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PCB Bancorp Reports Record Earnings of $11.0 Million for Q3 2021

PCB Bancorp (the “Company”) (NASDAQ: PCB), the holding company of Pacific City Bank (the “Bank”), today reported net income of $11.0 million, or $0.73 per diluted common share for the third quarter of 2021, compared with $9.8 million, or $0.64 per diluted common share, for the previous quarter and $3.4 million, or $0.22 per diluted common share, for the year-ago quarter.

Q3 2021 Highlights

  • Net income totaled $11.0 million or $0.73 per diluted common share;
    • The Company recorded a provision (reversal) for loan losses of $(1.1) million for the current quarter compared with $(934) thousand for the previous quarter and $4.3 million for the year-ago quarter.
    • Allowance for loan losses to loans held-for-investment (1) ratio was 1.39% at September 30, 2021 compared with 1.45% at June 30, 2021 and 1.55% at September 30, 2020. Adjusted allowance for loan losses to loans held-for-investment ratio (2) was 1.48% at September 30, 2021 compared with 1.62% at June 30, 2021 and 1.70% at September 30, 2020.
    • Net interest income was $20.2 million for the current quarter compared with $19.0 million for the previous quarter and $16.9 million for the year-ago quarter. Net interest margin was 3.93% for the third quarter of 2021 compared with 3.83% for the previous quarter and 3.43% for the year-ago quarter.
    • Gain on sale of loans was $4.3 million for the current quarter compared with $4.0 million for the previous quarter and $821 thousand for the year-ago quarter.
  • Total assets were $2.10 billion at September 30, 2021, an increase of $44.7 million, or 2.2%, from $2.06 billion at June 30, 2021 and an increase of $83.5 million, or 4.1%, from $2.02 billion at September 30, 2020;
  • Loans held-for-investment were $1.71 billion at September 30, 2021, a decrease of $11.8 million, or 0.7%, from $1.72 billion at June 30, 2021, but an increase of $129.1 million, or 8.2%, from $1.58 billion at September 30, 2020;
    • SBA PPP loans totaled $101.9 million and $181.0 million at September 30, 2021 and June 30, 2021, respectively.
    • The Company had no loans under modified terms related to COVID-19 at September 30, 2021.
  • Total deposits were $1.83 billion at September 30, 2021, an increase of $35.0 million from $1.80 billion at June 30, 2021 and an increase of $185.6 million, or 11.3%, from $1.65 billion at September 30, 2020;
  • The Company repurchased and retired 680,269 shares of common stock totaling $10.9 million for a weighted-average price of $15.99 per share under the repurchase program announced on April 8, 2021 that expired on September 7, 2021; and
  • A cash dividend of $0.12 per share was declared on October 28, 2021. This represents the 27th consecutive quarterly dividend paid by PCB Bancorp.

Henry Kim, President and Chief Executive Officer, commented, "We are pleased to announce another record quarter with net income of $11.0 million for the third quarter of 2021. Our total loans reached a record $1.74 billion as of September 30, 2021. Total loans increased by 19.7% annualized from June 30, 2021, and by 11.5% from September 30, 2020, excluding the changes in the balances of Paycheck Protection Program loans.”

“Total deposits increased at an annualized rate of 7.8% during the quarter to a record $1.83 billion as of September 30, 2021 driven by $36.5 million growth in noninterest-bearing demand deposits that now make up 45.4% of the total balances, compared with 35.0% a year ago.”

Mr. Kim continued, "In addition to the healthy organic loan and deposit growth, our net interest margin improved by ten basis points to 3.93% in the third quarter of 2021 as compared to the second quarter of 2021 and our credit quality remains solid as evidenced by nonperformance assets to total assets ratio of 0.05% at September 30, 2021.”

“The momentum in our loan pipeline continues to be strong with equally healthy liquidity to expand our net interest income. We are looking forward to finishing the year strong and remain positive in our outlook in delivering excellent financial performance for the year and heading into 2022.”

____________________________________

(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

 

Nine Months Ended

 

9/30/2021

 

6/30/2021

 

% Change

 

9/30/2020

 

% Change

 

9/30/2021

 

9/30/2020

 

% Change

Net income

 

$

11,023

 

 

$

9,844

 

 

12.0

%

 

$

3,449

 

 

219.6

%

 

$

29,427

 

 

$

10,388

 

 

183.3

%

Diluted earnings per common share

 

$

0.73

 

 

$

0.64

 

 

14.1

%

 

$

0.22

 

 

231.8

%

 

$

1.92

 

 

$

0.67

 

 

186.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

20,227

 

 

$

18,996

 

 

6.5

%

 

$

16,853

 

 

20.0

%

 

$

57,042

 

 

$

48,782

 

 

16.9

%

Provision (reversal) for loan losses

 

(1,053

)

 

(934

)

 

12.7

%

 

4,326

 

 

(124.3

)%

 

(3,134

)

 

11,077

 

 

(128.3

)%

Noninterest income

 

5,588

 

 

5,151

 

 

8.5

%

 

2,272

 

 

146.0

%

 

13,596

 

 

7,216

 

 

88.4

%

Noninterest expense

 

11,232

 

 

11,139

 

 

0.8

%

 

9,886

 

 

13.6

%

 

32,040

 

 

30,149

 

 

6.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (1)

 

2.11

%

 

1.96

%

 

 

 

0.69

%

 

 

 

1.94

%

 

0.73

%

 

 

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

 

17.98

%

 

16.49

%

 

 

 

5.98

%

 

 

 

16.40

%

 

6.10

%

 

 

Net interest margin (1)

 

3.93

%

 

3.83

%

 

 

 

3.43

%

 

 

 

3.82

%

 

3.49

%

 

 

Efficiency ratio (3)

 

43.51

%

 

46.13

%

 

 

 

51.69

%

 

 

 

45.36

%

 

53.84

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in thousands, except per share data)

 

9/30/2021

 

6/30/2021

 

% Change

 

12/31/2020

 

% Change

 

9/30/2020

 

% Change

Total assets

 

$

2,104,699

 

 

$

2,060,003

 

 

2.2

%

 

$

1,922,853

 

 

9.5

%

 

$

2,021,187

 

 

4.1

%

Net loans held-for-investment

 

1,684,071

 

 

1,694,767

 

 

(0.6

)%

 

1,557,068

 

 

8.2

%

 

1,554,258

 

 

8.4

%

Total deposits

 

1,832,666

 

 

1,797,648

 

 

1.9

%

 

1,594,851

 

 

14.9

%

 

1,647,107

 

 

11.3

%

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

 

$

16.68

 

 

$

16.09

 

 

3.7

%

 

$

15.19

 

 

9.8

%

 

$

14.91

 

 

11.9

%

Tier 1 leverage ratio (consolidated)

 

11.91

%

 

11.76

%

 

 

 

11.94

%

 

 

 

11.40

%

 

 

Total shareholders’ equity to total assets (2)

 

11.76

%

 

11.60

%

 

 

 

12.16

%

 

 

 

11.35

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 recent global economic and market conditions, including significant disruption of, and volatility in, financial markets; global supply chain disruptions; and the institution of social distancing and shelter-in-place requirements that have resulted in temporary closures of many businesses, lost revenues, and increased unemployment throughout the U.S., but also specifically in California, where most of the Company’s operations and a large majority of its customers are located. While California’s and New York’s shelter-at-home limits were largely lifted in June 2021, the local economies in the Company’s primary markets have not yet fully recovered.

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.

In addition, the Company has been monitoring its liquidity and capital closely. As of September 30, 2021, the Company maintained $215.0 million, or 10.2% of total assets, of cash and cash equivalents and $606.9 million, or 28.8% of total assets, of available borrowing capacity. All regulatory capital ratios were also well above the regulatory well-capitalized requirements as of September 30, 2021.

At this time, the Company cannot estimate the long term impact of the COVID-19 pandemic, but these conditions are expected to impact its business, results of operations, and financial condition negatively.

Network and Data Incident

As previously disclosed, on August 30, 2021, the Bank identified unusual activity on its network, responded promptly to disable the activity, investigate its source and monitor the Bank’s network. The Bank subsequently became aware of claims that it had been the target of a ransomware attack, and on September 7, 2021, determined that an external actor had accessed or acquired certain data on its network. The Bank has been working with third-party forensic investigators to understand the nature and scope of the incident and determine what information may have been accessed and what clients were impacted. The investigation, which is continuing, revealed that this incident impacted files containing certain Bank customer information, including in some cases personal information of customers and customers’ employees. The Bank has notified or will notify all individuals identified to date, consistent with applicable laws, whose information may have been impacted. All impacted individuals will be offered free Equifax Complete Premier credit monitoring and identity theft protection services. The Bank has notified law enforcement and appropriate authorities of the incident.

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)

 

9/30/2021

 

6/30/2021

 

% Change

 

9/30/2020

 

% Change

 

9/30/2021

 

9/30/2020

 

% Change

Interest income/expense on

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

20,537

 

 

$

19,511

 

 

5.3

%

 

$

18,938

 

 

8.4

%

 

$

58,792

 

 

$

57,617

 

 

2.0

%

Investment securities

 

437

 

 

375

 

 

16.5

%

 

515

 

 

(15.1

)%

 

1,172

 

 

1,698

 

 

(31.0

)%

Other interest-earning assets

 

194

 

 

165

 

 

17.6

%

 

167

 

 

16.2

%

 

513

 

 

938

 

 

(45.3

)%

Total interest-earning assets

 

21,168

 

 

20,051

 

 

5.6

%

 

19,620

 

 

7.9

%

 

60,477

 

 

60,253

 

 

0.4

%

Interest-bearing deposits

 

885

 

 

1,000

 

 

(11.5

)%

 

2,599

 

 

(65.9

)%

 

3,196

 

 

11,000

 

 

(70.9

)%

Borrowings

 

56

 

 

55

 

 

1.8

%

 

168

 

 

(66.7

)%

 

239

 

 

471

 

 

(49.3

)%

Total interest-bearing liabilities

 

941

 

 

1,055

 

 

(10.8

)%

 

2,767

 

 

(66.0

)%

 

3,435

 

 

11,471

 

 

(70.1

)%

Net interest income

 

$

20,227

 

 

$

18,996

 

 

6.5

%

 

$

16,853

 

 

20.0

%

 

$

57,042

 

 

$

48,782

 

 

16.9

%

Average balance of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

1,715,106

 

 

$

1,691,704

 

 

1.4

%

 

$

1,564,704

 

 

9.6

%

 

$

1,683,084

 

 

$

1,524,628

 

 

10.4

%

Investment securities

 

136,874

 

 

132,249

 

 

3.5

%

 

128,212

 

 

6.8

%

 

131,039

 

 

122,371

 

 

7.1

%

Other interest-earning assets

 

188,137

 

 

164,710

 

 

14.2

%

 

260,426

 

 

(27.8

)%

 

180,663

 

 

221,698

 

 

(18.5

)%

Total interest-earning assets

 

$

2,040,117

 

 

$

1,988,663

 

 

2.6

%

 

$

1,953,342

 

 

4.4

%

 

$

1,994,786

 

 

$

1,868,697

 

 

6.7

%

Interest-bearing deposits

 

$

1,000,332

 

 

$

1,026,937

 

 

(2.6

)%

 

$

1,063,962

 

 

(6.0

)%

 

$

1,026,842

 

 

$

1,100,855

 

 

(6.7

)%

Borrowings

 

18,152

 

 

19,012

 

 

(4.5

)%

 

130,000

 

 

(86.0

)%

 

37,363

 

 

95,276

 

 

(60.8

)%

Total interest-bearing liabilities

 

$

1,018,484

 

 

$

1,045,949

 

 

(2.6

)%

 

$

1,193,962

 

 

(14.7

)%

 

$

1,064,205

 

 

$

1,196,131

 

 

(11.0

)%

Total funding (1)

 

$

1,812,649

 

 

$

1,766,054

 

 

2.6

%

 

$

1,746,217

 

 

3.8

%

 

$

1,772,005

 

 

$

1,661,765

 

 

6.6

%

Annualized average yield/cost of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

4.75

%

 

4.63

%

 

 

 

4.81

%

 

 

 

4.67

%

 

5.05

%

 

 

Investment securities

 

1.27

%

 

1.14

%

 

 

 

1.60

%

 

 

 

1.20

%

 

1.85

%

 

 

Other interest-earning assets

 

0.41

%

 

0.40

%

 

 

 

0.26

%

 

 

 

0.38

%

 

0.57

%

 

 

Total interest-earning assets

 

4.12

%

 

4.04

%

 

 

 

4.00

%

 

 

 

4.05

%

 

4.31

%

 

 

Interest-bearing deposits

 

0.35

%

 

0.39

%

 

 

 

0.97

%

 

 

 

0.42

%

 

1.33

%

 

 

Borrowings

 

1.22

%

 

1.16

%

 

 

 

0.51

%

 

 

 

0.86

%

 

0.66

%

 

 

Total interest-bearing liabilities

 

0.37

%

 

0.40

%

 

 

 

0.92

%

 

 

 

0.43

%

 

1.28

%

 

 

Net interest margin

 

3.93

%

 

3.83

%

 

 

 

3.43

%

 

 

 

3.82

%

 

3.49

%

 

 

Cost of total funding (1)

 

0.21

%

 

0.24

%

 

 

 

0.63

%

 

 

 

0.26

%

 

0.92

%

 

 

Supplementary information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net accretion of discount on loans

 

$

932

 

 

$

1,012

 

 

(7.9

)%

 

$

743

 

 

25.4

%

 

$

2,689

 

 

$

2,301

 

 

16.9

%

Net amortization of deferred loan fees

 

$

1,983

 

 

$

1,459

 

 

35.9

%

 

$

1,218

 

 

62.8

%

 

$

4,662

 

 

$

1,988

 

 

134.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 an increase in net amortization of deferred loan fees from an increased forgiveness of SBA PPP loans, partially offset by a decrease in net accretion of discount on loans. The decreases in average yield for the current quarter and year-to-date period compared with the same periods of 2020 were primarily due to a decrease in overall interest rates on loans from lower market rates, partially offset by increases in net accretion of discount on loans and net amortization of deferred loan fees.

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:

 

 

9/30/2021

 

6/30/2021

 

12/31/2020

 

9/30/2020

 

 

% 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

 

29.9

%

 

3.86

%

 

33.9

%

 

3.56

%

 

31.7

%

 

3.86

%

 

40.6

%

 

4.12

%

Hybrid rate loans

 

26.4

%

 

4.28

%

 

22.5

%

 

4.52

%

 

20.8

%

 

4.82

%

 

12.2

%

 

4.98

%

Variable rate loans

 

43.7

%

 

3.96

%

 

43.6

%

 

3.99

%

 

47.5

%

 

4.06

%

 

47.2

%

 

4.10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Securities. The increase in average yield for the current quarter compared with the previous quarter was primarily due to a decrease in net amortization of premiums on mortgage-backed securities and collateralized mortgage obligations. The decreases in average yield for the current quarter and year-to-date period compared with the same periods of 2020 were primarily due to new investment securities purchased at lower market rates.

Other Interest-Earning Assets. The increase in average yield for the current quarter compared with the year-ago quarters was primarily due to an increase in dividend income on Federal Home Loan Bank stock. The decrease in average yield for the current year-to-date period compared with the previous year-to-date period was primarily due to lower market rates. The decreases in average balance for the current quarter and year-to-date period compared with the same periods of 2020 were primarily due to an increase in loans, partially offset by an increase in deposits. The Company maintains most of its cash at the Federal Reserve Bank account. For additional detail, please see the discussion in “Loans” and “Deposits” under the “Balance Sheet” discussion.

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

Borrowings. The increases in average cost for the current quarter and year-to-date period compared with the same periods of 2020 were primarily due to matured borrowings with lower interest rates during the current year-to-date period. Matured FHLB advances totaled $70.0 million with a weighted-average rate of 0.47% for the current year-to-date period. At September 30, 2021, the Company had a term FHLB advance of $10.0 million with an interest rate of 2.07% that matures on June 29, 2022.

Provision (reversal) for Loan Losses

Provision (reversal) for loan losses was $(1.1) million for the current quarter compared with $(934) thousand for the previous quarter and $4.3 million for the year-ago quarter. For the current and previous year-to-date periods, provision (reversal) for loan losses was $(3.1) million and $11.1 million, respectively. The reversals for the current and previous quarters were primarily due to a decrease in historical loss and qualitative adjustment factor allocations as a result of improving economic conditions. The Company recorded net charge-offs (recoveries) of $30 thousand for the current quarter compared with $(309) thousand for the previous quarter and $28 thousand for the year-ago quarter. For the current and previous year-to-date periods, net charge-offs (recoveries) were $(431) thousand and $911 thousand, respectively.

Adjusted allowance for loan losses to loans held-for-investment ratio(1) was 1.48%, 1.62%, 1.83% and 1.70% at September 30, 2021, June 30, 2021, December 31, 2020 and September 30, 2020, respectively.

____________________________________

(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

 

Nine Months Ended

($ in thousands)

 

9/30/2021

 

6/30/2021

 

% Change

 

9/30/2020

 

% Change

 

9/30/2021

 

9/30/2020

 

% Change

Gain on sale of loans

 

$

4,269

 

 

$

3,967

 

 

7.6

%

 

$

821

 

 

420.0

%

 

$

9,558

 

 

$

3,044

 

 

214.0

%

Service charges and fees on deposits

 

292

 

 

302

 

 

(3.3

)%

 

280

 

 

4.3

%

 

887

 

 

945

 

 

(6.1

)%

Loan servicing income

 

655

 

 

545

 

 

20.2

%

 

856

 

 

(23.5

)%

 

2,082

 

 

2,312

 

 

(9.9

)%

Other income

 

372

 

 

337

 

 

10.4

%

 

315

 

 

18.1

%

 

1,069

 

 

915

 

 

16.8

%

Total noninterest income

 

$

5,588

 

 

$

5,151

 

 

8.5

%

 

$

2,272

 

 

146.0

%

 

$

13,596

 

 

$

7,216

 

 

88.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

9/30/2021

 

6/30/2021

 

% Change

 

9/30/2020

 

% Change

 

9/30/2021

 

9/30/2020

 

% Change

Gain on sale of SBA loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sold loan balance

 

$

45,048

 

 

$

34,107

 

 

32.1

%

 

$

8,582

 

 

424.9

%

 

$

90,074

 

 

$

47,363

 

 

90.2

%

Premium received

 

4,879

 

 

4,172

 

 

16.9

%

 

917

 

 

432.1

%

 

10,360

 

 

4,015

 

 

158.0

%

Gain recognized

 

4,263

 

 

3,954

 

 

7.8

%

 

689

 

 

518.7

%

 

9,412

 

 

2,841

 

 

231.3

%

Gain on sale of residential property loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sold loan balance

 

$

301

 

 

$

1,615

 

 

(81.4

)%

 

$

16,585

 

 

(98.2

)%

 

$

9,823

 

 

$

24,782

 

 

(60.4

)%

Gain recognized

 

2

 

 

13

 

 

(84.6

)%

 

132

 

 

(98.5

)%

 

142

 

 

203

 

 

(30.0

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Company also sold certain commercial property loans of $3.5 million and $5.2 million during the current quarter and year-to-date period, respectively.

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

 

 

Three Months Ended

 

Nine Months Ended

($ in thousands)

 

9/30/2021

 

6/30/2021

 

% Change

 

9/30/2020

 

% Change

 

9/30/2021

 

9/30/2020

 

% Change

Loan servicing income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Servicing income received

 

$

1,180

 

 

$

1,124

 

 

5.0

%

 

$

1,244

 

 

(5.1

)%

 

$

3,577

 

 

$

3,696

 

 

(3.2

)%

Servicing assets amortization

 

(525

)

 

(579

)

 

(9.3

)%

 

(388

)

 

35.3

%

 

(1,495

)

 

(1,384

)

 

8.0

%

Loan servicing income

 

$

655

 

 

$

545

 

 

20.2

%

 

$

856

 

 

(23.5

)%

 

$

2,082

 

 

$

2,312

 

 

(9.9

)%

Underlying loans at end of period

 

$

511,930

 

 

$

492,130

 

 

4.0

%

 

$

484,651

 

 

5.6

%

 

$

511,930

 

 

$

484,651

 

 

5.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Company services SBA loans and certain residential property loans that are sold to the secondary market. The increase for the current quarter compared with the previous quarter was primarily due to a decrease in servicing asset amortization from a decrease in loan payoffs and an increase in servicing income received. The decreases for the current quarter and year-to-date period compared with the same periods of 2020 were primarily due to a decrease in servicing income received and an increase in servicing asset amortization from an increase in loan payoffs.

Noninterest Expense

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

 

 

Three Months Ended

 

Nine Months Ended

($ in thousands)

 

9/30/2021

 

6/30/2021

 

% Change

 

9/30/2020

 

% Change

 

9/30/2021

 

9/30/2020

 

% Change

Salaries and employee benefits

 

$

7,606

 

 

$

7,125

 

 

6.8

%

 

$

6,438

 

 

18.1

%

 

$

20,913

 

 

$

18,750

 

 

11.5

%

Occupancy and equipment

 

1,399

 

 

1,388

 

 

0.8

%

 

1,416

 

 

(1.2

)%

 

4,158

 

 

4,196

 

 

(0.9

)%

Professional fees

 

422

 

 

658

 

 

(35.9

)%

 

325

 

 

29.8

%

 

1,574

 

 

1,631

 

 

(3.5

)%

Marketing and business promotion

 

416

 

 

516

 

 

(19.4

)%

 

193

 

 

115.5

%

 

1,070

 

 

920

 

 

16.3

%

Data processing

 

391

 

 

396

 

 

(1.3

)%

 

373

 

 

4.8

%

 

1,164

 

 

1,097

 

 

6.1

%

Director fees and expenses

 

144

 

 

151

 

 

(4.6

)%

 

125

 

 

15.2

%

 

433

 

 

453

 

 

(4.4

)%

Regulatory assessments

 

12

 

 

179

 

 

(93.3

)%

 

267

 

 

(95.5

)%

 

399

 

 

728

 

 

(45.2

)%

Other expenses

 

842

 

 

726

 

 

16.0

%

 

749

 

 

12.4

%

 

2,329

 

 

2,374

 

 

(1.9

)%

Total noninterest expense

 

$

11,232

 

 

$

11,139

 

 

0.8

%

 

$

9,886

 

 

13.6

%

 

$

32,040

 

 

$

30,149

 

 

6.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and Employee Benefits. The increase for the current quarter compared the previous quarter was primarily due to the incentive tied to the sales of Loan Production Offices (“LPO”) originated SBA loans and the incentive for SBA PPP loan production paid during the current quarter. The increase for the current quarter and year-to-date period compared with the same periods of 2020 were primarily due to increases in wages, bonus accrual, and the incentives for LPO originated SBA loan sales and SBA PPP loan production, partially offset by decreases in vacation and stock compensation expense.

Professional Fees. The decrease for the current quarter compared with the previous quarter were primarily due to a decrease in expenses related to internal audit. The decrease for the current year-to-date period compared with the previous year-to-date period was primarily due to decreases in expenses related to the Bank’s Bank Secrecy Act and Anti-Money Laundering (“BSA/AML”) compliance enhancements.

Director fees and expense. The increase for the current quarter compared with the year-ago quarter was primarily due to the Board of Directors’ decision to temporarily decrease fees during the year-ago quarter. The decrease for the current year-to-date period compared with the previous year-to-date period was primarily due to a severance payment for a former director in the first quarter of 2020.

Regulatory Assessments. The decrease for the current quarter compared with the previous quarter was primarily due to an adjustment made for the assessment rate decrease for the previous quarter. The decreases for the current quarter and year-to-date period compared with the same periods of 2020 were primarily due to a decrease in assessment rate, partially offset by an increase in balance sheet growth.

Balance Sheet (Unaudited)

Total assets were $2.10 billion at September 30, 2021, an increase of $44.7 million, or 2.2%, from $2.06 billion at June 30, 2021 and an increase of $83.5 million, or 4.1%, from $2.02 billion at September 30, 2020. The increase for the current quarter was primarily due to increases in loans held-for-sale and cash and cash equivalents, partially offset by a decrease in net loans held-for-investment. The increase for the current year-to-date period was primarily due to increases in loans held-for-investment, loans-held-for-sale, investment securities, and cash and cash equivalents.

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)

 

9/30/2021

 

6/30/2021

 

% Change

 

12/31/2020

 

% Change

 

9/30/2020

 

% Change

Real estate loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial property

 

$

1,054,351

 

 

$

997,918

 

 

5.7

%

 

$

880,736

 

 

19.7

%

 

$

853,708

 

 

23.5

%

Residential property

 

201,635

 

 

196,983

 

 

2.4

%

 

198,431

 

 

1.6

%

 

212,804

 

 

(5.2

)%

SBA property

 

127,845

 

 

124,251

 

 

2.9

%

 

126,570

 

 

1.0

%

 

128,038

 

 

(0.2

)%

Construction

 

6,572

 

 

13,475

 

 

(51.2

)%

 

15,199

 

 

(56.8

)%

 

19,803

 

 

(66.8

)%

Commercial and industrial loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial term

 

74,390

 

 

74,503

 

 

(0.2

)%

 

87,250

 

 

(14.7

)%

 

90,867

 

 

(18.1

)%

Commercial lines of credit

 

101,456

 

 

90,286

 

 

12.4

%

 

96,087

 

 

5.6

%

 

92,222

 

 

10.0

%

SBA commercial term

 

18,338

 

 

19,614

 

 

(6.5

)%

 

21,878

 

 

(16.2

)%

 

23,011

 

 

(20.3

)%

SBA PPP

 

101,901

 

 

181,019

 

 

(43.7

)%

 

135,654

 

 

(24.9

)%

 

136,418

 

 

(25.3

)%

Other consumer loans

 

21,390

 

 

21,607

 

 

(1.0

)%

 

21,773

 

 

(1.8

)%

 

21,933

 

 

(2.5

)%

Loans held-for-investment

 

1,707,878

 

 

1,719,656

 

 

(0.7

)%

 

1,583,578

 

 

7.8

%

 

1,578,804

 

 

8.2

%

Loans held-for-sale

 

29,020

 

 

11,255

 

 

157.8

%

 

1,979

 

 

1,366.4

%

 

30,878

 

 

(6.0

)%

Total loans

 

$

1,736,898

 

 

$

1,730,911

 

 

0.3

%

 

$

1,585,557

 

 

9.5

%

 

$

1,609,682

 

 

7.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The decrease in loans held-for-investment for the current quarter was primarily due to pay-downs and pay-offs of $178.1 million, partially offset by new funding of $137.4 million and advances on lines of credit of $32.5 million. During the current quarter, SBA PPP loans of $81.9 million were paid off through regular payments or forgiveness from SBA, and related unamortized net deferred fees were recognized through interest income. The increase in loans held-for-investment for the current year-to-date period was primarily due to new funding of $498.9 million and advances on lines of credit of $88.9 million, partially offset by pay-downs and pay-offs of $457.9 million. During the current year-to-date period, SBA PPP loans of $144.9 million were paid off through regular payments or forgiveness from SBA, and related unamortized net deferred fees were recognized through interest income.

The increase in loans held-for-sale for the current quarter was primarily due to new funding of $63.1 million, partially offset by sales of $48.8 million. The increase in loans held-for-sale for the current year-to-date period was primarily due to new funding of $126.8 million, partially offset by sales of $105.1 million.

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

($ in thousands)

 

9/30/2021

 

6/30/2021

 

% Change

 

12/31/2020

 

% Change

 

9/30/2020

 

% Change

Real estate loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial property

 

$

17,873

 

 

$

15,277

 

 

17.0

%

 

$

21,016

 

 

(15.0

)%

 

$

17,621

 

 

1.4

%

SBA property

 

4,747

 

 

6,191

 

 

(23.3

)%

 

540

 

 

779.1

%

 

 

 

%

Construction

 

9,478

 

 

6,233

 

 

52.1

%

 

13,986

 

 

(32.2

)%

 

15,366

 

 

(38.3

)%

Commercial and industrial loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial term

 

1,455

 

 

2,950

 

 

(50.7

)%

 

1,000

 

 

45.5

%

 

1,000

 

 

45.5

%

Commercial lines of credit

 

156,411

 

 

164,648

 

 

(5.0

)%

 

156,870

 

 

(0.3

)%

 

173,080

 

 

(9.6

)%

SBA commercial term

 

245

 

 

 

 

%

 

 

 

%

 

 

 

%

Other consumer loans

 

130

 

 

118

 

 

10.2

%

 

84

 

 

54.8

%

 

75

 

 

73.3

%

Total commitments to extend credit

 

$

190,339

 

 

$

195,417

 

 

(2.6

)%

 

$

193,496

 

 

(1.6

)%

 

$

207,142

 

 

(8.1

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

9/30/2021

 

6/30/2021

 

% Change

 

12/31/2020

 

% Change

 

9/30/2020

 

% Change

Nonaccrual loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial property

 

$

 

 

$

 

 

%

 

$

524

 

 

(100.0

)%

 

$

 

 

%

Residential property

 

 

 

 

 

%

 

189

 

 

(100.0

)%

 

 

 

%

SBA property

 

766

 

 

781

 

 

(1.9

)%

 

885

 

 

(13.4

)%

 

923

 

 

(17.0

)%

Commercial and industrial loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial lines of credit

 

 

 

 

 

%

 

904

 

 

(100.0

)%

 

1,525

 

 

(100.0

)%

SBA commercial term

 

314

 

 

600

 

 

(47.7

)%

 

595

 

 

(47.2

)%

 

378

 

 

(16.9

)%

Other consumer loans

 

33

 

 

65

 

 

(49.2

)%

 

66

 

 

(50.0

)%

 

67

 

 

(50.7

)%

Total nonaccrual loans held-for-investment

 

1,113

 

 

1,446

 

 

(23.0

)%

 

3,163

 

 

(64.8

)%

 

2,893

 

 

(61.5

)%

Loans past due 90 days or more and still accruing

 

3

 

 

 

 

%

 

 

 

%

 

699

 

 

(99.6

)%

Non-performing loans (“NPLs”)

 

1,116

 

 

1,446

 

 

(22.8

)%

 

3,163

 

 

(64.7

)%

 

3,592

 

 

(68.9

)%

Other real estate owned (“OREO”)

 

 

 

 

 

%

 

1,401

 

 

(100.0

)%

 

376

 

 

(100.0

)%

Non-performing assets (“NPAs”)

 

$

1,116

 

 

$

1,446

 

 

(22.8

)%

 

$

4,564

 

 

(75.5

)%

 

$

3,968

 

 

(71.9

)%

Loans past due and still accruing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Past due 30 to 59 days

 

$

292

 

 

$

227

 

 

28.6

%

 

$

302

 

 

(3.3

)%

 

$

298

 

 

(2.0

)%

Past due 60 to 89 days

 

 

 

 

 

%

 

36

 

 

(100.0

)%

 

3

 

 

(100.0

)%

Past due 90 days or more

 

3

 

 

 

 

%

 

 

 

%

 

699

 

 

(99.6

)%

Total loans past due and still accruing

 

$

295

 

 

$

227

 

 

30.0

%

 

338

 

 

(12.7

)%

 

$

1,000

 

 

(70.5

)%

Troubled debt restructurings (“TDRs”)

 

 

 

 

 

 

 

 

 

 

 

 

 

Accruing TDRs

 

$

589

 

 

$

605

 

 

(2.6

)%

 

$

634

 

 

(7.1

)%

 

$

649

 

 

(9.2

)%

Nonaccrual TDRs

 

26

 

 

30

 

 

(13.3

)%

 

5

 

 

420.0

%

 

38

 

 

(31.6

)%

Total TDRs

 

$

615

 

 

$

635

 

 

(3.1

)%

 

$

639

 

 

(3.8

)%

 

$

687

 

 

(10.5

)%

Special mention loans

 

$

17,315

 

 

$

18,238

 

 

(5.1

)%

 

$

16,461

 

 

5.2

%

 

$

4,746

 

 

264.8

%

Classified assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Classified loans

 

$

5,345

 

 

$

9,666

 

 

(44.7

)%

 

$

10,130

 

 

(47.2

)%

 

$

4,860

 

 

10.0

%

OREO

 

 

 

 

 

%

 

1,401

 

 

(100.0

)%

 

376

 

 

(100.0

)%

Classified assets

 

$

5,345

 

 

$

9,666

 

 

(44.7

)%

 

$

11,531

 

 

(53.6

)%

 

$

5,236

 

 

2.1

%

NPLs to loans held-for-investment

 

0.07

%

 

0.08

%

 

 

 

0.20

%

 

 

 

0.23

%

 

 

NPAs to total assets

 

0.05

%

 

0.07

%

 

 

 

0.24

%

 

 

 

0.20

%

 

 

Classified assets to total assets

 

0.25

%

 

0.47

%

 

 

 

0.60

%

 

 

 

0.26

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan Modifications Related to the COVID-19 Pandemic

The Company 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 September 30, 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 were $16.2 million at June 30, 2021, $36.1 million at December 31, 2020 and $171.6 million at September 30, 2020.

The increases in special mention and classified loans for the current year periods were primarily due to the loans that were granted modifications related to the COVID-19 pandemic in excess of 6 months, on a cumulative basis. The Company had classified these loans as special mention or classified. Special mention and classified loans included $15.6 million and $2.7 million, respectively, at September 30, 2021, $16.4 million and $6.2 million, respectively, at June 30, 2021, and $14.9 million and $4.2 million, respectively, at December 31, 2020, of the loans that were granted such modifications.

Investment Securities

Total investment securities were $133.1 million at September 30, 2021, a decrease of $2.4 million, or 1.8%, from $135.5 million at June 30, 2021, but an increase of $4.1 million, or 3.2%, from $129.0 million at September 30, 2020. The decrease for the current quarter was primarily due to principal pay-downs and calls of $9.3 million and net premium amortization of $222 thousand, partially offset by purchases of $7.8 million. The increase in investment securities for the current year-to-date period was primarily due to purchases of $47.3 million, partially offset by principal pay-downs and calls of $32.2 million and net premium amortization of $811 thousand.

Deposits

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

 

 

9/30/2021

 

6/30/2021

 

12/31/2020

 

9/30/2020

($ in thousands)

 

Amount

 

% to Total

 

Amount

 

% to Total

 

Amount

 

% to Total

 

Amount

 

% to Total

Noninterest-bearing demand deposits

 

$

832,240

 

 

45.4

%

 

$

795,741

 

 

44.3

%

 

$

538,009

 

 

33.7

%

 

$

576,086

 

 

35.0

%

Interest-bearing deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings

 

13,294

 

 

0.7

%

 

11,671

 

 

0.6

%

 

10,481

 

 

0.7

%

 

11,124

 

 

0.7

%

NOW

 

20,461

 

 

1.1

%

 

21,725

 

 

1.2

%

 

21,604

 

 

1.4

%

 

21,726

 

 

1.3

%

Retail money market accounts

 

376,333

 

 

20.5

%

 

358,575

 

 

19.9

%

 

351,739

 

 

22.0

%

 

344,939

 

 

20.9

%

Brokered money market accounts

 

4

 

 

0.1

%

 

4

 

 

0.1

%

 

25,002

 

 

1.6

%

 

30,001

 

 

1.9

%

Retail time deposits of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$250,000 or less

 

262,207

 

 

14.3

%

 

271,531

 

 

15.1

%

 

299,431

 

 

18.7

%

 

312,171

 

 

18.9

%

More than $250,000

 

163,127

 

 

8.9

%

 

173,401

 

 

9.6

%

 

168,683

 

 

10.6

%

 

167,208

 

 

10.2

%

Time deposits from internet rate service providers

 

 

 

%

 

 

 

%

 

24,902

 

 

1.6

%

 

31,852

 

 

1.9

%

State and brokered time deposits

 

165,000

 

 

9.0

%

 

165,000

 

 

9.2

%

 

155,000

 

 

9.7

%

 

152,000

 

 

9.2

%

Total interest-bearing deposits

 

1,000,426

 

 

54.6

%

 

1,001,907

 

 

55.7

%

 

1,056,842

 

 

66.3

%

 

1,071,021

 

 

65.0

%

Total deposits

 

$

1,832,666

 

 

100.0

%

 

$

1,797,648

 

 

100.0

%

 

$

1,594,851

 

 

100.0

%

 

$

1,647,107

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The increase in noninterest-bearing demand deposits for the current year-to-date period was primarily due to the overall liquid deposit market. During the current year-to-date period, a total of $93.9 million of SBA PPP loans were funded through the Bank’s noninterest-bearing demand deposits and deposit customers also received $138.2 million of SBA Economic Injury Disaster Loans and SBA Revitalization Funds.

The decrease in retail time deposits for the current quarter was primarily due to matured and closed accounts of $135.7 million, partially offset by new accounts of $17.1 million, renewals of the matured accounts of $95.8 million, and balance increases of $3.2 million. The decrease in retail time deposits for the current year-to-date period was primarily due to matured and closed accounts of $457.6 million, partially offset by new accounts of $76.4 million, renewals of the matured accounts of $328.5 million, and balance increases of $9.9 million.

Liquidity

The following table presents a summary of the Company’s liquidity position as of September 30, 2021:

($ in thousands)

 

9/30/2021

Cash and cash equivalents

 

$

214,973

 

Cash and cash equivalents to total assets

 

10.2

%

 

 

 

Available borrowing capacity

 

 

FHLB advances

 

$

504,986

 

Federal Reserve Discount Window

 

36,889

 

Overnight federal funds lines

 

65,000

 

Total

 

$

606,875

 

Total available borrowing capacity to total assets

 

28.8

%

 

 

 

Shareholders’ Equity

Shareholders’ equity was $247.6 million at September 30, 2021, an increase of $8.7 million, or 3.6%, from $238.9 million at June 30, 2021 and an increase of $18.3 million, or 8.0%, from $229.3 million at September 30, 2020. The increase for the current quarter was primarily due to net income, partially offset by cash dividends declared on common stock of $1.8 million, repurchases of common stock of $543 thousand and a decrease in accumulated other comprehensive income. The increase for the current year-to-date period was primarily due to net income, partially offset by repurchases of common stock of $10.9 million, cash dividends declared on common stock of $4.9 million and a decrease in accumulated other comprehensive income.

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.

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:

 

 

9/30/2021

 

6/30/2021

 

12/31/2020

 

9/30/2020

 

Well Capitalized Requirements

PCB Bancorp

 

 

 

 

 

 

 

 

 

 

Common tier 1 capital (to risk-weighted assets)

 

15.07

%

 

15.17

%

 

15.97

%

 

15.60

%

 

N/A

 

Total capital (to risk-weighted assets)

 

16.32

%

 

16.43

%

 

17.22

%

 

16.86

%

 

N/A

 

Tier 1 capital (to risk-weighted assets)

 

15.07

%

 

15.17

%

 

15.97

%

 

15.60

%

 

N/A

 

Tier 1 capital (to average assets)

 

11.91

%

 

11.76

%

 

11.94

%

 

11.40

%

 

N/A

 

Pacific City Bank

 

 

 

 

 

 

 

 

 

 

Common tier 1 capital (to risk-weighted assets)

 

14.76

%

 

14.88

%

 

15.70

%

 

15.34

%

 

6.5

%

Total capital (to risk-weighted assets)

 

16.01

%

 

16.13

%

 

16.95

%

 

16.60

%

 

10.0

%

Tier 1 capital (to risk-weighted assets)

 

14.76

%

 

14.88

%

 

15.70

%

 

15.34

%

 

8.0

%

Tier 1 capital (to average assets)

 

11.66

%

 

11.53

%

 

11.74

%

 

11.21

%

 

5.0

%

 

 

 

 

 

 

 

 

 

 

 

About PCB Bancorp

PCB Bancorp, formerly known as Pacific City Financial Corporation, 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. 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)

 

 

 

9/30/2021

 

6/30/2021

 

% Change

 

12/31/2020

 

% Change

 

9/30/2020

 

% Change

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

19,688

 

 

$

18,417

 

 

6.9

%

 

$

19,605

 

 

0.4

%

 

$

13,572

 

 

45.1

%

Interest-bearing deposits in other financial institutions

 

195,285

 

 

156,204

 

 

25.0

%

 

174,493

 

 

11.9

%

 

243,810

 

 

(19.9

)%

Total cash and cash equivalents

 

214,973

 

 

174,621

 

 

23.1

%

 

194,098

 

 

10.8

%

 

257,382

 

 

(16.5

)%

Securities available-for-sale, at fair value

 

133,102

 

 

135,479

 

 

(1.8

)%

 

120,527

 

 

10.4

%

 

128,982

 

 

3.2

%

Loans held-for-sale

 

29,020

 

 

11,255

 

 

157.8

%

 

1,979

 

 

1,366.4

%

 

30,878

 

 

(6.0

)%

Loans held-for-investment

 

1,707,878

 

 

1,719,656

 

 

(0.7

)%

 

1,583,578

 

 

7.8

%

 

1,578,804

 

 

8.2

%

Allowance for loan losses

 

(23,807

)

 

(24,889

)

 

(4.3

)%

 

(26,510

)

 

(10.2

)%

 

(24,546

)

 

(3.0

)%

Net loans held-for-investment

 

1,684,071

 

 

1,694,767

 

 

(0.6

)%

 

1,557,068

 

 

8.2

%

 

1,554,258

 

 

8.4

%

Premises and equipment, net

 

3,306

 

 

3,576

 

 

(7.6

)%

 

4,048

 

 

(18.3

)%

 

4,355

 

 

(24.1

)%

Federal Home Loan Bank and other bank stock

 

8,577

 

 

8,577

 

 

%

 

8,447

 

 

1.5

%

 

8,447

 

 

1.5

%

Other real estate owned, net

 

 

 

 

 

%

 

1,401

 

 

(100.0

)%

 

376

 

 

(100.0

)%

Deferred tax assets, net

 

7,519

 

 

7,892

 

 

(4.7

)%

 

8,120

 

 

(7.4

)%

 

7,454

 

 

0.9

%

Servicing assets

 

7,009

 

 

6,482

 

 

8.1

%

 

6,400

 

 

9.5

%

 

6,166

 

 

13.7

%

Operating lease assets

 

7,164

 

 

6,595

 

 

8.6

%

 

7,616

 

 

(5.9

)%

 

7,329

 

 

(2.3

)%

Accrued interest receivable

 

5,494

 

 

6,741

 

 

(18.5

)%

 

9,334

 

 

(41.1

)%

 

11,246

 

 

(51.1

)%

Other assets

 

4,464

 

 

4,018

 

 

11.1

%

 

3,815

 

 

17.0

%

 

4,314

 

 

3.5

%

Total assets

 

$

2,104,699

 

 

$

2,060,003

 

 

2.2

%

 

$

1,922,853

 

 

9.5

%

 

$

2,021,187

 

 

4.1

%

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

832,240

 

 

$

795,741

 

 

4.6

%

 

$

538,009

 

 

54.7

%

 

$

576,086

 

 

44.5

%

Savings, NOW and money market accounts

 

410,092

 

 

391,975

 

 

4.6

%

 

408,826

 

 

0.3

%

 

407,790

 

 

0.6

%

Time deposits of $250,000 or less

 

327,207

 

 

336,531

 

 

(2.8

)%

 

379,333

 

 

(13.7

)%

 

406,023

 

 

(19.4

)%

Time deposits of more than $250,000

 

263,127

 

 

273,401

 

 

(3.8

)%

 

268,683

 

 

(2.1

)%

 

257,208

 

 

2.3

%

Total deposits

 

1,832,666

 

 

1,797,648

 

 

1.9

%

 

1,594,851

 

 

14.9

%

 

1,647,107

 

 

11.3

%

Federal Home Loan Bank advances

 

10,000

 

 

10,000

 

 

%

 

80,000

 

 

(87.5

)%

 

130,000

 

 

(92.3

)%

Operating lease liabilities

 

7,862

 

 

7,338

 

 

7.1

%

 

8,455

 

 

(7.0

)%

 

8,204

 

 

(4.2

)%

Accrued interest payable and other liabilities

 

6,573

 

 

6,076

 

 

8.2

%

 

5,759

 

 

14.1

%

 

6,537

 

 

0.6

%

Total liabilities

 

1,857,101

 

 

1,821,062

 

 

2.0

%

 

1,689,065

 

 

9.9

%

 

1,791,848

 

 

3.6

%

Commitments and contingent liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock, no par value

 

154,618

 

 

154,796

 

 

(0.1

)%

 

164,140

 

 

(5.8

)%

 

163,960

 

 

(5.7

)%

Retained earnings

 

92,248

 

 

83,002

 

 

11.1

%

 

67,692

 

 

36.3

%

 

63,443

 

 

45.4

%

Accumulated other comprehensive income, net

 

732

 

 

1,143

 

 

(36.0

)%

 

1,956

 

 

(62.6

)%

 

1,936

 

 

(62.2

)%

Total shareholders’ equity

 

247,598

 

 

238,941

 

 

3.6

%

 

233,788

 

 

5.9

%

 

229,339

 

 

8.0

%

Total liabilities and shareholders’ equity

 

$

2,104,699

 

 

$

2,060,003

 

 

2.2

%

 

$

1,922,853

 

 

9.5

%

 

$

2,021,187

 

 

4.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding common shares

 

14,841,626

 

 

14,854,315

 

 

 

 

15,385,878

 

 

 

 

15,379,538

 

 

 

Book value per common share (1)

 

$

16.68

 

 

$

16.09

 

 

 

 

$

15.19

 

 

 

 

$

14.91

 

 

 

Total loan to total deposit ratio

 

94.77

%

 

96.29

%

 

 

 

99.42

%

 

 

 

97.73

%

 

 

Noninterest-bearing deposits to total deposits

 

45.41

%

 

44.27

%

 

 

 

33.73

%

 

 

 

34.98

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

Nine Months Ended

 

 

9/30/2021

 

6/30/2021

 

% Change

 

9/30/2020

 

% Change

 

9/30/2021

 

9/30/2020

 

% Change

Interest and dividend income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

20,537

 

 

$

19,511

 

 

5.3

%

 

$

18,938

 

 

8.4

%

 

$

58,792

 

 

$

57,617

 

 

2.0

%

Investment securities

 

437

 

 

375

 

 

16.5

%

 

515

 

 

(15.1

)%

 

1,172

 

 

1,698

 

 

(31.0

)%

Other interest-earning assets

 

194

 

 

165

 

 

17.6

%

 

167

 

 

16.2

%

 

513

 

 

938

 

 

(45.3

)%

Total interest income

 

21,168

 

 

20,051

 

 

5.6

%

 

19,620

 

 

7.9

%

 

60,477

 

 

60,253

 

 

0.4

%

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

885

 

 

1,000

 

 

(11.5

)%

 

2,599

 

 

(65.9

)%

 

3,196

 

 

11,000

 

 

(70.9

)%

Other borrowings

 

56

 

 

55

 

 

1.8

%

 

168

 

 

(66.7

)%

 

239

 

 

471

 

 

(49.3

)%

Total interest expense

 

941

 

 

1,055

 

 

(10.8

)%

 

2,767

 

 

(66.0

)%

 

3,435

 

 

11,471

 

 

(70.1

)%

Net interest income

 

20,227

 

 

18,996

 

 

6.5

%

 

16,853

 

 

20.0

%

 

57,042

 

 

48,782

 

 

16.9

%

Provision (reversal) for loan losses

 

(1,053

)

 

(934

)

 

12.7

%

 

4,326

 

 

(124.3

)%

 

(3,134

)

 

11,077

 

 

(128.3

)%

Net interest income after provision (reversal) for loan losses

 

21,280

 

 

19,930

 

 

6.8

%

 

12,527

 

 

69.9

%

 

60,176

 

 

37,705

 

 

59.6

%

Noninterest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of loans

 

4,269

 

 

3,967

 

 

7.6

%

 

821

 

 

420.0

%

 

9,558

 

 

3,044

 

 

214.0

%

Service charges and fees on deposits

 

292

 

 

302

 

 

(3.3

)%

 

280

 

 

4.3

%

 

887

 

 

945

 

 

(6.1

)%

Loan servicing income

 

655

 

 

545

 

 

20.2

%

 

856

 

 

(23.5

)%

 

2,082

 

 

2,312

 

 

(9.9

)%

Other income

 

372

 

 

337

 

 

10.4

%

 

315

 

 

18.1

%

 

1,069

 

 

915

 

 

16.8

%

Total noninterest income

 

5,588

 

 

5,151

 

 

8.5

%

 

2,272

 

 

146.0

%

 

13,596

 

 

7,216

 

 

88.4

%

Noninterest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

7,606

 

 

7,125

 

 

6.8

%

 

6,438

 

 

18.1

%

 

20,913

 

 

18,750

 

 

11.5

%

Occupancy and equipment

 

1,399

 

 

1,388

 

 

0.8

%

 

1,416

 

 

(1.2

)%

 

4,158

 

 

4,196

 

 

(0.9

)%

Professional fees

 

422

 

 

658

 

 

(35.9

)%

 

325

 

 

29.8

%

 

1,574

 

 

1,631

 

 

(3.5

)%

Marketing and business promotion

 

416

 

 

516

 

 

(19.4

)%

 

193

 

 

115.5

%

 

1,070

 

 

920

 

 

16.3

%

Data processing

 

391

 

 

396

 

 

(1.3

)%

 

373

 

 

4.8

%

 

1,164

 

 

1,097

 

 

6.1

%

Director fees and expenses

 

144

 

 

151

 

 

(4.6

)%

 

125

 

 

15.2

%

 

433

 

 

453

 

 

(4.4

)%

Regulatory assessments

 

12

 

 

179

 

 

(93.3

)%

 

267

 

 

(95.5

)%

 

399

 

 

728

 

 

(45.2

)%

Other expenses

 

842

 

 

726

 

 

16.0

%

 

749

 

 

12.4

%

 

2,329

 

 

2,374

 

 

(1.9

)%

Total noninterest expense

 

11,232

 

 

11,139

 

 

0.8

%

 

9,886

 

 

13.6

%

 

32,040

 

 

30,149

 

 

6.3

%

Income before income taxes

 

15,636

 

 

13,942

 

 

12.2

%

 

4,913

 

 

218.3

%

 

41,732

 

 

14,772

 

 

182.5

%

Income tax expense

 

4,613

 

 

4,098

 

 

12.6

%

 

1,464

 

 

215.1

%

 

12,305

 

 

4,384

 

 

180.7

%

Net income

 

$

11,023

 

 

$

9,844

 

 

12.0

%

 

$

3,449

 

 

219.6

%

 

$

29,427

 

 

$

10,388

 

 

183.3

%

Earnings per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.74

 

 

$

0.65

 

 

 

 

$

0.22

 

 

 

 

$

1.94

 

 

$

0.67

 

 

 

Diluted

 

$

0.73

 

 

$

0.64

 

 

 

 

$

0.22

 

 

 

 

$

1.92

 

 

$

0.67

 

 

 

Average common shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

14,779,707

 

 

15,115,561

 

 

 

 

15,343,888

 

 

 

 

15,090,989

 

 

15,395,475

 

 

 

Diluted

 

15,031,558

 

 

15,309,873

 

 

 

 

15,377,531

 

 

 

 

15,298,065

 

 

15,466,207

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend paid per common share

 

$

0.12

 

 

$

0.10

 

 

 

 

$

0.10

 

 

 

 

$

0.32

 

 

$

0.30

 

 

 

Return on average assets (1)

 

2.11

%

 

1.96

%

 

 

 

0.69

%

 

 

 

1.94

%

 

0.73

%

 

 

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

 

17.98

%

 

16.49

%

 

 

 

5.98

%

 

 

 

16.40

%

 

6.10

%

 

 

Efficiency ratio (3)

 

43.51

%

 

46.13

%

 

 

 

51.69

%

 

 

 

45.36

%

 

53.84

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

9/30/2021

 

6/30/2021

 

9/30/2020

 

 

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)

 

$

1,715,106

 

 

$

20,537

 

 

4.75

%

 

$

1,691,704

 

 

$

19,511

 

 

4.63

%

 

$

1,564,704

 

 

$

18,938

 

 

4.81

%

Mortgage-backed securities

 

95,908

 

 

278

 

 

1.15

%

 

92,732

 

 

233

 

 

1.01

%

 

75,832

 

 

339

 

 

1.78

%

Collateralized mortgage obligation

 

22,534

 

 

57

 

 

1.00

%

 

22,929

 

 

54

 

 

0.94

%

 

33,393

 

 

82

 

 

0.98

%

SBA loan pool securities

 

10,390

 

 

45

 

 

1.72

%

 

10,828

 

 

51

 

 

1.89

%

 

12,996

 

 

57

 

 

1.74

%

Municipal bonds (2)

 

5,759

 

 

36

 

 

2.48

%

 

5,760

 

 

37

 

 

2.58

%

 

5,991

 

 

37

 

 

2.46

%

Corporate bonds

 

2,283

 

 

21

 

 

3.65

%

 

 

 

 

 

%

 

 

 

 

 

%

Other interest-earning assets

 

188,137

 

 

194

 

 

0.41

%

 

164,710

 

 

165

 

 

0.40

%

 

260,426

 

 

167

 

 

0.26

%

Total interest-earning assets

 

2,040,117

 

 

21,168

 

 

4.12

%

 

1,988,663

 

 

20,051

 

 

4.04

%

 

1,953,342

 

 

19,620

 

 

4.00

%

Noninterest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

19,915

 

 

 

 

 

 

19,080

 

 

 

 

 

 

17,094

 

 

 

 

 

Allowance for loan losses

 

(24,854

)

 

 

 

 

 

(25,559

)

 

 

 

 

 

(21,268

)

 

 

 

 

Other assets

 

35,187

 

 

 

 

 

 

36,605

 

 

 

 

 

 

42,446

 

 

 

 

 

Total noninterest-earning assets

 

30,248

 

 

 

 

 

 

30,126

 

 

 

 

 

 

38,272

 

 

 

 

 

Total assets

 

$

2,070,365

 

 

 

 

 

 

$

2,018,789

 

 

 

 

 

 

$

1,991,614

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

$

387,661

 

 

291

 

 

0.30

%

 

$

400,314

 

 

317

 

 

0.32

%

 

$

365,093

 

 

391

 

 

0.43

%

Savings

 

12,806

 

 

2

 

 

0.06

%

 

11,588

 

 

1

 

 

0.03

%

 

9,517

 

 

2

 

 

0.08

%

Time deposits

 

599,865

 

 

592

 

 

0.39

%

 

615,035

 

 

682

 

 

0.44

%

 

689,352

 

 

2,206

 

 

1.27

%

Total interest-bearing deposits

 

1,000,332

 

 

885

 

 

0.35

%

 

1,026,937

 

 

1,000

 

 

0.39

%

 

1,063,962

 

 

2,599

 

 

0.97

%

Federal Home Loan Bank advances

 

18,152

 

 

56

 

 

1.22

%

 

19,012

 

 

55

 

 

1.16

%

 

130,000

 

 

168

 

 

0.51

%

Total interest-bearing liabilities

 

1,018,484

 

 

941

 

 

0.37

%

 

1,045,949

 

 

1,055

 

 

0.40

%

 

1,193,962

 

 

2,767

 

 

0.92

%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

794,165

 

 

 

 

 

 

720,105

 

 

 

 

 

 

552,255

 

 

 

 

 

Other liabilities

 

14,531

 

 

 

 

 

 

13,287

 

 

 

 

 

 

15,934

 

 

 

 

 

Total noninterest-bearing liabilities

 

808,696

 

 

 

 

 

 

733,392

 

 

 

 

 

 

568,189

 

 

 

 

 

Total liabilities

 

1,827,180

 

 

 

 

 

 

1,779,341

 

 

 

 

 

 

1,762,151

 

 

 

 

 

Total shareholders’ equity

 

243,185

 

 

 

 

 

 

239,448

 

 

 

 

 

 

229,463

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

2,070,365

 

 

 

 

 

 

$

2,018,789

 

 

 

 

 

 

$

1,991,614

 

 

 

 

 

Net interest income

 

 

 

$

20,227

 

 

 

 

 

 

$

18,996

 

 

 

 

 

 

$

16,853

 

 

 

Net interest spread (3)

 

 

 

 

 

3.75

%

 

 

 

 

 

3.64

%

 

 

 

 

 

3.08

%

Net interest margin (4)

 

 

 

 

 

3.93

%

 

 

 

 

 

3.83

%

 

 

 

 

 

3.43

%

Total deposits

 

$

1,794,497

 

 

$

885

 

 

0.20

%

 

$

1,747,042

 

 

$

1,000

 

 

0.23

%

 

$

1,616,217

 

 

$

2,599

 

 

0.64

%

Total funding (5)

 

$

1,812,649

 

 

$

941

 

 

0.21

%

 

$

1,766,054

 

 

$

1,055

 

 

0.24

%

 

$

1,746,217

 

 

$

2,767

 

 

0.63

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

9/30/2021

 

9/30/2020

 

 

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)

 

$

1,683,084

 

 

$

58,792

 

 

4.67

%

 

$

1,524,628

 

 

$

57,617

 

 

5.05

%

Mortgage-backed securities

 

90,095

 

 

726

 

 

1.08

%

 

65,713

 

 

985

 

 

2.00

%

Collateralized mortgage obligation

 

23,442

 

 

168

 

 

0.96

%

 

37,500

 

 

402

 

 

1.43

%

SBA loan pool securities

 

10,959

 

 

148

 

 

1.81

%

 

13,351

 

 

198

 

 

1.98

%

Municipal bonds (2)

 

5,774

 

 

109

 

 

2.52

%

 

5,807

 

 

113

 

 

2.60

%

Corporate bonds

 

769

 

 

21

 

 

3.65

%

 

 

 

 

 

%

Other interest-earning assets

 

180,663

 

 

513

 

 

0.38

%

 

221,698

 

 

938

 

 

0.57

%

Total interest-earning assets

 

1,994,786

 

 

60,477

 

 

4.05

%

 

1,868,697

 

 

60,253

 

 

4.31

%

Noninterest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

19,359

 

 

 

 

 

 

17,324

 

 

 

 

 

Allowance for loan losses

 

(25,753

)

 

 

 

 

 

(17,676

)

 

 

 

 

Other assets

 

37,371

 

 

 

 

 

 

38,255

 

 

 

 

 

Total noninterest-earning assets

 

30,977

 

 

 

 

 

 

37,903

 

 

 

 

 

Total assets

 

$

2,025,763

 

 

 

 

 

 

$

1,906,600

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

$

398,459

 

 

941

 

 

0.32

%

 

$

367,222

 

 

2,058

 

 

0.75

%

Savings

 

11,676

 

 

4

 

 

0.05

%

 

7,706

 

 

8

 

 

0.14

%

Time deposits

 

616,707

 

 

2,251

 

 

0.49

%

 

725,927

 

 

8,934

 

 

1.64

%

Total interest-bearing deposits

 

1,026,842

 

 

3,196

 

 

0.42

%

 

1,100,855

 

 

11,000

 

 

1.33

%

Federal Home Loan Bank advances

 

37,363

 

 

239

 

 

0.86

%

 

95,276

 

 

471

 

 

0.66

%

Total interest-bearing liabilities

 

1,064,205

 

 

3,435

 

 

0.43

%

 

1,196,131

 

 

11,471

 

 

1.28

%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

707,800

 

 

 

 

 

 

465,634

 

 

 

 

 

Other liabilities

 

13,925

 

 

 

 

 

 

17,493

 

 

 

 

 

Total noninterest-bearing liabilities

 

721,725

 

 

 

 

 

 

483,127

 

 

 

 

 

Total liabilities

 

1,785,930

 

 

 

 

 

 

1,679,258

 

 

 

 

 

Total shareholders’ equity

 

239,833

 

 

 

 

 

 

227,342

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

2,025,763

 

 

 

 

 

 

$

1,906,600

 

 

 

 

 

Net interest income

 

 

 

$

57,042

 

 

 

 

 

 

$

48,782

 

 

 

Net interest spread (3)

 

 

 

 

 

3.62

%

 

 

 

 

 

3.03

%

Net interest margin (4)

 

 

 

 

 

3.82

%

 

 

 

 

 

3.49

%

Total deposits

 

$

1,734,642

 

 

$

3,196

 

 

0.25

%

 

$

1,566,489

 

 

$

11,000

 

 

0.94

%

Total funding (5)

 

$

1,772,005

 

 

$

3,435

 

 

0.26

%

 

$

1,661,765

 

 

$

11,471

 

 

0.92

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 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.

 

 

 

9/30/2021

 

6/30/2021

 

12/31/2020

 

9/30/2020

Loans held-for-investment

(a)

 

$

1,707,878

 

 

$

1,719,656

 

 

$

1,583,578

 

 

$

1,578,804

 

Less: SBA PPP loans

(b)

 

101,901

 

 

181,019

 

 

135,654

 

 

136,418

 

Loans held-for-investment, excluding SBA PPP loans

(c)=(a)-(b)

 

$

1,605,977

 

 

$

1,538,637

 

 

$

1,447,924

 

 

$

1,442,386

 

Allowance for loan losses

(d)

 

$

23,807

 

 

$

24,889

 

 

$

26,510

 

 

$

24,546

 

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

(d)/(a)

 

1.39

%

 

1.45

%

 

1.67

%

 

1.55

%

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

(d)/(c)

 

1.48

%

 

1.62

%

 

1.83

%

 

1.70

%

 

 

 

 

 

 

 

 

 

 

 

Contacts

Timothy Chang

Executive Vice President & Chief Financial Officer

213-210-2000

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