PCB Bancorp Reports Earnings of $8.7 million for Q4 2022 and $35.0 million for 2022

Rhea-AI Summary

PCB Bancorp (NASDAQ: PCB) reported Q4 2022 net income of $8.7 million ($0.58 per diluted share), up from $7.0 million ($0.46 per diluted share) in Q3 2022, but down from $10.7 million ($0.70 per diluted share) in Q4 2021. For the full year, net income was $35.0 million ($2.31 per share), down from $40.1 million ($2.62 per share) in 2021. Key highlights include a 4.15% net interest margin and an increase in total assets to $2.42 billion. The company opened a new branch in Carrollton, Texas and continued its stock buyback program. The allowance for loan losses was 1.22% of loans held-for-investment as of December 31, 2022.

Positive

• Net income increased by 25.2% from Q3 2022.
• Net interest income reached a record $24.3 million in Q4 2022.
• Total assets grew by 12.6% year-over-year to $2.42 billion.

Negative

• Net income decreased by 12.8% year-over-year.
• Net interest margin declined from 4.25% in Q3 2022 to 4.15% in Q4 2022.
• Noninterest income fell by 50.6% compared to Q4 2021.

LOS ANGELES--(BUSINESS WIRE)-- 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

Source: PCB Bancorp

FAQ

What was PCB Bancorp's net income for Q4 2022?

PCB Bancorp reported a net income of $8.7 million for Q4 2022.

How did PCB Bancorp perform in terms of net interest income?

The company reported a record net interest income of $24.3 million for Q4 2022.

What are the key financial metrics for PCB Bancorp in 2022?

In 2022, PCB Bancorp reported a net income of $35.0 million with a net interest margin of 4.08%.

Has PCB Bancorp opened any new branches recently?

Yes, PCB Bancorp opened a new full-service branch in Carrollton, Texas.