PCB Bancorp Announces Extension of Stock Repurchase Plan

Rhea-AI Summary

PCB Bancorp (NASDAQ: PCB) has extended its stock repurchase program until August 1, 2025. The original plan, approved on August 2, 2023, authorized the repurchase of up to 720,000 shares (approximately 5% of outstanding shares). As of July 24, 2024, the company has repurchased and retired 142,223 shares, leaving 577,777 shares available for repurchase. The program allows for various repurchase methods, including open market transactions and privately negotiated deals. PCB Bancorp plans to implement a Rule 10b5-1 trading plan to facilitate repurchases during periods when insider trading restrictions might otherwise apply. The repurchase program's execution depends on factors such as stock price, trading volume, and market conditions.

Positive

• Extension of stock repurchase program indicates confidence in company's financial position
• Potential increase in earnings per share due to reduction in outstanding shares
• Implementation of Rule 10b5-1 trading plan allows for more consistent execution of repurchases

Negative

• Only 19.75% of authorized shares repurchased in the first year of the program
• Capital used for share repurchases may limit funds available for other growth opportunities

Insights

Financial Analyst

PCB Bancorp's decision to extend its stock repurchase plan is a strategic move that warrants attention from investors. The extension from August 2, 2024, to August 1, 2025, coupled with the remaining 577,777 shares authorized for repurchase, signals the company's continued commitment to enhancing shareholder value.

This move can be interpreted as a vote of confidence from management in the company's financial health and future prospects. Stock buybacks typically indicate that a company believes its shares are undervalued and can lead to increased earnings per share by reducing the number of outstanding shares.

However, it's important to note that PCB Bancorp has only repurchased 142,223 shares out of the initially authorized 720,000 shares. This relatively low utilization rate (19.75%) over the past year might suggest either conservative management or opportunities for repurchases at attractive prices.

The flexibility in the repurchase program, including the ability to use various means such as open market transactions and privately negotiated deals, provides the company with options to optimize its capital allocation strategy. The planned adoption of a Rule 10b5-1 trading plan is a prudent move, allowing for continued repurchases during blackout periods and potentially reducing legal risks associated with insider trading concerns.

Investors should monitor the pace and timing of future repurchases, as well as their impact on the company's capital ratios and liquidity position. While buybacks can be positive, they should be balanced against other potential uses of capital, such as investments in growth opportunities or increasing dividends.

Market Research Analyst

The extension of PCB Bancorp's stock repurchase plan offers interesting insights into the company's market positioning and investor relations strategy. By maintaining the ability to repurchase shares through August 2025, the company is preserving financial flexibility in a dynamic banking environment.

This move comes at a time when the banking sector faces challenges, including interest rate uncertainties and potential regulatory changes. The decision to extend rather than expand the program suggests a cautious approach, balancing shareholder returns with the need for strong capital buffers.

It's worth noting that the original plan targeted approximately 5% of outstanding shares. With only 19.75% of the authorized shares repurchased so far, PCB Bancorp has significant room to maneuver. This could be particularly advantageous if market volatility creates opportunities for accretive repurchases.

The company's mention of factors influencing repurchases, such as stock price, trading volume and general market conditions, indicates a disciplined approach to capital management. This aligns with best practices in the industry and should reassure investors about the prudent use of company resources.

Investors should keep an eye on how PCB Bancorp's repurchase activity compares to peers in the regional banking sector. A more aggressive buyback pace could signal management's strong belief in the company's valuation, while a continued conservative approach might indicate a focus on maintaining capital strength in an uncertain economic environment.

LOS ANGELES--(BUSINESS WIRE)-- PCB Bancorp (the “Company”) (NASDAQ: PCB), the holding company of PCB Bank, announced that on July 24, 2024, its Board of Directors approved an amendment (the “Repurchase Program Amendment”) to its current repurchase program that was approved and announced on August 2, 2023. The original repurchase program authorized the repurchase of up to 720,000 shares of the Company’s outstanding common stock, which was then approximately 5% of the outstanding share, through August 2, 2024. The Repurchase Program Amendment extends the expiration date from August 2, 2024 to August 1, 2025. As of July 24, 2024, the Company has repurchased and retired 142,223 shares of its common stock, leaving an aggregate of 577,777 shares in authorized for repurchase under the Repurchase Program Amendment.

Under the stock repurchase program, the Company may purchase shares of its common stock through various means such as open market transactions, including block purchases, and privately negotiated transactions. The number of shares repurchased and the timing, manner, price and amount of any repurchases will be determined at the Company’s discretion. Factors include, but are not limited to, stock price, trading volume and general market conditions, along with the Company’s general business conditions. The program may be suspended or discontinued at any time and does not obligate the company to acquire any specific number of shares of its common stock.

As part of the stock repurchase program, the Company intends to enter into a trading plan adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The 10b5-1 trading plan would permit common stock to be repurchased at a time that the Company might otherwise be precluded from doing so under insider trading laws or self-imposed trading restrictions. The 10b5-1 trading plan will be administered by an independent broker and will be subject to price, market volume and timing restrictions.

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 the health of the national and local economies including the impact to the Company and its customers resulting from changes to, and the level of, inflation and interest rates; the Company’s ability to maintain and grow its deposit base; loan demand and continued portfolio performance; the impact of adverse developments at other banks, including bank failures, that impact general sentiment regarding the stability and liquidity of banks that could affect the Company’s liquidity, financial performance and stock price; changes to valuations of the Company’s assets and liabilities including the allowance for credit losses, earning assets, and intangible assets; changes to the availability of liquidity sources including borrowing lines and the ability to pledge or sell certain assets; the Company's ability to attract and retain skilled employees; customers' service expectations; cyber security risks; the Company's ability to successfully deploy new technology; acquisitions and branch and loan production office expansions; operational risks including the ability to detect and prevent errors and fraud; the effectiveness of the Company’s enterprise risk management framework; costs related to litigation; changes in laws, rules, regulations, or interpretations to which the Company is subject; the effects of severe weather events, pandemics, other public health crises, acts of war or terrorism, and other external events on our business. These and other important factors are detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and other filings the Company makes with the SEC, which are available at the SEC’s Internet site (http://www.sec.gov) or 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 the Company does 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240725740641/en/

Timothy Chang

Executive Vice President & Chief Financial Officer

213-210-2000

Source: PCB Bancorp

FAQ

How many shares can PCB Bancorp (PCB) repurchase under the extended program?

PCB Bancorp can repurchase up to 577,777 shares under the extended stock repurchase program, which runs until August 1, 2025.

What is the purpose of PCB Bancorp's (PCB) stock repurchase program?

The stock repurchase program aims to enhance shareholder value by reducing the number of outstanding shares, potentially increasing earnings per share and demonstrating confidence in the company's financial position.

How does the Rule 10b5-1 trading plan benefit PCB Bancorp's (PCB) stock repurchase program?

The Rule 10b5-1 trading plan allows PCB Bancorp to continue repurchasing shares during periods when insider trading restrictions might otherwise prevent such actions, ensuring more consistent execution of the repurchase program.

What factors determine PCB Bancorp's (PCB) stock repurchases under this program?

PCB Bancorp considers factors such as stock price, trading volume, general market conditions, and the company's business conditions when determining the timing, manner, price, and amount of stock repurchases.