PCB Bancorp (the “Company”) (NASDAQ: PCB), the holding company
of PCB Bank (the “Bank”), today reported net income of $8.7
million, or $0.58 per diluted common share, for the fourth quarter
of 2022, compared with $7.0 million, or $0.46 per diluted common
share, for the previous quarter and $10.7 million, or $0.70 per
diluted common share, for the year-ago quarter. For 2022, net
income was $35.0 million, or $2.31 per diluted common share,
compared with $40.1 million, or $2.62 per diluted common share, for
the previous year.
Q4 2022 and Full Year Highlights
- Net income totaled $8.7 million, or $0.58 per diluted common
share, for the current quarter and $35.0 million, or $2.31 per
diluted common share, for the current year;
- The Company recorded a provision (reversal) for loan losses of
$1.1 million for the current quarter compared with $3.8 million for
the previous quarter and $(1.5) million for the year-ago quarter.
For the current year, provision (reversal) for loan losses was $3.6
million compared with $(4.6) million for the previous year.
- Allowance for loan losses (“Allowance”) to loans
held-for-investment(1) ratio was 1.22% at December 31, 2022
compared with 1.21% at September 30, 2022 and 1.29% at December 31,
2021. Adjusted Allowance to loans held-for-investment ratio(2) was
1.22% at December 31, 2022 compared with 1.21% at September 30,
2022 and 1.34% at December 31, 2021.
- Net interest income was $24.3 million for the current quarter
compared with $24.0 million for the previous quarter and $20.1
million for the year-ago quarter. Net interest margin was 4.15% for
the current quarter compared with 4.25% for the previous quarter
and 3.87% for the year-ago quarter. For the current year, net
interest income and net interest margin were $89.6 million and
4.08%, respectively, compared with $77.1 million and 3.83%,
respectively, for the previous year.
- Gain on sale of loans was $759 thousand for the current quarter
compared with $1.4 million for the previous quarter and $3.4
million for the year-ago quarter. For the current year, gain on
sale of loans was $8.0 million compared with $12.9 million for the
previous year.
- Total assets were $2.42 billion at December 31, 2022, an
increase of $93.0 million, or 4.0%, from $2.33 billion at September
30, 2022 and an increase of $270.3 million, or 12.6%, from $2.15
billion at December 31, 2021.
- Loans held-for-investment were $2.05 billion at December 31,
2022, an increase of $86.8 million, or 4.4%, from $1.96 billion at
September 30, 2022 and an increase of $313.9 million, or 18.1%,
from $1.73 billion at December 31, 2021;
- Total deposits were $2.05 billion at December 31, 2022, an
increase of $67.9 million, or 3.4%, from $1.98 billion at September
30, 2022 and an increase of $178.8 million, or 9.6%, from $1.87
billion at December 31, 2021;
- The Company opened 1 new full-service branch in Carrollton,
Texas; and
- As of December 31, 2022, the Company repurchased and retired
362,557 shares of common stock for an aggregate cost of $6.7
million under the repurchase program announced on July 28, 2022. On
January 26, 2023, the Company announced the amendment to the
repurchase program, which extended the program expiration from
February 1, 2023 to February 1, 2024.
-------------------------------------------------------------------------------------
(1)
Loans held-for-investment are presented
net of deferred fees and costs in this press release.
(2)
Adjusted Allowance to loans
held-for-investment ratio is a non-GAAP measure, which excludes
U.S. Small Business Administration (“SBA”) Paycheck Protection
Program (“PPP”) loans from loans held-for-investment. See “Non-GAAP
Measures” for reconciliation of this measure to its most comparable
GAAP measure.
“We are pleased to announce another solid financial performance
for the fourth quarter of 2022 to close out the year,” stated Henry
Kim, President and Chief Executive Officer. “For the fourth
quarter, we achieve a well-balance loan held-for-investment
portfolio growth of $86.8 million, or 17.6% annualized, that
contributed to further diversification, sound deposit balance
growth of $67.9 million, or 13.6% annualized, in spite of the
ongoing challenges in the deposit market due to competition and
rising market interest rate environment, and a record net interest
income of $24.3 million.”
“During the 2022 fourth quarter, we successfully executed
several key strategic plans of expanding our branch network in
Texas by opening a full service branch in Carrollton to complement
our Dallas branch that opened in September 2022, maintaining our
exceptional credit quality by being proactive with our borrowers,
and actively continuing our stock repurchase program.”
“As we look ahead of 2023 and beyond, our strong balance sheet
combined with our exceptionally robust capital position will
provide us with the capacity to maneuver through potential
uncertain economic environment ahead. We remain entirely committed
to helping for the success of our customers and increase the
shareholder value through disciplined growth.”
Financial Highlights
(Unaudited)
($ in thousands, except per share
data)
Three Months
Ended
Year Ended
12/31/2022
9/30/2022
% Change
12/31/2021
% Change
12/31/2022
12/31/2021
% Change
Net income
$
8,702
$
6,953
25.2
%
$
10,676
(18.5
) %
$
34,987
$
40,103
(12.8
) %
Diluted earnings per common share
$
0.58
$
0.46
26.1
%
$
0.70
(17.1
) %
$
2.31
$
2.62
(11.8
) %
Net interest income
$
24,265
$
24,023
1.0
%
$
20,095
20.8
%
$
89,632
$
77,137
16.2
%
Provision (reversal) for loan losses
1,149
3,753
(69.4
) %
(1,462
)
NM
3,602
(4,596
)
NM
Noninterest income
2,389
3,176
(24.8
) %
4,838
(50.6
) %
14,499
18,434
(21.3
) %
Noninterest expense
13,115
13,695
(4.2
) %
11,168
17.4
%
51,126
43,208
18.3
%
Return on average assets (1)
1.44
%
1.19
%
2.01
%
1.54
%
1.96
%
Return on average shareholders’ equity
(1)
10.31
%
8.16
%
16.84
%
11.42
%
16.52
%
Return on average tangible common equity
(“TCE”) (2)
12.99
%
10.25
%
16.84
%
13.23
%
16.52
%
Net interest margin (1)
4.15
%
4.25
%
3.87
%
4.08
%
3.83
%
Efficiency ratio (3)
49.20
%
50.35
%
44.79
%
49.10
%
45.21
%
($ in thousands, except per share
data)
12/31/2022
9/30/2022
% Change
12/31/2021
% Change
Total assets
$
2,420,036
$
2,327,051
4.0
%
$
2,149,735
12.6
%
Net loans held-for-investment
2,021,121
1,935,476
4.4
%
1,709,824
18.2
%
Total deposits
2,045,983
1,978,098
3.4
%
1,867,134
9.6
%
Book value per common share (4)
$
22.94
$
22.40
$
17.24
TCE per common share (2)
$
18.21
$
17.75
$
17.24
Tier 1 leverage ratio (consolidated)
14.33
%
14.74
%
12.11
%
Total shareholders’ equity to total
assets
13.86
%
14.30
%
11.92
%
TCE to total assets (2), (5)
11.00
%
11.33
%
11.92
%
(1)
Ratios are presented on an annualized
basis.
(2)
Non-GAAP. See “Non-GAAP Measures” for
reconciliation of this measure to its most comparable GAAP
measure.
(3)
Calculated by dividing noninterest expense
by the sum of net interest income and noninterest income.
(4)
Calculated by dividing total shareholders’
equity by the number of outstanding common shares.
(5)
The Company did not have any intangible
asset component for the presented periods
Result of Operations
(Unaudited)
Net Interest Income and Net Interest Margin
The following table presents the components of net interest
income for the periods indicated:
Three Months
Ended
Year Ended
($ in thousands)
12/31/2022
9/30/2022
% Change
12/31/2021
% Change
12/31/2022
12/31/2021
% Change
Interest income/expense on
Loans
$
28,786
$
24,835
15.9
%
$
20,363
41.4
%
$
95,054
$
79,155
20.1
%
Investment securities
957
806
18.7
%
441
117.0
%
2,907
1,613
80.2
%
Other interest-earning assets
1,833
1,194
53.5
%
191
859.7
%
3,790
704
438.4
%
Total interest-earning assets
31,576
26,835
17.7
%
20,995
50.4
%
101,751
81,472
24.9
%
Interest-bearing deposits
7,295
2,798
160.7
%
847
761.3
%
11,984
4,043
196.4
%
Borrowings
16
14
14.3
%
53
(69.8
) %
135
292
(53.8
) %
Total interest-bearing liabilities
7,311
2,812
160.0
%
900
712.3
%
12,119
4,335
179.6
%
Net interest income
$
24,265
$
24,023
1.0
%
$
20,095
20.8
%
$
89,632
$
77,137
16.2
%
Average balance of
Loans
$
2,004,220
$
1,905,366
5.2
%
$
1,758,421
14.0
%
$
1,872,557
$
1,702,073
10.0
%
Investment securities
134,066
137,363
(2.4
) %
128,650
4.2
%
132,538
130,437
1.6
%
Other interest-earning assets
182,018
200,367
(9.2
) %
175,468
3.7
%
194,205
179,353
8.3
%
Total interest-earning assets
$
2,320,304
$
2,243,096
3.4
%
$
2,062,539
12.5
%
$
2,199,300
$
2,011,863
9.3
%
Interest-bearing deposits
$
1,269,739
$
1,137,739
11.6
%
$
1,008,027
26.0
%
$
1,111,449
$
1,022,099
8.7
%
Borrowings
1,739
2,033
(14.5
) %
13,315
(86.9
) %
6,290
31,302
(79.9
) %
Total interest-bearing liabilities
$
1,271,478
$
1,139,772
11.6
%
$
1,021,342
24.5
%
$
1,117,739
$
1,053,401
6.1
%
Total funding (1)
$
2,043,110
$
1,965,134
4.0
%
$
1,845,846
10.7
%
$
1,949,360
$
1,790,617
8.9
%
Annualized average yield/cost
of
Loans
5.70
%
5.17
%
4.59
%
5.08
%
4.65
%
Investment securities
2.83
%
2.33
%
1.36
%
2.19
%
1.24
%
Other interest-earning assets
4.00
%
2.36
%
0.43
%
1.95
%
0.39
%
Total interest-earning assets
5.40
%
4.75
%
4.04
%
4.63
%
4.05
%
Interest-bearing deposits
2.28
%
0.98
%
0.33
%
1.08
%
0.40
%
Borrowings
3.65
%
2.73
%
1.58
%
2.15
%
0.93
%
Total interest-bearing liabilities
2.28
%
0.98
%
0.35
%
1.08
%
0.41
%
Net interest margin
4.15
%
4.25
%
3.87
%
4.08
%
3.83
%
Cost of total funding (1)
1.42
%
0.57
%
0.19
%
0.62
%
0.24
%
Supplementary information
Net accretion of discount on loans
$
869
$
867
0.2
%
$
815
6.6
%
$
3,551
$
3,504
1.3
%
Net amortization of deferred loan fees
$
167
$
243
(31.3
) %
$
1,434
(88.4
) %
$
2,181
$
6,096
(64.2
) %
(1)
Total funding is the sum of
interest-bearing liabilities and noninterest-bearing deposits. The
cost of total funding is calculated as annualized total interest
expense divided by average total funding.
Loans. The increases in average
yield for the current quarter and year were primarily due to an
increase in overall interest rates on loans from the rising
interest rate environment, partially offset by a decrease in net
amortization of deferred loan fees from the decreased amount of SBA
PPP loan payoffs.
The following table presents a composition of total loans by
interest rate type accompanied with the weighted-average
contractual rates as of the dates indicated:
12/31/2022
9/30/2022
12/31/2021
% to Total Loans
Weighted-Average Contractual
Rate
% to Total Loans
Weighted-Average
Contractual Rate
% to Total Loans
Weighted-Average
Contractual Rate
Fixed rate loans
23.2
%
4.51
%
24.0
%
4.43
%
28.4
%
3.98
%
Hybrid rate loans
39.1
%
4.40
%
38.0
%
4.23
%
29.1
%
4.16
%
Variable rate loans
37.7
%
7.86
%
38.0
%
6.75
%
42.5
%
3.95
%
Investment Securities. The
increases in average yield for the current quarter and year were
primarily due to a decrease in net amortization of premiums on
mortgage-backed securities and collateralized mortgage obligations
and higher yield on newly purchased investment securities.
Other Interest-Earning Assets. The
increases in average yield for the current quarter and year were
primarily due to an increased interest rate on cash held at the
Federal Reserve Bank (“FRB”) account. The increases in average
balance for the current quarter and year compared with the same
periods of 2021 were primarily due to an increase in average
balance of deposits and the Emergency Capital Investment Program
(“ECIP”) capital investment, partially offset by an increase in
loans. The Company maintains most of its cash at the FRB
account.
Interest-Bearing Deposits. The
increases in average cost for the current quarter and year were
primarily due to an increase in market rates.
Provision (reversal) for Loan Losses
Provision (reversal) for loan losses was $1.1 million for the
current quarter compared with $3.8 million for the previous quarter
and $(1.5) million for the year-ago quarter. For the current and
previous years, provision (reversal) for loan losses was $3.6
million and $(4.6) million, respectively. The additional provision
for loan losses for the current quarter was primarily due to an
increase in gross loan balance. For the current year, the
additional provision for loan losses was primarily due to an
increase in gross loan balance and changes in qualitative
adjustment factors related to current economic conditions.
The Company recorded net charge-offs (recoveries) of $(32)
thousand for the current quarter compared with $1.1 million for the
previous quarter and $(36) thousand for the year-ago quarter. For
the current and previous years, the Company recorded net
charge-offs (recoveries) of $1.0 million and $(467) thousand,
respectively.
Adjusted Allowance to loans held-for-investment ratio(1) was
1.22%, 1.21% and 1.34% at December 31, 2022, September 30, 2022 and
December 31, 2021, respectively.
-------------------------------------------------------------------------------------
(1)
Adjusted Allowance to loans
held-for-investment ratio is a non-GAAP measure, which excludes SBA
PPP loans from loans held-for-investment. See “Non-GAAP Measures”
for reconciliation of this measure to its most comparable GAAP
measure.
Noninterest Income
The following table presents the components of noninterest
income for the periods indicated:
Three Months
Ended
Year Ended
($ in thousands)
12/31/2022
9/30/2022
% Change
12/31/2021
% Change
12/31/2022
12/31/2021
% Change
Gain on sale of loans
$
759
$
1,415
(46.4
) %
$
3,374
(77.5
) %
$
7,990
$
12,932
(38.2
) %
Service charges and fees on deposits
352
341
3.2
%
308
14.3
%
1,326
1,195
11.0
%
Loan servicing income
734
780
(5.9
) %
688
6.7
%
2,969
2,770
7.2
%
Bank-owned life insurance income
181
178
1.7
%
108
67.6
%
706
108
553.7
%
Other income
363
462
(21.4
) %
360
0.8
%
1,508
1,429
5.5
%
Total noninterest income
$
2,389
$
3,176
(24.8
) %
$
4,838
(50.6
) %
$
14,499
$
18,434
(21.3
) %
Gain on Sale of Loans. The
following table presents information on gain on sale of loans for
the periods indicated:
Three Months
Ended
Year Ended
($ in thousands)
12/31/2022
9/30/2022
% Change
12/31/2021
% Change
12/31/2022
12/31/2021
% Change
Gain on sale of SBA loans
Sold loan balance
$
17,448
$
27,313
(36.1
) %
$
36,765
(52.5
) %
$
122,886
$
126,839
(3.1
) %
Premium received
1,102
2,036
(45.9
) %
3,683
(70.1
) %
9,944
14,043
(29.2
) %
Gain recognized
759
1,407
(46.1
) %
3,363
(77.4
) %
7,982
12,775
(37.5
) %
Gain on sale of residential property
loans
Sold loan balance
$
—
$
858
(100.0
) %
$
559
(100.0
) %
$
858
$
10,382
(91.7
) %
Gain recognized
—
8
(100.0
) %
9
(100.0
) %
8
151
(94.7
) %
The Company also sold certain commercial property loans of $3.4
million and $8.6 million during the year-ago quarter and previous
year, respectively.
Loan Servicing Income. The
following table presents information on loan servicing income for
the periods indicated:
Three Months
Ended
Year Ended
($ in thousands)
12/31/2022
9/30/2022
% Change
12/31/2021
% Change
12/31/2022
12/31/2021
% Change
Loan servicing income
Servicing income received
$
1,284
$
1,302
(1.4
) %
$
1,202
6.8
%
$
5,103
$
4,779
6.8
%
Servicing assets amortization
(550
)
(522
)
5.4
%
(514
)
7.0
%
(2,134
)
(2,009
)
6.2
%
Loan servicing income
$
734
$
780
(5.9
) %
$
688
6.7
%
$
2,969
$
2,770
7.2
%
Underlying loans at end of period
$
531,095
$
538,904
(1.4
) %
$
519,706
2.2
%
$
531,095
$
519,706
2.2
%
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
Year Ended
($ in thousands)
12/31/2022
9/30/2022
% Change
12/31/2021
% Change
12/31/2022
12/31/2021
% Change
Salaries and employee benefits
$
7,879
$
8,457
(6.8
) %
$
7,061
11.6
%
$
33,056
$
27,974
18.2
%
Occupancy and equipment
1,897
1,650
15.0
%
1,417
33.9
%
6,481
5,575
16.3
%
Professional fees
607
587
3.4
%
585
3.8
%
2,239
2,159
3.7
%
Marketing and business promotion
724
909
(20.4
) %
586
23.5
%
2,150
1,656
29.8
%
Data processing
434
427
1.6
%
408
6.4
%
1,706
1,572
8.5
%
Director fees and expenses
176
179
(1.7
) %
161
9.3
%
706
594
18.9
%
Regulatory assessments
159
150
6.0
%
138
15.2
%
597
537
11.2
%
Other expense
1,239
1,336
(7.3
) %
812
52.6
%
4,191
3,141
33.4
%
Total noninterest expense
$
13,115
$
13,695
(4.2
) %
$
11,168
17.4
%
$
51,126
$
43,208
18.3
%
Salaries and Employee Benefits. The
decrease for the current quarter compared with the previous quarter
was primarily due to decreases in bonus and vacation accruals, and
incentives tied to the sales of Loan Production Offices (“LPO”)
originated SBA loans, partially offset by a decrease in loan
origination cost, which offsets the recognition of salaries. The
increases for the current quarter and year compared with the same
periods of 2021 were primarily due to increases in salaries and
other employee benefit expense from the increased number of
employees and a decrease in loan origination cost, partially offset
by a decrease the incentives tied to sales of LPO originated SBA
loans.
Total loan origination cost included in salaries and employee
benefits were $345 thousand, $488 thousand and $435 thousand for
the current, previous and year-ago quarters, respectively, and $1.7
million and $2.2 million for the current and previous years,
respectively. The Company recognized a higher loan origination cost
for the previous year primarily due to the SBA PPP loan production
in the first quarter of 2021. The number of full-time equivalent
employees was 272, 274 and 248 as of December 31, 2022, September
30, 2022 and December 31, 2021, respectively.
Occupancy and Equipment. The
increases for the current quarter and year were primarily due to
new branch openings. The Company opened 3 new full-service branches
in Dallas and Carrollton, Texas and Palisades Park, New Jersey
during the current year.
Professional Fees. The increases
for the current quarter and year were primarily due to the
additional legal expenses associated with the on-going legal
matters related to the 2021 Network and Data Incident, partially
offset by a decrease in internal audit fees.
Marketing and Business Promotion.
The increases for the current year was primarily due to increases
in marketing activities and advertisement for the Bank's name
change to PCB Bank and new branch openings.
Director Fees and Expenses. The
increases for the current quarter and year compared with the same
periods of 2021 were primarily due to a new director appointed
during the fourth quarter of 2021.
Other Expense. The increases for
the current quarter and year compared with the same periods of 2021
were primarily due to an increase in office expense for the new
branches. The decrease for the current quarter compared with the
previous quarter was primarily due to a legal settlement of $150
thousand for the previous quarter.
Balance Sheet
(Unaudited)
Total assets were $2.42 billion at December 31, 2022, an
increase of $93.0 million, or 4.0%, from $2.33 billion at September
30, 2022 and an increase of $270.3 million, or 12.6%, from $2.15
billion at December 31, 2021. The increase for the current quarter
was primarily due to increases in cash and cash equivalents,
securities available-for-sale, loans held-for-sale and loans
held-for-investment. The increase for the current year was
primarily due to increases in loans held-for-investment and
securities available-for-sale, partially offset by decreases in
cash and cash equivalents and loans held-for-sale.
Loans
The following table presents a composition of total loans
(includes both loans held-for-sale and loans held-for-investment)
as of the dates indicated:
($ in thousands)
12/31/2022
9/30/2022
% Change
12/31/2021
% Change
Real estate loans
Commercial property
$
1,288,392
$
1,271,781
1.3
%
$
1,105,843
16.5
%
Residential property
333,726
297,506
12.2
%
209,485
59.3
%
SBA property
134,892
136,088
(0.9
) %
129,661
4.0
%
Construction
17,054
14,592
16.9
%
8,252
106.7
%
Commercial and industrial loans
Commercial term
77,700
80,225
(3.1
) %
73,438
5.8
%
Commercial lines of credit
154,142
117,960
30.7
%
100,936
52.7
%
SBA commercial term
16,211
16,542
(2.0
) %
17,640
(8.1
) %
SBA PPP
1,197
1,309
(8.6
) %
65,329
(98.2
) %
Other consumer loans
22,749
23,234
(2.1
) %
21,621
5.2
%
Loans held-for-investment
2,046,063
1,959,237
4.4
%
1,732,205
18.1
%
Loans held-for-sale
22,811
18,982
20.2
%
37,026
(38.4
) %
Total loans
$
2,068,874
$
1,978,219
4.6
%
$
1,769,231
16.9
%
The increase in loans held-for-investment for the current
quarter was primarily due to new funding of $181.1 million and
advances on lines of credit of $51.1 million, partially offset by
pay-downs and pay-offs of $141.4 million. The increase for the
current year was primarily due to new funding of $631.9 million and
advances of lines of credit of $162.4 million, partially offset by
pay-downs and pay-offs of $474.8 million. SBA PPP loans of $112
thousand and $64.1 million were paid off through regular payments
or forgiveness from SBA during the current quarter and year,
respectively.
The increase in loans held-for-sale for the current quarter was
primarily due to new funding of $17.3 million and transfer of $4.0
million from loans held-for-investment, partially offset by sales
of $17.4 million. The decrease for the current year was primarily
due to sales of $123.7 million, partially offset by new funding of
$105.6 million and transfer of $4.5 million from loans
held-for-investment.
The following table presents a composition of commitments to
extend credit as of the dates indicated:
($ in thousands)
12/31/2022
9/30/2022
% Change
12/31/2021
% Change
Real estate loans
Commercial property
$
16,172
$
18,400
(12.1
) %
$
20,194
(19.9
) %
SBA property
3,730
3,730
—
%
3,068
21.6
%
Construction
18,211
11,093
64.2
%
5,180
251.6
%
Commercial and industrial loans
Commercial term
139
2,027
(93.1
) %
1,097
(87.3
) %
Commercial lines of credit
254,295
254,738
(0.2
) %
169,000
50.5
%
SBA commercial term
234
572
(59.1
) %
149
57.0
%
Other consumer loans
692
847
(18.3
) %
595
16.3
%
Total commitments to extend
credit
$
293,473
$
291,407
0.7
%
$
199,283
47.3
%
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)
12/31/2022
9/30/2022
% Change
12/31/2021
% Change
Nonaccrual loans
Real estate loans
Commercial property
$
2,400
$
2,444
(1.8
) %
$
—
—
%
Residential property
372
372
—
%
—
—
%
SBA property
585
552
6.0
%
746
(21.6
) %
Commercial and industrial loans
Commercial term
—
3
(100.0
) %
—
—
%
Commercial lines of credit
—
4,000
(100.0
) %
—
—
%
SBA commercial term
—
—
—
%
213
(100.0
) %
Other consumer loans
3
25
(88.0
) %
35
(91.4
) %
Total nonaccrual loans
held-for-investment
3,360
7,396
(54.6
) %
994
238.0
%
Loans past due 90 days or more and still
accruing
—
—
—
%
—
—
%
Non-performing loans (“NPLs”)
held-for-investment
3,360
7,396
(54.6
) %
994
238.0
%
NPLs held-for-sale
4,000
—
—
%
—
—
%
Total NPLs
7,360
7,396
(0.5
) %
994
640.4
%
Other real estate owned (“OREO”)
—
—
—
%
—
—
%
Non-performing assets (“NPAs”)
$
7,360
$
7,396
(0.5
) %
$
994
640.4
%
Loans past due and still accruing
Past due 30 to 59 days
$
47
$
215
(78.1
) %
$
549
(91.4
) %
Past due 60 to 89 days
87
195
(55.4
) %
5
1,640.0
%
Past due 90 days or more
—
—
—
%
—
—
%
Total loans past due and still
accruing
$
134
$
410
(67.3
) %
554
(75.8
) %
Troubled debt restructurings (“TDRs”)
Accruing TDRs
$
534
$
542
(1.5
) %
$
576
(7.3
) %
Nonaccrual TDRs
—
7
(100.0
) %
17
(100.0
) %
Total TDRs
$
534
$
549
(2.7
) %
$
593
(9.9
) %
Special mention loans
$
6,857
$
5,986
14.6
%
$
18,092
(62.1
) %
Classified assets
Classified loans held-for-investment
$
6,211
$
10,293
(39.7
) %
$
5,168
20.2
%
Classified loans held-for-sale
4,000
—
—
%
—
—
%
OREO
—
—
—
%
—
—
%
Classified assets
$
10,211
$
10,293
(0.8
) %
$
5,168
97.6
%
NPLs held-for-investment to loans
held-for-investment
0.16
%
0.38
%
0.06
%
NPAs to total assets
0.30
%
0.32
%
0.05
%
Classified assets to total assets
0.42
%
0.44
%
0.24
%
During the current quarter, nonaccrual commercial lines of
credit of $4.0 million were transferred to loan held-for-sale. The
decrease in special mention loans for the current year was
primarily due to improvements of 2 loans with an aggregated
carrying value of $11.3 million at December 31, 2021.
Investment Securities
Total investment securities were $141.9 million at December 31,
2022, an increase of $12.5 million, or 9.6%, from $129.4 million at
September 30, 2022 and an increase of $18.7 million, or 15.2%, from
$123.2 million at December 31, 2021. The increase for the current
quarter was primarily due to purchases of $16.3 million and a fair
value increase of $711 thousand, partially offset by principal
pay-downs and calls of $4.5 million and net premium amortization of
$60 thousand. The increase for the current year was primarily due
to purchases of $57.4 million, partially offset by principal
pay-downs and calls of $23.2 million, a fair value decrease of
$15.1 million and net premium amortization of $367 thousand.
Deposits
The following table presents the Company’s deposit mix as of the
dates indicated:
12/31/2022
9/30/2022
12/31/2021
($ in thousands)
Amount
% to Total
Amount
% to Total
Amount
% to Total
Noninterest-bearing demand deposits
$
734,989
35.9
%
$
809,842
40.9
%
$
830,383
44.5
%
Interest-bearing deposits
Savings
8,579
0.4
%
13,028
0.7
%
16,299
0.9
%
NOW
11,405
0.6
%
17,550
0.9
%
20,185
1.1
%
Retail money market accounts
494,749
24.2
%
522,412
26.4
%
386,041
20.5
%
Brokered money market accounts
8
—
%
10,010
0.5
%
1
0.1
%
Retail time deposits of
$250,000 or less
295,354
14.4
%
236,864
12.0
%
256,956
13.8
%
More than $250,000
353,876
17.3
%
239,271
12.1
%
172,269
9.2
%
State and brokered time deposits
147,023
7.2
%
129,121
6.5
%
185,000
9.9
%
Total interest-bearing deposits
1,310,994
64.1
%
1,168,256
59.1
%
1,036,751
55.5
%
Total deposits
$
2,045,983
100.0
%
$
1,978,098
100.0
%
$
1,867,134
100.0
%
The decrease in noninterest-bearing demand deposits was
primarily due to strong deposit market competition and the
migration of noninterest-bearing demand deposits to money market
accounts and time deposits attributable to the rising market rates.
To remain competitive in this rising interest rate environment, the
Bank started to offer higher rates on deposit products to retain
and attract new customers.
The increase in retail time deposits for the current quarter was
primarily due to new accounts of $384.5 million, renewals of the
matured accounts of $122.6 million and balance increases of $7.6
million, partially offset by matured and closed accounts of $341.6
million. The increase for the current year was primarily due to new
accounts of $636.7 million, renewals of the matured accounts of
$602.9 million and balance increases of $23.4 million, partially
offset by matured and closed accounts of $1.04 billion.
Liquidity
The following table presents a summary of the Company’s
liquidity position as of December 31, 2022:
($ in thousands)
12/31/2022
Cash and cash equivalents
$
147,031
Cash and cash equivalents to total
assets
6.1
%
Available borrowing capacity
FHLB advances
$
581,745
Federal Reserve Discount Window
23,902
Overnight federal funds lines
65,000
Total
$
670,647
Total available borrowing capacity to
total assets
27.7
%
Shareholders’ Equity
Shareholders’ equity was $335.4 million at December 31, 2022, an
increase of $2.7 million, or 0.8%, from $332.7 million at September
30, 2022 and an increase of $79.2 million, or 30.9%, from $256.3
million at December 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 repurchase of common
stock of $4.5 million. The increase for the current year was
primarily due to net income and issuance of preferred stock of
$69.1 million (as discussed below), partially offset by cash
dividends declared on common stock of $8.9 million, repurchase of
common stock of $6.7 million and an increase in accumulated other
comprehensive loss of $10.7 million.
Stock Repurchase
On April 8, 2021, the Company’s Board of Directors approved a
repurchase program authorizing the repurchase of up to 5% of the
Company’s outstanding common stock as of the date of the board
meeting, which represented 775,000 shares, through September 7,
2021. The Company repurchased and retired 680,269 shares of common
stock totaling $10.9 million at a weighted-average price of $15.99
per share under this program.
On July 28, 2022, the Company’s Board of Directors approved a
repurchase program authorizing for the repurchase of up to 5% of
the Company’s outstanding common stock as of the date of the board
meeting, which represented 747,938 shares, through February 1,
2023. On January 26, 2023, the Company announced the amendment to
the repurchase program, which extended the program expiration from
February 1, 2023 to February 1, 2024. The Company repurchased and
retired 362,557 shares of common stock at a weighted-average price
of $18.57 per share, totaling $6.7 million under this repurchase
program as of December 31, 2022.
Issuance of Preferred Stock Under the
Emergency Capital Investment Program
On May 24, 2022, the Company issued 69,141 shares of Senior
Non-Cumulative Perpetual Preferred Stock, Series C, liquidation
preference of $1,000 per share (“Series C Preferred Stock”) for the
capital investment of $69.1 million from the U.S. Treasury under
the Emergency Capital Investment Program (“ECIP”). ECIP investment
is treated as tier 1 capital for regulatory capital purposes.
The Series C Preferred Stock bears no dividend for the first 24
months following the investment date. Thereafter, the dividend rate
will be adjusted based on the lending growth criteria listed in the
terms of the ECIP investment with an annual dividend rate up to 2%.
After the tenth anniversary of the investment date, the dividend
rate will be fixed based on average annual amount of lending in
years 2 through 10.
Capital Ratios
Based on changes to the Federal Reserve’s definition of a “Small
Bank Holding Company” that increased the threshold to $3 billion in
assets in August 2018, the Company is not currently subject to
separate minimum capital measurements. At such time as the Company
reaches the $3 billion asset level, it will again be subject to
capital measurements independent of the Bank. For comparison
purposes, the Company’s ratios are included in following
discussion. The following table presents capital ratios for the
Company and the Bank as of the dates indicated:
12/31/2022
9/30/2022
12/31/2021
Well Capitalized
Requirements
PCB Bancorp
Common tier 1 capital (to risk-weighted
assets)
13.29
%
13.69
%
14.79
%
N/A
Total capital (to risk-weighted
assets)
17.83
%
18.34
%
16.04
%
N/A
Tier 1 capital (to risk-weighted
assets)
16.62
%
17.14
%
14.79
%
N/A
Tier 1 capital (to average assets)
14.33
%
14.74
%
12.11
%
N/A
PCB Bank
Common tier 1 capital (to risk-weighted
assets)
16.30
%
16.82
%
14.48
%
6.5
%
Total capital (to risk-weighted
assets)
17.52
%
18.02
%
15.73
%
10.0
%
Tier 1 capital (to risk-weighted
assets)
16.30
%
16.82
%
14.48
%
8.0
%
Tier 1 capital (to average assets)
14.05
%
14.47
%
11.85
%
5.0
%
About PCB Bancorp
PCB Bancorp is the bank holding company for PCB Bank, a
California state chartered bank, offering a full suite of
commercial banking services to small to medium-sized businesses,
individuals and professionals, primarily in Southern California,
and predominantly in Korean-American and other minority
communities.
Cautionary Note Regarding
Forward-Looking Statements
This press release contains forward-looking statements. These
forward-looking statements represent plans, estimates, objectives,
goals, guidelines, expectations, intentions, projections and
statements of our beliefs concerning future events, business plans,
objectives, expected operating results and the assumptions upon
which those statements are based. Forward-looking statements
include without limitation, any statement that may predict,
forecast, indicate or imply future results, performance or
achievements, and are typically identified with words such as
“may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,”
“estimate,” “expect,” “aim,” “intend,” “plan,” or words or phases
of similar meaning. We caution that the forward-looking statements
are based largely on our expectations and are subject to a number
of known and unknown risks and uncertainties that are subject to
change based on factors which are, in many instances, beyond our
control, including but not limited to general economic uncertainty
in the United States and abroad, the impact of inflation, changes
in interest rates (including actions taken by the Federal Reserve
to address inflation), deposit flows, and real estate values, and
their corresponding impact on our customers, and the network and
data incident discovered on August 30, 2021. These and other
important factors are detailed in various securities law filings
made periodically by the Company, copies of which are available
from the Company without charge. Actual results, performance or
achievements could differ materially from those contemplated,
expressed, or implied by the forward-looking statements. Any
forward-looking statements presented herein are made only as of the
date of this press release, and we do not undertake any obligation
to update or revise any forward-looking statements to reflect
changes in assumptions, the occurrence of unanticipated events, or
otherwise, except as required by law.
PCB Bancorp and Subsidiary
Consolidated Balance Sheets
(Unaudited)
($ in thousands, except share and per
share data)
12/31/2022
9/30/2022
% Change
12/31/2021
% Change
Assets
Cash and due from banks
$
23,202
$
22,252
4.3
%
$
15,222
52.4
%
Interest-bearing deposits in other
financial institutions
123,829
131,786
(6.0
) %
188,063
(34.2
) %
Total cash and cash equivalents
147,031
154,038
(4.5
) %
203,285
(27.7
) %
Securities available-for-sale, at fair
value
141,863
129,401
9.6
%
123,198
15.2
%
Loans held-for-sale
22,811
18,982
20.2
%
37,026
(38.4
) %
Loans held-for-investment
2,046,063
1,959,237
4.4
%
1,732,205
18.1
%
Allowance for loan losses
(24,942
)
(23,761
)
5.0
%
(22,381
)
11.4
%
Net loans held-for-investment
2,021,121
1,935,476
4.4
%
1,709,824
18.2
%
Premises and equipment, net
6,916
4,671
48.1
%
3,098
123.2
%
Federal Home Loan Bank and other bank
stock
10,183
10,183
—
%
8,577
18.7
%
Bank-owned life insurance
30,064
29,883
0.6
%
29,358
2.4
%
Deferred tax assets, net
3,115
12,135
(74.3
) %
10,824
(71.2
) %
Servicing assets
7,347
7,627
(3.7
) %
7,269
1.1
%
Operating lease assets
6,358
6,897
(7.8
) %
6,786
(6.3
) %
Accrued interest receivable
7,472
6,070
23.1
%
5,368
39.2
%
Other assets
15,755
11,688
34.8
%
5,122
207.6
%
Total assets
$
2,420,036
$
2,327,051
4.0
%
$
2,149,735
12.6
%
Liabilities
Deposits
Noninterest-bearing demand
$
734,989
$
809,842
(9.2
) %
$
830,383
(11.5
) %
Savings, NOW and money market accounts
514,741
563,000
(8.6
) %
422,526
21.8
%
Time deposits of $250,000 or less
382,377
305,985
25.0
%
341,956
11.8
%
Time deposits of more than $250,000
413,876
299,271
38.3
%
272,269
52.0
%
Total deposits
2,045,983
1,978,098
3.4
%
1,867,134
9.6
%
Federal Home Loan Bank advances
20,000
—
—
%
10,000
100.0
%
Operating lease liabilities
6,809
7,402
(8.0
) %
7,444
(8.5
) %
Accrued interest payable and other
liabilities
11,802
8,832
33.6
%
8,871
33.0
%
Total liabilities
2,084,594
1,994,332
4.5
%
1,893,449
10.1
%
Commitments and contingent liabilities
Shareholders’ equity
Preferred stock
69,141
69,141
—
%
—
—
%
Common stock
149,631
153,890
(2.8
) %
154,992
(3.5
) %
Retained earnings
127,181
120,699
5.4
%
101,140
25.7
%
Accumulated other comprehensive income
(loss), net
(10,511
)
(11,011
)
(4.5
) %
154
NM
Total shareholders’ equity
335,442
332,719
0.8
%
256,286
30.9
%
Total liabilities and shareholders’
equity
$
2,420,036
$
2,327,051
4.0
%
$
2,149,735
12.6
%
Outstanding common shares
14,625,474
14,853,140
14,865,825
Book value per common share (1)
$
22.94
$
22.40
$
17.24
TCE per common share (2)
$
18.21
$
17.75
$
17.24
Total loan to total deposit ratio
101.12
%
100.01
%
94.76
%
Noninterest-bearing deposits to total
deposits
35.92
%
40.94
%
44.47
%
(1)
The ratios are calculated by dividing
total shareholders’ equity by the number of outstanding common
shares. The Company did not have any intangible equity components
for the presented periods.
(2)
Non-GAAP. See “Non-GAAP Measures” for
reconciliation of this measure to its most comparable GAAP
measure.
PCB Bancorp and Subsidiary
Consolidated Statements of Income
(Unaudited)
($ in thousands, except share and per
share data)
Three Months
Ended
Year Ended
12/31/2022
9/30/2022
% Change
12/31/2021
% Change
12/31/2022
12/31/2021
% Change
Interest and dividend income
Loans, including fees
$
28,786
$
24,835
15.9
%
$
20,363
41.4
%
$
95,054
$
79,155
20.1
%
Investment securities
957
806
18.7
%
441
117.0
%
2,907
1,613
80.2
%
Other interest-earning assets
1,833
1,194
53.5
%
191
859.7
%
3,790
704
438.4
%
Total interest income
31,576
26,835
17.7
%
20,995
50.4
%
101,751
81,472
24.9
%
Interest expense
Deposits
7,295
2,798
160.7
%
847
761.3
%
11,984
4,043
196.4
%
Other borrowings
16
14
14.3
%
53
(69.8
) %
135
292
(53.8
) %
Total interest expense
7,311
2,812
160.0
%
900
712.3
%
12,119
4,335
179.6
%
Net interest income
24,265
24,023
1.0
%
20,095
20.8
%
89,632
77,137
16.2
%
Provision (reversal) for loan losses
1,149
3,753
(69.4
) %
(1,462
)
NM
3,602
(4,596
)
NM
Net interest income after provision
(reversal) for loan losses
23,116
20,270
14.0
%
21,557
7.2
%
86,030
81,733
5.3
%
Noninterest income
Gain on sale of loans
759
1,415
(46.4
) %
3,374
(77.5
) %
7,990
12,932
(38.2
) %
Service charges and fees on deposits
352
341
3.2
%
308
14.3
%
1,326
1,195
11.0
%
Loan servicing income
734
780
(5.9
) %
688
6.7
%
2,969
2,770
7.2
%
Bank-owned life insurance income
181
178
1.7
%
108
67.6
%
706
108
553.7
%
Other income
363
462
(21.4
) %
360
0.8
%
1,508
1,429
5.5
%
Total noninterest income
2,389
3,176
(24.8
) %
4,838
(50.6
) %
14,499
18,434
(21.3
) %
Noninterest expense
Salaries and employee benefits
7,879
8,457
(6.8
) %
7,061
11.6
%
33,056
27,974
18.2
%
Occupancy and equipment
1,897
1,650
15.0
%
1,417
33.9
%
6,481
5,575
16.3
%
Professional fees
607
587
3.4
%
585
3.8
%
2,239
2,159
3.7
%
Marketing and business promotion
724
909
(20.4
) %
586
23.5
%
2,150
1,656
29.8
%
Data processing
434
427
1.6
%
408
6.4
%
1,706
1,572
8.5
%
Director fees and expenses
176
179
(1.7
) %
161
9.3
%
706
594
18.9
%
Regulatory assessments
159
150
6.0
%
138
15.2
%
597
537
11.2
%
Other expense
1,239
1,336
(7.3
) %
812
52.6
%
4,191
3,141
33.4
%
Total noninterest expense
13,115
13,695
(4.2
) %
11,168
17.4
%
51,126
43,208
18.3
%
Income before income taxes
12,390
9,751
27.1
%
15,227
(18.6
) %
49,403
56,959
(13.3
) %
Income tax expense
3,688
2,798
31.8
%
4,551
(19.0
) %
14,416
16,856
(14.5
) %
Net income
$
8,702
$
6,953
25.2
%
$
10,676
(18.5
) %
$
34,987
$
40,103
(12.8
) %
Earnings per common share
Basic
$
0.59
$
0.47
$
0.72
$
2.35
$
2.66
Diluted
$
0.58
$
0.46
$
0.70
$
2.31
$
2.62
Average common shares
Basic
14,700,010
14,877,879
14,799,973
14,833,191
15,017,637
Diluted
14,904,106
15,088,089
15,093,351
15,076,348
15,253,820
Dividend paid per common share
$
0.15
$
0.15
$
0.12
$
0.60
$
0.44
Return on average assets (1)
1.44
%
1.19
%
2.01
%
1.54
%
1.96
%
Return on average shareholders’ equity
(1)
10.31
%
8.16
%
16.84
%
11.42
%
16.52
%
Return on average TCE (1), (2)
12.99
%
10.25
%
16.84
%
13.23
%
16.52
%
Efficiency ratio (3)
49.20
%
50.35
%
44.79
%
49.10
%
45.21
%
(1)
Ratios are presented on an annualized
basis.
(2)
Non-GAAP. See “Non-GAAP Measures” for
reconciliation of this measure to its most comparable GAAP
measure.
(3)
The ratios are calculated by dividing
noninterest expense by the sum of net interest income and
noninterest income.
PCB Bancorp and Subsidiary
Average Balance, Average Yield, and
Average Rate (Unaudited)
($ in thousands)
Three Months Ended
12/31/2022
9/30/2022
12/31/2021
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)
$
2,004,220
$
28,786
5.70
%
$
1,905,366
$
24,835
5.17
%
$
1,758,421
$
20,363
4.59
%
Mortgage-backed securities
90,346
585
2.57
%
93,546
518
2.20
%
88,501
263
1.18
%
Collateralized mortgage obligation
25,570
221
3.43
%
24,090
151
2.49
%
20,233
53
1.04
%
SBA loan pool securities
9,545
71
2.95
%
10,435
56
2.13
%
9,199
41
1.77
%
Municipal bonds (2)
4,050
33
3.23
%
4,491
34
3.00
%
5,698
37
2.58
%
Corporate bonds
4,555
47
4.09
%
4,801
47
3.88
%
5,019
47
3.72
%
Other interest-earning assets
182,018
1,833
4.00
%
200,367
1,194
2.36
%
175,468
191
0.43
%
Total interest-earning assets
2,320,304
31,576
5.40
%
2,243,096
26,835
4.75
%
2,062,539
20,995
4.04
%
Noninterest-earning assets
Cash and due from banks
21,139
20,609
20,618
Allowance for loan losses
(23,800
)
(21,117
)
(23,835
)
Other assets
78,069
76,851
52,512
Total noninterest-earning assets
75,408
76,343
49,295
Total assets
$
2,395,712
$
2,319,439
$
2,111,834
Liabilities and Shareholders’
Equity
Interest-bearing liabilities
Deposits
NOW and money market accounts
$
540,312
2,852
2.09
%
$
577,975
1,375
0.94
%
$
406,343
301
0.29
%
Savings
10,692
3
0.11
%
14,990
2
0.05
%
14,161
2
0.06
%
Time deposits
718,735
4,440
2.45
%
544,774
1,421
1.03
%
587,523
544
0.37
%
Total interest-bearing deposits
1,269,739
7,295
2.28
%
1,137,739
2,798
0.98
%
1,008,027
847
0.33
%
Other borrowings
1,739
16
3.65
%
2,033
14
2.73
%
13,315
53
1.58
%
Total interest-bearing liabilities
1,271,478
7,311
2.28
%
1,139,772
2,812
0.98
%
1,021,342
900
0.35
%
Noninterest-bearing liabilities
Noninterest-bearing demand
771,632
825,362
824,504
Other liabilities
17,770
16,057
14,511
Total noninterest-bearing liabilities
789,402
841,419
839,015
Total liabilities
2,060,880
1,981,191
1,860,357
Total shareholders’ equity
334,832
338,248
251,477
Total liabilities and shareholders’
equity
$
2,395,712
$
2,319,439
$
2,111,834
Net interest income
$
24,265
$
24,023
$
20,095
Net interest spread (3)
3.12
%
3.77
%
3.69
%
Net interest margin (4)
4.15
%
4.25
%
3.87
%
Total deposits
$
2,041,371
$
7,295
1.42
%
$
1,963,101
$
2,798
0.57
%
$
1,832,531
$
847
0.18
%
Total funding (5)
$
2,043,110
$
7,311
1.42
%
$
1,965,134
$
2,812
0.57
%
$
1,845,846
$
900
0.19
%
(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)
Year Ended
12/31/2022
12/31/2021
Average Balance
Interest Income
/Expense
Avg. Yield/Rate
Average
Balance
Interest Income
/Expense
Avg. Yield/Rate
Assets
Interest-earning assets
Total loans (1)
$
1,872,557
$
95,054
5.08
%
$
1,702,073
$
79,155
4.65
%
Mortgage-backed securities
89,066
1,826
2.05
%
89,693
989
1.10
%
Collateralized mortgage obligation
23,479
545
2.32
%
22,633
221
0.98
%
SBA loan pool securities
10,309
208
2.02
%
10,515
189
1.80
%
Municipal bonds (2)
4,874
140
2.87
%
5,755
146
2.54
%
Corporate bonds
4,810
188
3.91
%
1,841
68
3.69
%
Other interest-earning assets
194,205
3,790
1.95
%
179,353
704
0.39
%
Total interest-earning assets
2,199,300
101,751
4.63
%
2,011,863
81,472
4.05
%
Noninterest-earning assets
Cash and due from banks
20,735
19,676
Allowance for loan losses
(22,125
)
(25,270
)
Other assets
73,951
41,187
Total noninterest-earning assets
72,561
35,593
Total assets
$
2,271,861
$
2,047,456
Liabilities and Shareholders’
Equity
Interest-bearing liabilities
Deposits
NOW and money market accounts
$
504,275
4,970
0.99
%
$
400,446
1,242
0.31
%
Savings
14,068
9
0.06
%
12,302
6
0.05
%
Time deposits
593,106
7,005
1.18
%
609,351
2,795
0.46
%
Total interest-bearing deposits
1,111,449
11,984
1.08
%
1,022,099
4,043
0.40
%
Other borrowings
6,290
135
2.15
%
31,302
292
0.93
%
Total interest-bearing liabilities
1,117,739
12,119
1.08
%
1,053,401
4,335
0.41
%
Noninterest-bearing liabilities
Noninterest-bearing demand
831,621
737,216
Other liabilities
16,061
14,073
Total noninterest-bearing liabilities
847,682
751,289
Total liabilities
1,965,421
1,804,690
Total shareholders’ equity
306,440
242,766
Total liabilities and shareholders’
equity
$
2,271,861
$
2,047,456
Net interest income
$
89,632
$
77,137
Net interest spread (3)
3.55
%
3.64
%
Net interest margin (4)
4.08
%
3.83
%
Total deposits
$
1,943,070
$
11,984
0.62
%
$
1,759,315
$
4,043
0.23
%
Total funding (5)
$
1,949,360
$
12,119
0.62
%
$
1,790,617
$
4,335
0.24
%
(1)
Total loans include both loans
held-for-sale and loans held-for-investment, net of deferred loan
fees and costs.
(2)
The yield on municipal bonds has
not been computed on a tax-equivalent basis.
(3)
Net interest spread is calculated by
subtracting average rate on interest-bearing liabilities from
average yield on interest-earning assets.
(4)
Net interest margin is calculated by
dividing annualized net interest income by average interest-earning
assets.
(5)
Total funding is the sum of
interest-bearing liabilities and noninterest-bearing deposits. The
cost of total funding is calculated as annualized total interest
expense divided by average total funding.
PCB Bancorp and Subsidiary Non-GAAP Measures ($ in
thousands)
Adjusted allowance for loan losses to loans
held-for-investment ratio
Adjusted Allowance to loans held-for-investment ratio is
calculated by removing SBA PPP loans from loans held-for-investment
from the Allowance to loans held-for-investment ratio calculation.
The SBA launched the PPP to provide a direct incentive for small
businesses to keep their workers on the payroll in response to the
COVID-19 pandemic. The SBA guarantees 100% of the PPP loans made to
eligible borrowers, and the loans are eligible to be forgiven if
certain conditions are met, at which point the SBA will make
payments to the Bank for the forgiven amounts. The SBA guarantee on
PPP loans cannot be separated from the loan and therefore is not a
separate unit of account. The Company considered the SBA guarantee
in the Allowance evaluation and determined that it is not required
to reserve an Allowance on SBA PPP loans. Management believes this
non-GAAP measure enhances comparability to prior periods and
provide supplemental information regarding the Company’s credit
trends. This disclosure should not be viewed as a substitute for
results determined in accordance with GAAP, nor is it necessarily
comparable to non-GAAP performance measures that may be presented
by other companies. The following tables provide reconciliations of
the non-GAAP measure with financial measure defined by GAAP.
($ in thousands)
12/31/2022
9/30/2022
12/31/2021
Loans held-for-investment
(a)
$
2,046,063
$
1,959,237
$
1,732,205
Less: SBA PPP loans
(b)
1,197
1,309
65,329
Loans held-for-investment, excluding SBA
PPP loans
(c)=(a)-(b)
$
2,044,866
$
1,957,928
$
1,666,876
Allowance
(d)
$
24,942
$
23,761
$
22,381
Allowance to loans held-for-investment
ratio
(d)/(a)
1.22
%
1.21
%
1.29
%
Adjusted Allowance to loans
held-for-investment ratio
(d)/(c)
1.22
%
1.21
%
1.34
%
Return on average tangible common equity, tangible common
equity per common share and tangible common equity to total assets
ratios
The Company's TCE is calculated by subtracting preferred stock
from stockholders’ equity. The Company does not have any intangible
assets for the presented periods. Return on average TCE, TCE per
common share, and TCE to total assets constitute supplemental
financial information determined by methods other than in
accordance with GAAP. These non-GAAP measures are used by
management in its analysis of the Company's performance. This
disclosure should not be viewed as a substitute for results
determined in accordance with GAAP, nor is it necessarily
comparable to non-GAAP performance measures that may be presented
by other companies. The following tables provide reconciliations of
the non-GAAP measures with financial measures defined by GAAP.
($ in thousands)
Three Months
Ended
Year Ended
12/31/2022
9/30/2022
12/31/2021
12/31/2022
12/31/2021
Average total shareholders' equity
(a)
$
334,832
$
338,248
$
251,477
$
306,440
$
242,766
Less: average preferred stock
(b)
69,141
69,141
—
42,053
—
Average TCE
(c)=(a)-(b)
$
265,691
$
269,107
$
251,477
$
264,387
$
242,766
Net income
(d)
$
8,702
$
6,953
$
10,676
$
34,987
$
40,103
Return on average shareholder's equity
(1)
(d)/(a)
10.31
%
8.16
%
16.84
%
11.42
%
16.52
%
Return on average TCE (1)
(d)/(c)
12.99
%
10.25
%
16.84
%
13.23
%
16.52
%
(1) Annualized.
($ in thousands, except per share
data)
12/31/2022
9/30/2022
12/31/2021
Total shareholders' equity
(a)
$
335,442
$
332,719
$
256,286
Less: preferred stock
(b)
69,141
69,141
—
TCE
(c)=(a)-(b)
$
266,301
$
263,578
$
256,286
Outstanding common shares
(d)
14,625,474
14,853,140
14,865,825
Book value per common share
(a)/(d)
$
22.94
$
22.40
$
17.24
TCE per common share
(c)/(d)
$
18.21
$
17.75
$
17.24
Total assets
(e)
$
2,420,036
$
2,327,051
$
2,149,735
Total shareholders' equity to total
assets
(a)/(e)
13.86
%
14.30
%
11.92
%
TCE to total assets
(c)/(e)
11.00
%
11.33
%
11.92
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230126005242/en/
Timothy Chang Executive Vice President & Chief Financial
Officer 213-210-2000
PCB Bancorp (NASDAQ:PCB)
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