LOS ANGELES--(BUSINESS WIRE)--PCB Bancorp (the “Company”) (NASDAQ: PCB), the holding company of Pacific City Bank (the “Bank”), today reported net income of $10.2 million, or $0.67 per diluted common share, for the first quarter of 2022, compared with $10.7 million, or $0.70 per diluted common share, for the previous quarter and $8.6 million, or $0.55 per diluted common share, for the year-ago quarter.
Q1 2022 Highlights
-
Net income totaled $10.2 million, or $0.67 per diluted common share, for the current quarter;
- The Company recorded a reversal for loan losses of $1.2 million for the current quarter compared with $1.5 million for the previous quarter and $1.1 million for the year-ago quarter.
- Allowance for loan losses to loans held-for-investment(1) ratio was 1.22% at March 31, 2022 compared with 1.29% at December 31, 2021 and 1.51% at March 31, 2021. Adjusted allowance for loan losses to loans held-for-investment ratio(2) was 1.23% at March 31, 2022 compared with 1.34% at December 31, 2021 and 1.74% at March 31, 2021.
- Net interest income was $20.0 million for the current quarter compared with $20.1 million for the previous quarter and $17.8 million for the year-ago quarter. Net interest margin was 3.87% for the current quarter compared with 3.87% for the previous quarter and 3.70% for the year-ago quarter.
- Gain on sale of loans was $3.8 million for the current quarter compared with $3.4 million for the previous quarter and $1.3 million for the year-ago quarter.
- Total assets were $2.20 billion at March 31, 2022, an increase of $50.0 million, or 2.3%, from $2.15 billion at December 31, 2021 and an increase of $149.1 million, or 7.3%, from $2.05 billion at March 31, 2021;
-
Loans held-for-investment were $1.74 billion at March 31, 2022, an increase of $10.8 million, or 0.6%, from $1.73 billion at December 31, 2021 and an increase of $57.0 million, or 3.4%, from $1.69 billion at March 31, 2021; and
- SBA PPP loans totaled $22.9 million, $65.3 million and $218.7 million at March 31, 2022, December 31, 2021 and March 31, 2021, respectively.
- The Company had no loans under modified terms related to COVID-19 at March 31, 2022 and December 31, 2021. Loans under modified terms related to the COVID-19 pandemic totaled $19.8 million at March 31, 2021.
- Total deposits were $1.91 billion at March 31, 2022, an increase of $43.2 million, or 2.3%, from $1.87 billion at December 31, 2021 and an increase of $156.6 million, or 8.9%, from $1.75 billion at March 31, 2021.
Henry Kim, President and Chief Executive Officer, commented, “PCB kicked off the year with another solid quarterly financial results that were highlighted by the net income of $10.2 million or $0.67 per diluted share, an 8.1% annualized total loan growth, excluding SBA PPP, a 22.2% annualized retail deposit growth, and a 12.5% increase in book value per share to $17.47, compared with March 31, 2021. In addition, with 41.8% of our loans in variable rate, our asset sensitive balance sheet is well position to benefit from the current rising interest rate environment. Our exceptional credit quality continued with recognition of net recoveries for the quarter, and non-performing loans to loans held-for-investment ratio of 0.08%, and classified assets to total assets ratio of 0.24%.”
“In spite of the ongoing challenging economic environment from the pandemic and global conflict, we will continue to execute our focused expansion initiatives of opening three new full-service branches during the second half of this year; two in Dallas, Texas area, and one in Palisades Park, New Jersey. We are optimistic in our outlook and expect to continue to deliver strong growth and earnings for the rest of the year and beyond,” concluded Kim.
-------------------------------------------------------------------------------------
(1) |
Loans held-for-investment are presented net of deferred fees and costs in this press release. |
|
(2) |
Adjusted allowance for loan losses to loans held-for-investment ratio is a non-GAAP measure, which excludes U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans from loans held-for-investment. See “Non-GAAP Measures” for reconciliation of this measure to its most comparable GAAP measure. |
Financial Highlights (Unaudited)
($ in thousands, except per share data) |
|
Three Months Ended |
||||||||||||||
|
3/31/2022 |
|
12/31/2021 |
|
% Change |
|
3/31/2021 |
|
% Change |
|||||||
Net income |
|
$ |
10,240 |
|
|
$ |
10,676 |
|
|
(4.1)% |
|
$ |
8,560 |
|
|
19.6% |
Diluted earnings per common share |
|
$ |
0.67 |
|
|
$ |
0.70 |
|
|
(4.3)% |
|
$ |
0.55 |
|
|
21.8% |
|
|
|
|
|
|
|
|
|
|
|
||||||
Net interest income |
|
$ |
19,993 |
|
|
$ |
20,095 |
|
|
(0.5)% |
|
$ |
17,819 |
|
|
12.2% |
Reversal for loan losses |
|
|
(1,191 |
) |
|
|
(1,462 |
) |
|
(18.5)% |
|
|
(1,147 |
) |
|
3.8% |
Noninterest income |
|
|
5,286 |
|
|
|
4,838 |
|
|
9.3% |
|
|
2,857 |
|
|
85.0% |
Noninterest expense |
|
|
12,071 |
|
|
|
11,168 |
|
|
8.1% |
|
|
9,669 |
|
|
24.8% |
|
|
|
|
|
|
|
|
|
|
|
||||||
Return on average assets (1) |
|
|
1.92 |
% |
|
|
2.01 |
% |
|
|
|
|
1.75 |
% |
|
|
Return on average shareholders’ equity (1), (2) |
|
|
16.01 |
% |
|
|
16.84 |
% |
|
|
|
|
14.66 |
% |
|
|
Net interest margin (1) |
|
|
3.87 |
% |
|
|
3.87 |
% |
|
|
|
|
3.70 |
% |
|
|
Efficiency ratio (3) |
|
|
47.75 |
% |
|
|
44.79 |
% |
|
|
|
|
46.76 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
($ in thousands, except per share data) |
|
3/31/2022 |
|
12/31/2021 |
|
% Change |
|
3/31/2021 |
|
% Change |
||||||
Total assets |
|
$ |
2,199,742 |
|
|
$ |
2,149,735 |
|
|
2.3% |
|
$ |
2,050,672 |
|
|
7.3% |
Net loans held-for-investment |
|
|
1,721,757 |
|
|
|
1,709,824 |
|
|
0.7% |
|
|
1,660,402 |
|
|
3.7% |
Total deposits |
|
|
1,910,379 |
|
|
|
1,867,134 |
|
|
2.3% |
|
|
1,753,771 |
|
|
8.9% |
Book value per common share (2), (4) |
|
$ |
17.47 |
|
|
$ |
17.24 |
|
|
1.3% |
|
$ |
15.53 |
|
|
12.5% |
Tier 1 leverage ratio (consolidated) |
|
|
12.22 |
% |
|
|
12.11 |
% |
|
|
|
|
12.03 |
% |
|
|
Total shareholders’ equity to total assets (2) |
|
|
11.87 |
% |
|
|
11.92 |
% |
|
|
|
|
11.72 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
(1) |
Ratios are presented on an annualized basis. |
|
(2) |
The Company did not have any intangible equity components for the presented periods. |
|
(3) |
The ratios are calculated by dividing noninterest expense by the sum of net interest income and noninterest income. |
|
(4) |
Calculated by dividing total shareholders’ equity by the number of outstanding common shares. |
COVID-19 Pandemic
The ongoing COVID-19 pandemic, and governmental and societal responses thereto, have had a severe impact on global economic and market conditions. The U.S. government has enacted a number of monetary and fiscal policies to provide fiscal stimulus and relief in order to mitigate the impact of the COVID-19 pandemic. However, the COVID-19 pandemic continues to be a challenge to public health, including the emergence of new variants, and impact global economic and market conditions, including global supply chain disruptions and high inflation.
Since the beginning of the crisis, the Company has taken a number of steps to protect the safety of its employees and to support its customers. The Company has enabled its staff to work remotely and established safety measures within its bank premises and branches for both employees and customers. In order to support its customers, the Company has been in close contact with them, assessing the level of impact on their businesses, and putting a process in place to evaluate each client’s specific situation and provide relief programs where appropriate, including SBA PPP loans and loan modifications related to the COVID-19 pandemic.
At this time, the Company cannot estimate the long term impact of the COVID-19 pandemic, but these conditions are expected to continue to impact its business, results of operations, and financial condition negatively.
Result of Operations (Unaudited)
Net Interest Income and Net Interest Margin
The following table presents the components of net interest income for the periods indicated:
|
|
Three Months Ended |
||||||||||||||
($ in thousands) |
|
3/31/2022 |
|
12/31/2021 |
|
% Change |
|
3/31/2021 |
|
% Change |
||||||
Interest income/expense on |
|
|
|
|
|
|
|
|
|
|
||||||
Loans |
|
$ |
20,190 |
|
|
$ |
20,363 |
|
|
(0.8)% |
|
$ |
18,744 |
|
|
7.7% |
Investment securities |
|
|
476 |
|
|
|
441 |
|
|
7.9% |
|
|
360 |
|
|
32.2% |
Other interest-earning assets |
|
|
228 |
|
|
|
191 |
|
|
19.4% |
|
|
154 |
|
|
48.1% |
Total interest-earning assets |
|
|
20,894 |
|
|
|
20,995 |
|
|
(0.5)% |
|
|
19,258 |
|
|
8.5% |
Interest-bearing deposits |
|
|
850 |
|
|
|
847 |
|
|
0.4% |
|
|
1,311 |
|
|
(35.2)% |
Borrowings |
|
|
51 |
|
|
|
53 |
|
|
(3.8)% |
|
|
128 |
|
|
(60.2)% |
Total interest-bearing liabilities |
|
|
901 |
|
|
|
900 |
|
|
0.1% |
|
|
1,439 |
|
|
(37.4)% |
Net interest income |
|
$ |
19,993 |
|
|
$ |
20,095 |
|
|
(0.5)% |
|
$ |
17,819 |
|
|
12.2% |
Average balance of |
|
|
|
|
|
|
|
|
|
|
||||||
Loans |
|
$ |
1,773,376 |
|
|
$ |
1,758,421 |
|
|
0.9% |
|
$ |
1,641,634 |
|
|
8.0% |
Investment securities |
|
|
123,230 |
|
|
|
128,650 |
|
|
(4.2)% |
|
|
123,851 |
|
|
(0.5)% |
Other interest-earning assets |
|
|
198,918 |
|
|
|
175,468 |
|
|
13.4% |
|
|
189,153 |
|
|
5.2% |
Total interest-earning assets |
|
$ |
2,095,524 |
|
|
$ |
2,062,539 |
|
|
1.6% |
|
$ |
1,954,638 |
|
|
7.2% |
Interest-bearing deposits |
|
$ |
1,034,012 |
|
|
$ |
1,008,027 |
|
|
2.6% |
|
$ |
1,053,845 |
|
|
(1.9)% |
Borrowings |
|
|
10,400 |
|
|
|
13,315 |
|
|
(21.9)% |
|
|
75,556 |
|
|
(86.2)% |
Total interest-bearing liabilities |
|
$ |
1,044,412 |
|
|
$ |
1,021,342 |
|
|
2.3% |
|
$ |
1,129,401 |
|
|
(7.5)% |
Total funding (1) |
|
$ |
1,885,038 |
|
|
$ |
1,845,846 |
|
|
2.1% |
|
$ |
1,736,477 |
|
|
8.6% |
Annualized average yield/cost of |
|
|
|
|
|
|
|
|
|
|
||||||
Loans |
|
|
4.62 |
% |
|
|
4.59 |
% |
|
|
|
|
4.63 |
% |
|
|
Investment securities |
|
|
1.57 |
% |
|
|
1.36 |
% |
|
|
|
|
1.18 |
% |
|
|
Other interest-earning assets |
|
|
0.46 |
% |
|
|
0.43 |
% |
|
|
|
|
0.33 |
% |
|
|
Total interest-earning assets |
|
|
4.04 |
% |
|
|
4.04 |
% |
|
|
|
|
4.00 |
% |
|
|
Interest-bearing deposits |
|
|
0.33 |
% |
|
|
0.33 |
% |
|
|
|
|
0.50 |
% |
|
|
Borrowings |
|
|
1.99 |
% |
|
|
1.58 |
% |
|
|
|
|
0.69 |
% |
|
|
Total interest-bearing liabilities |
|
|
0.35 |
% |
|
|
0.35 |
% |
|
|
|
|
0.52 |
% |
|
|
Net interest margin |
|
|
3.87 |
% |
|
|
3.87 |
% |
|
|
|
|
3.70 |
% |
|
|
Cost of total funding (1) |
|
|
0.19 |
% |
|
|
0.19 |
% |
|
|
|
|
0.34 |
% |
|
|
Supplementary information |
|
|
|
|
|
|
|
|
|
|
||||||
Net accretion of discount on loans |
|
$ |
908 |
|
|
$ |
815 |
|
|
11.4% |
|
$ |
745 |
|
|
21.9% |
Net amortization of deferred loan fees |
|
$ |
1,165 |
|
|
$ |
1,434 |
|
|
(18.8)% |
|
$ |
1,220 |
|
|
(4.5)% |
|
|
|
|
|
|
|
|
|
|
|
||||||
(1) |
Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding. |
Loans. The increase in average yield for the current quarter compared with the previous quarter was primarily due to increases in net accretion of discount on loans, prepayment penalties and late-charges, partially offset by a decrease in net deferred loan fee amortization during the current quarter. Compared with the year-ago quarter, the decrease in average yield was primarily due to a decrease in overall interest rates on loans from lower market rates throughout 2021, partially offset by an increase in net accretion of discount on loans.
The following table presents a composition of total loans by interest rate type accompanied with the weighted-average contractual rates as of the dates indicated:
|
|
3/31/2022 |
|
12/31/2021 |
|
3/31/2021 |
||||||
|
|
% to Total
|
|
Weighted-
|
|
% to Total
|
|
Weighted-
|
|
% to Total
|
|
Weighted-
|
Fixed rate loans |
|
26.7 % |
|
4.25 % |
|
28.4 % |
|
3.98 % |
|
36.3 % |
|
3.44 % |
Hybrid rate loans |
|
31.5 % |
|
4.07 % |
|
29.1 % |
|
4.16 % |
|
19.3 % |
|
4.77 % |
Variable rate loans |
|
41.8 % |
|
4.14 % |
|
42.5 % |
|
3.95 % |
|
44.4 % |
|
4.04 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Securities. The increases in average yield for the current quarter compared with the previous and year-ago quarters were primarily due to a decrease in net amortization of premiums on mortgage-backed securities and collateralized mortgage obligations.
Other Interest-Earning Assets. The increases in average yield for the current quarter compared with the previous and year-ago quarters were primarily due to increases in dividend income on Federal Home Loan Bank (“FHLB”) stock and interest rate on cash held at the Federal Reserve Bank (“FRB”) account. The increases in average balance for the current quarter compared with the previous and year-ago quarters were primarily due to an increase in deposits, partially offset by an increase in loans. The Company maintains most of its cash at the FRB account. For additional detail, please see the discussion in “Loans” and “Deposits” under the “Balance Sheet” discussion.
Interest-Bearing Deposits. The decrease in average cost for the current quarter compared with the year-ago quarter was primarily due to the decreases in market rates.
Borrowings. The increase in average cost for the current quarter compared with the year-ago quarter was primarily due to matured borrowings with lower interest rates during 2021. At March 31, 2022, the Company had a term FHLB advance of $10.0 million with an interest rate of 2.07% that matures on June 29, 2022.
Reversal for Loan Losses
Reversal for loan losses was $1.2 million for the current quarter compared with $1.5 million for the previous quarter and $1.1 million for the year-ago quarter. The reversal for the current quarter was primarily due to a decrease in qualitative adjustment factor allocations related to economic implications of the COVID-19 pandemic. The Company recorded net recoveries of $8 thousand for the current quarter compared with $36 thousand for the previous quarter and $151 thousand for the year-ago quarter.
Adjusted allowance for loan losses to loans held-for-investment ratio(1) was 1.23%, 1.34%, and 1.74% at March 31, 2022, December 31, 2021, and March 31, 2021, respectively.
-------------------------------------------------------------------------------------
(1) |
Adjusted allowance for loan losses to loans held-for-investment ratio is a non-GAAP measure, which excludes SBA PPP loans from loans held-for-investment. See “Non-GAAP Measures” for reconciliation of this measure to its most comparable GAAP measure. |
Noninterest Income
The following table presents the components of noninterest income for the periods indicated:
|
|
Three Months Ended |
|||||||||||
($ in thousands) |
|
3/31/2022 |
|
12/31/2021 |
|
% Change |
|
3/31/2021 |
|
% Change |
|||
Gain on sale of loans |
|
$ |
3,777 |
|
$ |
3,374 |
|
11.9% |
|
$ |
1,322 |
|
185.7% |
Service charges and fees on deposits |
|
|
303 |
|
|
308 |
|
(1.6)% |
|
|
293 |
|
3.4% |
Loan servicing income |
|
|
700 |
|
|
688 |
|
1.7% |
|
|
882 |
|
(20.6)% |
Bank-owned life insurance income |
|
|
172 |
|
|
108 |
|
59.3% |
|
|
— |
|
NM |
Other income |
|
|
334 |
|
|
360 |
|
(7.2)% |
|
|
360 |
|
(7.2)% |
Total noninterest income |
|
$ |
5,286 |
|
$ |
4,838 |
|
9.3% |
|
$ |
2,857 |
|
85.0% |
|
|
|
|
|
|
|
|
|
|
|
|||
Gain on Sale of Loans. The following table presents information on gain on sale of loans for the periods indicated:
|
|
Three Months Ended |
|||||||||||
($ in thousands) |
|
3/31/2022 |
|
12/31/2021 |
|
% Change |
|
3/31/2021 |
|
% Change |
|||
Gain on sale of SBA loans |
|
|
|
|
|
|
|
|
|
|
|||
Sold loan balance |
|
$ |
39,683 |
|
$ |
36,765 |
|
7.9% |
|
$ |
10,919 |
|
263.4% |
Premium received |
|
|
4,206 |
|
|
3,683 |
|
14.2% |
|
|
1,309 |
|
221.3% |
Gain recognized |
|
|
3,777 |
|
|
3,363 |
|
12.3% |
|
|
1,195 |
|
216.1% |
Gain on sale of residential property loans |
|
|
|
|
|
|
|
|
|
|
|||
Sold loan balance |
|
$ |
— |
|
$ |
559 |
|
(100.0)% |
|
$ |
7,907 |
|
(100.0)% |
Gain recognized |
|
|
— |
|
|
9 |
|
(100.0)% |
|
|
127 |
|
(100.0)% |
|
|
|
|
|
|
|
|
|
|
|
|||
The Company also sold certain commercial property loans of $3.4 million during the previous quarter.
Loan Servicing Income. The following table presents information on loan servicing income for the periods indicated:
|
|
Three Months Ended |
||||||||||||||
($ in thousands) |
|
3/31/2022 |
|
12/31/2021 |
|
% Change |
|
3/31/2021 |
|
% Change |
||||||
Loan servicing income |
|
|
|
|
|
|
|
|
|
|
||||||
Servicing income received |
|
$ |
1,230 |
|
|
$ |
1,202 |
|
|
2.3% |
|
$ |
1,273 |
|
|
(3.4)% |
Servicing assets amortization |
|
|
(530 |
) |
|
|
(514 |
) |
|
3.1% |
|
|
(391 |
) |
|
35.5% |
Loan servicing income |
|
$ |
700 |
|
|
$ |
688 |
|
|
1.7% |
|
$ |
882 |
|
|
(20.6)% |
Underlying loans at end of period |
|
$ |
531,183 |
|
|
$ |
519,706 |
|
|
2.2% |
|
$ |
492,981 |
|
|
7.7% |
|
|
|
|
|
|
|
|
|
|
|
||||||
The Company services SBA loans and certain residential property loans that are sold to the secondary market.
Noninterest Expense
The following table presents the components of noninterest expense for the periods indicated:
|
|
Three Months Ended |
|||||||||||
($ in thousands) |
|
3/31/2022 |
|
12/31/2021 |
|
% Change |
|
3/31/2021 |
|
% Change |
|||
Salaries and employee benefits |
|
$ |
8,595 |
|
$ |
7,061 |
|
21.7% |
|
$ |
6,182 |
|
39.0% |
Occupancy and equipment |
|
|
1,397 |
|
|
1,417 |
|
(1.4)% |
|
|
1,371 |
|
1.9% |
Professional fees |
|
|
403 |
|
|
585 |
|
(31.1)% |
|
|
494 |
|
(18.4)% |
Marketing and business promotion |
|
|
207 |
|
|
586 |
|
(64.7)% |
|
|
138 |
|
50.0% |
Data processing |
|
|
404 |
|
|
408 |
|
(1.0)% |
|
|
377 |
|
7.2% |
Director fees and expenses |
|
|
169 |
|
|
161 |
|
5.0% |
|
|
138 |
|
22.5% |
Regulatory assessments |
|
|
141 |
|
|
138 |
|
2.2% |
|
|
208 |
|
(32.2)% |
Other expenses |
|
|
755 |
|
|
812 |
|
(7.0)% |
|
|
761 |
|
(0.8)% |
Total noninterest expense |
|
$ |
12,071 |
|
$ |
11,168 |
|
8.1% |
|
$ |
9,669 |
|
24.8% |
|
|
|
|
|
|
|
|
|
|
|
|||
Salaries and Employee Benefits. The increases for the current quarter compared with the previous and year-ago quarters were primarily due to increases in salaries from the annual merit increase and number of employees increase, incentives tied to the sales of Loan Production Offices originated SBA loans, vacation accrual, and a decrease in loan origination cost, which offsets the recognition of salaries and employee benefits expense. The Company recognized a higher loan origination cost for the year-ago quarter primarily due to the SBA PPP loan production. Total loan origination cost included in salaries and employee benefits were $365 thousand, $435 thousand, and $986 thousand for the current, previous and year-ago quarters, respectively. The number of full-time equivalent employees was 256, 248 and 246 as of March 31, 2022, December 31, 2021 and March 31, 2021, respectively.
Professional Fees. The decrease for the current quarter compared with the previous quarter was primarily due to increased internal audit and other professional fees during the previous quarter as a part of the year-end processes. Compared with the year-ago quarter, the decrease was primarily due to a decrease in internal audit fees.
Marketing and Business Promotion. The decrease for the current quarter compared with the previous quarter was primarily due to the year-end promotion during the previous quarter. Compared with the year-ago quarter, the increase was primarily due to more marketing activities and advertisement for the current quarter.
Director Fees and Expenses. The increase for the current quarter compared with the year-ago quarter was primarily due to a new director appointed during the fourth quarter of 2021.
Regulatory Assessments. The decrease for the current quarter compared with the year-ago quarter was primarily due to a decrease in assessment rate, partially offset by an increase in balance sheet.
Balance Sheet (Unaudited)
Total assets were $2.20 billion at March 31, 2022, an increase of $50.0 million, or 2.3%, from $2.15 billion at December 31, 2021 and an increase of $149.1 million, or 7.3%, from $2.05 billion at March 31, 2021. The increase for the current quarter was primarily due to increases in cash and cash equivalents and securities available-for-sale, partially offset by a decrease in loans held-for-sale.
The following table presents a composition of total loans (includes both loans held-for-sale and loans held-for-investment) as of the dates indicated:
($ in thousands) |
|
3/31/2022 |
|
12/31/2021 |
|
% Change |
|
3/31/2021 |
|
% Change |
|||
Real estate loans |
|
|
|
|
|
|
|
|
|
|
|||
Commercial property |
|
$ |
1,150,101 |
|
$ |
1,105,843 |
|
4.0% |
|
$ |
922,536 |
|
24.7% |
Residential property |
|
|
215,132 |
|
|
209,485 |
|
2.7% |
|
|
190,990 |
|
12.6% |
SBA property |
|
|
129,400 |
|
|
129,661 |
|
(0.2)% |
|
|
125,989 |
|
2.7% |
Construction |
|
|
9,522 |
|
|
8,252 |
|
15.4% |
|
|
13,151 |
|
(27.6)% |
Commercial and industrial loans |
|
|
|
|
|
|
|
|
|
|
|||
Commercial term |
|
|
69,836 |
|
|
73,438 |
|
(4.9)% |
|
|
80,361 |
|
(13.1)% |
Commercial lines of credit |
|
|
107,406 |
|
|
100,936 |
|
6.4% |
|
|
91,970 |
|
16.8% |
SBA commercial term |
|
|
16,880 |
|
|
17,640 |
|
(4.3)% |
|
|
21,078 |
|
(19.9)% |
SBA PPP |
|
|
22,926 |
|
|
65,329 |
|
(64.9)% |
|
|
218,709 |
|
(89.5)% |
Other consumer loans |
|
|
21,752 |
|
|
21,621 |
|
0.6% |
|
|
21,132 |
|
2.9% |
Loans held-for-investment |
|
|
1,742,955 |
|
|
1,732,205 |
|
0.6% |
|
|
1,685,916 |
|
3.4% |
Loans held-for-sale |
|
|
18,340 |
|
|
37,026 |
|
(50.5)% |
|
|
3,569 |
|
413.9% |
Total loans |
|
$ |
1,761,295 |
|
$ |
1,769,231 |
|
(0.4)% |
|
$ |
1,689,485 |
|
4.3% |
|
|
|
|
|
|
|
|
|
|
|
|||
The increase in loans held-for-investment for the current quarter was primarily due to new funding of $117.9 million and advances on lines of credit of $29.2 million, partially offset by pay-downs and pay-offs of $136.4 million. SBA PPP loans of $42.4 million were paid off through regular payments or forgiveness from SBA during the current quarter.
The decrease in loans held-for-sale for the current quarter was primarily due to sales of $39.7 million, partially offset by new funding of $21.2 million.
The following table presents a composition of commitments to extend credit as of the dates indicated:
($ in thousands) |
|
3/31/2022 |
|
12/31/2021 |
|
% Change |
|
3/31/2021 |
|
% Change |
|||
Real estate loans |
|
|
|
|
|
|
|
|
|
|
|||
Commercial property |
|
$ |
21,195 |
|
$ |
20,194 |
|
5.0% |
|
$ |
20,003 |
|
6.0% |
SBA property |
|
|
3,142 |
|
|
3,068 |
|
2.4% |
|
|
3,677 |
|
(14.5)% |
Construction |
|
|
6,528 |
|
|
5,180 |
|
26.0% |
|
|
13,588 |
|
(52.0)% |
Commercial and industrial loans |
|
|
|
|
|
|
|
|
|
|
|||
Commercial term |
|
|
2,674 |
|
|
1,097 |
|
143.8% |
|
|
1,000 |
|
167.4% |
Commercial lines of credit |
|
|
175,742 |
|
|
169,000 |
|
4.0% |
|
|
168,381 |
|
4.4% |
SBA commercial term |
|
|
950 |
|
|
149 |
|
537.6% |
|
|
— |
|
—% |
Other consumer loans |
|
|
1,080 |
|
|
595 |
|
81.5% |
|
|
96 |
|
1,025.0% |
Total commitments to extend credit |
|
$ |
211,311 |
|
$ |
199,283 |
|
6.0% |
|
$ |
206,745 |
|
2.2% |
|
|
|
|
|
|
|
|
|
|
|
|||
Credit Quality
The following table presents a summary of non-performing loans, non-performing assets and classified assets as of the dates indicated:
($ in thousands) |
|
3/31/2022 |
|
12/31/2021 |
|
% Change |
|
3/31/2021 |
|
% Change |
||||||
Nonaccrual loans |
|
|
|
|
|
|
|
|
|
|
||||||
Real estate loans |
|
|
|
|
|
|
|
|
|
|
||||||
Residential property |
|
$ |
461 |
|
|
$ |
— |
|
|
—% |
|
$ |
— |
|
|
—% |
SBA property |
|
|
733 |
|
|
|
746 |
|
|
(1.7)% |
|
|
841 |
|
|
(12.8)% |
Commercial and industrial loans |
|
|
|
|
|
|
|
|
|
|
||||||
SBA commercial term |
|
|
199 |
|
|
|
213 |
|
|
(6.6)% |
|
|
568 |
|
|
(65.0)% |
Other consumer loans |
|
|
25 |
|
|
|
35 |
|
|
(28.6)% |
|
|
52 |
|
|
(51.9)% |
Total nonaccrual loans held-for-investment |
|
|
1,418 |
|
|
|
994 |
|
|
42.7% |
|
|
1,461 |
|
|
(2.9)% |
Loans past due 90 days or more and still accruing |
|
|
— |
|
|
|
— |
|
|
—% |
|
|
— |
|
|
—% |
Non-performing loans (“NPLs”) |
|
|
1,418 |
|
|
|
994 |
|
|
42.7% |
|
|
1,461 |
|
|
(2.9)% |
Other real estate owned (“OREO”) |
|
|
— |
|
|
|
— |
|
|
—% |
|
|
2,336 |
|
|
(100.0)% |
Non-performing assets (“NPAs”) |
|
$ |
1,418 |
|
|
$ |
994 |
|
|
42.7% |
|
$ |
3,797 |
|
|
(62.7)% |
Loans past due and still accruing |
|
|
|
|
|
|
|
|
|
|
||||||
Past due 30 to 59 days |
|
$ |
119 |
|
|
$ |
549 |
|
|
(78.3)% |
|
$ |
56 |
|
|
112.5% |
Past due 60 to 89 days |
|
|
1 |
|
|
|
5 |
|
|
(80.0)% |
|
|
52 |
|
|
(98.1)% |
Past due 90 days or more |
|
|
— |
|
|
|
— |
|
|
—% |
|
|
— |
|
|
—% |
Total loans past due and still accruing |
|
$ |
120 |
|
|
$ |
554 |
|
|
(78.3)% |
|
$ |
108 |
|
|
11.1% |
Troubled debt restructurings (“TDRs”) |
|
|
|
|
|
|
|
|
|
|||||||
Accruing TDRs |
|
$ |
565 |
|
|
$ |
576 |
|
|
(1.9)% |
|
$ |
620 |
|
|
(8.9)% |
Nonaccrual TDRs |
|
|
15 |
|
|
|
17 |
|
|
(11.8)% |
|
|
33 |
|
|
(54.5)% |
Total TDRs |
|
$ |
580 |
|
|
$ |
593 |
|
|
(2.2)% |
|
$ |
653 |
|
|
(11.2)% |
Special mention loans |
|
$ |
5,562 |
|
|
$ |
18,092 |
|
|
(69.3)% |
|
$ |
17,997 |
|
|
(69.1)% |
Classified assets |
|
|
|
|
|
|
|
|
|
|||||||
Classified loans |
|
$ |
5,377 |
|
|
$ |
5,168 |
|
|
4.0% |
|
$ |
7,090 |
|
|
(24.2)% |
OREO |
|
|
— |
|
|
|
— |
|
|
—% |
|
|
2,336 |
|
|
(100.0)% |
Classified assets |
|
$ |
5,377 |
|
|
$ |
5,168 |
|
|
4.0% |
|
$ |
9,426 |
|
|
(43.0)% |
NPLs to loans held-for-investment |
|
|
0.08 |
% |
|
|
0.06 |
% |
|
|
|
|
0.09 |
% |
|
|
NPAs to total assets |
|
|
0.06 |
% |
|
|
0.05 |
% |
|
|
|
|
0.19 |
% |
|
|
Classified assets to total assets |
|
|
0.24 |
% |
|
|
0.24 |
% |
|
|
|
|
0.46 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Loan Modifications Related to the COVID-19 Pandemic
The Company had provided modifications, including interest only payments or payment deferrals, to customers that were adversely affected by the COVID-19 pandemic. The loan modifications met all criteria under the Coronavirus Aid, Relief, and Economic Security Act. Therefore, the modified loans were not considered TDRs. As of March 31, 2022 and December 31, 2021, the Company had no loans under modified terms related to the COVID-19 pandemic. Total loans under modified terms related to the COVID-19 pandemic totaled $19.8 million at March 31, 2021.
The Company had classified the loans that were granted modifications related to the COVID-19 pandemic in excess of 6 months on a cumulative basis as special mention or classified. Special mention and classified loans included $4.1 million and $2.7 million, respectively, at March 31, 2022, $15.6 million and $2.7 million, respectively, at December 31, 2021, and $16.4 million and $2.8 million, respectively, at March 31, 2021, of the loans that were granted such modifications. The decrease in special mention loans for the current quarter was primarily due to improvements of 2 loans with an aggregated carrying value of $11.3 million.
Investment Securities
Total investment securities were $131.3 million at March 31, 2022, an increase of $8.1 million, or 6.6%, from $123.2 million at December 31, 2021, and an increase of $4.2 million, or 3.3%, from $127.1 million at March 31, 2021. The increase for the current quarter was primarily due to purchases of $19.9 million, partially offset by principal pay-downs and calls of $6.2 million and net premium amortization of $135 thousand.
Deposits
The following table presents the Company’s deposit mix as of the dates indicated:
|
|
3/31/2022 |
|
12/31/2021 |
|
3/31/2021 |
|||||||||
($ in thousands) |
|
Amount |
|
% to
|
|
Amount |
|
% to
|
|
Amount |
|
% to
|
|||
Noninterest-bearing demand deposits |
|
$ |
891,797 |
|
46.7% |
|
$ |
830,383 |
|
44.5% |
|
$ |
715,719 |
|
40.8% |
Interest-bearing deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Savings |
|
|
15,037 |
|
0.8% |
|
|
16,299 |
|
0.9% |
|
|
11,271 |
|
0.6% |
NOW |
|
|
17,543 |
|
0.9% |
|
|
20,185 |
|
1.1% |
|
|
19,380 |
|
1.1% |
Retail money market accounts |
|
|
431,057 |
|
22.5% |
|
|
386,041 |
|
20.5% |
|
|
381,704 |
|
21.7% |
Brokered money market accounts |
|
|
1 |
|
0.1% |
|
|
1 |
|
0.1% |
|
|
4 |
|
0.1% |
Retail time deposits of |
|
|
|
|
|
|
|
|
|
|
|
|
|||
$250,000 or less |
|
|
246,100 |
|
12.8% |
|
|
256,956 |
|
13.8% |
|
|
276,232 |
|
15.8% |
More than $250,000 |
|
|
173,844 |
|
9.1% |
|
|
172,269 |
|
9.2% |
|
|
166,845 |
|
9.5% |
Time deposits from internet rate service providers |
|
|
— |
|
—% |
|
|
— |
|
—% |
|
|
17,616 |
|
1.0% |
State and brokered time deposits |
|
|
135,000 |
|
7.1% |
|
|
185,000 |
|
9.9% |
|
|
165,000 |
|
9.4% |
Total interest-bearing deposits |
|
|
1,018,582 |
|
53.3% |
|
|
1,036,751 |
|
55.5% |
|
|
1,038,052 |
|
59.2% |
Total deposits |
|
$ |
1,910,379 |
|
100.0% |
|
$ |
1,867,134 |
|
100.0% |
|
$ |
1,753,771 |
|
100.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
The increase in noninterest-bearing demand deposits and retail money market accounts for the current quarter was primarily due to the overall liquid deposit market.
The decrease in retail time deposits for the current quarter was primarily due to matured and closed accounts of $188.5 million, partially offset by new accounts of $30.6 million, renewals of the matured accounts of $143.6 million, and balance increases of $5.1 million.
Liquidity
The following table presents a summary of the Company’s liquidity position as of March 31, 2022:
($ in thousands) |
|
3/31/2022 |
||
Cash and cash equivalents |
|
$ |
250,212 |
|
Cash and cash equivalents to total assets |
|
|
11.4 |
% |
|
|
|
||
Available borrowing capacity |
|
|
||
FHLB advances |
|
$ |
527,426 |
|
Federal Reserve Discount Window |
|
|
26,455 |
|
Overnight federal funds lines |
|
|
65,000 |
|
Total |
|
$ |
618,881 |
|
Total available borrowing capacity to total assets |
|
|
28.1 |
% |
|
|
|
||
Shareholders’ Equity
Shareholders’ equity was $261.1 million at March 31, 2022, an increase of $4.8 million, or 1.9%, from $256.3 million at December 31, 2021 and an increase of $20.8 million, or 8.7%, from $240.3 million at March 31, 2021. The increase for the current quarter was primarily due to net income, partially offset by cash dividends declared on common stock of $2.2 million and a decrease in accumulated other comprehensive income (loss).
Stock Repurchase
On April 8, 2021, the Company’s Board of Directors approved a repurchase program authorizing the repurchase of up to 5% of the Company’s outstanding common stock as of the date of the board meeting, which represented 775,000 shares, through September 7, 2021. The Company repurchased and retired 680,269 shares of common stock totaling $10.9 million at a weighted-average price of $15.99 per share under this program.
Emergency Capital Investment Program
On December 14, 2021, the U.S. Treasury informed the Company that the U.S Treasury has reviewed the Company’s application to receive a capital investment from the U.S Treasury under the Emergency Capital Investment Program (“ECIP”), and that the Company would be eligible to receive an ECIP investment in an amount up to $69.1 million in the form of non-dilutive Tier 1 senior perpetual preferred capital. The Company determined to accept the offer to receive the ECIP investment for the full amount. The Company expects to close the investment in the second quarter of 2022.
Established by the Consolidated Appropriations Act, 2021, the ECIP was created to encourage low- and moderate-income community financial institutions and minority depository institutions such as the Bank to augment their efforts to support small businesses and consumers in their communities.
Capital Ratios
Based on changes to the Federal Reserve’s definition of a “Small Bank Holding Company” that increased the threshold to $3 billion in assets in August 2018, the Company is not currently subject to separate minimum capital measurements. At such time as the Company reaches the $3 billion asset level, it will again be subject to capital measurements independent of the Bank. For comparison purposes, the Company’s ratios are included in following discussion. The following table presents capital ratios for the Company and the Bank as of dates indicated:
|
|
3/31/2022 |
|
12/31/2021 |
|
3/31/2021 |
|
Well
|
PCB Bancorp |
|
|
|
|
|
|
|
|
Common tier 1 capital (to risk-weighted assets) |
|
14.77% |
|
14.79% |
|
15.92% |
|
N/A |
Total capital (to risk-weighted assets) |
|
15.97% |
|
16.04% |
|
17.17% |
|
N/A |
Tier 1 capital (to risk-weighted assets) |
|
14.77% |
|
14.79% |
|
15.92% |
|
N/A |
Tier 1 capital (to average assets) |
|
12.22% |
|
12.11% |
|
12.03% |
|
N/A |
Pacific City Bank |
|
|
|
|
|
|
|
|
Common tier 1 capital (to risk-weighted assets) |
|
14.43% |
|
14.48% |
|
15.62% |
|
6.5% |
Total capital (to risk-weighted assets) |
|
15.63% |
|
15.73% |
|
16.88% |
|
10.0% |
Tier 1 capital (to risk-weighted assets) |
|
14.43% |
|
14.48% |
|
15.62% |
|
8.0% |
Tier 1 capital (to average assets) |
|
11.94% |
|
11.85% |
|
11.81% |
|
5.0% |
|
|
|
|
|
|
|
|
|
About PCB Bancorp
PCB Bancorp is the bank holding company for Pacific City Bank, a California state chartered bank, offering a full suite of commercial banking services to small to medium-sized businesses, individuals and professionals, primarily in Southern California, and predominantly in Korean-American and other minority communities.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan,” or words or phases of similar meaning. We caution that the forward-looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control, including but not limited to our borrowers’ actual payment performance as loan deferrals related to the COVID-19 pandemic expire, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to the COVID-19 pandemic, including the potential adverse impact of loan modifications and payment deferrals implemented consistent with recent regulatory guidance, and the general economic uncertainty caused by the COVID-19 pandemic, and government and societal responses thereto, general economic uncertainty in the United States and abroad, the impact of inflation, changes in interest rates, deposit flows, and real estate values, and their corresponding impact on our customers, and the network and data incident discovered on August 30, 2021. These and other important factors are detailed in various securities law filings made periodically by the Company, copies of which are available from the Company without charge. Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements. Any forward-looking statements presented herein are made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise, except as required by law.
PCB Bancorp and Subsidiary |
||||||||||||||||
Consolidated Balance Sheets (Unaudited) |
||||||||||||||||
($ in thousands, except share and per share data) |
||||||||||||||||
|
|
3/31/2022 |
|
12/31/2021 |
|
% Change |
|
3/31/2021 |
|
% Change |
||||||
Assets |
|
|
|
|
|
|
|
|
|
|
||||||
Cash and due from banks |
|
$ |
19,693 |
|
|
$ |
15,222 |
|
|
29.4% |
|
$ |
16,764 |
|
|
17.5% |
Interest-bearing deposits in other financial institutions |
|
|
230,519 |
|
|
|
188,063 |
|
|
22.6% |
|
|
195,016 |
|
|
18.2% |
Total cash and cash equivalents |
|
|
250,212 |
|
|
|
203,285 |
|
|
23.1% |
|
|
211,780 |
|
|
18.1% |
Securities available-for-sale, at fair value |
|
|
131,345 |
|
|
|
123,198 |
|
|
6.6% |
|
|
127,114 |
|
|
3.3% |
Loans held-for-sale |
|
|
18,340 |
|
|
|
37,026 |
|
|
(50.5)% |
|
|
3,569 |
|
|
413.9% |
Loans held-for-investment |
|
|
1,742,955 |
|
|
|
1,732,205 |
|
|
0.6% |
|
|
1,685,916 |
|
|
3.4% |
Allowance for loan losses |
|
|
(21,198 |
) |
|
|
(22,381 |
) |
|
(5.3)% |
|
|
(25,514 |
) |
|
(16.9)% |
Net loans held-for-investment |
|
|
1,721,757 |
|
|
|
1,709,824 |
|
|
0.7% |
|
|
1,660,402 |
|
|
3.7% |
Premises and equipment, net |
|
|
3,106 |
|
|
|
3,098 |
|
|
0.3% |
|
|
3,774 |
|
|
(17.7) % |
Federal Home Loan Bank and other bank stock |
|
|
8,577 |
|
|
|
8,577 |
|
|
—% |
|
|
8,447 |
|
|
1.5% |
Other real estate owned, net |
|
|
— |
|
|
|
— |
|
|
—% |
|
|
2,336 |
|
|
(100.0) % |
Bank-owned life insurance |
|
|
29,530 |
|
|
|
29,358 |
|
|
0.6% |
|
|
— |
|
|
NM |
Deferred tax assets, net |
|
|
11,895 |
|
|
|
10,824 |
|
|
9.9% |
|
|
8,170 |
|
|
45.6% |
Servicing assets |
|
|
7,533 |
|
|
|
7,269 |
|
|
3.6% |
|
|
6,253 |
|
|
20.5% |
Operating lease assets |
|
|
6,511 |
|
|
|
6,786 |
|
|
(4.1)% |
|
|
7,145 |
|
|
(8.9)% |
Accrued interest receivable |
|
|
5,050 |
|
|
|
5,368 |
|
|
(5.9)% |
|
|
7,523 |
|
|
(32.9)% |
Other assets |
|
|
5,886 |
|
|
|
5,122 |
|
|
14.9% |
|
|
4,159 |
|
|
41.5% |
Total assets |
|
$ |
2,199,742 |
|
|
$ |
2,149,735 |
|
|
2.3% |
|
$ |
2,050,672 |
|
|
7.3% |
Liabilities |
|
|
|
|
|
|
|
|
|
|
||||||
Deposits |
|
|
|
|
|
|
|
|
|
|
||||||
Noninterest-bearing demand |
|
$ |
891,797 |
|
|
$ |
830,383 |
|
|
7.4% |
|
$ |
715,719 |
|
|
24.6% |
Savings, NOW and money market accounts |
|
|
463,638 |
|
|
|
422,526 |
|
|
9.7% |
|
|
412,359 |
|
|
12.4% |
Time deposits of $250,000 or less |
|
|
281,100 |
|
|
|
341,956 |
|
|
(17.8)% |
|
|
358,848 |
|
|
(21.7)% |
Time deposits of more than $250,000 |
|
|
273,844 |
|
|
|
272,269 |
|
|
0.6% |
|
|
266,845 |
|
|
2.6% |
Total deposits |
|
|
1,910,379 |
|
|
|
1,867,134 |
|
|
2.3% |
|
|
1,753,771 |
|
|
8.9% |
Federal Home Loan Bank advances |
|
|
10,000 |
|
|
|
10,000 |
|
|
—% |
|
|
40,000 |
|
|
(75.0)% |
Operating lease liabilities |
|
|
7,176 |
|
|
|
7,444 |
|
|
(3.6)% |
|
|
7,935 |
|
|
(9.6)% |
Accrued interest payable and other liabilities |
|
|
11,129 |
|
|
|
8,871 |
|
|
25.5% |
|
|
8,703 |
|
|
27.9% |
Total liabilities |
|
|
1,938,684 |
|
|
|
1,893,449 |
|
|
2.4% |
|
|
1,810,409 |
|
|
7.1% |
Commitments and contingent liabilities |
|
|
|
|
|
|
|
|
|
|
||||||
Shareholders’ equity |
|
|
|
|
|
|
|
|
|
|
||||||
Common stock, no par value |
|
|
155,614 |
|
|
|
154,992 |
|
|
0.4% |
|
|
164,698 |
|
|
(5.5)% |
Retained earnings |
|
|
109,142 |
|
|
|
101,140 |
|
|
7.9% |
|
|
74,707 |
|
|
46.1% |
Accumulated other comprehensive income (loss), net |
|
|
(3,698 |
) |
|
|
154 |
|
|
NM |
|
|
858 |
|
|
NM |
Total shareholders’ equity |
|
|
261,058 |
|
|
|
256,286 |
|
|
1.9% |
|
|
240,263 |
|
|
8.7% |
Total liabilities and shareholders’ equity |
|
$ |
2,199,742 |
|
|
$ |
2,149,735 |
|
|
2.3% |
|
$ |
2,050,672 |
|
|
7.3% |
|
|
|
|
|
|
|
|
|
|
|
||||||
Outstanding common shares |
|
|
14,944,663 |
|
|
|
14,865,825 |
|
|
|
|
|
15,468,242 |
|
|
|
Book value per common share (1) |
|
$ |
17.47 |
|
|
$ |
17.24 |
|
|
|
|
$ |
15.53 |
|
|
|
Total loan to total deposit ratio |
|
|
92.20 |
% |
|
|
94.76 |
% |
|
|
|
|
96.33 |
% |
|
|
Noninterest-bearing deposits to total deposits |
|
|
46.68 |
% |
|
|
44.47 |
% |
|
|
|
|
40.81 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
(1) |
The ratios are calculated by dividing total shareholders’ equity by the number of outstanding common shares. The Company did not have any intangible equity components for the presented periods. |
PCB Bancorp and Subsidiary |
||||||||||||||||
Consolidated Statements of Income (Unaudited) |
||||||||||||||||
($ in thousands, except share and per share data) |
||||||||||||||||
|
|
Three Months Ended |
||||||||||||||
|
|
3/31/2022 |
|
12/31/2021 |
|
% Change |
|
3/31/2021 |
|
% Change |
||||||
Interest and dividend income |
|
|
|
|
|
|
|
|
|
|
||||||
Loans, including fees |
|
$ |
20,190 |
|
|
$ |
20,363 |
|
|
(0.8)% |
|
$ |
18,744 |
|
|
7.7% |
Investment securities |
|
|
476 |
|
|
|
441 |
|
|
7.9% |
|
|
360 |
|
|
32.2% |
Other interest-earning assets |
|
|
228 |
|
|
|
191 |
|
|
19.4% |
|
|
154 |
|
|
48.1% |
Total interest income |
|
|
20,894 |
|
|
|
20,995 |
|
|
(0.5)% |
|
|
19,258 |
|
|
8.5% |
Interest expense |
|
|
|
|
|
|
|
|
|
|
||||||
Deposits |
|
|
850 |
|
|
|
847 |
|
|
0.4% |
|
|
1,311 |
|
|
(35.2)% |
Other borrowings |
|
|
51 |
|
|
|
53 |
|
|
(3.8)% |
|
|
128 |
|
|
(60.2)% |
Total interest expense |
|
|
901 |
|
|
|
900 |
|
|
0.1% |
|
|
1,439 |
|
|
(37.4)% |
Net interest income |
|
|
19,993 |
|
|
|
20,095 |
|
|
(0.5)% |
|
|
17,819 |
|
|
12.2% |
Reversal for loan losses |
|
|
(1,191 |
) |
|
|
(1,462 |
) |
|
(18.5)% |
|
|
(1,147 |
) |
|
3.8% |
Net interest income after reversal for loan losses |
|
|
21,184 |
|
|
|
21,557 |
|
|
(1.7)% |
|
|
18,966 |
|
|
11.7% |
Noninterest income |
|
|
|
|
|
|
|
|
|
|
||||||
Gain on sale of loans |
|
|
3,777 |
|
|
|
3,374 |
|
|
11.9% |
|
|
1,322 |
|
|
185.7% |
Service charges and fees on deposits |
|
|
303 |
|
|
|
308 |
|
|
(1.6)% |
|
|
293 |
|
|
3.4% |
Loan servicing income |
|
|
700 |
|
|
|
688 |
|
|
1.7% |
|
|
882 |
|
|
(20.6)% |
Bank-owned life insurance income |
|
|
172 |
|
|
|
108 |
|
|
59.3% |
|
|
— |
|
|
NM |
Other income |
|
|
334 |
|
|
|
360 |
|
|
(7.2)% |
|
|
360 |
|
|
(7.2)% |
Total noninterest income |
|
|
5,286 |
|
|
|
4,838 |
|
|
9.3% |
|
|
2,857 |
|
|
85.0% |
Noninterest expense |
|
|
|
|
|
|
|
|
|
|
||||||
Salaries and employee benefits |
|
|
8,595 |
|
|
|
7,061 |
|
|
21.7% |
|
|
6,182 |
|
|
39.0% |
Occupancy and equipment |
|
|
1,397 |
|
|
|
1,417 |
|
|
(1.4)% |
|
|
1,371 |
|
|
1.9% |
Professional fees |
|
|
403 |
|
|
|
585 |
|
|
(31.1)% |
|
|
494 |
|
|
(18.4)% |
Marketing and business promotion |
|
|
207 |
|
|
|
586 |
|
|
(64.7)% |
|
|
138 |
|
|
50.0% |
Data processing |
|
|
404 |
|
|
|
408 |
|
|
(1.0)% |
|
|
377 |
|
|
7.2% |
Director fees and expenses |
|
|
169 |
|
|
|
161 |
|
|
5.0% |
|
|
138 |
|
|
22.5% |
Regulatory assessments |
|
|
141 |
|
|
|
138 |
|
|
2.2% |
|
|
208 |
|
|
(32.2)% |
Other expenses |
|
|
755 |
|
|
|
812 |
|
|
(7.0)% |
|
|
761 |
|
|
(0.8)% |
Total noninterest expense |
|
|
12,071 |
|
|
|
11,168 |
|
|
8.1% |
|
|
9,669 |
|
|
24.8% |
Income before income taxes |
|
|
14,399 |
|
|
|
15,227 |
|
|
(5.4)% |
|
|
12,154 |
|
|
18.5% |
Income tax expense |
|
|
4,159 |
|
|
|
4,551 |
|
|
(8.6)% |
|
|
3,594 |
|
|
15.7% |
Net income |
|
$ |
10,240 |
|
|
$ |
10,676 |
|
|
(4.1)% |
|
$ |
8,560 |
|
|
19.6% |
Earnings per common share |
|
|
|
|
|
|
|
|
|
|
||||||
Basic |
|
$ |
0.69 |
|
|
$ |
0.72 |
|
|
|
|
$ |
0.55 |
|
|
|
Diluted |
|
$ |
0.67 |
|
|
$ |
0.70 |
|
|
|
|
$ |
0.55 |
|
|
|
Average common shares |
|
|
|
|
|
|
|
|
|
|
||||||
Basic |
|
|
14,848,014 |
|
|
|
14,799,973 |
|
|
|
|
|
15,384,343 |
|
|
|
Diluted |
|
|
15,141,693 |
|
|
|
15,093,351 |
|
|
|
|
|
15,533,608 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Dividend paid per common share |
|
$ |
0.15 |
|
|
$ |
0.12 |
|
|
|
|
$ |
0.10 |
|
|
|
Return on average assets (1) |
|
|
1.92 |
% |
|
|
2.01 |
% |
|
|
|
|
1.75 |
% |
|
|
Return on average shareholders’ equity (1), (2) |
|
|
16.01 |
% |
|
|
16.84 |
% |
|
|
|
|
14.66 |
% |
|
|
Efficiency ratio (3) |
|
|
47.75 |
% |
|
|
44.79 |
% |
|
|
|
|
46.76 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
(1) |
|
Ratios are presented on an annualized basis. |
(2) |
|
The Company did not have any intangible equity components for the presented periods. |
(3) |
|
The ratios are calculated by dividing noninterest expense by the sum of net interest income and noninterest income. |
PCB Bancorp and Subsidiary |
|||||||||||||||||||||||||||
Average Balance, Average Yield, and Average Rate (Unaudited) |
|||||||||||||||||||||||||||
($ in thousands) |
|||||||||||||||||||||||||||
|
|
Three Months Ended |
|||||||||||||||||||||||||
|
|
3/31/2022 |
|
12/31/2021 |
|
3/31/2021 |
|||||||||||||||||||||
|
|
Average
|
|
Interest
|
|
Avg.
|
|
Average
|
|
Interest
|
|
Avg.
|
|
Average
|
|
Interest
|
|
Avg.
|
|||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total loans (1) |
|
$ |
1,773,376 |
|
|
$ |
20,190 |
|
4.62% |
|
$ |
1,758,421 |
|
|
$ |
20,363 |
|
4.59% |
|
$ |
1,641,634 |
|
|
$ |
18,744 |
|
4.63% |
Mortgage-backed securities |
|
|
84,223 |
|
|
|
307 |
|
1.48% |
|
|
88,501 |
|
|
|
263 |
|
1.18% |
|
|
81,486 |
|
|
|
215 |
|
1.07% |
Collateralized mortgage obligation |
|
|
18,242 |
|
|
|
48 |
|
1.07% |
|
|
20,233 |
|
|
|
53 |
|
1.04% |
|
|
24,888 |
|
|
|
57 |
|
0.93% |
SBA loan pool securities |
|
|
10,095 |
|
|
|
38 |
|
1.53% |
|
|
9,199 |
|
|
|
41 |
|
1.77% |
|
|
11,673 |
|
|
|
52 |
|
1.81% |
Municipal bonds (2) |
|
|
5,632 |
|
|
|
36 |
|
2.59% |
|
|
5,698 |
|
|
|
37 |
|
2.58% |
|
|
5,804 |
|
|
|
36 |
|
2.52% |
Corporate bonds |
|
|
5,038 |
|
|
|
47 |
|
3.78% |
|
|
5,019 |
|
|
|
47 |
|
3.72% |
|
|
— |
|
|
|
— |
|
—% |
Other interest-earning assets |
|
|
198,918 |
|
|
|
228 |
|
0.46% |
|
|
175,468 |
|
|
|
191 |
|
0.43% |
|
|
189,153 |
|
|
|
154 |
|
0.33% |
Total interest-earning assets |
|
|
2,095,524 |
|
|
|
20,894 |
|
4.04% |
|
|
2,062,539 |
|
|
|
20,995 |
|
4.04% |
|
|
1,954,638 |
|
|
|
19,258 |
|
4.00% |
Noninterest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash and due from banks |
|
|
20,385 |
|
|
|
|
|
|
|
20,618 |
|
|
|
|
|
|
|
19,072 |
|
|
|
|
|
|||
Allowance for loan losses |
|
|
(22,377 |
) |
|
|
|
|
|
|
(23,835 |
) |
|
|
|
|
|
|
(26,870 |
) |
|
|
|
|
|||
Other assets |
|
|
67,600 |
|
|
|
|
|
|
|
52,512 |
|
|
|
|
|
|
|
40,377 |
|
|
|
|
|
|||
Total noninterest-earning assets |
|
|
65,608 |
|
|
|
|
|
|
|
49,295 |
|
|
|
|
|
|
|
32,579 |
|
|
|
|
|
|||
Total assets |
|
$ |
2,161,132 |
|
|
|
|
|
|
$ |
2,111,834 |
|
|
|
|
|
|
$ |
1,987,217 |
|
|
|
|
|
|||
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
NOW and money market accounts |
|
$ |
431,981 |
|
|
|
313 |
|
0.29% |
|
$ |
406,343 |
|
|
|
301 |
|
0.29% |
|
$ |
407,623 |
|
|
|
333 |
|
0.33% |
Savings |
|
|
15,644 |
|
|
|
2 |
|
0.05% |
|
|
14,161 |
|
|
|
2 |
|
0.06% |
|
|
10,609 |
|
|
|
1 |
|
0.04% |
Time deposits |
|
|
586,387 |
|
|
|
535 |
|
0.37% |
|
|
587,523 |
|
|
|
544 |
|
0.37% |
|
|
635,613 |
|
|
|
977 |
|
0.62% |
Total interest-bearing deposits |
|
|
1,034,012 |
|
|
|
850 |
|
0.33% |
|
|
1,008,027 |
|
|
|
847 |
|
0.33% |
|
|
1,053,845 |
|
|
|
1,311 |
|
0.50% |
Other borrowings |
|
|
10,400 |
|
|
|
51 |
|
1.99% |
|
|
13,315 |
|
|
|
53 |
|
1.58% |
|
|
75,556 |
|
|
|
128 |
|
0.69% |
Total interest-bearing liabilities |
|
|
1,044,412 |
|
|
|
901 |
|
0.35% |
|
|
1,021,342 |
|
|
|
900 |
|
0.35% |
|
|
1,129,401 |
|
|
|
1,439 |
|
0.52% |
Noninterest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Noninterest-bearing demand |
|
|
840,626 |
|
|
|
|
|
|
|
824,504 |
|
|
|
|
|
|
|
607,076 |
|
|
|
|
|
|||
Other liabilities |
|
|
16,727 |
|
|
|
|
|
|
|
14,511 |
|
|
|
|
|
|
|
13,950 |
|
|
|
|
|
|||
Total noninterest-bearing liabilities |
|
|
857,353 |
|
|
|
|
|
|
|
839,015 |
|
|
|
|
|
|
|
621,026 |
|
|
|
|
|
|||
Total liabilities |
|
|
1,901,765 |
|
|
|
|
|
|
|
1,860,357 |
|
|
|
|
|
|
|
1,750,427 |
|
|
|
|
|
|||
Total shareholders’ equity |
|
|
259,367 |
|
|
|
|
|
|
|
251,477 |
|
|
|
|
|
|
|
236,790 |
|
|
|
|
|
|||
Total liabilities and shareholders’ equity |
|
$ |
2,161,132 |
|
|
|
|
|
|
$ |
2,111,834 |
|
|
|
|
|
|
$ |
1,987,217 |
|
|
|
|
|
|||
Net interest income |
|
|
|
$ |
19,993 |
|
|
|
|
|
$ |
20,095 |
|
|
|
|
|
$ |
17,819 |
|
|
||||||
Net interest spread (3) |
|
|
|
|
|
3.69% |
|
|
|
|
|
3.69% |
|
|
|
|
|
3.48% |
|||||||||
Net interest margin (4) |
|
|
|
|
|
3.87% |
|
|
|
|
|
3.87% |
|
|
|
|
|
3.70% |
|||||||||
Total deposits |
|
$ |
1,874,638 |
|
|
$ |
850 |
|
0.18% |
|
$ |
1,832,531 |
|
|
$ |
847 |
|
0.18% |
|
$ |
1,660,921 |
|
|
$ |
1,311 |
|
0.32% |
Total funding (5) |
|
$ |
1,885,038 |
|
|
$ |
901 |
|
0.19% |
|
$ |
1,845,846 |
|
|
$ |
900 |
|
0.19% |
|
$ |
1,736,477 |
|
|
$ |
1,439 |
|
0.34% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
(1) |
|
Total loans include both loans held-for-sale and loans held-for-investment, net of deferred loan fees and costs. |
(2) |
|
The yield on municipal bonds has not been computed on a tax-equivalent basis. |
(3) |
|
Net interest spread is calculated by subtracting average rate on interest-bearing liabilities from average yield on interest-earning assets. |
(4) |
|
Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets. |
(5) |
|
Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding. |
(6) |
|
Annualized. |
PCB Bancorp and Subsidiary
Non-GAAP Measures
($ in thousands)
Adjusted allowance for loan losses to loans held-for-investment ratio
Adjusted allowance for loan losses to loans held-for-investment ratio is calculated by removing SBA PPP loans from loans held-for-investment from the allowance for loan losses to loans held-for-investment ratio calculation. The SBA launched the PPP to provide a direct incentive for small businesses to keep their workers on the payroll in response to the COVID-19 pandemic. The SBA guarantees 100% of the PPP loans made to eligible borrowers, and the loans are eligible to be forgiven if certain conditions are met, at which point the SBA will make payments to the Bank for the forgiven amounts. The SBA guarantee on PPP loans cannot be separated from the loan and therefore is not a separate unit of account. The Company considered the SBA guarantee in the allowance for loan losses evaluation and determined that it is not required to reserve an allowance on SBA PPP loans. Management believes this non-GAAP measure enhances comparability to prior periods and provide supplemental information regarding the Company’s credit trends.
|
|
|
3/31/2022 |
|
12/31/2021 |
|
3/31/2021 |
||||||
Loans held-for-investment |
(a) |
|
$ |
1,742,955 |
|
|
$ |
1,732,205 |
|
|
$ |
1,685,916 |
|
Less: SBA PPP loans |
(b) |
|
|
22,926 |
|
|
|
65,329 |
|
|
|
218,709 |
|
Loans held-for-investment, excluding SBA PPP loans |
(c)=(a)-(b) |
|
$ |
1,720,029 |
|
|
$ |
1,666,876 |
|
|
$ |
1,467,207 |
|
Allowance for loan losses |
(d) |
|
$ |
21,198 |
|
|
$ |
22,381 |
|
|
$ |
25,514 |
|
Allowance for loan losses to loans held-for-investment ratio |
(d)/(a) |
|
|
1.22 |
% |
|
|
1.29 |
% |
|
|
1.51 |
% |
Adjusted allowance for loan losses to loans held-for-investment ratio |
(d)/(c) |
|
|
1.23 |
% |
|
|
1.34 |
% |
|
|
1.74 |
% |
|
|
|
|
|
|
|
|
||||||
