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
shareholders’ equity 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
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220728005118/en/
Timothy Chang Executive Vice President & Chief Financial
Officer 213-210-2000
PCB Bancorp (NASDAQ:PCB)
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