PCB Bancorp (the “Company”) (NASDAQ: PCB), the holding company
of PCB Bank (the “Bank”), today reported net income of $7.0
million, or $0.46 per diluted common share, for the third quarter
of 2022, compared with $9.1 million, or $0.60 per diluted common
share, for the previous quarter and $11.0 million, or $0.73 per
diluted common share, for the year-ago quarter.
Q3 2022 Highlights
- Net income totaled $7.0 million, or $0.46 per diluted common
share, for the current quarter;
- The Company recorded a provision (reversal) for loan losses of
$3.8 million for the current quarter compared with $(109) thousand
for the previous quarter and $(1.1) million for the year-ago
quarter.
- Allowance for loan losses (“Allowance”) to loans
held-for-investment(1) ratio was 1.21% at September 30, 2022
compared with 1.15% at June 30, 2022, 1.29% at December 31, 2021
and 1.39% at September 30, 2021. Adjusted Allowance to loans
held-for-investment ratio(2) was 1.21% at September 30, 2022
compared with 1.15% at June 30, 2022, 1.34% at December 31, 2021
and 1.48% at September 30, 2021.
- Net interest income was $24.0 million for the current quarter
compared with $21.4 million for the previous quarter and $20.2
million for the year-ago quarter. Net interest margin was 4.25% for
the current quarter compared with 4.01% for the previous quarter
and 3.93% for the year-ago quarter.
- Gain on sale of loans was $1.4 million for the current quarter
compared with $2.0 million for the previous quarter and $4.3
million for the year-ago quarter.
- Total assets were $2.33 billion at September 30, 2022, a
decrease of $17.5 million, or 0.7%, from $2.34 billion at June 30,
2022, but an increase of $177.3 million, or 8.2%, from $2.15
billion at December 31, 2021 and an increase of $222.4 million, or
10.6%, from $2.10 billion at September 30, 2021;
- Loans held-for-investment were $1.96 billion at September 30,
2022, an increase of $126.2 million, or 6.9%, from $1.83 billion at
June 30, 2022, an increase of $227.0 million, or 13.1%, from $1.73
billion at December 31, 2021, and an increase of $251.4 million, or
14.7%, from $1.71 billion at September 30, 2021;
- Total deposits were $1.98 billion at September 30, 2022, a
decrease of $19.5 million, or 1.0%, from $2.00 billion at June 30,
2022, but an increase of $111.0 million, or 5.9%, from $1.87
billion at December 31, 2021 and an increase of $145.4 million, or
7.9%, from $1.83 billion at September 30, 2021;
- The Company announced a repurchase program on July 28, 2022 for
the repurchase up to 5% of outstanding common stock. As of
September 30, 2022, the Company repurchased and retired 119,941
shares of common stock for an aggregate cost of $2.2 million;
and
- The Bank changed its name from Pacific City Bank to PCB Bank
and opened 2 new full-service branches in Dallas, Texas and
Palisades Park, New Jersey.
“We are pleased to announce our continued solid financial
performance for the third quarter of 2022,” stated Henry Kim,
President and Chief Executive Officer. “We funded $172 million in
loans held-for-investment during the third quarter, resulting in a
loan balance increase of 6.9% quarter-over-quarter or 13.1%
year-to-date. Compared with the second quarter of 2022, our net
interest margin expanded 24 basis points to 4.25% and our net
interest income increased 12.5% to $24.0 million for the third
quarter. In keeping with our expansion strategic initiative to
increase the value of our franchise, we successfully opened two new
full-service branches in Dallas, Texas, and Palisades Park, New
Jersey during the third quarter of 2022.”
“As we look ahead into the fourth quarter of this year, we will
continue to remain opportunistic with our strong capital position
and invest in our long-term franchise value by strategically
expanding our footprint. We are on schedule to open one more
full-service branch in Carrollton, Texas during the fourth quarter
of this year,” concluded Kim.
-------------------------------------------------------------------------------------
(1)
Loans held-for-investment are presented
net of deferred fees and costs in this press release.
(2)
Adjusted Allowance to loans
held-for-investment ratio is a non-GAAP measure, which excludes
U.S. Small Business Administration (“SBA”) Paycheck Protection
Program (“PPP”) loans from loans held-for-investment. See “Non-GAAP
Measures” for reconciliation of this measure to its most comparable
GAAP measure.
Financial Highlights
(Unaudited)
($ in thousands, except per share
data)
Three Months
Ended
Nine Months Ended
9/30/2022
6/30/2022
% Change
9/30/2021
% Change
9/30/2022
9/30/2021
% Change
Net income
$
6,953
$
9,092
(23.5
)%
$
11,023
(36.9
)%
$
26,285
$
29,427
(10.7
)%
Diluted earnings per common share
$
0.46
$
0.60
(23.3
)%
$
0.73
(37.0
)%
$
1.73
$
1.92
(9.9
)%
Net interest income
$
24,023
$
21,351
12.5
%
$
20,227
18.8
%
$
65,367
$
57,042
14.6
%
Provision (reversal) for loan losses
3,753
(109
)
NM
(1,053
)
NM
2,453
(3,134
)
NM
Noninterest income
3,176
3,648
(12.9
)%
5,588
(43.2
)%
12,110
13,596
(10.9
)%
Noninterest expense
13,695
12,245
11.8
%
11,232
21.9
%
38,011
32,040
18.6
%
Return on average assets (1)
1.19
%
1.65
%
2.11
%
1.58
%
1.94
%
Return on average shareholders’ equity
(1)
8.16
%
12.48
%
17.98
%
11.84
%
16.40
%
Return on average tangible common equity
(“TCE”) (2)
10.25
%
13.85
%
17.98
%
13.31
%
16.40
%
Net interest margin (1)
4.25
%
4.01
%
3.93
%
4.05
%
3.82
%
Efficiency ratio (3)
50.35
%
48.98
%
43.51
%
49.06
%
45.36
%
($ in thousands, except per share
data)
9/30/2022
6/30/2022
% Change
12/31/2021
% Change
9/30/2021
% Change
Total assets
$
2,327,051
$
2,344,560
(0.7
)%
$
2,149,735
8.2
%
$
2,104,699
10.6
%
Net loans held-for-investment
1,935,476
1,811,939
6.8
%
1,709,824
13.2
%
1,684,071
14.9
%
Total deposits
1,978,098
1,997,607
(1.0
)%
1,867,134
5.9
%
1,832,666
7.9
%
Book value per common share (4)
$
22.40
$
22.36
$
17.24
$
16.68
TCE per common share (2)
$
17.75
$
17.73
$
17.24
$
16.68
Tier 1 leverage ratio (consolidated)
14.74
%
15.37
%
12.11
%
11.91
%
Total shareholders’ equity to total
assets
14.30
%
14.26
%
11.92
%
11.76
%
TCE to total assets (2), (5)
11.33
%
11.31
%
11.92
%
11.76
%
(1)
Ratios are presented on an annualized
basis.
(2)
Non-GAAP. See “Non-GAAP Measures” for
reconciliation of this measure to its most comparable GAAP
measure.
(3)
Calculated by dividing noninterest expense
by the sum of net interest income and noninterest income.
(4)
Calculated by dividing total shareholders’
equity by the number of outstanding common shares.
(5)
The Company did not have any intangible
asset component for the presented periods.
Result of Operations
(Unaudited)
Net Interest Income and Net Interest Margin
The following table presents the components of net interest
income for the periods indicated:
Three Months
Ended
Nine Months Ended
($ in thousands)
9/30/2022
6/30/2022
% Change
9/30/2021
% Change
9/30/2022
9/30/2021
% Change
Interest income/expense on
Loans
$
24,835
$
21,243
16.9
%
$
20,537
20.9
%
$
66,268
$
58,792
12.7
%
Investment securities
806
668
20.7
%
437
84.4
%
1,950
1,172
66.4
%
Other interest-earning assets
1,194
535
123.2
%
194
515.5
%
1,957
513
281.5
%
Total interest-earning assets
26,835
22,446
19.6
%
21,168
26.8
%
70,175
60,477
16.0
%
Interest-bearing deposits
2,798
1,041
168.8
%
885
216.2
%
4,689
3,196
46.7
%
Borrowings
14
54
(74.1
)%
56
(75.0
)%
119
239
(50.2
)%
Total interest-bearing liabilities
2,812
1,095
156.8
%
941
198.8
%
4,808
3,435
40.0
%
Net interest income
$
24,023
$
21,351
12.5
%
$
20,227
18.8
%
$
65,367
$
57,042
14.6
%
Average balance of
Loans
$
1,905,366
$
1,804,368
5.6
%
$
1,715,106
11.1
%
$
1,828,187
$
1,683,084
8.6
%
Investment securities
137,363
135,324
1.5
%
136,874
0.4
%
132,023
131,039
0.8
%
Other interest-earning assets
200,367
195,633
2.4
%
188,137
6.5
%
198,311
180,663
9.8
%
Total interest-earning assets
$
2,243,096
$
2,135,325
5.0
%
$
2,040,117
9.9
%
$
2,158,521
$
1,994,786
8.2
%
Interest-bearing deposits
$
1,137,739
$
1,001,424
13.6
%
$
1,000,332
13.7
%
$
1,058,105
$
1,026,842
3.0
%
Borrowings
2,033
11,132
(81.7
)%
18,152
(88.8
)%
7,824
37,363
(79.1
)%
Total interest-bearing liabilities
$
1,139,772
$
1,012,556
12.6
%
$
1,018,484
11.9
%
$
1,065,929
$
1,064,205
0.2
%
Total funding (1)
$
1,965,134
$
1,902,247
3.3
%
$
1,812,649
8.4
%
$
1,917,766
$
1,772,005
8.2
%
Annualized average yield/cost
of
Loans
5.17
%
4.72
%
4.75
%
4.85
%
4.67
%
Investment securities
2.33
%
1.98
%
1.27
%
1.97
%
1.20
%
Other interest-earning assets
2.36
%
1.10
%
0.41
%
1.32
%
0.38
%
Total interest-earning assets
4.75
%
4.22
%
4.12
%
4.35
%
4.05
%
Interest-bearing deposits
0.98
%
0.42
%
0.35
%
0.59
%
0.42
%
Borrowings
2.73
%
1.95
%
1.22
%
2.03
%
0.86
%
Total interest-bearing liabilities
0.98
%
0.43
%
0.37
%
0.60
%
0.43
%
Net interest margin
4.25
%
4.01
%
3.93
%
4.05
%
3.82
%
Cost of total funding (1)
0.57
%
0.23
%
0.21
%
0.34
%
0.26
%
Supplementary information
Net accretion of discount on loans
$
867
$
907
(4.4
)%
$
932
(7.0
)%
$
2,682
$
2,689
(0.3
)%
Net amortization of deferred loan fees
$
243
$
606
(59.9
)%
$
1,983
(87.7
)%
$
2,014
$
4,662
(56.8
)%
(1)
Total funding is the sum of
interest-bearing liabilities and noninterest-bearing deposits. The
cost of total funding is calculated as annualized total interest
expense divided by average total funding.
Loans. The increases in average
yield for the current quarter and year-to-date period were
primarily due to an increase in overall interest rates on loans
from the rising interest rate environment, partially offset by a
decrease in net amortization of deferred loan fees from the
decreased amount of SBA PPP loan payoffs.
The following table presents a composition of total loans by
interest rate type accompanied with the weighted-average
contractual rates as of the dates indicated:
9/30/2022
6/30/2022
12/31/2021
9/30/2021
% to Total Loans
Weighted- Average Contractual
Rate
% to Total Loans
Weighted- Average Contractual
Rate
% to Total Loans
Weighted- Average Contractual
Rate
% to Total Loans
Weighted- Average Contractual
Rate
Fixed rate loans
24.0%
4.43%
24.5%
4.35%
28.4%
3.98%
29.9%
3.86%
Hybrid rate loans
38.0%
4.23%
37.0%
4.11%
29.1%
4.16%
26.4%
4.28%
Variable rate loans
38.0%
6.75%
38.5%
5.12%
42.5%
3.95%
43.7%
3.96%
Investment Securities. The
increases in average yield for the current quarter and year-to-date
period were primarily due to a decrease in net amortization of
premiums on mortgage-backed securities and collateralized mortgage
obligations and higher yield on newly purchased investment
securities.
Other Interest-Earning Assets. The
increases in average yield for the current quarter and year-to-date
period were primarily due to an increased interest rate on cash
held at the Federal Reserve Bank (“FRB”) account. The increases in
average balance for the current quarter and year-to-date period
compared with the same periods of 2021 were primarily due to an
increase in average balance of deposits and the Emergency Capital
Investment Program (“ECIP”) capital investment, partially offset by
an increase in loans. The Company maintains most of its cash at the
FRB account.
Interest-Bearing Deposits. The
increases in average cost for the current quarter and year-to-date
period were primarily due to an increase in market rates.
Provision (reversal) for Loan Losses
Provision (reversal) for loan losses was $3.8 million for the
current quarter compared with $(109) thousand for the previous
quarter and $(1.1) million for the year-ago quarter. For the
current and previous year-to-date periods, provision (reversal) for
loan losses was $2.5 million and $(3.1) million, respectively. The
increase in provision for loan losses was primarily due to
increases in gross loan balance, and qualitative adjustment factors
related to current economic condition and increased charge-offs
during the current quarter.
The Company recorded net charge-offs of $1.1 million for the
current quarter compared with $18 thousand for the previous quarter
and $29 thousand for the year-ago quarter. For the current and
previous year-to-date periods, the Company recorded net charge-offs
(recoveries) of $1.1 million and $(431) thousand, respectively.
Adjusted Allowance to loans held-for-investment ratio(1) was
1.21%, 1.15%, 1.34%, and 1.48% at September 30, 2022, June 30,
2022, December 31, 2021, and September 30, 2021, respectively.
-------------------------------------------------------------------------------------
(1)
Adjusted Allowance to loans
held-for-investment ratio is a non-GAAP measure, which excludes SBA
PPP loans from loans held-for-investment. See “Non-GAAP Measures”
for reconciliation of this measure to its most comparable GAAP
measure.
Noninterest Income
The following table presents the components of noninterest
income for the periods indicated:
Three Months
Ended
Nine Months Ended
($ in thousands)
9/30/2022
6/30/2022
% Change
9/30/2021
% Change
9/30/2022
9/30/2021
% Change
Gain on sale of loans
$
1,415
$
2,039
(30.6
)%
$
4,269
(66.9
)%
$
7,231
$
9,558
(24.3
)%
Service charges and fees on deposits
341
330
3.3
%
292
16.8
%
974
887
9.8
%
Loan servicing income
780
755
3.3
%
655
19.1
%
2,235
2,082
7.3
%
Bank-owned life insurance income
178
175
1.7
%
—
—
%
525
—
—
%
Other income
462
349
32.4
%
372
24.2
%
1,145
1,069
7.1
%
Total noninterest income
$
3,176
$
3,648
(12.9
)%
$
5,588
(43.2
)%
$
12,110
$
13,596
(10.9
)%
Gain on Sale of Loans. The
following table presents information on gain on sale of loans for
the periods indicated:
Three Months
Ended
Nine Months Ended
($ in thousands)
9/30/2022
6/30/2022
% Change
9/30/2021
% Change
9/30/2022
9/30/2021
% Change
Gain on sale of SBA loans
Sold loan balance
$
27,313
$
38,442
(29.0
)%
$
45,048
(39.4
)%
$
105,438
$
90,074
17.1
%
Premium received
2,036
2,600
(21.7
)%
4,879
(58.3
)%
8,842
10,360
(14.7
)%
Gain recognized
1,407
2,039
(31.0
)%
4,263
(67.0
)%
7,223
9,412
(23.3
)%
Gain on sale of residential property
loans
Sold loan balance
$
858
$
—
—
%
$
301
185.0
%
$
858
$
9,823
(91.3
)%
Gain recognized
8
—
—
%
2
300.0
%
8
142
(94.4
)%
Loan Servicing Income. The
following table presents information on loan servicing income for
the periods indicated:
Three Months
Ended
Nine Months Ended
($ in thousands)
9/30/2022
6/30/2022
% Change
9/30/2021
% Change
9/30/2022
9/30/2021
% Change
Loan servicing income
Servicing income received
$
1,302
$
1,287
1.2
%
$
1,180
10.3
%
$
3,819
$
3,577
6.8
%
Servicing assets amortization
(522
)
(532
)
(1.9
)%
(525
)
(0.6
)%
(1,584
)
(1,495
)
6.0
%
Loan servicing income
$
780
$
755
3.3
%
$
655
19.1
%
$
2,235
$
2,082
7.3
%
Underlying loans at end of period
$
538,904
$
537,990
0.2
%
$
511,930
5.3
%
$
538,904
$
511,930
5.3
%
The Company services SBA loans and certain residential property
loans that are sold to the secondary market.
Noninterest Expense
The following table presents the components of noninterest
expense for the periods indicated:
Three Months
Ended
Nine Months Ended
($ in thousands)
9/30/2022
6/30/2022
% Change
9/30/2021
% Change
9/30/2022
9/30/2021
% Change
Salaries and employee benefits
$
8,457
$
8,125
4.1
%
$
7,606
11.2
%
$
25,177
$
20,913
20.4
%
Occupancy and equipment
1,650
1,537
7.4
%
1,399
17.9
%
4,584
4,158
10.2
%
Professional fees
587
642
(8.6
)%
422
39.1
%
1,632
1,574
3.7
%
Marketing and business promotion
909
310
193.2
%
416
118.5
%
1,426
1,070
33.3
%
Data processing
427
441
(3.2
)%
391
9.2
%
1,272
1,164
9.3
%
Director fees and expenses
179
182
(1.6
)%
144
24.3
%
530
433
22.4
%
Regulatory assessments
150
147
2.0
%
12
1,150.0
%
438
399
9.8
%
Other expense
1,336
861
55.2
%
842
58.7
%
2,952
2,329
26.7
%
Total noninterest expense
$
13,695
$
12,245
11.8
%
$
11,232
21.9
%
$
38,011
$
32,040
18.6
%
Salaries and Employee Benefits. The
increases for the current quarter compared with the previous and
year-ago quarters were primarily due to increases in salaries and
other employee benefit expense from the increased number of
employees, partially offset by a decrease in incentives tied to the
sales of Loan Production Offices (“LPO”) originated SBA loans and
an increase in loan origination cost, which offsets the recognition
of salaries. The increase for the current year-to-date period
compared with the previous year-to-date period was due to increases
in salaries, other employee benefit expense, the incentives tied to
sales of LPO originated SBA loans, and a decrease in loan
origination cost.
Total loan origination cost included in salaries and employee
benefits were $488 thousand, $461 thousand, and $421 thousand for
the current, previous, and year-ago quarters, respectively, and
$1.3 million and $1.8 million for the current and previous
year-to-date periods, respectively. The Company recognized a higher
loan origination cost for the previous year-to-date period
primarily due to the SBA PPP loan production in the first quarter
of 2021. The number of full-time equivalent employees was 274, 271,
and 249 as of September 30, 2022, June 30, 2022, and September 30,
2021, respectively.
Occupancy and Equipment. The
increases for the current quarter and year-to-date period were
primarily due to new branch openings. The Company opened 2 new
branches in Dallas, Texas and Palisades Park, New Jersey during the
current quarter and plans to open one more branch in Carrollton,
Texas during the fourth quarter of 2022.
Marketing and Business Promotion.
The increases for the current quarter and year-to-date period were
primarily due to increases in marketing activities and
advertisement for the Bank's name change to PCB Bank, and new
branch openings.
Director Fees and Expenses. The
increases for the current quarter and year-to-date periods compared
with the same periods of 2021 were primarily due to a new director
appointed during the fourth quarter of 2021.
Regulatory Assessments. During the
year-ago quarter, an adjustment was made for the assessment rate
decrease.
Other Expense. The increases for
the current quarter and year-to-date period were primarily due to
an increase in office expense for the new branches and a legal
settlement of $150 thousand for the current quarter.
Balance Sheet
(Unaudited)
Total assets were $2.33 billion at September 30, 2022, a
decrease of $17.5 million, or 0.7%, from $2.34 billion at June 30,
2022, but an increase of $177.3 million, or 8.2%, from $2.15
billion at December 31, 2021 and an increase of $222.4 million, or
10.6%, from $2.10 billion at September 30, 2021. The decrease for
the current quarter was primarily due to decreases in cash and cash
equivalents and securities available-for-sale, partially offset by
increases in loans held-for-sale and loans held-for-investment. The
increase for the current year-to-date period was primarily due to
increases in loans held-for-investment and securities
available-for-sale, partially offset by decreases in cash and cash
equivalents and loans held-for-sale.
Loans
The following table presents a composition of total loans
(includes both loans held-for-sale and loans held-for-investment)
as of the dates indicated:
($ in thousands)
9/30/2022
6/30/2022
% Change
12/31/2021
% Change
9/30/2021
% Change
Real estate loans
Commercial property
$
1,271,781
$
1,204,142
5.6
%
$
1,105,843
15.0
%
$
1,054,351
20.6
%
Residential property
297,506
258,259
15.2
%
209,485
42.0
%
201,635
47.5
%
SBA property
136,088
131,420
3.6
%
129,661
5.0
%
127,845
6.4
%
Construction
14,592
12,595
15.9
%
8,252
76.8
%
6,572
122.0
%
Commercial and industrial loans
Commercial term
80,225
73,885
8.6
%
73,438
9.2
%
74,390
7.8
%
Commercial lines of credit
117,960
111,916
5.4
%
100,936
16.9
%
101,456
16.3
%
SBA commercial term
16,542
16,985
(2.6
)%
17,640
(6.2
)%
18,338
(9.8
)%
SBA PPP
1,309
1,583
(17.3
)%
65,329
(98.0
)%
101,901
(98.7
)%
Other consumer loans
23,234
22,225
4.5
%
21,621
7.5
%
21,390
8.6
%
Loans held-for-investment
1,959,237
1,833,010
6.9
%
1,732,205
13.1
%
1,707,878
14.7
%
Loans held-for-sale
18,982
9,627
97.2
%
37,026
(48.7
)%
29,020
(34.6
)%
Total loans
$
1,978,219
$
1,842,637
7.4
%
$
1,769,231
11.8
%
$
1,736,898
13.9
%
The increase in loans held-for-investment for the current
quarter was primarily due to new funding of $171.9 million and
advances on lines of credit of $42.0 million, partially offset by
pay-downs and pay-offs of $86.6 million. The increase for the
current year-to-date period was primarily due to new funding of
$450.8 million and advances of lines of credit of $111.3 million,
partially offset by pay-downs and pay-offs of $333.9 million. SBA
PPP loans of $274 thousand and $64.0 million were paid off through
regular payments or forgiveness from SBA during the current quarter
and year-to-date period, respectively.
The increase in loans held-for-sale for the current quarter was
primarily due to new funding of $37.1 million, partially offset by
sales of $27.7 million. The decrease for the current year-to-date
period was primarily due to sales of $105.8 million, partially
offset by new funding of $88.2 million.
The following table presents a composition of commitments to
extend credit as of the dates indicated:
($ in thousands)
9/30/2022
6/30/2022
% Change
12/31/2021
% Change
9/30/2021
% Change
Real estate loans
Commercial property
$
18,400
$
20,425
(9.9
)%
$
20,194
(8.9
)%
$
17,873
2.9
%
SBA property
3,730
4,265
(12.5
)%
3,068
21.6
%
4,747
(21.4
)%
Construction
11,093
12,080
(8.2
)%
5,180
114.2
%
9,478
17.0
%
Commercial and industrial loans
Commercial term
2,027
2,347
(13.6
)%
1,097
84.8
%
1,455
39.3
%
Commercial lines of credit
254,738
218,850
16.4
%
169,000
50.7
%
156,411
62.9
%
SBA commercial term
572
383
49.3
%
149
283.9
%
245
133.5
%
Other consumer loans
847
1,086
(22.0
)%
595
42.4
%
130
551.5
%
Total commitments to extend
credit
$
291,407
$
259,436
12.3
%
$
199,283
46.2
%
$
190,339
53.1
%
Credit Quality
The following table presents a summary of non-performing loans,
non-performing assets and classified assets as of the dates
indicated:
($ in thousands)
9/30/2022
6/30/2022
% Change
12/31/2021
% Change
9/30/2021
% Change
Nonaccrual loans
Real estate loans
Commercial property
$
2,444
$
—
—
%
$
—
—
%
$
—
—
%
Residential property
372
450
(17.3
) %
—
—
%
—
—
%
SBA property
552
564
(2.1
) %
746
(26.0
)%
766
(27.9
)%
Commercial and industrial loans
Commercial term
3
—
—
%
—
—
%
—
—
%
Commercial lines of credit
4,000
—
—
%
—
—
%
—
—
%
SBA commercial term
—
185
(100.0
)%
213
(100.0
)%
314
(100.0
)%
Other consumer loans
25
24
4.2
%
35
(28.6
)%
33
(24.2
)%
Total nonaccrual loans
held-for-investment
7,396
1,223
504.7
%
994
644.1
%
1,113
564.5
%
Loans past due 90 days or more and still
accruing
—
—
—
%
—
—
%
3
(100.0
)%
Non-performing loans (“NPLs”)
7,396
1,223
504.7
%
994
644.1
%
1,116
562.7
%
Other real estate owned (“OREO”)
—
808
(100.0
)%
—
—
%
—
—
%
Non-performing assets (“NPAs”)
$
7,396
$
2,031
264.2
%
$
994
644.1
%
$
1,116
562.7
%
Loans past due and still accruing
Past due 30 to 59 days
$
215
$
682
(68.5
)%
$
549
(60.8
)%
$
292
(26.4
)%
Past due 60 to 89 days
195
—
—
%
5
3,800.0
%
—
—
%
Past due 90 days or more
—
—
—
%
—
—
%
3
(100.0
)%
Total loans past due and still
accruing
$
410
$
682
(39.9
)%
554
(26.0
)%
$
295
39.0
%
Troubled debt restructurings (“TDRs”)
Accruing TDRs
$
542
$
555
(2.3
)%
$
576
(5.9
)%
$
589
(8.0
)%
Nonaccrual TDRs
7
10
(30.0
)%
17
(58.8
)%
26
(73.1
)%
Total TDRs
$
549
$
565
(2.8
)%
$
593
(7.4
)%
$
615
(10.7
)%
Special mention loans
$
5,986
$
6,313
(5.2
)%
$
18,092
(66.9
)%
$
17,315
(65.4
)%
Classified assets
Classified loans
$
10,293
$
3,980
158.6
%
$
5,168
99.2
%
$
5,345
92.6
%
OREO
—
808
(100.0
)%
—
—
%
—
—
%
Classified assets
$
10,293
$
4,788
115.0
%
$
5,168
99.2
%
$
5,345
92.6
%
NPLs to loans held-for-investment
0.38
%
0.07
%
0.06
%
0.07
%
NPAs to total assets
0.32
%
0.09
%
0.05
%
0.05
%
Classified assets to total assets
0.44
%
0.20
%
0.24
%
0.25
%
The decrease in special mention loans for the current
year-to-date period was primarily due to improvements of 2 loans
with an aggregated carrying value of $11.3 million at December 31,
2021. The increases in nonaccrual commercial property loans and
commercial lines of credit, and classified loans for the current
quarter were primarily due to downgrades of loans to a single
credit relationship.
Investment Securities
Total investment securities were $129.4 million at September 30,
2022, a decrease of $9.7 million, or 6.95%, from $139.1 million at
June 30, 2022 and a decrease of $3.7 million, or 2.8%, from $133.1
million at September 30, 2021, but an increase of $6.2 million, or
5.03%, from $123.2 million at December 31, 2021. The decrease for
the current quarter was primarily due to principal pay-downs and
calls of $6.4 million, a fair value decrease of $6.3 million, and
net premium amortization of $75 thousand, partially offset by
purchases of $3.1 million. The increase for the current
year-to-date period was primarily due to purchases of $41.1
million, partially offset by principal pay-downs and calls of $18.8
million, a fair value decrease of $15.8 million, and net premium
amortization of $307 thousand.
Deposits
The following table presents the Company’s deposit mix as of the
dates indicated:
9/30/2022
6/30/2022
12/31/2021
9/30/2021
($ in thousands)
Amount
% to Total
Amount
% to Total
Amount
% to Total
Amount
% to Total
Noninterest-bearing demand deposits
$
809,842
40.9
%
$
988,454
49.5
%
$
830,383
44.5
%
$
832,240
45.4
%
Interest-bearing deposits
Savings
13,028
0.7
%
14,686
0.7
%
16,299
0.9
%
13,294
0.7
%
NOW
17,550
0.9
%
18,881
0.9
%
20,185
1.1
%
20,461
1.1
%
Retail money market accounts
522,412
26.4
%
458,605
22.9
%
386,041
20.5
%
376,333
20.5
%
Brokered money market accounts
10,010
0.5
%
1
0.1
%
1
0.1
%
4
0.1
%
Retail time deposits of
$250,000 or less
236,864
12.0
%
235,956
11.8
%
256,956
13.8
%
262,207
14.3
%
More than $250,000
239,271
12.1
%
186,024
9.3
%
172,269
9.2
%
163,127
8.9
%
State and brokered time deposits
129,121
6.5
%
95,000
4.8
%
185,000
9.9
%
165,000
9.0
%
Total interest-bearing deposits
1,168,256
59.1
%
1,009,153
50.5
%
1,036,751
55.5
%
1,000,426
54.6
%
Total deposits
$
1,978,098
100.0
%
$
1,997,607
100.0
%
$
1,867,134
100.0
%
$
1,832,666
100.0
%
The decrease in noninterest-bearing demand deposits for the
current quarter was primarily due to strong deposit market
competition and the migration of large amount of
noninterest-bearing demand deposits to money market accounts and
time deposits attributable to the rising market rates. To remain
competitive in this rising interest rate environment, the Bank
started to offer higher rates on deposit products to retain and
attract new customers.
The increase in retail time deposits for the current quarter was
primarily due to new accounts of $152.8 million, renewals of the
matured accounts of $182.6 million and balance increases of $6.3
million, partially offset by matured and closed accounts of $287.7
million. The increase for the current year-to-date period was
primarily due to new accounts of $252.2 million, renewals of the
matured accounts of $480.2 million and balance increases of $15.8
million, partially offset by matured and closed accounts of $701.4
million.
Liquidity
The following table presents a summary of the Company’s
liquidity position as of September 30, 2022:
($ in thousands)
9/30/2022
Cash and cash equivalents
$
154,038
Cash and cash equivalents to total
assets
6.6
%
Available borrowing capacity
FHLB advances
$
586,125
Federal Reserve Discount Window
29,065
Overnight federal funds lines
65,000
Total
$
680,190
Total available borrowing capacity to
total assets
29.2
%
Shareholders’ Equity
Shareholders’ equity was $332.7 million at September 30, 2022, a
decrease of $1.7 million, or 0.5%, from $334.4 million at June 30,
2022, but an increase of $76.4 million, or 29.8%, from $256.3
million at December 31, 2021 and an increase of $85.1 million, or
34.4%, from $247.6 million at September 30, 2021. The decrease for
the current quarter and year-to-date period were primarily due to
cash dividends declared on common stock, an increase in accumulated
other comprehensive loss, and repurchase of common stock, partially
offset by net income. The increase for the current year-to-date
period was primarily due to net income and issuance of preferred
stock (as discussed below), partially offset by cash dividends
declared on common stock, repurchase of common stock and an
increase in accumulated other comprehensive loss. The Company
declared cash dividends of $2.2 million and $6.7 million for the
current quarter and year-to-date period, respectively.
Stock Repurchase
On April 8, 2021, the Company’s Board of Directors approved a
repurchase program authorizing the repurchase of up to 5% of the
Company’s outstanding common stock as of the date of the board
meeting, which represented 775,000 shares, through September 7,
2021. The Company repurchased and retired 680,269 shares of common
stock totaling $10.9 million at a weighted-average price of $15.99
per share under this program.
On July 28, 2022, the Company’s Board of Directors approved a
repurchase program authorizing for the repurchase of up to 5% of
the Company’s outstanding common stock as of the date of the board
meeting, which represented 747,938 shares, through February 1,
2023. The Company repurchased and retired 119,941 shares of common
stock at a weighted-average price of $18.75 per share, totaling
$2.2 million under this repurchase program as of September 30,
2022.
Issuance of Preferred Stock Under the
Emergency Capital Investment Program
On May 24, 2022, the Company issued 69,141 shares of Senior
Non-Cumulative Perpetual Preferred Stock, Series C, liquidation
preference of $1,000 per share (“Series C Preferred Stock”) for the
capital investment of $69.1 million from the U.S. Treasury under
the Emergency Capital Investment Program (“ECIP”). ECIP investment
is treated as tier 1 capital for regulatory capital purposes.
The Series C Preferred Stock bears no dividend for the first 24
months following the investment date. Thereafter, the dividend rate
will be adjusted based on the lending growth criteria listed in the
terms of the ECIP investment with an annual dividend rate up to 2%.
After the tenth anniversary of the investment date, the dividend
rate will be fixed based on average annual amount of lending in
years 2 through 10.
Capital Ratios
Based on changes to the Federal Reserve’s definition of a “Small
Bank Holding Company” that increased the threshold to $3 billion in
assets in August 2018, the Company is not currently subject to
separate minimum capital measurements. At such time as the Company
reaches the $3 billion asset level, it will again be subject to
capital measurements independent of the Bank. For comparison
purposes, the Company’s ratios are included in following
discussion. The following table presents capital ratios for the
Company and the Bank as of the dates indicated:
9/30/2022
6/30/2022
12/31/2021
9/30/2021
Well Capitalized
Requirements
PCB Bancorp
Common tier 1 capital (to risk-weighted
assets)
13.69 %
14.44 %
14.79 %
15.07 %
N/A
Total capital (to risk-weighted
assets)
18.34 %
19.25 %
16.04 %
16.32 %
N/A
Tier 1 capital (to risk-weighted
assets)
17.14 %
18.11 %
14.79 %
15.07 %
N/A
Tier 1 capital (to average assets)
14.74 %
15.37 %
12.11 %
11.91 %
N/A
PCB Bank
Common tier 1 capital (to risk-weighted
assets)
16.82 %
17.79 %
14.48 %
14.76 %
6.5 %
Total capital (to risk-weighted
assets)
18.02 %
18.92 %
15.73 %
16.01 %
10.0 %
Tier 1 capital (to risk-weighted
assets)
16.82 %
17.79 %
14.48 %
14.76 %
8.0 %
Tier 1 capital (to average assets)
14.47 %
15.09 %
11.85 %
11.66 %
5.0 %
About PCB Bancorp
PCB Bancorp is the bank holding company for PCB Bank, a
California state chartered bank, offering a full suite of
commercial banking services to small to medium-sized businesses,
individuals and professionals, primarily in Southern California,
and predominantly in Korean-American and other minority
communities.
Cautionary Note Regarding
Forward-Looking Statements
This press release contains forward-looking statements. These
forward-looking statements represent plans, estimates, objectives,
goals, guidelines, expectations, intentions, projections and
statements of our beliefs concerning future events, business plans,
objectives, expected operating results and the assumptions upon
which those statements are based. Forward-looking statements
include without limitation, any statement that may predict,
forecast, indicate or imply future results, performance or
achievements, and are typically identified with words such as
“may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,”
“estimate,” “expect,” “aim,” “intend,” “plan,” or words or phases
of similar meaning. We caution that the forward-looking statements
are based largely on our expectations and are subject to a number
of known and unknown risks and uncertainties that are subject to
change based on factors which are, in many instances, beyond our
control, including but not limited to general economic uncertainty
in the United States and abroad, the impact of inflation, changes
in interest rates (including actions taken by the Federal Reserve
to address inflation), deposit flows, and real estate values, and
their corresponding impact on our customers, and the network and
data incident discovered on August 30, 2021. These and other
important factors are detailed in various securities law filings
made periodically by the Company, copies of which are available
from the Company without charge. Actual results, performance or
achievements could differ materially from those contemplated,
expressed, or implied by the forward-looking statements. Any
forward-looking statements presented herein are made only as of the
date of this press release, and we do not undertake any obligation
to update or revise any forward-looking statements to reflect
changes in assumptions, the occurrence of unanticipated events, or
otherwise, except as required by law.
PCB Bancorp and Subsidiary
Consolidated Balance Sheets
(Unaudited)
($ in thousands, except share and per
share data)
9/30/2022
6/30/2022
% Change
12/31/2021
% Change
9/30/2021
% Change
Assets
Cash and due from banks
$
22,252
$
23,125
(3.8
)%
$
15,222
46.2
%
$
19,688
13.0
%
Interest-bearing deposits in other
financial institutions
131,786
276,785
(52.4
)%
188,063
(29.9
)%
195,285
(32.5
)%
Total cash and cash equivalents
154,038
299,910
(48.6
)%
203,285
(24.2
)%
214,973
(28.3
)%
Securities available-for-sale, at fair
value
129,401
139,067
(7.0
)%
123,198
5.0
%
133,102
(2.8
)%
Loans held-for-sale
18,982
9,627
97.2
%
37,026
(48.7
) %
29,020
(34.6
)%
Loans held-for-investment
1,959,237
1,833,010
6.9
%
1,732,205
13.1
%
1,707,878
14.7
%
Allowance for loan losses
(23,761
)
(21,071
)
12.8
%
(22,381
)
6.2
%
(23,807
)
(0.2
)%
Net loans held-for-investment
1,935,476
1,811,939
6.8
%
1,709,824
13.2
%
1,684,071
14.9
%
Premises and equipment, net
4,671
3,633
28.6
%
3,098
50.8
%
3,306
41.3
%
Federal Home Loan Bank and other bank
stock
10,183
10,183
—
%
8,577
18.7
%
8,577
18.7
%
Other real estate owned, net
—
808
(100.0
)%
—
—
%
—
—
%
Bank-owned life insurance
29,883
29,705
0.6
%
29,358
1.8
%
—
—
%
Deferred tax assets, net
12,135
11,869
2.2
%
10,824
12.1
%
7,519
61.4
%
Servicing assets
7,627
7,716
(1.2
)%
7,269
4.9
%
7,009
8.8
%
Operating lease assets
6,897
6,512
5.9
%
6,786
1.6
%
7,164
(3.7
)%
Accrued interest receivable
6,070
5,212
16.5
%
5,368
13.1
%
5,494
10.5
%
Other assets
11,688
8,379
39.5
%
5,122
128.2
%
4,464
161.8
%
Total assets
$
2,327,051
$
2,344,560
(0.7
)%
$
2,149,735
8.2
%
$
2,104,699
10.6
%
Liabilities
Deposits
Noninterest-bearing demand
$
809,842
$
988,454
(18.1
)%
$
830,383
(2.5
)%
$
832,240
(2.7
)%
Savings, NOW and money market accounts
563,000
492,173
14.4
%
422,526
33.2
%
410,092
37.3
%
Time deposits of $250,000 or less
305,985
270,956
12.9
%
341,956
(10.5
)%
327,207
(6.5
)%
Time deposits of more than $250,000
299,271
246,024
21.6
%
272,269
9.9
%
263,127
13.7
%
Total deposits
1,978,098
1,997,607
(1.0
)%
1,867,134
5.9
%
1,832,666
7.9
%
Federal Home Loan Bank advances
—
—
—
%
10,000
(100.0
)%
10,000
(100.0
)%
Operating lease liabilities
7,402
7,067
4.7
%
7,444
(0.6
)%
7,862
(5.9
)%
Accrued interest payable and other
liabilities
8,832
5,511
60.3
%
8,871
(0.4
)%
6,573
34.4
%
Total liabilities
1,994,332
2,010,185
(0.8
)%
1,893,449
5.3
%
1,857,101
7.4
%
Commitments and contingent liabilities
Shareholders’ equity
Preferred stock
69,141
69,141
—
%
—
—
%
—
—
%
Common stock
153,890
155,842
(1.3
)%
154,992
(0.7
)%
154,618
(0.5
)%
Retained earnings
120,699
115,992
4.1
%
101,140
19.3
%
92,248
30.8
%
Accumulated other comprehensive income
(loss), net
(11,011
)
(6,600
)
66.8
%
154
NM
732
NM
Total shareholders’ equity
332,719
334,375
(0.5
)%
256,286
29.8
%
247,598
34.4
%
Total liabilities and shareholders’
equity
$
2,327,051
$
2,344,560
(0.7
)%
$
2,149,735
8.2
%
$
2,104,699
10.6
%
Outstanding common shares
14,853,140
14,956,760
14,865,825
14,841,626
Book value per common share (1)
$
22.40
$
22.36
$
17.24
$
16.68
TCE per common share (2)
$
17.75
$
17.73
$
17.24
$
16.68
Total loan to total deposit ratio
100.01
%
92.24
%
94.76
%
94.77
%
Noninterest-bearing deposits to total
deposits
40.94
%
49.48
%
44.47
%
45.41
%
(1)
The ratios are calculated by dividing
total shareholders’ equity by the number of outstanding common
shares. The Company did not have any intangible equity components
for the presented periods.
(2)
Non-GAAP. See “Non-GAAP Measures” for
reconciliation of this measure to its most comparable GAAP
measure.
PCB Bancorp and Subsidiary
Consolidated Statements of Income
(Unaudited)
($ in thousands, except share and per
share data)
Three Months
Ended
Nine Months Ended
9/30/2022
6/30/2022
% Change
9/30/2021
% Change
9/30/2022
9/30/2021
% Change
Interest and dividend income
Loans, including fees
$
24,835
$
21,243
16.9
%
$
20,537
20.9
%
$
66,268
$
58,792
12.7
%
Investment securities
806
668
20.7
%
437
84.4
%
1,950
1,172
66.4
%
Other interest-earning assets
1,194
535
123.2
%
194
515.5
%
1,957
513
281.5
%
Total interest income
26,835
22,446
19.6
%
21,168
26.8
%
70,175
60,477
16.0
%
Interest expense
Deposits
2,798
1,041
168.8
%
885
216.2
%
4,689
3,196
46.7
%
Other borrowings
14
54
(74.1
)%
56
(75.0
)%
119
239
(50.2
)%
Total interest expense
2,812
1,095
156.8
%
941
198.8
%
4,808
3,435
40.0
%
Net interest income
24,023
21,351
12.5
%
20,227
18.8
%
65,367
57,042
14.6
%
Provision (reversal) for loan losses
3,753
(109
)
NM
(1,053
)
NM
2,453
(3,134
)
NM
Net interest income after provision
(reversal) for loan losses
20,270
21,460
(5.5
)%
21,280
(4.7
)%
62,914
60,176
4.5
%
Noninterest income
Gain on sale of loans
1,415
2,039
(30.6
)%
4,269
(66.9
)%
7,231
9,558
(24.3
)%
Service charges and fees on deposits
341
330
3.3
%
292
16.8
%
974
887
9.8
%
Loan servicing income
780
755
3.3
%
655
19.1
%
2,235
2,082
7.3
%
Bank-owned life insurance income
178
175
1.7
%
—
—
%
525
—
—
%
Other income
462
349
32.4
%
372
24.2
%
1,145
1,069
7.1
%
Total noninterest income
3,176
3,648
(12.9
)%
5,588
(43.2
)%
12,110
13,596
(10.9
)%
Noninterest expense
Salaries and employee benefits
8,457
8,125
4.1
%
7,606
11.2
%
25,177
20,913
20.4
%
Occupancy and equipment
1,650
1,537
7.4
%
1,399
17.9
%
4,584
4,158
10.2
%
Professional fees
587
642
(8.6
)%
422
39.1
%
1,632
1,574
3.7
%
Marketing and business promotion
909
310
193.2
%
416
118.5
%
1,426
1,070
33.3
%
Data processing
427
441
(3.2
)%
391
9.2
%
1,272
1,164
9.3
%
Director fees and expenses
179
182
(1.6
)%
144
24.3
%
530
433
22.4
%
Regulatory assessments
150
147
2.0
%
12
1,150.0
%
438
399
9.8
%
Other expense
1,336
861
55.2
%
842
58.7
%
2,952
2,329
26.7
%
Total noninterest expense
13,695
12,245
11.8
%
11,232
21.9
%
38,011
32,040
18.6
%
Income before income taxes
9,751
12,863
(24.2
)%
15,636
(37.6
)%
37,013
41,732
(11.3
)%
Income tax expense
2,798
3,771
(25.8
)%
4,613
(39.3
)%
10,728
12,305
(12.8
)%
Net income
$
6,953
$
9,092
(23.5
)%
$
11,023
(36.9
)%
$
26,285
$
29,427
(10.7
)%
Earnings per common share
Basic
$
0.47
$
0.61
$
0.74
$
1.76
$
1.94
Diluted
$
0.46
$
0.60
$
0.73
$
1.73
$
1.92
Average common shares
Basic
14,877,879
14,883,768
14,779,707
14,869,997
15,090,989
Diluted
15,088,089
15,122,452
15,031,558
15,126,863
15,298,065
Dividend paid per common share
$
0.15
$
0.15
$
0.12
$
0.45
$
0.32
Return on average assets (1)
1.19
%
1.65
%
2.11
%
1.58
%
1.94
%
Return on average shareholders’ equity
(1)
8.16
%
12.48
%
17.98
%
11.84
%
16.40
%
Return on average TCE (1), (2)
10.25
%
13.85
%
17.98
%
13.31
%
16.40
%
Efficiency ratio (3)
50.35
%
48.98
%
43.51
%
49.06
%
45.36
%
(1)
Ratios are presented on an annualized
basis.
(2)
Non-GAAP. See “Non-GAAP Measures” for
reconciliation of this measure to its most comparable GAAP
measure.
(3)
The ratios are calculated by dividing
noninterest expense by the sum of net interest income and
noninterest income.
PCB Bancorp and Subsidiary
Average Balance, Average Yield, and
Average Rate (Unaudited)
($ in thousands)
Three Months Ended
9/30/2022
6/30/2022
9/30/2021
Average Balance
Interest Income/
Expense
Avg. Yield/ Rate(6)
Average Balance
Interest Income/
Expense
Avg. Yield/ Rate(6)
Average Balance
Interest Income/
Expense
Avg. Yield/ Rate(6)
Assets
Interest-earning assets
Total loans (1)
$
1,905,366
$
24,835
5.17
%
$
1,804,368
$
21,243
4.72
%
$
1,715,106
$
20,537
4.75
%
Mortgage-backed securities
93,546
518
2.20
%
88,032
416
1.90
%
95,908
278
1.15
%
Collateralized mortgage obligation
24,090
151
2.49
%
25,929
125
1.93
%
22,534
57
1.00
%
SBA loan pool securities
10,435
56
2.13
%
11,164
43
1.54
%
10,390
45
1.72
%
Municipal bonds (2)
4,491
34
3.00
%
5,347
37
2.78
%
5,759
36
2.48
%
Corporate bonds
4,801
47
3.88
%
4,852
47
3.89
%
2,283
21
3.65
%
Other interest-earning assets
200,367
1,194
2.36
%
195,633
535
1.10
%
188,137
194
0.41
%
Total interest-earning assets
2,243,096
26,835
4.75
%
2,135,325
22,446
4.22
%
2,040,117
21,168
4.12
%
Noninterest-earning assets
Cash and due from banks
20,609
20,801
19,915
Allowance for loan losses
(21,117
)
(21,204
)
(24,854
)
Other assets
76,851
73,137
35,187
Total noninterest-earning assets
76,343
72,734
30,248
Total assets
$
2,319,439
$
2,208,059
$
2,070,365
Liabilities and Shareholders’
Equity
Interest-bearing liabilities
Deposits
NOW and money market accounts
$
577,975
1,375
0.94
%
$
464,829
430
0.37
%
$
387,661
291
0.30
%
Savings
14,990
2
0.05
%
14,989
2
0.05
%
12,806
2
0.06
%
Time deposits
544,774
1,421
1.03
%
521,606
609
0.47
%
599,865
592
0.39
%
Total interest-bearing deposits
1,137,739
2,798
0.98
%
1,001,424
1,041
0.42
%
1,000,332
885
0.35
%
Other borrowings
2,033
14
2.73
%
11,132
54
1.95
%
18,152
56
1.22
%
Total interest-bearing liabilities
1,139,772
2,812
0.98
%
1,012,556
1,095
0.43
%
1,018,484
941
0.37
%
Noninterest-bearing liabilities
Noninterest-bearing demand
825,362
889,691
794,165
Other liabilities
16,057
13,677
14,531
Total noninterest-bearing liabilities
841,419
903,368
808,696
Total liabilities
1,981,191
1,915,924
1,827,180
Total shareholders’ equity
338,248
292,135
243,185
Total liabilities and shareholders’
equity
$
2,319,439
$
2,208,059
$
2,070,365
Net interest income
$
24,023
$
21,351
$
20,227
Net interest spread (3)
3.77
%
3.79
%
3.75
%
Net interest margin (4)
4.25
%
4.01
%
3.93
%
Total deposits
$
1,963,101
$
2,798
0.57
%
$
1,891,115
$
1,041
0.22
%
$
1,794,497
$
885
0.20
%
Total funding (5)
$
1,965,134
$
2,812
0.57
%
$
1,902,247
$
1,095
0.23
%
$
1,812,649
$
941
0.21
%
(1)
Total loans include both loans
held-for-sale and loans held-for-investment, net of deferred loan
fees and costs.
(2)
The yield on municipal bonds has not been
computed on a tax-equivalent basis.
(3)
Net interest spread is calculated by
subtracting average rate on interest-bearing liabilities from
average yield on interest-earning assets.
(4)
Net interest margin is calculated by
dividing annualized net interest income by average interest-earning
assets.
(5)
Total funding is the sum of
interest-bearing liabilities and noninterest-bearing deposits. The
cost of total funding is calculated as annualized total interest
expense divided by average total funding.
(6)
Annualized.
PCB Bancorp and Subsidiary
Average Balance, Average Yield, and
Average Rate (Unaudited)
($ in thousands)
Nine Months Ended
9/30/2022
9/30/2021
Average Balance
Interest Income/
Expense
Avg. Yield/Rate(6)
Average Balance
Interest Income/
Expense
Avg. Yield/Rate(6)
Assets
Interest-earning assets
Total loans (1)
$
1,828,187
$
66,268
4.85
%
$
1,683,084
$
58,792
4.67
%
Mortgage-backed securities
88,634
1,241
1.87
%
90,095
726
1.08
%
Collateralized mortgage obligation
22,775
324
1.90
%
23,442
168
0.96
%
SBA loan pool securities
10,566
137
1.73
%
10,959
148
1.81
%
Municipal bonds (2)
5,152
107
2.78
%
5,774
109
2.52
%
Corporate bonds
4,896
141
3.85
%
769
21
3.65
%
Other interest-earning assets
198,311
1,957
1.32
%
180,663
513
0.38
%
Total interest-earning assets
2,158,521
70,175
4.35
%
1,994,786
60,477
4.05
%
Noninterest-earning assets
Cash and due from banks
20,599
19,359
Allowance for loan losses
(21,561
)
(25,753
)
Other assets
72,563
37,371
Total noninterest-earning assets
71,601
30,977
Total assets
$
2,230,122
$
2,025,763
Liabilities and Shareholders’
Equity
Interest-bearing liabilities
Deposits
NOW and money market accounts
$
492,130
2,118
0.58
%
$
398,459
941
0.32
%
Savings
15,205
6
0.05
%
11,676
4
0.05
%
Time deposits
550,770
2,565
0.62
%
616,707
2,251
0.49
%
Total interest-bearing deposits
1,058,105
4,689
0.59
%
1,026,842
3,196
0.42
%
Other borrowings
7,824
119
2.03
%
37,363
239
0.86
%
Total interest-bearing liabilities
1,065,929
4,808
0.60
%
1,064,205
3,435
0.43
%
Noninterest-bearing liabilities
Noninterest-bearing demand
851,837
707,800
Other liabilities
15,485
13,925
Total noninterest-bearing liabilities
867,322
721,725
Total liabilities
1,933,251
1,785,930
Total shareholders’ equity
296,871
239,833
Total liabilities and shareholders’
equity
$
2,230,122
$
2,025,763
Net interest income
$
65,367
$
57,042
Net interest spread (3)
3.75
%
3.62
%
Net interest margin (4)
4.05
%
3.82
%
Total deposits
$
1,909,942
$
4,689
0.33
%
$
1,734,642
$
3,196
0.25
%
Total funding (5)
$
1,917,766
$
4,808
0.34
%
$
1,772,005
$
3,435
0.26
%
(1)
Total loans include both loans
held-for-sale and loans held-for-investment, net of deferred loan
fees and costs.
(2)
The yield on municipal bonds has not been
computed on a tax-equivalent basis.
(3)
Net interest spread is calculated by
subtracting average rate on interest-bearing liabilities from
average yield on interest-earning assets.
(4)
Net interest margin is calculated by
dividing annualized net interest income by average interest-earning
assets.
(5)
Total funding is the sum of
interest-bearing liabilities and noninterest-bearing deposits. The
cost of total funding is calculated as annualized total interest
expense divided by average total funding.
(6)
Annualized.
PCB Bancorp and Subsidiary Non-GAAP Measures ($ in
thousands)
Adjusted allowance for loan losses to loans
held-for-investment ratio
Adjusted Allowance to loans held-for-investment ratio is
calculated by removing SBA PPP loans from loans held-for-investment
from the Allowance to loans held-for-investment ratio calculation.
The SBA launched the PPP to provide a direct incentive for small
businesses to keep their workers on the payroll in response to the
COVID-19 pandemic. The SBA guarantees 100% of the PPP loans made to
eligible borrowers, and the loans are eligible to be forgiven if
certain conditions are met, at which point the SBA will make
payments to the Bank for the forgiven amounts. The SBA guarantee on
PPP loans cannot be separated from the loan and therefore is not a
separate unit of account. The Company considered the SBA guarantee
in the Allowance evaluation and determined that it is not required
to reserve an Allowance on SBA PPP loans. Management believes this
non-GAAP measure enhances comparability to prior periods and
provide supplemental information regarding the Company’s credit
trends. This disclosure should not be viewed as a substitute for
results determined in accordance with GAAP, nor is it necessarily
comparable to non-GAAP performance measures that may be presented
by other companies. The following tables provide reconciliations of
the non-GAAP measure with financial measure defined by GAAP.
($ in thousands)
9/30/2022
6/30/2022
12/31/2021
9/30/2021
Loans held-for-investment
(a)
$
1,959,237
$
1,833,010
$
1,732,205
$
1,707,878
Less: SBA PPP loans
(b)
1,309
1,583
65,329
101,901
Loans held-for-investment, excluding SBA
PPP loans
(c)=(a)-(b)
$
1,957,928
$
1,831,427
$
1,666,876
$
1,605,977
Allowance
(d)
$
23,761
$
21,071
$
22,381
$
23,807
Allowance to loans held-for-investment
ratio
(d)/(a)
1.21
%
1.15
%
1.29
%
1.39
%
Adjusted Allowance to loans
held-for-investment ratio
(d)/(c)
1.21
%
1.15
%
1.34
%
1.48
%
Return on average tangible common equity, tangible common
equity per common share and tangible common equity to total assets
ratios
The Company's TCE is calculated by subtracting preferred stock
from stockholders’ equity. The Company does not have any intangible
assets for the presented periods. Return on average TCE, TCE per
common share, and TCE to total assets constitute supplemental
financial information determined by methods other than in
accordance with GAAP. These non-GAAP measures are used by
management in its analysis of the Company's performance. This
disclosure should not be viewed as a substitute for results
determined in accordance with GAAP, nor is it necessarily
comparable to non-GAAP performance measures that may be presented
by other companies. The following tables provide reconciliations of
the non-GAAP measures with financial measures defined by GAAP.
($ in thousands)
Three Months
Ended
Nine Months Ended
9/30/2022
6/30/2022
9/30/2021
9/30/2022
9/30/2021
Average total shareholders' equity
(a)
$
338,248
$
292,135
$
243,185
$
296,871
$
239,833
Less: average preferred stock
(b)
69,141
28,872
—
32,924
—
Average TCE
(c)=(a)-(b)
$
269,107
$
263,263
$
243,185
$
263,947
$
239,833
Net income
(d)
$
6,953
$
9,092
$
11,023
$
26,285
$
29,427
Return on average shareholder's equity
(1)
(d)/(a)
8.16
%
12.48
%
17.98
%
11.84
%
16.40
%
Return on average TCE (1)
(d)/(c)
10.25
%
13.85
%
17.98
%
13.31
%
16.40
%
(1) Annualized.
($ in thousands, except per share
data)
9/30/2022
6/30/2022
12/31/2021
9/30/2021
Total shareholders' equity
(a)
$
332,719
$
334,375
$
256,286
$
247,598
Less: preferred stock
(b)
69,141
69,141
—
—
TCE
(c)=(a)-(b)
$
263,578
$
265,234
$
256,286
$
247,598
Outstanding common shares
(d)
14,853,140
14,956,760
14,865,825
14,841,626
Book value per common share
(a)/(d)
$
22.40
$
22.36
$
17.24
$
16.68
TCE per common share
(c)/(d)
$
17.75
$
17.73
$
17.24
$
16.68
Total assets
(e)
$
2,327,051
$
2,344,560
$
2,149,735
$
2,104,699
Total shareholders' equity to total
assets
(a)/(e)
14.30
%
14.26
%
11.92
%
11.76
%
TCE to total assets
(c)/(e)
11.33
%
11.31
%
11.92
%
11.76
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221027005113/en/
Timothy Chang Executive Vice President & Chief Financial
Officer 213-210-2000
PCB Bancorp (NASDAQ:PCB)
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