an annualized rate of 18% and we funded $161 million in loans held-for-investment, resulting in a 26% annualized growth rate, excluding SBA PPP loans. Our outstanding credit quality continued as demonstrated by our non-performing assets to loans held-for-investment ratio of 0.09% and classified assets to total assets ratio of 0.20%. Our net interest margin expanded 14 basis points quarter-over-quarter to 4.01% for the second quarter while we maintained our efficiency rate at 49%.”

“As we look ahead to the second half of this year, in spite of the challenging economic outlook ahead, we will remain opportunistic with our strong capital position and continue to invest in our franchise value by expanding our footprint. We are on schedule to open two new full-service branches in Dallas, Texas and a new full-service branch in Palisades Park, New Jersey during the third quarter of this year,” concluded Kim.

Financial Highlights (Unaudited)

($ in thousands, except per share data)

 

Three Months Ended

 

Six Months Ended

 

6/30/2022

 

3/31/2022

 

% Change

 

6/30/2021

 

% Change

 

6/30/2022

 

6/30/2021

 

% Change

Net income

 

$

9,092

 

 

$

10,240

 

 

(11.2

)%

 

$

9,844

 

 

(7.6

)%

 

$

19,332

 

 

$

18,404

 

 

5.0

%

Diluted earnings per common share

 

$

0.60

 

 

$

0.67

 

 

(10.4

)%

 

$

0.64

 

 

(6.3

)%

 

$

1.27

 

 

$

1.19

 

 

6.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

21,351

 

 

$

19,993

 

 

6.8

%

 

$

18,996

 

 

12.4

%

 

$

41,344

 

 

$

36,815

 

 

12.3

%

Reversal for loan losses

 

 

(109

)

 

 

(1,191

)

 

(90.8

)%

 

 

(934

)

 

(88.3

)%

 

 

(1,300

)

 

 

(2,081

)

 

(37.5

)%

Noninterest income

 

 

3,648

 

 

 

5,286

 

 

(31.0

)%

 

 

5,151

 

 

(29.2

)%

 

 

8,934

 

 

 

8,008

 

 

11.6

%

Noninterest expense

 

 

12,245

 

 

 

12,071

 

 

1.4

%

 

 

11,139

 

 

9.9

%

 

 

24,316

 

 

 

20,808

 

 

16.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (1)

 

 

1.65

%

 

 

1.92

%

 

 

 

 

1.96

%

 

 

 

 

1.78

%

 

 

1.85

%

 

 

Return on average shareholders’ equity (1)

 

 

12.48

%

 

 

16.01

%

 

 

 

 

16.49

%

 

 

 

 

14.13

%

 

 

15.59

%

 

 

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

 

 

13.85

%

 

 

16.01

%

 

 

 

 

16.49

%

 

 

 

 

14.92

%

 

 

15.59

%

 

 

Net interest margin (1)

 

 

4.01

%

 

 

3.87

%

 

 

 

 

3.83

%

 

 

 

 

3.94

%

 

 

3.77

%

 

 

Efficiency ratio (3)

 

 

48.98

%

 

 

47.75

%

 

 

 

 

46.13

%

 

 

 

 

48.36

%

 

 

46.42

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in thousands, except per share data)

 

6/30/2022

 

3/31/2022

 

% Change

 

12/31/2021

 

% Change

 

6/30/2021

 

% Change

Total assets

 

$

2,344,560

 

 

$

2,199,742

 

 

6.6

%

 

$

2,149,735

 

 

9.1

%

 

$

2,060,003

 

 

13.8

%

Net loans held-for-investment

 

 

1,811,939

 

 

 

1,721,757

 

 

5.2

%

 

 

1,709,824

 

 

6.0

%

 

 

1,694,767

 

 

6.9

%

Total deposits

 

 

1,997,607

 

 

 

1,910,379

 

 

4.6

%

 

 

1,867,134

 

 

7.0

%

 

 

1,797,648

 

 

11.1

%

Book value per common share (4)

 

$

22.36

 

 

$

17.47

 

 

 

$

17.24

 

 

 

$

16.09

 

 

TCE per common share (2)

 

$

17.73

 

 

$

17.47

 

 

 

$

17.24

 

 

 

$

16.09

 

 

Tier 1 leverage ratio (consolidated)

 

 

15.37

%

 

 

12.22

%

 

 

 

 

12.11

%

 

 

 

 

11.76

%

 

 

Total shareholders’ equity to total assets

 

 

14.26

%

 

 

11.87

%

 

 

 

 

11.92

%

 

 

 

 

11.60

%

 

 

TCE to total assets (2), (5)

 

 

11.31

%

 

 

11.87

%

 

 

 

 

11.92

%

 

 

 

 

11.60

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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.

COVID-19 Pandemic

The ongoing COVID-19 pandemic, and governmental and societal responses thereto, have had a severe impact on global economic and market conditions. The U.S. government has enacted a number of monetary and fiscal policies to provide fiscal stimulus and relief in order to mitigate the impact of the COVID-19 pandemic. However, the COVID-19 pandemic continues to be a challenge to public health, including the emergence of new variants, and impact global economic and market conditions, including global supply chain disruptions and high inflation.

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 them, 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, including SBA PPP loans and loan modifications related to the COVID-19 pandemic.

At this time, the Company cannot estimate the long term impact of the COVID-19 pandemic, but these conditions are expected to continue 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

 

Six Months Ended

($ in thousands)

 

6/30/2022

 

3/31/2022

 

% Change

 

6/30/2021

 

% Change

 

6/30/2022

 

6/30/2021

 

% Change

Interest income/expense on

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

21,243

 

 

$

20,190

 

 

5.2

%

 

$

19,511

 

 

8.9

%

 

$

41,433

 

 

$

38,255

 

 

8.3

%

Investment securities

 

 

668

 

 

 

476

 

 

40.3

%

 

 

375

 

 

78.1

%

 

 

1,144

 

 

 

735

 

 

55.6

%

Other interest-earning assets

 

 

535

 

 

 

228

 

 

134.6

%

 

 

165

 

 

224.2

%

 

 

763

 

 

 

319

 

 

139.2

%

Total interest-earning assets

 

 

22,446

 

 

 

20,894

 

 

7.4

%

 

 

20,051

 

 

11.9

%

 

 

43,340

 

 

 

39,309

 

 

10.3

%

Interest-bearing deposits

 

 

1,041

 

 

 

850

 

 

22.5

%

 

 

1,000

 

 

4.1

%

 

 

1,891

 

 

 

2,311

 

 

(18.2

)%

Borrowings

 

 

54

 

 

 

51

 

 

5.9

%

 

 

55

 

 

(1.8

)%

 

 

105

 

 

 

183

 

 

(42.6

)%

Total interest-bearing liabilities

 

 

1,095

 

 

 

901

 

 

21.5

%

 

 

1,055

 

 

3.8

%

 

 

1,996

 

 

 

2,494

 

 

(20.0

)%

Net interest income

 

$

21,351

 

 

$

19,993

 

 

6.8

%

 

$

18,996

 

 

12.4

%

 

$

41,344

 

 

$

36,815

 

 

12.3

%

Average balance of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

1,804,368

 

 

$

1,773,376

 

 

1.7

%

 

$

1,691,704

 

 

6.7

%

 

$

1,788,958

 

 

$

1,666,808

 

 

7.3

%

Investment securities

 

 

135,324

 

 

 

123,230

 

 

9.8

%

 

 

132,249

 

 

2.3

%

 

 

129,310

 

 

 

128,073

 

 

1.0

%

Other interest-earning assets

 

 

195,633

 

 

 

198,918

 

 

(1.7

)%

 

 

164,710

 

 

18.8

%

 

 

197,267

 

 

 

176,864

 

 

11.5

%

Total interest-earning assets

 

$

2,135,325

 

 

$

2,095,524

 

 

1.9

%

 

$

1,988,663

 

 

7.4

%

 

$

2,115,535

 

 

$

1,971,745

 

 

7.3

%

Interest-bearing deposits

 

$

1,001,424

 

 

$

1,034,012

 

 

(3.2

)%

 

$

1,026,937

 

 

(2.5

)%

 

$

1,017,629

 

 

$

1,040,316

 

 

(2.2

)%

Borrowings

 

 

11,132

 

 

 

10,400

 

 

7.0

%

 

 

19,012

 

 

(41.4

)%

 

 

10,768

 

 

 

47,128

 

 

(77.2

)%

Total interest-bearing liabilities

 

$

1,012,556

 

 

$

1,044,412

 

 

(3.1

)%

 

$

1,045,949

 

 

(3.2

)%

 

$

1,028,397

 

 

$

1,087,444

 

 

(5.4

)%

Total funding (1)

 

$

1,902,247

 

 

$

1,885,038

 

 

0.9

%

 

$

1,766,054

 

 

7.7

%

 

$

1,893,691

 

 

$

1,751,346

 

 

8.1

%

Annualized average yield/cost of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

 

4.72

%

 

 

4.62

%

 

 

 

 

4.63

%

 

 

 

 

4.67

%

 

 

4.63

%

 

 

Investment securities

 

 

1.98

%

 

 

1.57

%

 

 

 

 

1.14

%

 

 

 

 

1.78

%

 

 

1.16

%

 

 

Other interest-earning assets

 

 

1.10

%

 

 

0.46

%

 

 

 

 

0.40

%

 

 

 

 

0.78

%

 

 

0.36

%

 

 

Total interest-earning assets

 

 

4.22

%

 

 

4.04

%

 

 

 

 

4.04

%

 

 

 

 

4.13

%

 

 

4.02

%

 

 

Interest-bearing deposits

 

 

0.42

%

 

 

0.33

%

 

 

 

 

0.39

%

 

 

 

 

0.37

%

 

 

0.45

%

 

 

Borrowings

 

 

1.95

%

 

 

1.99

%

 

 

 

 

1.16

%

 

 

 

 

1.97

%

 

 

0.78

%

 

 

Total interest-bearing liabilities

 

 

0.43

%

 

 

0.35

%

 

 

 

 

0.40

%

 

 

 

 

0.39

%

 

 

0.46

%

 

 

Net interest margin

 

 

4.01

%

 

 

3.87

%

 

 

 

 

3.83

%

 

 

 

 

3.94

%

 

 

3.77

%

 

 

Cost of total funding (1)

 

 

0.23

%

 

 

0.19

%

 

 

 

 

0.24

%

 

 

 

 

0.21

%

 

 

0.29

%

 

 

Supplementary information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net accretion of discount on loans

 

$

907

 

 

$

908

 

 

(0.1

)%

 

$

1,012

 

 

(10.4

)%

 

$

1,815

 

 

$

1,757

 

 

3.3

%

Net amortization of deferred loan fees

 

$

606

 

 

$

1,165

 

 

(48.0

)%

 

$

1,459

 

 

(58.5

)%

 

$

1,771

 

 

$

2,679

 

 

(33.9

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

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

Loans. The 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:

 

 

6/30/2022

 

3/31/2022

 

12/31/2021

 

6/30/2021

 

 

% 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

 

24.5

%

 

4.35

%

 

26.7

%

 

4.25

%

 

28.4

%

 

3.98

%

 

33.9

%

 

3.56

%

Hybrid rate loans

 

37.0

%

 

4.11

%

 

31.5

%

 

4.07

%

 

29.1

%

 

4.16

%

 

22.5

%

 

4.52

%

Variable rate loans

 

38.5

%

 

5.12

%

 

41.8

%

 

4.14

%

 

42.5

%

 

3.95

%

 

43.6

%

 

3.99

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

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 deposits and the 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 compared with the previous and year-ago quarters were primarily due to an increase in market rates. The decrease in average cost for the current year-to-date period compared with the previous year-to-date period was primarily due to the lower interest rates on time deposits opened throughout 2021.

Borrowings. The increase in average cost for the current quarter compared with the year-ago quarter was primarily due to matured borrowings with lower interest rates during 2021. At June 30, 2022, the Company had no FHLB advances.

Reversal for Loan Losses

Reversal for loan losses was $109 thousand for the current quarter compared with $1.2 million for the previous quarter and $934 thousand for the year-ago quarter. For the current and previous year-to-date periods, reversal for loan losses was $1.3 million and $2.1 million, respectively. The reversals for the current quarter and year-to-date period were primarily due to a decrease in qualitative adjustment factor allocations related to economic implications of the COVID-19 pandemic. The Company recorded net charge-offs (recoveries) of $18 thousand for the current quarter compared with $(8) thousand for the previous quarter and $(309) thousand for the year-ago quarter. For the current and previous year-to-date periods, the Company recorded net charge-offs (recoveries) of $10 thousand and $(460) thousand, respectively.

Adjusted Allowance to loans held-for-investment ratio(1) was 1.15%, 1.23%, 1.34%, and 1.62% at June 30, 2022, March 31, 2022, December 31, 2021, and June 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

 

Six Months Ended

($ in thousands)

 

6/30/2022

 

3/31/2022

 

% Change

 

6/30/2021

 

% Change

 

6/30/2022

 

6/30/2021

 

% Change

Gain on sale of loans

 

$

2,039

 

$

3,777

 

(46.0

)%

 

$

3,967

 

(48.6

)%

 

$

5,816

 

$

5,289

 

10.0

%

Service charges and fees on deposits

 

 

330

 

 

303

 

8.9

%

 

 

302

 

9.3

%

 

 

633

 

 

595

 

6.4

%

Loan servicing income

 

 

755

 

 

700

 

7.9

%

 

 

545

 

38.5

%

 

 

1,455

 

 

1,427

 

2.0

%

Bank-owned life insurance income

 

 

175

 

 

172

 

1.7

%

 

 

 

%

 

 

347

 

 

 

%

Other income

 

 

349

 

 

334

 

4.5

%

 

 

337

 

3.6

%

 

 

683

 

 

697

 

(2.0

)%

Total noninterest income

 

$

3,648

 

$

5,286

 

(31.0

)%

 

$

5,151

 

(29.2

)%

 

$

8,934

 

$

8,008

 

11.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

Three Months Ended

 

Six Months Ended

($ in thousands)

 

6/30/2022

 

3/31/2022

 

% Change

 

6/30/2021

 

% Change

 

6/30/2022

 

6/30/2021

 

% Change

Gain on sale of SBA loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sold loan balance

 

$

38,442

 

$

39,683

 

(3.1

)%

 

$

34,107

 

12.7

%

 

$

78,125

 

$

45,026

 

73.5

%

Premium received

 

 

2,600

 

 

4,206

 

(38.2

)%

 

 

4,172

 

(37.7

)%

 

 

6,806

 

 

5,481

 

24.2

%

Gain recognized

 

 

2,039

 

 

3,777

 

(46.0

)%

 

 

3,954

 

(48.4

)%

 

 

5,816

 

 

5,149

 

13.0

%

Gain on sale of residential property loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sold loan balance

 

$

 

$

 

%

 

$

1,615

 

(100.0

)%

 

$

 

$

9,522

 

(100.0

)%

Gain recognized

 

 

 

 

 

%

 

 

13

 

(100.0

)%

 

 

 

 

140

 

(100.0

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The decrease in gain on sale of SBA loans was primarily due to reduced premiums received in the secondary market.

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

 

 

Three Months Ended

 

Six Months Ended

($ in thousands)

 

6/30/2022

 

3/31/2022

 

% Change

 

6/30/2021

 

% Change

 

6/30/2022

 

6/30/2021

 

% Change

Loan servicing income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Servicing income received

 

$

1,287

 

 

$

1,230

 

 

4.6

%

 

$

1,124

 

 

14.5

%

 

$

2,517

 

 

$

2,397

 

 

5.0

%

Servicing assets amortization

 

 

(532

)

 

 

(530

)

 

0.4

%

 

 

(579

)

 

(8.1

)%

 

 

(1,062

)

 

 

(970

)

 

9.5

%

Loan servicing income

 

$

755

 

 

$

700

 

 

7.9

%

 

$

545

 

 

38.5

%

 

$

1,455

 

 

$

1,427

 

 

2.0

%

Underlying loans at end of period

 

$

537,990

 

 

$

531,183

 

 

1.3

%

 

$

492,130

 

 

9.3

%

 

$

537,990

 

 

$

492,130

 

 

9.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Six Months Ended

($ in thousands)

 

6/30/2022

 

3/31/2022

 

% Change

 

6/30/2021

 

% Change

 

6/30/2022

 

6/30/2021

 

% Change

Salaries and employee benefits

 

$

8,125

 

$

8,595

 

(5.5

)%

 

$

7,125

 

14.0

%

 

$

16,720

 

$

13,307

 

25.6

%

Occupancy and equipment

 

 

1,537

 

 

1,397

 

10.0

%

 

 

1,388

 

10.7

%

 

 

2,934

 

 

2,759

 

6.3

%

Professional fees

 

 

642

 

 

403

 

59.3

%

 

 

658

 

(2.4

)%

 

 

1,045

 

 

1,152

 

(9.3

)%

Marketing and business promotion

 

 

310

 

 

207

 

49.8

%

 

 

516

 

(39.9

)%

 

 

517

 

 

654

 

(20.9

)%

Data processing

 

 

441

 

 

404

 

9.2

%

 

 

396

 

11.4

%

 

 

845

 

 

773

 

9.3

%

Director fees and expenses

 

 

182

 

 

169

 

7.7

%

 

 

151

 

20.5

%

 

 

351

 

 

289

 

21.5

%

Regulatory assessments

 

 

147

 

 

141

 

4.3

%

 

 

179

 

(17.9

)%

 

 

288

 

 

387

 

(25.6

)%

Other expense

 

 

861

 

 

755

 

14.0

%

 

 

726

 

18.6

%

 

 

1,616

 

 

1,487

 

8.7

%

Total noninterest expense

 

$

12,245

 

$

12,071

 

1.4

%

 

$

11,139

 

9.9

%

 

$

24,316

 

$

20,808

 

16.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

Total loan origination cost included in salaries and employee benefits were $461 thousand, $365 thousand, and $399 thousand for the current, previous, and year-ago quarters, respectively, and $826 thousand and $1.4 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 271, 256, and 248 as of June 30, 2022, March 31, 2022, and June 30, 2021, respectively.

Professional Fees. The increase for the current quarter compared with the previous quarter was primarily to increases in internal audit and other professional fees. The decrease for the current year-to-date period compared with the previous year-to-date period was primarily due to a decrease in internal audit fees.

Marketing and Business Promotion. The increase for the current quarter compared with the previous quarter was primarily due to increases in marketing activities and advertisement. The decreases for the current quarter and year-to-date period compared with the same periods of 2021 were primarily due to a decrease in advertisement, partially offset by an increase in marketing activities.

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. The decrease for the current quarter and year-to-date periods compared with the same periods of 2021 were primarily due to a decrease in assessment rate.

Balance Sheet (Unaudited)

Total assets were $2.34 billion at June 30, 2022, an increase of $144.8 million, or 6.6%, from $2.20 billion at March 31, 2022, an increase of $194.8 million, or 9.1%, from $2.15 billion at December 31, 2021, and an increase of $284.6 million, or 13.8%, from $2.06 billion at June 30, 2021. The increases for the current quarter and year-to-date period were primarily due to increases in cash and cash equivalents, securities available-for-sale, and loans held-for-investment, supported by an increase in deposits and the ECIP capital investment.

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)

 

6/30/2022

 

3/31/2022

 

% Change

 

12/31/2021

 

% Change

 

6/30/2021

 

% Change

Real estate loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial property

 

$

1,204,142

 

$

1,150,101

 

4.7

%

 

$

1,105,843

 

8.9

%

 

$

997,918

 

20.7

%

Residential property

 

 

258,259

 

 

215,132

 

20.0

%

 

 

209,485

 

23.3

%

 

 

196,983

 

31.1

%

SBA property

 

 

131,420

 

 

129,400

 

1.6

%

 

 

129,661

 

1.4

%

 

 

124,251

 

5.8

%

Construction

 

 

12,595

 

 

9,522

 

32.3

%

 

 

8,252

 

52.6

%

 

 

13,475

 

(6.5

)%

Commercial and industrial loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial term

 

 

73,885

 

 

69,836

 

5.8

%

 

 

73,438

 

0.6

%

 

 

74,503

 

(0.8

)%

Commercial lines of credit

 

 

111,916

 

 

107,406

 

4.2

%

 

 

100,936

 

10.9

%

 

 

90,286

 

24.0

%

SBA commercial term

 

 

16,985

 

 

16,880

 

0.6

%

 

 

17,640

 

(3.7

)%

 

 

19,614

 

(13.4

)%

SBA PPP

 

 

1,583

 

 

22,926

 

(93.1

)%

 

 

65,329

 

(97.6

)%

 

 

181,019

 

(99.1

)%

Other consumer loans

 

 

22,225

 

 

21,752

 

2.2

%

 

 

21,621

 

2.8

%

 

 

21,607

 

2.9

%

Loans held-for-investment

 

 

1,833,010

 

 

1,742,955

 

5.2

%

 

 

1,732,205

 

5.8

%

 

 

1,719,656

 

6.6

%

Loans held-for-sale

 

 

9,627

 

 

18,340

 

(47.5

)%

 

 

37,026

 

(74.0

)%

 

 

11,255

 

(14.5

)%

Total loans

 

$

1,842,637

 

$

1,761,295

 

4.6

%

 

$

1,769,231

 

4.1

%

 

$

1,730,911

 

6.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The increase in loans held-for-investment for the current quarter was primarily due to new funding of $160.9 million and advances on lines of credit of $40.1 million, partially offset by pay-downs and pay-offs of $110.9 million. The increase for the current year-to-date period was primarily due to new funding of $278.9 million and advances of lines of credit of $69.3 million, partially offset by pay-downs and pay-offs of $247.3 million. SBA PPP loans of $21.3 million and $63.7 million were paid off through regular payments or forgiveness from SBA during the current quarter and year-to-date period, respectively.

The decrease in loans held-for-sale for the current quarter was primarily due to sales of $38.4 million, partially offset by new funding of $29.9 million. The decrease for the current year-to-date period was primarily due to sales of $78.1 million, partially offset by new funding of $51.1 million.

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

($ in thousands)

 

6/30/2022

 

3/31/2022

 

% Change

 

12/31/2021

 

% Change

 

6/30/2021

 

% Change

Real estate loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial property

 

$

20,425

 

$

21,195

 

(3.6

)%

 

$

20,194

 

1.1

%

 

$

15,277

 

33.7

%

SBA property

 

 

4,265

 

 

3,142

 

35.7

%

 

 

3,068

 

39.0

%

 

 

6,191

 

(31.1

)%

Construction

 

 

12,080

 

 

6,528

 

85.0

%

 

 

5,180

 

133.2

%

 

 

6,233

 

93.8

%

Commercial and industrial loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial term

 

 

2,347

 

 

2,674

 

(12.2

)%

 

 

1,097

 

113.9

%

 

 

2,950

 

(20.4

)%

Commercial lines of credit

 

 

218,850

 

 

175,742

 

24.5

%

 

 

169,000

 

29.5

%

 

 

164,648

 

32.9

%

SBA commercial term

 

 

383

 

 

950

 

(59.7

)%

 

 

149

 

157.0

%

 

 

 

%

Other consumer loans

 

 

1,086

 

 

1,080

 

0.6

%

 

 

595

 

82.5

%

 

 

118

 

820.3

%

Total commitments to extend credit

 

$

259,436

 

$

211,311

 

22.8

%

 

$

199,283

 

30.2

%

 

$

195,417

 

32.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

6/30/2022

 

3/31/2022

 

% Change

 

12/31/2021

 

% Change

 

6/30/2021

 

% Change

Nonaccrual loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential property

 

$

450

 

 

$

461

 

 

(2.4

)%

 

$

 

 

%

 

$

 

 

%

SBA property

 

 

564

 

 

 

733

 

 

(23.1

)%

 

 

746

 

 

(24.4

)%

 

 

781

 

 

(27.8

)%

Commercial and industrial loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SBA commercial term

 

 

185

 

 

 

199

 

 

(7.0

)%

 

 

213

 

 

(13.1

)%

 

 

600

 

 

(69.2

)%

Other consumer loans

 

 

24

 

 

 

25

 

 

(4.0

)%

 

 

35

 

 

(31.4

)%

 

 

65

 

 

(63.1

)%

Total nonaccrual loans held-for-investment

 

 

1,223

 

 

 

1,418

 

 

(13.8

)%

 

 

994

 

 

23.0

%

 

 

1,446

 

 

(15.4

)%

Loans past due 90 days or more and still accruing

 

 

 

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

Non-performing loans (“NPLs”)

 

 

1,223

 

 

 

1,418

 

 

(13.8

)%

 

 

994

 

 

23.0

%

 

 

1,446

 

 

(15.4

)%

Other real estate owned (“OREO”)

 

 

808

 

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

Non-performing assets (“NPAs”)

 

$

2,031

 

 

$

1,418

 

 

43.2

%

 

$

994

 

 

104.3

%

 

$

1,446

 

 

40.5

%

Loans past due and still accruing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Past due 30 to 59 days

 

$

682

 

 

$

119

 

 

473.1

%

 

$

549

 

 

24.2

%

 

$

227

 

 

200.4

%

Past due 60 to 89 days

 

 

 

 

 

1

 

 

(100.0

)%

 

 

5

 

 

(100.0

)%

 

 

 

 

%

Past due 90 days or more

 

 

 

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

Total loans past due and still accruing

 

$

682

 

 

$

120

 

 

468.3

%

 

 

554

 

 

23.1

%

 

$

227

 

 

200.4

%

Troubled debt restructurings (“TDRs”)

 

 

 

 

 

 

 

 

 

 

 

 

 

Accruing TDRs

 

$

555

 

 

$

565

 

 

(1.8

)%

 

$

576

 

 

(3.6

)%

 

$

605

 

 

(8.3

)%

Nonaccrual TDRs

 

 

10

 

 

 

15

 

 

(33.3

)%

 

 

17

 

 

(41.2

)%

 

 

30

 

 

(66.7

)%

Total TDRs

 

$

565

 

 

$

580

 

 

(2.6

)%

 

$

593

 

 

(4.7

)%

 

$

635

 

 

(11.0

)%

Special mention loans

 

$

6,313

 

 

$

5,562

 

 

13.5

%

 

$

18,092

 

 

(65.1

)%

 

$

18,238

 

 

(65.4

)%

Classified assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Classified loans

 

$

3,980

 

 

$

5,377

 

 

(26.0

)%

 

$

5,168

 

 

(23.0

)%

 

$

9,666

 

 

(58.8

)%

OREO

 

 

808

 

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

Classified assets

 

$

4,788

 

 

$

5,377

 

 

(11.0

)%

 

$

5,168

 

 

(7.4

)%

 

$

9,666

 

 

(50.5

)%

NPLs to loans held-for-investment

 

 

0.07

%

 

 

0.08

%

 

 

 

 

0.06

%

 

 

 

 

0.08

%

 

 

NPAs to total assets

 

 

0.09

%

 

 

0.06

%

 

 

 

 

0.05

%

 

 

 

 

0.07

%

 

 

Classified assets to total assets

 

 

0.20

%

 

 

0.24

%

 

 

 

 

0.24

%

 

 

 

 

0.47

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan Modifications Related to the COVID-19 Pandemic

The Company had 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. Therefore, the modified loans were not considered TDRs. As of June 30, 2022 and March 31, 2022, the Company had no loans under modified terms related to the COVID-19 pandemic. Total loans under modified terms related to the COVID-19 pandemic totaled $16.2 million at June 30, 2021.

The Company had classified the loans that were granted modifications related to the COVID-19 pandemic in excess of 6 months on a cumulative basis as special mention or classified. Special mention and classified loans included $4.0 million and $1.5 million, respectively, at June 30, 2022, $4.1 million and $2.7 million, respectively, at March 31, 2022, $15.6 million and $2.7 million, respectively, December 31, 2021, and $16.4 million and $6.2 million, respectively, at June 30, 2021, of the loans that were granted such modifications.

Investment Securities

Total investment securities were $139.1 million at June 30, 2022, an increase of $7.7 million, or 5.9%, from $131.3 million at March 31, 2022, an increase of $15.9 million, or 12.9%, from $123.2 million at December 31, 2021, and an increase of $3.6 million, or 2.6%, from $135.5 million at June 30, 2021. The increase for the current quarter was primarily due to purchases of $18.1 million, partially offset by principal pay-downs and calls of $6.2 million, a fair value decrease of $4.1 million, and net premium amortization of $97 thousand. The increase for the current year-to-date period was primarily due to purchases of $38.0 million, partially offset by principal pay-downs and calls of $12.3 million, a fair value decrease of $9.6 million, and net premium amortization of $232 thousand.

Deposits

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

 

 

6/30/2022

 

3/31/2022

 

12/31/2021

 

6/30/2021

($ in thousands)

 

Amount

 

% to Total

 

Amount

 

% to Total

 

Amount

 

% to Total

 

Amount

 

% to Total

Noninterest-bearing demand deposits

 

$

988,454

 

49.5

%

 

$

891,797

 

46.7

%

 

$

830,383

 

44.5

%

 

$

795,741

 

44.3

%

Interest-bearing deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings

 

 

14,686

 

0.7

%

 

 

15,037

 

0.8

%

 

 

16,299

 

0.9

%

 

 

11,671

 

0.6

%

NOW

 

 

18,881

 

0.9

%

 

 

17,543

 

0.9

%

 

 

20,185

 

1.1

%

 

 

21,725

 

1.2

%

Retail money market accounts

 

 

458,605

 

22.9

%

 

 

431,057

 

22.5

%

 

 

386,041

 

20.5

%

 

 

358,575

 

19.9

%

Brokered money market accounts

 

 

1

 

0.1

%

 

 

1

 

0.1

%

 

 

1

 

0.1

%

 

 

4

 

0.1

%

Retail time deposits of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$250,000 or less

 

 

235,956

 

11.8

%

 

 

246,100

 

12.8

%

 

 

256,956

 

13.8

%

 

 

271,531

 

15.1

%

More than $250,000

 

 

186,024

 

9.3

%

 

 

173,844

 

9.1

%

 

 

172,269

 

9.2

%

 

 

173,401

 

9.6

%

State and brokered time deposits

 

 

95,000

 

4.8

%

 

 

135,000

 

7.1

%

 

 

185,000

 

9.9

%

 

 

165,000

 

9.2

%

Total interest-bearing deposits

 

 

1,009,153

 

50.5

%

 

 

1,018,582

 

53.3

%

 

 

1,036,751

 

55.5

%

 

 

1,001,907

 

55.7

%

Total deposits

 

$

1,997,607

 

100.0

%

 

$

1,910,379

 

100.0

%

 

$

1,867,134

 

100.0

%

 

$

1,797,648

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The increases in noninterest-bearing demand deposits and retail money market accounts for the current quarter and year-to-date period were primarily due to the overall liquid deposit market.

The increase in retail time deposits for the current quarter was primarily due to new accounts of $68.8 million, renewals of the matured accounts of $154.0 million and balance increases of $4.4 million, partially offset by matured and closed accounts of $225.2 million. The decrease for the current year was primarily due to matured and closed accounts of $413.7 million, partially offset by new accounts of $99.4 million, renewals of the matured accounts of $297.6 million and balance increases of $9.5 million.

Liquidity

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

($ in thousands)

 

6/30/2022

Cash and cash equivalents

 

$

299,910

 

Cash and cash equivalents to total assets

 

 

12.8

%

 

 

 

Available borrowing capacity

 

 

FHLB advances

 

$

549,920

 

Federal Reserve Discount Window

 

 

21,955

 

Overnight federal funds lines

 

 

65,000

 

Total

 

$

636,875

 

Total available borrowing capacity to total assets

 

 

27.2

%

 

 

 

Shareholders’ Equity

Shareholders’ equity was $334.4 million at June 30, 2022, an increase of $73.3 million, or 28.1%, from $261.1 million at March 31, 2022, an increase of $78.1 million, or 30.5%, from $256.3 million at December 31, 2021, and an increase of $95.4 million, or 39.9%, from $238.9 million at June 30, 2021. The increases for the current quarter and year-to-date period were primarily due to net income and issuance of preferred stock (as discussed below), partially offset by cash dividends declared on common stock and a decrease in accumulated other comprehensive income (loss). The Company declared cash dividends of $2.2 million and $4.5 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.

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 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. Dividends will be payable quarterly in arrears on March 15, June 15, September 15, and December 15.

The Series C Preferred Stock may be redeemed at the option of the Company on or after the fifth anniversary of issuance (or earlier in the event of loss of regulatory capital treatment), subject to the approval of the appropriate federal banking regulator and in accordance with the federal banking agencies’ regulatory capital regulations.

Established by the Consolidated Appropriations Act, 2021, the ECIP was created to encourage low- and moderate-income community financial institutions and minority depository institutions to provide loans, grants, and forbearance for small businesses, minority-owned businesses, and consumers, especially low-income and underserved communities, including persistent poverty counties, that may be disproportionately impacted by the economic effect of the COVID-19 pandemic by providing direct and indirect capital investments in low- and moderate-income community financial institutions.

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:

 

 

6/30/2022

 

3/31/2022

 

12/31/2021

 

6/30/2021

 

Well Capitalized Requirements

PCB Bancorp

 

 

 

 

 

 

 

 

 

 

Common tier 1 capital (to risk-weighted assets)

 

14.44

%

 

14.77

%

 

14.79

%

 

15.17

%

 

N/A

 

Total capital (to risk-weighted assets)

 

19.25

%

 

15.97

%

 

16.04

%

 

16.43

%

 

N/A

 

Tier 1 capital (to risk-weighted assets)

 

18.11

%

 

14.77

%

 

14.79

%

 

15.17

%

 

N/A

 

Tier 1 capital (to average assets)

 

15.37

%

 

12.22

%

 

12.11

%

 

11.76

%

 

N/A

 

Pacific City Bank

 

 

 

 

 

 

 

 

 

 

Common tier 1 capital (to risk-weighted assets)

 

17.79

%

 

14.43

%

 

14.48

%

 

14.88

%

 

6.5

%

Total capital (to risk-weighted assets)

 

18.92

%

 

15.63

%

 

15.73

%

 

16.13

%

 

10.0

%

Tier 1 capital (to risk-weighted assets)

 

17.79

%

 

14.43

%

 

14.48

%

 

14.88

%

 

8.0

%

Tier 1 capital (to average assets)

 

15.09

%

 

11.94

%

 

11.85

%

 

11.53

%

 

5.0

%

 

 

 

 

 

 

 

 

 

 

 

Name Change of Pacific City Bank to PCB Bank

On August 25, 2022, the Pacific City Bank will change its name to PCB Bank. In addition, the Company introduced a new logo, which will also be utilized by the Bank after its name change. In accordance with the name change, the Bank will update its website, branch signage and marketing collateral.

“As we continued to grow and expand our national presence, we felt that now is a good time to announce our new name which is better suited to the broad geographic reach of our institution now and in the future,” stated Henry Kim, President and Chief Executive Officer.

About PCB Bancorp

PCB Bancorp 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 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)

 

 

 

6/30/2022

 

3/31/2022

 

% Change

 

12/31/2021

 

% Change

 

6/30/2021

 

% Change

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

23,125

 

 

$

19,693

 

 

17.4

%

 

$

15,222

 

 

51.9

%

 

$

18,417

 

 

25.6

%

Interest-bearing deposits in other financial institutions

 

 

276,785

 

 

 

230,519

 

 

20.1

%

 

 

188,063

 

 

47.2

%

 

 

156,204

 

 

77.2

%

Total cash and cash equivalents

 

 

299,910

 

 

 

250,212

 

 

19.9

%

 

 

203,285

 

 

47.5

%

 

 

174,621

 

 

71.7

%

Securities available-for-sale, at fair value

 

 

139,067

 

 

 

131,345

 

 

5.9

%

 

 

123,198

 

 

12.9

%

 

 

135,479

 

 

2.6

%

Loans held-for-sale

 

 

9,627

 

 

 

18,340

 

 

(47.5

)%

 

 

37,026

 

 

(74.0

)%

 

 

11,255

 

 

(14.5

)%

Loans held-for-investment

 

 

1,833,010

 

 

 

1,742,955

 

 

5.2

%

 

 

1,732,205

 

 

5.8

%

 

 

1,719,656

 

 

6.6

%

Allowance for loan losses

 

 

(21,071

)

 

 

(21,198

)

 

(0.6

)%

 

 

(22,381

)

 

(5.9

)%

 

 

(24,889

)

 

(15.3

)%

Net loans held-for-investment

 

 

1,811,939

 

 

 

1,721,757

 

 

5.2

%

 

 

1,709,824

 

 

6.0

%

 

 

1,694,767

 

 

6.9

%

Premises and equipment, net

 

 

3,633

 

 

 

3,106

 

 

17.0

%

 

 

3,098

 

 

17.3

%

 

 

3,576

 

 

1.6

%

Federal Home Loan Bank and other bank stock

 

 

10,183

 

 

 

8,577

 

 

18.7

%

 

 

8,577

 

 

18.7

%

 

 

8,577

 

 

18.7

%

Other real estate owned, net

 

 

808

 

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

Bank-owned life insurance

 

 

29,705

 

 

 

29,530

 

 

0.6

%

 

 

29,358

 

 

1.2

%

 

 

 

 

%

Deferred tax assets, net

 

 

11,869

 

 

 

11,895

 

 

(0.2

)%

 

 

10,824

 

 

9.7

%

 

 

7,892

 

 

50.4

%

Servicing assets

 

 

7,716

 

 

 

7,533

 

 

2.4

%

 

 

7,269

 

 

6.1

%

 

 

6,482

 

 

19.0

%

Operating lease assets

 

 

6,512

 

 

 

6,511

 

 

%

 

 

6,786

 

 

(4.0

)%

 

 

6,595

 

 

(1.3

)%

Accrued interest receivable

 

 

5,212

 

 

 

5,050

 

 

3.2

%

 

 

5,368

 

 

(2.9

)%

 

 

6,741

 

 

(22.7

)%

Other assets

 

 

8,379

 

 

 

5,886

 

 

42.4

%

 

 

5,122

 

 

63.6

%

 

 

4,018

 

 

108.5

%

Total assets

 

$

2,344,560

 

 

$

2,199,742

 

 

6.6

%

 

$

2,149,735

 

 

9.1

%

 

$

2,060,003

 

 

13.8

%

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

988,454

 

 

$

891,797

 

 

10.8

%

 

$

830,383

 

 

19.0

%

 

$

795,741

 

 

24.2

%

Savings, NOW and money market accounts

 

 

492,173

 

 

 

463,638

 

 

6.2

%

 

 

422,526

 

 

16.5

%

 

 

391,975

 

 

25.6

%

Time deposits of $250,000 or less

 

 

270,956

 

 

 

281,100

 

 

(3.6

)%

 

 

341,956

 

 

(20.8

)%

 

 

336,531

 

 

(19.5

)%

Time deposits of more than $250,000

 

 

246,024

 

 

 

273,844

 

 

(10.2

)%

 

 

272,269

 

 

(9.6

)%

 

 

273,401

 

 

(10.0

)%

Total deposits

 

 

1,997,607

 

 

 

1,910,379

 

 

4.6

%

 

 

1,867,134

 

 

7.0

%

 

 

1,797,648

 

 

11.1

%

Federal Home Loan Bank advances

 

 

 

 

 

10,000

 

 

(100.0

)%

 

 

10,000

 

 

(100.0

)%

 

 

10,000

 

 

(100.0

)%

Operating lease liabilities

 

 

7,067

 

 

 

7,176

 

 

(1.5

)%

 

 

7,444

 

 

(5.1

)%

 

 

7,338

 

 

(3.7

)%

Accrued interest payable and other liabilities

 

 

5,511

 

 

 

11,129

 

 

(50.5

)%

 

 

8,871

 

 

(37.9

)%

 

 

6,076

 

 

(9.3

)%

Total liabilities

 

 

2,010,185

 

 

 

1,938,684

 

 

3.7

%

 

 

1,893,449

 

 

6.2

%

 

 

1,821,062

 

 

10.4

%

Commitments and contingent liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

69,141

 

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

Common stock

 

 

155,842

 

 

 

155,614

 

 

0.1

%

 

 

154,992

 

 

0.5

%

 

 

154,796

 

 

0.7

%

Retained earnings

 

 

115,992

 

 

 

109,142

 

 

6.3

%

 

 

101,140

 

 

14.7

%

 

 

83,002

 

 

39.7

%

Accumulated other comprehensive income (loss), net

 

 

(6,600

)

 

 

(3,698

)

 

NM

 

 

 

154

 

 

NM

 

 

 

1,143

 

 

NM

 

Total shareholders’ equity

 

 

334,375

 

 

 

261,058

 

 

28.1

%

 

 

256,286

 

 

30.5

%

 

 

238,941

 

 

39.9

%

Total liabilities and shareholders’ equity

 

$

2,344,560

 

 

$

2,199,742

 

 

6.6

%

 

$

2,149,735

 

 

9.1

%

 

$

2,060,003

 

 

13.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding common shares

 

 

14,956,760

 

 

 

14,944,663

 

 

 

 

 

14,865,825

 

 

 

 

 

14,854,315

 

 

 

Book value per common share (1)

 

$

22.36

 

 

$

17.47

 

 

 

 

$

17.24

 

 

 

 

$

16.09

 

 

 

TCE per common share (2)

 

$

17.73

 

 

$

17.47

 

 

 

 

$

17.24

 

 

 

 

$

16.09

 

 

 

Total loan to total deposit ratio

 

 

92.24

%

 

 

92.20

%

 

 

 

 

94.76

%

 

 

 

 

96.29

%

 

 

Noninterest-bearing deposits to total deposits

 

 

49.48

%

 

 

46.68

%

 

 

 

 

44.47

%

 

 

 

 

44.27

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

Six Months Ended

 

 

6/30/2022

 

3/31/2022

 

% Change

 

6/30/2021

 

% Change

 

6/30/2022

 

6/30/2021

 

% Change

Interest and dividend income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

21,243

 

 

$

20,190

 

 

5.2

%

 

$

19,511

 

 

8.9

%

 

$

41,433

 

 

$

38,255

 

 

8.3

%

Investment securities

 

 

668

 

 

 

476

 

 

40.3

%

 

 

375

 

 

78.1

%

 

 

1,144

 

 

 

735

 

 

55.6

%

Other interest-earning assets

 

 

535

 

 

 

228

 

 

134.6

%

 

 

165

 

 

224.2

%

 

 

763

 

 

 

319

 

 

139.2

%

Total interest income

 

 

22,446

 

 

 

20,894

 

 

7.4

%

 

 

20,051

 

 

11.9

%

 

 

43,340

 

 

 

39,309

 

 

10.3

%

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

1,041

 

 

 

850

 

 

22.5

%

 

 

1,000

 

 

4.1

%

 

 

1,891

 

 

 

2,311

 

 

(18.2

)%

Other borrowings

 

 

54

 

 

 

51

 

 

5.9

%

 

 

55

 

 

(1.8

)%

 

 

105

 

 

 

183

 

 

(42.6

)%

Total interest expense

 

 

1,095

 

 

 

901

 

 

21.5

%

 

 

1,055

 

 

3.8

%

 

 

1,996

 

 

 

2,494

 

 

(20.0

)%

Net interest income

 

 

21,351

 

 

 

19,993

 

 

6.8

%

 

 

18,996

 

 

12.4

%

 

 

41,344

 

 

 

36,815

 

 

12.3

%

Reversal for loan losses

 

 

(109

)

 

 

(1,191

)

 

(90.8

)%

 

 

(934

)

 

(88.3

)%

 

 

(1,300

)

 

 

(2,081

)

 

(37.5

)%

Net interest income after reversal for loan losses

 

 

21,460

 

 

 

21,184

 

 

1.3

%

 

 

19,930

 

 

7.7

%

 

 

42,644

 

 

 

38,896

 

 

9.6

%

Noninterest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of loans

 

 

2,039

 

 

 

3,777

 

 

(46.0

)%

 

 

3,967

 

 

(48.6

)%

 

 

5,816

 

 

 

5,289

 

 

10.0

%

Service charges and fees on deposits

 

 

330

 

 

 

303

 

 

8.9

%

 

 

302

 

 

9.3

%

 

 

633

 

 

 

595

 

 

6.4

%

Loan servicing income

 

 

755

 

 

 

700

 

 

7.9

%

 

 

545

 

 

38.5

%

 

 

1,455

 

 

 

1,427

 

 

2.0

%

Bank-owned life insurance income

 

 

175

 

 

 

172

 

 

1.7

%

 

 

 

 

%

 

 

347

 

 

 

 

 

%

Other income

 

 

349

 

 

 

334

 

 

4.5

%

 

 

337

 

 

3.6

%

 

 

683

 

 

 

697

 

 

(2.0

)%

Total noninterest income

 

 

3,648

 

 

 

5,286

 

 

(31.0

)%

 

 

5,151

 

 

(29.2

)%

 

 

8,934

 

 

 

8,008

 

 

11.6

%

Noninterest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

8,125

 

 

 

8,595

 

 

(5.5

)%

 

 

7,125

 

 

14.0

%

 

 

16,720

 

 

 

13,307

 

 

25.6

%

Occupancy and equipment

 

 

1,537

 

 

 

1,397

 

 

10.0

%

 

 

1,388

 

 

10.7

%

 

 

2,934

 

 

 

2,759

 

 

6.3

%

Professional fees

 

 

642

 

 

 

403

 

 

59.3

%

 

 

658

 

 

(2.4

)%

 

 

1,045

 

 

 

1,152

 

 

(9.3

)%

Marketing and business promotion

 

 

310

 

 

 

207

 

 

49.8

%

 

 

516

 

 

(39.9

)%

 

 

517

 

 

 

654

 

 

(20.9

)%

Data processing

 

 

441

 

 

 

404

 

 

9.2

%

 

 

396

 

 

11.4

%

 

 

845

 

 

 

773

 

 

9.3

%

Director fees and expenses

 

 

182

 

 

 

169

 

 

7.7

%

 

 

151

 

 

20.5

%

 

 

351

 

 

 

289

 

 

21.5

%

Regulatory assessments

 

 

147

 

 

 

141

 

 

4.3

%

 

 

179

 

 

(17.9

)%

 

 

288

 

 

 

387

 

 

(25.6

)%

Other expense

 

 

861

 

 

 

755

 

 

14.0

%

 

 

726

 

 

18.6

%

 

 

1,616

 

 

 

1,487

 

 

8.7

%

Total noninterest expense

 

 

12,245

 

 

 

12,071

 

 

1.4

%

 

 

11,139

 

 

9.9

%

 

 

24,316

 

 

 

20,808

 

 

16.9

%

Income before income taxes

 

 

12,863

 

 

 

14,399

 

 

(10.7

)%

 

 

13,942

 

 

(7.7

)%

 

 

27,262

 

 

 

26,096

 

 

4.5

%

Income tax expense

 

 

3,771

 

 

 

4,159

 

 

(9.3

)%

 

 

4,098

 

 

(8.0

)%

 

 

7,930

 

 

 

7,692

 

 

3.1

%

Net income

 

$

9,092

 

 

$

10,240

 

 

(11.2

)%

 

$

9,844

 

 

(7.6

)%

 

$

19,332

 

 

$

18,404

 

 

5.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.61

 

 

$

0.69

 

 

 

 

$

0.65

 

 

 

 

$

1.29

 

 

$

1.20

 

 

 

Diluted

 

$

0.60

 

 

$

0.67

 

 

 

 

$

0.64

 

 

 

 

$

1.27

 

 

$

1.19

 

 

 

Average common shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

14,883,768

 

 

 

14,848,014

 

 

 

 

 

15,115,561

 

 

 

 

 

14,865,990

 

 

 

15,249,210

 

 

 

Diluted

 

 

15,122,452

 

 

 

15,141,693

 

 

 

 

 

15,309,873

 

 

 

 

 

15,138,493

 

 

 

15,425,308

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend paid per common share

 

$

0.15

 

 

$

0.15

 

 

 

 

$

0.10

 

 

 

 

$

0.30

 

 

$

0.20

 

 

 

Return on average assets (1)

 

 

1.65

%

 

 

1.92

%

 

 

 

 

1.96

%

 

 

 

 

1.78

%

 

 

1.85

%

 

 

Return on average shareholders’ equity (1)

 

 

12.48

%

 

 

16.01

%

 

 

 

 

16.49

%

 

 

 

 

14.13

%

 

 

15.59

%

 

 

Return on average TCE (1), (2)

 

 

13.85

%

 

 

16.01

%

 

 

 

 

16.49

%

 

 

 

 

14.92

%

 

 

15.59

%

 

 

Efficiency ratio (3)

 

 

48.98

%

 

 

47.75

%

 

 

 

 

46.13

%

 

 

 

 

48.36

%

 

 

46.42

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

6/30/2022

 

3/31/2022

 

6/30/2021

 

 

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)

 

$

1,804,368

 

 

$

21,243

 

4.72

%

 

$

1,773,376

 

 

$

20,190

 

4.62

%

 

$

1,691,704

 

 

$

19,511

 

4.63

%

Mortgage-backed securities

 

 

88,032

 

 

 

416

 

1.90

%

 

 

84,223

 

 

 

307

 

1.48

%

 

 

92,732

 

 

 

233

 

1.01

%

Collateralized mortgage obligation

 

 

25,929

 

 

 

125

 

1.93

%

 

 

18,242

 

 

 

48

 

1.07

%

 

 

22,929

 

 

 

54

 

0.94

%

SBA loan pool securities

 

 

11,164

 

 

 

43

 

1.54

%

 

 

10,095

 

 

 

38

 

1.53

%

 

 

10,828

 

 

 

51

 

1.89

%

Municipal bonds (2)

 

 

5,347

 

 

 

37

 

2.78

%

 

 

5,632

 

 

 

36

 

2.59

%

 

 

5,760

 

 

 

37

 

2.58

%

Corporate bonds

 

 

4,852

 

 

 

47

 

3.89

%

 

 

5,038

 

 

 

47

 

3.78

%

 

 

 

 

 

 

%

Other interest-earning assets

 

 

195,633

 

 

 

535

 

1.10

%

 

 

198,918

 

 

 

228

 

0.46

%

 

 

164,710

 

 

 

165

 

0.40

%

Total interest-earning assets

 

 

2,135,325

 

 

 

22,446

 

4.22

%

 

 

2,095,524

 

 

 

20,894

 

4.04

%

 

 

1,988,663

 

 

 

20,051

 

4.04

%

Noninterest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

20,801

 

 

 

 

 

 

 

20,385

 

 

 

 

 

 

 

19,080

 

 

 

 

 

Allowance for loan losses

 

 

(21,204

)

 

 

 

 

 

 

(22,377

)

 

 

 

 

 

 

(25,559

)

 

 

 

 

Other assets

 

 

73,137

 

 

 

 

 

 

 

67,600

 

 

 

 

 

 

 

36,605

 

 

 

 

 

Total noninterest-earning assets

 

 

72,734

 

 

 

 

 

 

 

65,608

 

 

 

 

 

 

 

30,126

 

 

 

 

 

Total assets

 

$

2,208,059

 

 

 

 

 

 

$

2,161,132

 

 

 

 

 

 

$

2,018,789

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

$

464,829

 

 

 

430

 

0.37

%

 

$

431,981

 

 

 

313

 

0.29

%

 

$

400,314

 

 

 

317

 

0.32

%

Savings

 

 

14,989

 

 

 

2

 

0.05

%

 

 

15,644

 

 

 

2

 

0.05

%

 

 

11,588

 

 

 

1

 

0.03

%

Time deposits

 

 

521,606

 

 

 

609

 

0.47

%

 

 

586,387

 

 

 

535

 

0.37

%

 

 

615,035

 

 

 

682

 

0.44

%

Total interest-bearing deposits

 

 

1,001,424

 

 

 

1,041

 

0.42

%

 

 

1,034,012

 

 

 

850

 

0.33

%

 

 

1,026,937

 

 

 

1,000

 

0.39

%

Other borrowings

 

 

11,132

 

 

 

54

 

1.95

%

 

 

10,400

 

 

 

51

 

1.99

%

 

 

19,012

 

 

 

55

 

1.16

%

Total interest-bearing liabilities

 

 

1,012,556

 

 

 

1,095

 

0.43

%

 

 

1,044,412

 

 

 

901

 

0.35

%

 

 

1,045,949

 

 

 

1,055

 

0.40

%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

 

889,691

 

 

 

 

 

 

 

840,626

 

 

 

 

 

 

 

720,105

 

 

 

 

 

Other liabilities

 

 

13,677

 

 

 

 

 

 

 

16,727

 

 

 

 

 

 

 

13,287

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

903,368

 

 

 

 

 

 

 

857,353

 

 

 

 

 

 

 

733,392

 

 

 

 

 

Total liabilities

 

 

1,915,924

 

 

 

 

 

 

 

1,901,765

 

 

 

 

 

 

 

1,779,341

 

 

 

 

 

Total shareholders’ equity

 

 

292,135

 

 

 

 

 

 

 

259,367

 

 

 

 

 

 

 

239,448

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

2,208,059

 

 

 

 

 

 

$

2,161,132

 

 

 

 

 

 

$

2,018,789

 

 

 

 

 

Net interest income

 

 

 

$

21,351

 

 

 

 

 

$

19,993

 

 

 

 

 

$

18,996

 

 

Net interest spread (3)

 

 

 

 

 

3.79

%

 

 

 

 

 

3.69

%

 

 

 

 

 

3.64

%

Net interest margin (4)

 

 

 

 

 

4.01

%

 

 

 

 

 

3.87

%

 

 

 

 

 

3.83

%

Total deposits

 

$

1,891,115

 

 

$

1,041

 

0.22

%

 

$

1,874,638

 

 

$

850

 

0.18

%

 

$

1,747,042

 

 

$

1,000

 

0.23

%

Total funding (5)

 

$

1,902,247

 

 

$

1,095

 

0.23

%

 

$

1,885,038

 

 

$

901

 

0.19

%

 

$

1,766,054

 

 

$

1,055

 

0.24

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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)

 

 

 

Six Months Ended

 

 

6/30/2022

 

6/30/2021

 

 

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)

 

$

1,788,958

 

 

$

41,433

 

4.67

%

 

$

1,666,808

 

 

$

38,255

 

4.63

%

Mortgage-backed securities

 

 

86,138

 

 

 

723

 

1.69

%

 

 

87,140

 

 

 

448

 

1.04

%

Collateralized mortgage obligation

 

 

22,106

 

 

 

173

 

1.58

%

 

 

23,903

 

 

 

111

 

0.94

%

SBA loan pool securities

 

 

10,633

 

 

 

81

 

1.54

%

 

 

11,248

 

 

 

103

 

1.85

%

Municipal bonds (2)

 

 

5,489

 

 

 

73

 

2.68

%

 

 

5,782

 

 

 

73

 

2.55

%

Corporate bonds

 

 

4,944

 

 

 

94

 

3.83

%

 

 

 

 

 

 

%

Other interest-earning assets

 

 

197,267

 

 

 

763

 

0.78

%

 

 

176,864

 

 

 

319

 

0.36

%

Total interest-earning assets

 

 

2,115,535

 

 

 

43,340

 

4.13

%

 

 

1,971,745

 

 

 

39,309

 

4.02

%

Noninterest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

20,594

 

 

 

 

 

 

 

19,076

 

 

 

 

 

Allowance for loan losses

 

 

(21,787

)

 

 

 

 

 

 

(26,211

)

 

 

 

 

Other assets

 

 

70,384

 

 

 

 

 

 

 

38,481

 

 

 

 

 

Total noninterest-earning assets

 

 

69,191

 

 

 

 

 

 

 

31,346

 

 

 

 

 

Total assets

 

$

2,184,726

 

 

 

 

 

 

$

2,003,091

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

$

448,496

 

 

 

743

 

0.33

%

 

$

403,948

 

 

 

650

 

0.32

%

Savings

 

 

15,315

 

 

 

4

 

0.05

%

 

 

11,101

 

 

 

2

 

0.04

%

Time deposits

 

 

553,818

 

 

 

1,144

 

0.42

%

 

 

625,267

 

 

 

1,659

 

0.54

%

Total interest-bearing deposits

 

 

1,017,629

 

 

 

1,891

 

0.37

%

 

 

1,040,316

 

 

 

2,311

 

0.45

%

Other borrowings

 

 

10,768

 

 

 

105

 

1.97

%

 

 

47,128

 

 

 

183

 

0.78

%

Total interest-bearing liabilities

 

 

1,028,397

 

 

 

1,996

 

0.39

%

 

 

1,087,444

 

 

 

2,494

 

0.46

%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

 

865,294

 

 

 

 

 

 

 

663,902

 

 

 

 

 

Other liabilities

 

 

15,194

 

 

 

 

 

 

 

13,618

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

880,488

 

 

 

 

 

 

 

677,520

 

 

 

 

 

Total liabilities

 

 

1,908,885

 

 

 

 

 

 

 

1,764,964

 

 

 

 

 

Total shareholders’ equity

 

 

275,841

 

 

 

 

 

 

 

238,127

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

2,184,726

 

 

 

 

 

 

$

2,003,091

 

 

 

 

 

Net interest income

 

 

 

$

41,344

 

 

 

 

 

$

36,815

 

 

Net interest spread (3)

 

 

 

 

 

3.74

%

 

 

 

 

 

3.56

%

Net interest margin (4)

 

 

 

 

 

3.94

%

 

 

 

 

 

3.77

%

Total deposits

 

$

1,882,923

 

 

$

1,891

 

0.20

%

 

$

1,704,218

 

 

$

2,311

 

0.27

%

Total funding (5)

 

$

1,893,691

 

 

$

1,996

 

0.21

%

 

$

1,751,346

 

 

$

2,494

 

0.29

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(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)

 

 

6/30/2022

 

3/31/2022

 

12/31/2021

 

6/30/2021

Loans held-for-investment

(a)

 

$

1,833,010

 

 

$

1,742,955

 

 

$

1,732,205

 

 

$

1,719,656

 

Less: SBA PPP loans

(b)

 

 

1,583

 

 

 

22,926

 

 

 

65,329

 

 

 

181,019

 

Loans held-for-investment, excluding SBA PPP loans

(c)=(a)-(b)

 

$

1,831,427

 

 

$

1,720,029

 

 

$

1,666,876

 

 

$

1,538,637

 

Allowance

(d)

 

$

21,071

 

 

$

21,198

 

 

$

22,381

 

 

$

24,889

 

Allowance to loans held-for-investment ratio

(d)/(a)

 

 

1.15

%

 

 

1.22

%

 

 

1.29

%

 

 

1.45

%

Adjusted Allowance to loans held-for-investment ratio

(d)/(c)

 

 

1.15

%

 

 

1.23

%

 

 

1.34

%

 

 

1.62

%

 

 

 

 

 

 

 

 

 

 

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

Six Months Ended

 

 

6/30/2022

 

3/31/2022

 

6/30/2021

 

6/30/2022

 

6/30/2021

Average total shareholders' equity

(a)

 

$

292,135

 

 

$

259,367

 

 

$

239,448

 

 

$

275,841

 

 

$

238,127

 

Less: average preferred stock

(b)

 

 

28,872

 

 

 

 

 

 

 

 

 

14,516

 

 

 

 

Average TCE

(c)=(a)-(b)

 

$

263,263

 

 

$

259,367

 

 

$

239,448

 

 

$

261,325

 

 

$

238,127

 

Net income

(d)

 

$

9,092

 

 

$

10,240

 

 

$

9,844

 

 

$

19,332

 

 

$

18,404

 

Return on average shareholder's equity (1)

(d)/(a)

 

 

12.48

%

 

 

16.01

%

 

 

16.49

%

 

 

14.13

%

 

 

15.59

%

Return on average TCE (1)

(d)/(c)

 

 

13.85

%

 

 

16.01

%

 

 

16.49

%

 

 

14.92

%

 

 

15.59

%

 

 

 

 

 

 

 

 

 

 

 

 

(1) Annualized.

($ in thousands, except per share data)

 

 

6/30/2022

 

3/31/2022

 

12/31/2021

 

6/30/2021

Total shareholders' equity

(a)

 

$

334,375

 

 

$

261,058

 

 

$

256,286

 

 

$

238,941

 

Less: preferred stock

(b)

 

 

69,141

 

 

 

 

 

 

 

 

 

 

TCE

(c)=(a)-(b)

 

$

265,234

 

 

$

261,058

 

 

$

256,286

 

 

$

238,941

 

Outstanding common shares

(d)

 

 

14,956,760

 

 

 

14,944,663

 

 

 

14,865,825

 

 

 

14,854,315

 

Book value per common share

(a)/(d)

 

$

22.36

 

 

$

17.47

 

 

$

17.24

 

 

$

16.09

 

TCE per common share

(c)/(d)

 

$

17.73

 

 

$

17.47

 

 

$

17.24

 

 

$

16.09

 

Total assets

(e)

 

$

2,344,560

 

 

$

2,199,742

 

 

$

2,149,735

 

 

$

2,060,003

 

Total shareholders' equity to total assets

(a)/(e)

 

 

14.26

%

 

 

11.87

%

 

 

11.92

%

 

 

11.60

%

TCE to total assets

(c)/(e)

 

 

11.31

%

 

 

11.87

%

 

 

11.92

%

 

 

11.60

%

 

 

 

 

 

 

 

 

 

 

 

Contacts

Timothy Chang

Executive Vice President & Chief Financial Officer

213-210-2000

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