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PCB Bancorp Reports Earnings of $10.2 million for Q1 2022

PCB Bancorp (the “Company”) (NASDAQ: PCB), the holding company of Pacific City Bank (the “Bank”), today reported net income of $10.2 million, or $0.67 per diluted common share, for the first quarter of 2022, compared with $10.7 million, or $0.70 per diluted common share, for the previous quarter and $8.6 million, or $0.55 per diluted common share, for the year-ago quarter.

Q1 2022 Highlights

  • Net income totaled $10.2 million, or $0.67 per diluted common share, for the current quarter;
    • The Company recorded a reversal for loan losses of $1.2 million for the current quarter compared with $1.5 million for the previous quarter and $1.1 million for the year-ago quarter.
    • Allowance for loan losses to loans held-for-investment(1) ratio was 1.22% at March 31, 2022 compared with 1.29% at December 31, 2021 and 1.51% at March 31, 2021. Adjusted allowance for loan losses to loans held-for-investment ratio(2) was 1.23% at March 31, 2022 compared with 1.34% at December 31, 2021 and 1.74% at March 31, 2021.
    • Net interest income was $20.0 million for the current quarter compared with $20.1 million for the previous quarter and $17.8 million for the year-ago quarter. Net interest margin was 3.87% for the current quarter compared with 3.87% for the previous quarter and 3.70% for the year-ago quarter.
    • Gain on sale of loans was $3.8 million for the current quarter compared with $3.4 million for the previous quarter and $1.3 million for the year-ago quarter.
  • Total assets were $2.20 billion at March 31, 2022, an increase of $50.0 million, or 2.3%, from $2.15 billion at December 31, 2021 and an increase of $149.1 million, or 7.3%, from $2.05 billion at March 31, 2021;
  • Loans held-for-investment were $1.74 billion at March 31, 2022, an increase of $10.8 million, or 0.6%, from $1.73 billion at December 31, 2021 and an increase of $57.0 million, or 3.4%, from $1.69 billion at March 31, 2021; and
    • SBA PPP loans totaled $22.9 million, $65.3 million and $218.7 million at March 31, 2022, December 31, 2021 and March 31, 2021, respectively.
    • The Company had no loans under modified terms related to COVID-19 at March 31, 2022 and December 31, 2021. Loans under modified terms related to the COVID-19 pandemic totaled $19.8 million at March 31, 2021.
  • Total deposits were $1.91 billion at March 31, 2022, an increase of $43.2 million, or 2.3%, from $1.87 billion at December 31, 2021 and an increase of $156.6 million, or 8.9%, from $1.75 billion at March 31, 2021.

Henry Kim, President and Chief Executive Officer, commented, “PCB kicked off the year with another solid quarterly financial results that were highlighted by the net income of $10.2 million or $0.67 per diluted share, an 8.1% annualized total loan growth, excluding SBA PPP, a 22.2% annualized retail deposit growth, and a 12.5% increase in book value per share to $17.47, compared with March 31, 2021. In addition, with 41.8% of our loans in variable rate, our asset sensitive balance sheet is well position to benefit from the current rising interest rate environment. Our exceptional credit quality continued with recognition of net recoveries for the quarter, and non-performing loans to loans held-for-investment ratio of 0.08%, and classified assets to total assets ratio of 0.24%.”

“In spite of the ongoing challenging economic environment from the pandemic and global conflict, we will continue to execute our focused expansion initiatives of opening three new full-service branches during the second half of this year; two in Dallas, Texas area, and one in Palisades Park, New Jersey. We are optimistic in our outlook and expect to continue to deliver strong growth and earnings for the rest of the year and beyond,” concluded Kim.

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

(1)

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

(2)

Adjusted allowance for loan losses 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

 

3/31/2022

 

12/31/2021

 

% Change

 

3/31/2021

 

% Change

Net income

 

$

10,240

 

 

$

10,676

 

 

(4.1)%

 

$

8,560

 

 

19.6%

Diluted earnings per common share

 

$

0.67

 

 

$

0.70

 

 

(4.3)%

 

$

0.55

 

 

21.8%

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

19,993

 

 

$

20,095

 

 

(0.5)%

 

$

17,819

 

 

12.2%

Reversal for loan losses

 

 

(1,191

)

 

 

(1,462

)

 

(18.5)%

 

 

(1,147

)

 

3.8%

Noninterest income

 

 

5,286

 

 

 

4,838

 

 

9.3%

 

 

2,857

 

 

85.0%

Noninterest expense

 

 

12,071

 

 

 

11,168

 

 

8.1%

 

 

9,669

 

 

24.8%

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (1)

 

 

1.92

%

 

 

2.01

%

 

 

 

 

1.75

%

 

 

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

 

 

16.01

%

 

 

16.84

%

 

 

 

 

14.66

%

 

 

Net interest margin (1)

 

 

3.87

%

 

 

3.87

%

 

 

 

 

3.70

%

 

 

Efficiency ratio (3)

 

 

47.75

%

 

 

44.79

%

 

 

 

 

46.76

%

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in thousands, except per share data)

 

3/31/2022

 

12/31/2021

 

% Change

 

3/31/2021

 

% Change

Total assets

 

$

2,199,742

 

 

$

2,149,735

 

 

2.3%

 

$

2,050,672

 

 

7.3%

Net loans held-for-investment

 

 

1,721,757

 

 

 

1,709,824

 

 

0.7%

 

 

1,660,402

 

 

3.7%

Total deposits

 

 

1,910,379

 

 

 

1,867,134

 

 

2.3%

 

 

1,753,771

 

 

8.9%

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

 

$

17.47

 

 

$

17.24

 

 

1.3%

 

$

15.53

 

 

12.5%

Tier 1 leverage ratio (consolidated)

 

 

12.22

%

 

 

12.11

%

 

 

 

 

12.03

%

 

 

Total shareholders’ equity to total assets (2)

 

 

11.87

%

 

 

11.92

%

 

 

 

 

11.72

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Ratios are presented on an annualized basis.

(2)

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

(3)

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

(4)

Calculated by dividing total shareholdersequity by the number of outstanding common shares.

COVID-19 Pandemic

The ongoing COVID-19 pandemic, and governmental and societal responses thereto, have had a severe impact on 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

($ in thousands)

 

3/31/2022

 

12/31/2021

 

% Change

 

3/31/2021

 

% Change

Interest income/expense on

 

 

 

 

 

 

 

 

 

 

Loans

 

$

20,190

 

 

$

20,363

 

 

(0.8)%

 

$

18,744

 

 

7.7%

Investment securities

 

 

476

 

 

 

441

 

 

7.9%

 

 

360

 

 

32.2%

Other interest-earning assets

 

 

228

 

 

 

191

 

 

19.4%

 

 

154

 

 

48.1%

Total interest-earning assets

 

 

20,894

 

 

 

20,995

 

 

(0.5)%

 

 

19,258

 

 

8.5%

Interest-bearing deposits

 

 

850

 

 

 

847

 

 

0.4%

 

 

1,311

 

 

(35.2)%

Borrowings

 

 

51

 

 

 

53

 

 

(3.8)%

 

 

128

 

 

(60.2)%

Total interest-bearing liabilities

 

 

901

 

 

 

900

 

 

0.1%

 

 

1,439

 

 

(37.4)%

Net interest income

 

$

19,993

 

 

$

20,095

 

 

(0.5)%

 

$

17,819

 

 

12.2%

Average balance of

 

 

 

 

 

 

 

 

 

 

Loans

 

$

1,773,376

 

 

$

1,758,421

 

 

0.9%

 

$

1,641,634

 

 

8.0%

Investment securities

 

 

123,230

 

 

 

128,650

 

 

(4.2)%

 

 

123,851

 

 

(0.5)%

Other interest-earning assets

 

 

198,918

 

 

 

175,468

 

 

13.4%

 

 

189,153

 

 

5.2%

Total interest-earning assets

 

$

2,095,524

 

 

$

2,062,539

 

 

1.6%

 

$

1,954,638

 

 

7.2%

Interest-bearing deposits

 

$

1,034,012

 

 

$

1,008,027

 

 

2.6%

 

$

1,053,845

 

 

(1.9)%

Borrowings

 

 

10,400

 

 

 

13,315

 

 

(21.9)%

 

 

75,556

 

 

(86.2)%

Total interest-bearing liabilities

 

$

1,044,412

 

 

$

1,021,342

 

 

2.3%

 

$

1,129,401

 

 

(7.5)%

Total funding (1)

 

$

1,885,038

 

 

$

1,845,846

 

 

2.1%

 

$

1,736,477

 

 

8.6%

Annualized average yield/cost of

 

 

 

 

 

 

 

 

 

 

Loans

 

 

4.62

%

 

 

4.59

%

 

 

 

 

4.63

%

 

 

Investment securities

 

 

1.57

%

 

 

1.36

%

 

 

 

 

1.18

%

 

 

Other interest-earning assets

 

 

0.46

%

 

 

0.43

%

 

 

 

 

0.33

%

 

 

Total interest-earning assets

 

 

4.04

%

 

 

4.04

%

 

 

 

 

4.00

%

 

 

Interest-bearing deposits

 

 

0.33

%

 

 

0.33

%

 

 

 

 

0.50

%

 

 

Borrowings

 

 

1.99

%

 

 

1.58

%

 

 

 

 

0.69

%

 

 

Total interest-bearing liabilities

 

 

0.35

%

 

 

0.35

%

 

 

 

 

0.52

%

 

 

Net interest margin

 

 

3.87

%

 

 

3.87

%

 

 

 

 

3.70

%

 

 

Cost of total funding (1)

 

 

0.19

%

 

 

0.19

%

 

 

 

 

0.34

%

 

 

Supplementary information

 

 

 

 

 

 

 

 

 

 

Net accretion of discount on loans

 

$

908

 

 

$

815

 

 

11.4%

 

$

745

 

 

21.9%

Net amortization of deferred loan fees

 

$

1,165

 

 

$

1,434

 

 

(18.8)%

 

$

1,220

 

 

(4.5)%

 

 

 

 

 

 

 

 

 

 

 

(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 increase in average yield for the current quarter compared with the previous quarter was primarily due to increases in net accretion of discount on loans, prepayment penalties and late-charges, partially offset by a decrease in net deferred loan fee amortization during the current quarter. Compared with the year-ago quarter, the decrease in average yield was primarily due to a decrease in overall interest rates on loans from lower market rates throughout 2021, partially offset by an increase in net accretion of discount on loans.

The following table presents a composition of total loans by interest rate type accompanied with the weighted-average contractual rates as of the dates indicated:

 

 

3/31/2022

 

12/31/2021

 

3/31/2021

 

 

% to Total

Loans

 

Weighted-

Average

Contractual

Rate

 

% to Total

Loans

 

Weighted-

Average

Contractual

Rate

 

% to Total

Loans

 

Weighted-

Average

Contractual

Rate

Fixed rate loans

 

26.7 %

 

4.25 %

 

28.4 %

 

3.98 %

 

36.3 %

 

3.44 %

Hybrid rate loans

 

31.5 %

 

4.07 %

 

29.1 %

 

4.16 %

 

19.3 %

 

4.77 %

Variable rate loans

 

41.8 %

 

4.14 %

 

42.5 %

 

3.95 %

 

44.4 %

 

4.04 %

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Securities. The increases in average yield for the current quarter compared with the previous and year-ago quarters 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 compared with the previous and year-ago quarters were primarily due to increases in dividend income on Federal Home Loan Bank (“FHLB”) stock and interest rate on cash held at the Federal Reserve Bank (“FRB”) account. The increases in average balance for the current quarter compared with the previous and year-ago quarters were primarily due to an increase in deposits, partially offset by an increase in loans. The Company maintains most of its cash at the FRB account. For additional detail, please see the discussion in “Loans” and “Deposits” under the “Balance Sheet” discussion.

Interest-Bearing Deposits. The decrease in average cost for the current quarter compared with the year-ago quarter was primarily due to the decreases in market rates.

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 March 31, 2022, the Company had a term FHLB advance of $10.0 million with an interest rate of 2.07% that matures on June 29, 2022.

Reversal for Loan Losses

Reversal for loan losses was $1.2 million for the current quarter compared with $1.5 million for the previous quarter and $1.1 million for the year-ago quarter. The reversal for the current quarter was primarily due to a decrease in qualitative adjustment factor allocations related to economic implications of the COVID-19 pandemic. The Company recorded net recoveries of $8 thousand for the current quarter compared with $36 thousand for the previous quarter and $151 thousand for the year-ago quarter.

Adjusted allowance for loan losses to loans held-for-investment ratio(1) was 1.23%, 1.34%, and 1.74% at March 31, 2022, December 31, 2021, and March 31, 2021, respectively.

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(1)

Adjusted allowance for loan losses 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

($ in thousands)

 

3/31/2022

 

12/31/2021

 

% Change

 

3/31/2021

 

% Change

Gain on sale of loans

 

$

3,777

 

$

3,374

 

11.9%

 

$

1,322

 

185.7%

Service charges and fees on deposits

 

 

303

 

 

308

 

(1.6)%

 

 

293

 

3.4%

Loan servicing income

 

 

700

 

 

688

 

1.7%

 

 

882

 

(20.6)%

Bank-owned life insurance income

 

 

172

 

 

108

 

59.3%

 

 

 

NM

Other income

 

 

334

 

 

360

 

(7.2)%

 

 

360

 

(7.2)%

Total noninterest income

 

$

5,286

 

$

4,838

 

9.3%

 

$

2,857

 

85.0%

 

 

 

 

 

 

 

 

 

 

 

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

 

 

Three Months Ended

($ in thousands)

 

3/31/2022

 

12/31/2021

 

% Change

 

3/31/2021

 

% Change

Gain on sale of SBA loans

 

 

 

 

 

 

 

 

 

 

Sold loan balance

 

$

39,683

 

$

36,765

 

7.9%

 

$

10,919

 

263.4%

Premium received

 

 

4,206

 

 

3,683

 

14.2%

 

 

1,309

 

221.3%

Gain recognized

 

 

3,777

 

 

3,363

 

12.3%

 

 

1,195

 

216.1%

Gain on sale of residential property loans

 

 

 

 

 

 

 

 

 

 

Sold loan balance

 

$

 

$

559

 

(100.0)%

 

$

7,907

 

(100.0)%

Gain recognized

 

 

 

 

9

 

(100.0)%

 

 

127

 

(100.0)%

 

 

 

 

 

 

 

 

 

 

 

The Company also sold certain commercial property loans of $3.4 million during the previous quarter.

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

 

 

Three Months Ended

($ in thousands)

 

3/31/2022

 

12/31/2021

 

% Change

 

3/31/2021

 

% Change

Loan servicing income

 

 

 

 

 

 

 

 

 

 

Servicing income received

 

$

1,230

 

 

$

1,202

 

 

2.3%

 

$

1,273

 

 

(3.4)%

Servicing assets amortization

 

 

(530

)

 

 

(514

)

 

3.1%

 

 

(391

)

 

35.5%

Loan servicing income

 

$

700

 

 

$

688

 

 

1.7%

 

$

882

 

 

(20.6)%

Underlying loans at end of period

 

$

531,183

 

 

$

519,706

 

 

2.2%

 

$

492,981

 

 

7.7%

 

 

 

 

 

 

 

 

 

 

 

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

($ in thousands)

 

3/31/2022

 

12/31/2021

 

% Change

 

3/31/2021

 

% Change

Salaries and employee benefits

 

$

8,595

 

$

7,061

 

21.7%

 

$

6,182

 

39.0%

Occupancy and equipment

 

 

1,397

 

 

1,417

 

(1.4)%

 

 

1,371

 

1.9%

Professional fees

 

 

403

 

 

585

 

(31.1)%

 

 

494

 

(18.4)%

Marketing and business promotion

 

 

207

 

 

586

 

(64.7)%

 

 

138

 

50.0%

Data processing

 

 

404

 

 

408

 

(1.0)%

 

 

377

 

7.2%

Director fees and expenses

 

 

169

 

 

161

 

5.0%

 

 

138

 

22.5%

Regulatory assessments

 

 

141

 

 

138

 

2.2%

 

 

208

 

(32.2)%

Other expenses

 

 

755

 

 

812

 

(7.0)%

 

 

761

 

(0.8)%

Total noninterest expense

 

$

12,071

 

$

11,168

 

8.1%

 

$

9,669

 

24.8%

 

 

 

 

 

 

 

 

 

 

 

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 from the annual merit increase and number of employees increase, incentives tied to the sales of Loan Production Offices originated SBA loans, vacation accrual, and a decrease in loan origination cost, which offsets the recognition of salaries and employee benefits expense. The Company recognized a higher loan origination cost for the year-ago quarter primarily due to the SBA PPP loan production. Total loan origination cost included in salaries and employee benefits were $365 thousand, $435 thousand, and $986 thousand for the current, previous and year-ago quarters, respectively. The number of full-time equivalent employees was 256, 248 and 246 as of March 31, 2022, December 31, 2021 and March 31, 2021, respectively.

Professional Fees. The decrease for the current quarter compared with the previous quarter was primarily due to increased internal audit and other professional fees during the previous quarter as a part of the year-end processes. Compared with the year-ago quarter, the decrease was primarily due to a decrease in internal audit fees.

Marketing and Business Promotion. The decrease for the current quarter compared with the previous quarter was primarily due to the year-end promotion during the previous quarter. Compared with the year-ago quarter, the increase was primarily due to more marketing activities and advertisement for the current quarter.

Director Fees and Expenses. The increase for the current quarter compared with the year-ago quarter was primarily due to a new director appointed during the fourth quarter of 2021.

Regulatory Assessments. The decrease for the current quarter compared with the year-ago quarter was primarily due to a decrease in assessment rate, partially offset by an increase in balance sheet.

Balance Sheet (Unaudited)

Total assets were $2.20 billion at March 31, 2022, an increase of $50.0 million, or 2.3%, from $2.15 billion at December 31, 2021 and an increase of $149.1 million, or 7.3%, from $2.05 billion at March 31, 2021. The increase for the current quarter was primarily due to increases in cash and cash equivalents and securities available-for-sale, partially offset by a decrease in loans held-for-sale.

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)

 

3/31/2022

 

12/31/2021

 

% Change

 

3/31/2021

 

% Change

Real estate loans

 

 

 

 

 

 

 

 

 

 

Commercial property

 

$

1,150,101

 

$

1,105,843

 

4.0%

 

$

922,536

 

24.7%

Residential property

 

 

215,132

 

 

209,485

 

2.7%

 

 

190,990

 

12.6%

SBA property

 

 

129,400

 

 

129,661

 

(0.2)%

 

 

125,989

 

2.7%

Construction

 

 

9,522

 

 

8,252

 

15.4%

 

 

13,151

 

(27.6)%

Commercial and industrial loans

 

 

 

 

 

 

 

 

 

 

Commercial term

 

 

69,836

 

 

73,438

 

(4.9)%

 

 

80,361

 

(13.1)%

Commercial lines of credit

 

 

107,406

 

 

100,936

 

6.4%

 

 

91,970

 

16.8%

SBA commercial term

 

 

16,880

 

 

17,640

 

(4.3)%

 

 

21,078

 

(19.9)%

SBA PPP

 

 

22,926

 

 

65,329

 

(64.9)%

 

 

218,709

 

(89.5)%

Other consumer loans

 

 

21,752

 

 

21,621

 

0.6%

 

 

21,132

 

2.9%

Loans held-for-investment

 

 

1,742,955

 

 

1,732,205

 

0.6%

 

 

1,685,916

 

3.4%

Loans held-for-sale

 

 

18,340

 

 

37,026

 

(50.5)%

 

 

3,569

 

413.9%

Total loans

 

$

1,761,295

 

$

1,769,231

 

(0.4)%

 

$

1,689,485

 

4.3%

 

 

 

 

 

 

 

 

 

 

 

The increase in loans held-for-investment for the current quarter was primarily due to new funding of $117.9 million and advances on lines of credit of $29.2 million, partially offset by pay-downs and pay-offs of $136.4 million. SBA PPP loans of $42.4 million were paid off through regular payments or forgiveness from SBA during the current quarter.

The decrease in loans held-for-sale for the current quarter was primarily due to sales of $39.7 million, partially offset by new funding of $21.2 million.

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

($ in thousands)

 

3/31/2022

 

12/31/2021

 

% Change

 

3/31/2021

 

% Change

Real estate loans

 

 

 

 

 

 

 

 

 

 

Commercial property

 

$

21,195

 

$

20,194

 

5.0%

 

$

20,003

 

6.0%

SBA property

 

 

3,142

 

 

3,068

 

2.4%

 

 

3,677

 

(14.5)%

Construction

 

 

6,528

 

 

5,180

 

26.0%

 

 

13,588

 

(52.0)%

Commercial and industrial loans

 

 

 

 

 

 

 

 

 

 

Commercial term

 

 

2,674

 

 

1,097

 

143.8%

 

 

1,000

 

167.4%

Commercial lines of credit

 

 

175,742

 

 

169,000

 

4.0%

 

 

168,381

 

4.4%

SBA commercial term

 

 

950

 

 

149

 

537.6%

 

 

 

—%

Other consumer loans

 

 

1,080

 

 

595

 

81.5%

 

 

96

 

1,025.0%

Total commitments to extend credit

 

$

211,311

 

$

199,283

 

6.0%

 

$

206,745

 

2.2%

 

 

 

 

 

 

 

 

 

 

 

Credit Quality

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

($ in thousands)

 

3/31/2022

 

12/31/2021

 

% Change

 

3/31/2021

 

% Change

Nonaccrual loans

 

 

 

 

 

 

 

 

 

 

Real estate loans

 

 

 

 

 

 

 

 

 

 

Residential property

 

$

461

 

 

$

 

 

—%

 

$

 

 

—%

SBA property

 

 

733

 

 

 

746

 

 

(1.7)%

 

 

841

 

 

(12.8)%

Commercial and industrial loans

 

 

 

 

 

 

 

 

 

 

SBA commercial term

 

 

199

 

 

 

213

 

 

(6.6)%

 

 

568

 

 

(65.0)%

Other consumer loans

 

 

25

 

 

 

35

 

 

(28.6)%

 

 

52

 

 

(51.9)%

Total nonaccrual loans held-for-investment

 

 

1,418

 

 

 

994

 

 

42.7%

 

 

1,461

 

 

(2.9)%

Loans past due 90 days or more and still accruing

 

 

 

 

 

 

 

—%

 

 

 

 

—%

Non-performing loans (“NPLs”)

 

 

1,418

 

 

 

994

 

 

42.7%

 

 

1,461

 

 

(2.9)%

Other real estate owned (“OREO”)

 

 

 

 

 

 

 

—%

 

 

2,336

 

 

(100.0)%

Non-performing assets (“NPAs”)

 

$

1,418

 

 

$

994

 

 

42.7%

 

$

3,797

 

 

(62.7)%

Loans past due and still accruing

 

 

 

 

 

 

 

 

 

 

Past due 30 to 59 days

 

$

119

 

 

$

549

 

 

(78.3)%

 

$

56

 

 

112.5%

Past due 60 to 89 days

 

 

1

 

 

 

5

 

 

(80.0)%

 

 

52

 

 

(98.1)%

Past due 90 days or more

 

 

 

 

 

 

 

—%

 

 

 

 

—%

Total loans past due and still accruing

 

$

120

 

 

$

554

 

 

(78.3)%

 

$

108

 

 

11.1%

Troubled debt restructurings (“TDRs”)

 

 

 

 

 

 

 

 

 

Accruing TDRs

 

$

565

 

 

$

576

 

 

(1.9)%

 

$

620

 

 

(8.9)%

Nonaccrual TDRs

 

 

15

 

 

 

17

 

 

(11.8)%

 

 

33

 

 

(54.5)%

Total TDRs

 

$

580

 

 

$

593

 

 

(2.2)%

 

$

653

 

 

(11.2)%

Special mention loans

 

$

5,562

 

 

$

18,092

 

 

(69.3)%

 

$

17,997

 

 

(69.1)%

Classified assets

 

 

 

 

 

 

 

 

 

Classified loans

 

$

5,377

 

 

$

5,168

 

 

4.0%

 

$

7,090

 

 

(24.2)%

OREO

 

 

 

 

 

 

 

—%

 

 

2,336

 

 

(100.0)%

Classified assets

 

$

5,377

 

 

$

5,168

 

 

4.0%

 

$

9,426

 

 

(43.0)%

NPLs to loans held-for-investment

 

 

0.08

%

 

 

0.06

%

 

 

 

 

0.09

%

 

 

NPAs to total assets

 

 

0.06

%

 

 

0.05

%

 

 

 

 

0.19

%

 

 

Classified assets to total assets

 

 

0.24

%

 

 

0.24

%

 

 

 

 

0.46

%

 

 

 

 

 

 

 

 

 

 

 

 

 

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 March 31, 2022 and December 31, 2021, 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 $19.8 million at March 31, 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 $4.1 million and $2.7 million, respectively, at March 31, 2022, $15.6 million and $2.7 million, respectively, at December 31, 2021, and $16.4 million and $2.8 million, respectively, at March 31, 2021, of the loans that were granted such modifications. The decrease in special mention loans for the current quarter was primarily due to improvements of 2 loans with an aggregated carrying value of $11.3 million.

Investment Securities

Total investment securities were $131.3 million at March 31, 2022, an increase of $8.1 million, or 6.6%, from $123.2 million at December 31, 2021, and an increase of $4.2 million, or 3.3%, from $127.1 million at March 31, 2021. The increase for the current quarter was primarily due to purchases of $19.9 million, partially offset by principal pay-downs and calls of $6.2 million and net premium amortization of $135 thousand.

Deposits

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

 

 

3/31/2022

 

12/31/2021

 

3/31/2021

($ in thousands)

 

Amount

 

% to

Total

 

Amount

 

% to

Total

 

Amount

 

% to

Total

Noninterest-bearing demand deposits

 

$

891,797

 

46.7%

 

$

830,383

 

44.5%

 

$

715,719

 

40.8%

Interest-bearing deposits

 

 

 

 

 

 

 

 

 

 

 

 

Savings

 

 

15,037

 

0.8%

 

 

16,299

 

0.9%

 

 

11,271

 

0.6%

NOW

 

 

17,543

 

0.9%

 

 

20,185

 

1.1%

 

 

19,380

 

1.1%

Retail money market accounts

 

 

431,057

 

22.5%

 

 

386,041

 

20.5%

 

 

381,704

 

21.7%

Brokered money market accounts

 

 

1

 

0.1%

 

 

1

 

0.1%

 

 

4

 

0.1%

Retail time deposits of

 

 

 

 

 

 

 

 

 

 

 

 

$250,000 or less

 

 

246,100

 

12.8%

 

 

256,956

 

13.8%

 

 

276,232

 

15.8%

More than $250,000

 

 

173,844

 

9.1%

 

 

172,269

 

9.2%

 

 

166,845

 

9.5%

Time deposits from internet rate service providers

 

 

 

—%

 

 

 

—%

 

 

17,616

 

1.0%

State and brokered time deposits

 

 

135,000

 

7.1%

 

 

185,000

 

9.9%

 

 

165,000

 

9.4%

Total interest-bearing deposits

 

 

1,018,582

 

53.3%

 

 

1,036,751

 

55.5%

 

 

1,038,052

 

59.2%

Total deposits

 

$

1,910,379

 

100.0%

 

$

1,867,134

 

100.0%

 

$

1,753,771

 

100.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

The increase in noninterest-bearing demand deposits and retail money market accounts for the current quarter was primarily due to the overall liquid deposit market.

The decrease in retail time deposits for the current quarter was primarily due to matured and closed accounts of $188.5 million, partially offset by new accounts of $30.6 million, renewals of the matured accounts of $143.6 million, and balance increases of $5.1 million.

Liquidity

The following table presents a summary of the Company’s liquidity position as of March 31, 2022:

($ in thousands)

 

3/31/2022

Cash and cash equivalents

 

$

250,212

 

Cash and cash equivalents to total assets

 

 

11.4

%

 

 

 

Available borrowing capacity

 

 

FHLB advances

 

$

527,426

 

Federal Reserve Discount Window

 

 

26,455

 

Overnight federal funds lines

 

 

65,000

 

Total

 

$

618,881

 

Total available borrowing capacity to total assets

 

 

28.1

%

 

 

 

Shareholders’ Equity

Shareholders’ equity was $261.1 million at March 31, 2022, an increase of $4.8 million, or 1.9%, from $256.3 million at December 31, 2021 and an increase of $20.8 million, or 8.7%, from $240.3 million at March 31, 2021. The increase for the current quarter was primarily due to net income, partially offset by cash dividends declared on common stock of $2.2 million and a decrease in accumulated other comprehensive income (loss).

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.

Emergency Capital Investment Program

On December 14, 2021, the U.S. Treasury informed the Company that the U.S Treasury has reviewed the Company’s application to receive a capital investment from the U.S Treasury under the Emergency Capital Investment Program (“ECIP”), and that the Company would be eligible to receive an ECIP investment in an amount up to $69.1 million in the form of non-dilutive Tier 1 senior perpetual preferred capital. The Company determined to accept the offer to receive the ECIP investment for the full amount. The Company expects to close the investment in the second quarter of 2022.

Established by the Consolidated Appropriations Act, 2021, the ECIP was created to encourage low- and moderate-income community financial institutions and minority depository institutions such as the Bank to augment their efforts to support small businesses and consumers in their communities.

Capital Ratios

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

 

 

3/31/2022

 

12/31/2021

 

3/31/2021

 

Well

Capitalized

Requirements

PCB Bancorp

 

 

 

 

 

 

 

 

Common tier 1 capital (to risk-weighted assets)

 

14.77%

 

14.79%

 

15.92%

 

N/A

Total capital (to risk-weighted assets)

 

15.97%

 

16.04%

 

17.17%

 

N/A

Tier 1 capital (to risk-weighted assets)

 

14.77%

 

14.79%

 

15.92%

 

N/A

Tier 1 capital (to average assets)

 

12.22%

 

12.11%

 

12.03%

 

N/A

Pacific City Bank

 

 

 

 

 

 

 

 

Common tier 1 capital (to risk-weighted assets)

 

14.43%

 

14.48%

 

15.62%

 

6.5%

Total capital (to risk-weighted assets)

 

15.63%

 

15.73%

 

16.88%

 

10.0%

Tier 1 capital (to risk-weighted assets)

 

14.43%

 

14.48%

 

15.62%

 

8.0%

Tier 1 capital (to average assets)

 

11.94%

 

11.85%

 

11.81%

 

5.0%

 

 

 

 

 

 

 

 

 

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 our borrowers’ actual payment performance as loan deferrals related to the COVID-19 pandemic expire, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to the COVID-19 pandemic, including the potential adverse impact of loan modifications and payment deferrals implemented consistent with recent regulatory guidance, and the general economic uncertainty caused by the COVID-19 pandemic, and government and societal responses thereto, general economic uncertainty in the United States and abroad, the impact of inflation, changes in interest rates, 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)

 

 

 

3/31/2022

 

12/31/2021

 

% Change

 

3/31/2021

 

% Change

Assets

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

19,693

 

 

$

15,222

 

 

29.4%

 

$

16,764

 

 

17.5%

Interest-bearing deposits in other financial institutions

 

 

230,519

 

 

 

188,063

 

 

22.6%

 

 

195,016

 

 

18.2%

Total cash and cash equivalents

 

 

250,212

 

 

 

203,285

 

 

23.1%

 

 

211,780

 

 

18.1%

Securities available-for-sale, at fair value

 

 

131,345

 

 

 

123,198

 

 

6.6%

 

 

127,114

 

 

3.3%

Loans held-for-sale

 

 

18,340

 

 

 

37,026

 

 

(50.5)%

 

 

3,569

 

 

413.9%

Loans held-for-investment

 

 

1,742,955

 

 

 

1,732,205

 

 

0.6%

 

 

1,685,916

 

 

3.4%

Allowance for loan losses

 

 

(21,198

)

 

 

(22,381

)

 

(5.3)%

 

 

(25,514

)

 

(16.9)%

Net loans held-for-investment

 

 

1,721,757

 

 

 

1,709,824

 

 

0.7%

 

 

1,660,402

 

 

3.7%

Premises and equipment, net

 

 

3,106

 

 

 

3,098

 

 

0.3%

 

 

3,774

 

 

(17.7) %

Federal Home Loan Bank and other bank stock

 

 

8,577

 

 

 

8,577

 

 

—%

 

 

8,447

 

 

1.5%

Other real estate owned, net

 

 

 

 

 

 

 

—%

 

 

2,336

 

 

(100.0) %

Bank-owned life insurance

 

 

29,530

 

 

 

29,358

 

 

0.6%

 

 

 

 

NM

Deferred tax assets, net

 

 

11,895

 

 

 

10,824

 

 

9.9%

 

 

8,170

 

 

45.6%

Servicing assets

 

 

7,533

 

 

 

7,269

 

 

3.6%

 

 

6,253

 

 

20.5%

Operating lease assets

 

 

6,511

 

 

 

6,786

 

 

(4.1)%

 

 

7,145

 

 

(8.9)%

Accrued interest receivable

 

 

5,050

 

 

 

5,368

 

 

(5.9)%

 

 

7,523

 

 

(32.9)%

Other assets

 

 

5,886

 

 

 

5,122

 

 

14.9%

 

 

4,159

 

 

41.5%

Total assets

 

$

2,199,742

 

 

$

2,149,735

 

 

2.3%

 

$

2,050,672

 

 

7.3%

Liabilities

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

891,797

 

 

$

830,383

 

 

7.4%

 

$

715,719

 

 

24.6%

Savings, NOW and money market accounts

 

 

463,638

 

 

 

422,526

 

 

9.7%

 

 

412,359

 

 

12.4%

Time deposits of $250,000 or less

 

 

281,100

 

 

 

341,956

 

 

(17.8)%

 

 

358,848

 

 

(21.7)%

Time deposits of more than $250,000

 

 

273,844

 

 

 

272,269

 

 

0.6%

 

 

266,845

 

 

2.6%

Total deposits

 

 

1,910,379

 

 

 

1,867,134

 

 

2.3%

 

 

1,753,771

 

 

8.9%

Federal Home Loan Bank advances

 

 

10,000

 

 

 

10,000

 

 

—%

 

 

40,000

 

 

(75.0)%

Operating lease liabilities

 

 

7,176

 

 

 

7,444

 

 

(3.6)%

 

 

7,935

 

 

(9.6)%

Accrued interest payable and other liabilities

 

 

11,129

 

 

 

8,871

 

 

25.5%

 

 

8,703

 

 

27.9%

Total liabilities

 

 

1,938,684

 

 

 

1,893,449

 

 

2.4%

 

 

1,810,409

 

 

7.1%

Commitments and contingent liabilities

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

 

 

 

 

Common stock, no par value

 

 

155,614

 

 

 

154,992

 

 

0.4%

 

 

164,698

 

 

(5.5)%

Retained earnings

 

 

109,142

 

 

 

101,140

 

 

7.9%

 

 

74,707

 

 

46.1%

Accumulated other comprehensive income (loss), net

 

 

(3,698

)

 

 

154

 

 

NM

 

 

858

 

 

NM

Total shareholders’ equity

 

 

261,058

 

 

 

256,286

 

 

1.9%

 

 

240,263

 

 

8.7%

Total liabilities and shareholders’ equity

 

$

2,199,742

 

 

$

2,149,735

 

 

2.3%

 

$

2,050,672

 

 

7.3%

 

 

 

 

 

 

 

 

 

 

 

Outstanding common shares

 

 

14,944,663

 

 

 

14,865,825

 

 

 

 

 

15,468,242

 

 

 

Book value per common share (1)

 

$

17.47

 

 

$

17.24

 

 

 

 

$

15.53

 

 

 

Total loan to total deposit ratio

 

 

92.20

%

 

 

94.76

%

 

 

 

 

96.33

%

 

 

Noninterest-bearing deposits to total deposits

 

 

46.68

%

 

 

44.47

%

 

 

 

 

40.81

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

The ratios are calculated by dividing total shareholders equity by the number of outstanding common shares. The Company did not have any intangible equity components for the presented periods.

PCB Bancorp and Subsidiary

Consolidated Statements of Income (Unaudited)

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

 

 

 

Three Months Ended

 

 

3/31/2022

 

12/31/2021

 

% Change

 

3/31/2021

 

% Change

Interest and dividend income

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

20,190

 

 

$

20,363

 

 

(0.8)%

 

$

18,744

 

 

7.7%

Investment securities

 

 

476

 

 

 

441

 

 

7.9%

 

 

360

 

 

32.2%

Other interest-earning assets

 

 

228

 

 

 

191

 

 

19.4%

 

 

154

 

 

48.1%

Total interest income

 

 

20,894

 

 

 

20,995

 

 

(0.5)%

 

 

19,258

 

 

8.5%

Interest expense

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

850

 

 

 

847

 

 

0.4%

 

 

1,311

 

 

(35.2)%

Other borrowings

 

 

51

 

 

 

53

 

 

(3.8)%

 

 

128

 

 

(60.2)%

Total interest expense

 

 

901

 

 

 

900

 

 

0.1%

 

 

1,439

 

 

(37.4)%

Net interest income

 

 

19,993

 

 

 

20,095

 

 

(0.5)%

 

 

17,819

 

 

12.2%

Reversal for loan losses

 

 

(1,191

)

 

 

(1,462

)

 

(18.5)%

 

 

(1,147

)

 

3.8%

Net interest income after reversal for loan losses

 

 

21,184

 

 

 

21,557

 

 

(1.7)%

 

 

18,966

 

 

11.7%

Noninterest income

 

 

 

 

 

 

 

 

 

 

Gain on sale of loans

 

 

3,777

 

 

 

3,374

 

 

11.9%

 

 

1,322

 

 

185.7%

Service charges and fees on deposits

 

 

303

 

 

 

308

 

 

(1.6)%

 

 

293

 

 

3.4%

Loan servicing income

 

 

700

 

 

 

688

 

 

1.7%

 

 

882

 

 

(20.6)%

Bank-owned life insurance income

 

 

172

 

 

 

108

 

 

59.3%

 

 

 

 

NM

Other income

 

 

334

 

 

 

360

 

 

(7.2)%

 

 

360

 

 

(7.2)%

Total noninterest income

 

 

5,286

 

 

 

4,838

 

 

9.3%

 

 

2,857

 

 

85.0%

Noninterest expense

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

8,595

 

 

 

7,061

 

 

21.7%

 

 

6,182

 

 

39.0%

Occupancy and equipment

 

 

1,397

 

 

 

1,417

 

 

(1.4)%

 

 

1,371

 

 

1.9%

Professional fees

 

 

403

 

 

 

585

 

 

(31.1)%

 

 

494

 

 

(18.4)%

Marketing and business promotion

 

 

207

 

 

 

586

 

 

(64.7)%

 

 

138

 

 

50.0%

Data processing

 

 

404

 

 

 

408

 

 

(1.0)%

 

 

377

 

 

7.2%

Director fees and expenses

 

 

169

 

 

 

161

 

 

5.0%

 

 

138

 

 

22.5%

Regulatory assessments

 

 

141

 

 

 

138

 

 

2.2%

 

 

208

 

 

(32.2)%

Other expenses

 

 

755

 

 

 

812

 

 

(7.0)%

 

 

761

 

 

(0.8)%

Total noninterest expense

 

 

12,071

 

 

 

11,168

 

 

8.1%

 

 

9,669

 

 

24.8%

Income before income taxes

 

 

14,399

 

 

 

15,227

 

 

(5.4)%

 

 

12,154

 

 

18.5%

Income tax expense

 

 

4,159

 

 

 

4,551

 

 

(8.6)%

 

 

3,594

 

 

15.7%

Net income

 

$

10,240

 

 

$

10,676

 

 

(4.1)%

 

$

8,560

 

 

19.6%

Earnings per common share

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.69

 

 

$

0.72

 

 

 

 

$

0.55

 

 

 

Diluted

 

$

0.67

 

 

$

0.70

 

 

 

 

$

0.55

 

 

 

Average common shares

 

 

 

 

 

 

 

 

 

 

Basic

 

 

14,848,014

 

 

 

14,799,973

 

 

 

 

 

15,384,343

 

 

 

Diluted

 

 

15,141,693

 

 

 

15,093,351

 

 

 

 

 

15,533,608

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend paid per common share

 

$

0.15

 

 

$

0.12

 

 

 

 

$

0.10

 

 

 

Return on average assets (1)

 

 

1.92

%

 

 

2.01

%

 

 

 

 

1.75

%

 

 

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

 

 

16.01

%

 

 

16.84

%

 

 

 

 

14.66

%

 

 

Efficiency ratio (3)

 

 

47.75

%

 

 

44.79

%

 

 

 

 

46.76

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

 

Ratios are presented on an annualized basis.

(2)

 

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

(3)

 

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

PCB Bancorp and Subsidiary

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

($ in thousands)

 

 

 

Three Months Ended

 

 

3/31/2022

 

12/31/2021

 

3/31/2021

 

 

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)

 

$

1,773,376

 

 

$

20,190

 

4.62%

 

$

1,758,421

 

 

$

20,363

 

4.59%

 

$

1,641,634

 

 

$

18,744

 

4.63%

Mortgage-backed securities

 

 

84,223

 

 

 

307

 

1.48%

 

 

88,501

 

 

 

263

 

1.18%

 

 

81,486

 

 

 

215

 

1.07%

Collateralized mortgage obligation

 

 

18,242

 

 

 

48

 

1.07%

 

 

20,233

 

 

 

53

 

1.04%

 

 

24,888

 

 

 

57

 

0.93%

SBA loan pool securities

 

 

10,095

 

 

 

38

 

1.53%

 

 

9,199

 

 

 

41

 

1.77%

 

 

11,673

 

 

 

52

 

1.81%

Municipal bonds (2)

 

 

5,632

 

 

 

36

 

2.59%

 

 

5,698

 

 

 

37

 

2.58%

 

 

5,804

 

 

 

36

 

2.52%

Corporate bonds

 

 

5,038

 

 

 

47

 

3.78%

 

 

5,019

 

 

 

47

 

3.72%

 

 

 

 

 

 

—%

Other interest-earning assets

 

 

198,918

 

 

 

228

 

0.46%

 

 

175,468

 

 

 

191

 

0.43%

 

 

189,153

 

 

 

154

 

0.33%

Total interest-earning assets

 

 

2,095,524

 

 

 

20,894

 

4.04%

 

 

2,062,539

 

 

 

20,995

 

4.04%

 

 

1,954,638

 

 

 

19,258

 

4.00%

Noninterest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

20,385

 

 

 

 

 

 

 

20,618

 

 

 

 

 

 

 

19,072

 

 

 

 

 

Allowance for loan losses

 

 

(22,377

)

 

 

 

 

 

 

(23,835

)

 

 

 

 

 

 

(26,870

)

 

 

 

 

Other assets

 

 

67,600

 

 

 

 

 

 

 

52,512

 

 

 

 

 

 

 

40,377

 

 

 

 

 

Total noninterest-earning assets

 

 

65,608

 

 

 

 

 

 

 

49,295

 

 

 

 

 

 

 

32,579

 

 

 

 

 

Total assets

 

$

2,161,132

 

 

 

 

 

 

$

2,111,834

 

 

 

 

 

 

$

1,987,217

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

$

431,981

 

 

 

313

 

0.29%

 

$

406,343

 

 

 

301

 

0.29%

 

$

407,623

 

 

 

333

 

0.33%

Savings

 

 

15,644

 

 

 

2

 

0.05%

 

 

14,161

 

 

 

2

 

0.06%

 

 

10,609

 

 

 

1

 

0.04%

Time deposits

 

 

586,387

 

 

 

535

 

0.37%

 

 

587,523

 

 

 

544

 

0.37%

 

 

635,613

 

 

 

977

 

0.62%

Total interest-bearing deposits

 

 

1,034,012

 

 

 

850

 

0.33%

 

 

1,008,027

 

 

 

847

 

0.33%

 

 

1,053,845

 

 

 

1,311

 

0.50%

Other borrowings

 

 

10,400

 

 

 

51

 

1.99%

 

 

13,315

 

 

 

53

 

1.58%

 

 

75,556

 

 

 

128

 

0.69%

Total interest-bearing liabilities

 

 

1,044,412

 

 

 

901

 

0.35%

 

 

1,021,342

 

 

 

900

 

0.35%

 

 

1,129,401

 

 

 

1,439

 

0.52%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

 

840,626

 

 

 

 

 

 

 

824,504

 

 

 

 

 

 

 

607,076

 

 

 

 

 

Other liabilities

 

 

16,727

 

 

 

 

 

 

 

14,511

 

 

 

 

 

 

 

13,950

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

857,353

 

 

 

 

 

 

 

839,015

 

 

 

 

 

 

 

621,026

 

 

 

 

 

Total liabilities

 

 

1,901,765

 

 

 

 

 

 

 

1,860,357

 

 

 

 

 

 

 

1,750,427

 

 

 

 

 

Total shareholders’ equity

 

 

259,367

 

 

 

 

 

 

 

251,477

 

 

 

 

 

 

 

236,790

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

2,161,132

 

 

 

 

 

 

$

2,111,834

 

 

 

 

 

 

$

1,987,217

 

 

 

 

 

Net interest income

 

 

 

$

19,993

 

 

 

 

 

$

20,095

 

 

 

 

 

$

17,819

 

 

Net interest spread (3)

 

 

 

 

 

3.69%

 

 

 

 

 

3.69%

 

 

 

 

 

3.48%

Net interest margin (4)

 

 

 

 

 

3.87%

 

 

 

 

 

3.87%

 

 

 

 

 

3.70%

Total deposits

 

$

1,874,638

 

 

$

850

 

0.18%

 

$

1,832,531

 

 

$

847

 

0.18%

 

$

1,660,921

 

 

$

1,311

 

0.32%

Total funding (5)

 

$

1,885,038

 

 

$

901

 

0.19%

 

$

1,845,846

 

 

$

900

 

0.19%

 

$

1,736,477

 

 

$

1,439

 

0.34%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 for loan losses to loans held-for-investment ratio is calculated by removing SBA PPP loans from loans held-for-investment from the allowance for loan losses 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 for loan losses 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.

 

 

 

3/31/2022

 

12/31/2021

 

3/31/2021

Loans held-for-investment

(a)

 

$

1,742,955

 

 

$

1,732,205

 

 

$

1,685,916

 

Less: SBA PPP loans

(b)

 

 

22,926

 

 

 

65,329

 

 

 

218,709

 

Loans held-for-investment, excluding SBA PPP loans

(c)=(a)-(b)

 

$

1,720,029

 

 

$

1,666,876

 

 

$

1,467,207

 

Allowance for loan losses

(d)

 

$

21,198

 

 

$

22,381

 

 

$

25,514

 

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

(d)/(a)

 

 

1.22

%

 

 

1.29

%

 

 

1.51

%

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

(d)/(c)

 

 

1.23

%

 

 

1.34

%

 

 

1.74

%

 

 

 

 

 

 

 

 

 

Contacts

Timothy Chang

Executive Vice President & Chief Financial Officer

213-210-2000

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