PCB Bancorp Reports Earnings of $4.2 million for Q4 2019 and Announces Stock Repurchase

LOS ANGELES--()--PCB Bancorp (the “Company”) (NASDAQ: PCB), the holding company of Pacific City Bank (the “Bank”), today reported net income of $4.2 million, or $0.26 per diluted common share for the fourth quarter of 2019, compared with $6.8 million, or $0.42 per diluted common share, for the previous quarter and $6.7 million, or $0.41 per diluted common share, for the year-ago quarter.

Q4 2019 Financial Highlights

  • Net income totaled $4.2 million or $0.26 per diluted common share;
    • The Company recorded a provision for loan losses of $4.0 million for the fourth quarter of 2019.
  • Total assets were $1.75 billion at December 31, 2019, an increase of $46.9 million, or 2.8%, from $1.70 billion at September 30, 2019, and an increase of $49.3 million, or 2.9%, from $1.70 billion at December 31, 2018;
  • Loans held-for-investment, net of deferred costs (fees), were $1.45 billion at December 31, 2019, an increase of $61.0 million, or 4.4%, from $1.39 billion at September 30, 2019, and an increase of $112.1 million, or 8.4%, from $1.34 billion at December 31, 2018;
  • Total deposits were $1.48 billion at December 31, 2019, an increase of $47.0 million, or 3.3%, from $1.43 billion at September 30, 2019, and an increase of $35.6 million, or 2.5%, from $1.44 billion at December 31, 2018;
  • The Company completed the publicly announced $6.5 million share repurchase program in October 2019 (repurchased 396,715 shares of its common stock since its commencement in March 2019) and the Board of Directors approved a new repurchase program of $6.5 million to commence shortly following issuance of this press release and continuing until November 20, 2021; and
  • The Company declared a cash dividend of $0.08 per common share for the fourth quarter of 2019 compared with $0.06 per common share for the third quarter of 2019 and $0.03 per common share for the fourth quarter of 2018.

“We are pleased to report a disciplined loan and deposit growth. During the fourth quarter of 2019, our loan portfolio increased $61.4 million or 17.6% annualized to $1.45 billion and our deposit balance increased $47.0 million or 13.1% annualized to $1.48 billion,” stated Henry Kim, President and Chief Executive Officer. “Our net income decreased $2.6 million to $4.2 million compared with third quarter of 2019 and the fourth quarter of 2018 primarily due to a $2.5 million charge-off related to a single credit relationship.”

Financial Highlights (Unaudited)

 

 

Three Months Ended

 

Year Ended

($ in thousands, except per share data)

 

12/31/2019

 

9/30/2019

 

% Change

 

12/31/2018

 

% Change

 

12/31/2019

 

12/31/2018

 

% Change

Net income

 

$

4,158

 

 

$

6,785

 

 

(38.7

)%

 

$

6,732

 

 

(38.2

)%

 

$

24,108

 

 

$

24,301

 

 

(0.8

)%

Diluted earnings per common share

 

$

0.26

 

 

$

0.42

 

 

(38.1

)%

 

$

0.41

 

 

(36.6

)%

 

$

1.49

 

 

$

1.65

 

 

(9.7

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

16,660

 

 

$

17,529

 

 

(5.0

)%

 

$

17,856

 

 

(6.7

)%

 

$

69,034

 

 

$

65,748

 

 

5.0

%

Provision (reversal) for loan losses

 

4,030

 

 

(102

)

 

NM

 

294

 

 

1,270.7

%

 

4,237

 

 

1,231

 

 

244.2

%

Noninterest income

 

3,604

 

 

2,802

 

 

28.6

%

 

2,239

 

 

61.0

%

 

11,869

 

 

10,454

 

 

13.5

%

Noninterest expense

 

10,265

 

 

10,777

 

 

(4.8

)%

 

10,135

 

 

1.3

%

 

42,315

 

 

40,226

 

 

5.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (1)

 

0.96

%

 

1.55

%

 

 

 

1.60

%

 

 

 

1.40

%

 

1.53

%

 

 

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

 

7.25

%

 

12.02

%

 

 

 

12.92

%

 

 

 

10.88

%

 

14.26

%

 

 

Net interest margin (1)

 

3.96

%

 

4.11

%

 

 

 

4.33

%

 

 

 

4.11

%

 

4.23

%

 

 

Efficiency ratio (3)

 

50.66

%

 

53.01

%

 

 

 

50.44

%

 

 

 

52.30

%

 

52.79

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in thousands, except per share data)

 

12/31/2019

 

9/30/2019

 

% Change

 

12/31/2018

 

% Change

Total assets

 

$

1,746,328

 

 

$

1,699,446

 

 

2.8

%

 

$

1,697,028

 

 

2.9

%

Net loans held-for-investment

 

1,436,451

 

 

1,376,736

 

 

4.3

%

 

1,325,515

 

 

8.4

%

Total deposits

 

1,479,307

 

 

1,432,262

 

 

3.3

%

 

1,443,753

 

 

2.5

%

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

 

$

14.44

 

 

$

14.30

 

 

1.0

%

 

$

13.16

 

 

9.7

%

Tier 1 leverage ratio (consolidated)

 

13.23

%

 

12.87

%

 

 

 

12.60

%

 

 

Total shareholders’ equity to total assets (2)

 

12.99

%

 

13.22

%

 

 

 

12.39

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(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)

The ratios are calculated by dividing total shareholdersequity by the number of outstanding common shares.

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)

 

12/31/2019

 

9/30/2019

 

% Change

 

12/31/2018

 

% Change

 

12/31/2019

 

12/31/2018

 

% Change

Interest income/expense on:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

20,888

 

 

$

21,876

 

 

(4.5

)%

 

$

21,088

 

 

(0.9

)%

 

$

85,667

 

 

$

76,837

 

 

11.5

%

Investment securities

 

823

 

 

978

 

 

(15.8

)%

 

1,076

 

 

(23.5

)%

 

3,956

 

 

3,724

 

 

6.2

%

Other interest-earning assets

 

565

 

 

833

 

 

(32.2

)%

 

1,067

 

 

(47.0

)%

 

3,322

 

 

3,138

 

 

5.9

%

Total interest-earning assets

 

22,276

 

 

23,687

 

 

(6.0

)%

 

23,231

 

 

(4.1

)%

 

92,945

 

 

83,699

 

 

11.0

%

Interest-bearing deposits

 

5,514

 

 

6,060

 

 

(9.0

)%

 

5,239

 

 

5.2

%

 

23,439

 

 

17,340

 

 

35.2

%

Borrowings

 

102

 

 

98

 

 

4.1

%

 

136

 

 

(25.0

)%

 

472

 

 

611

 

 

(22.7

)%

Total interest-bearing liabilities

 

5,616

 

 

6,158

 

 

(8.8

)%

 

5,375

 

 

4.5

%

 

23,911

 

 

17,951

 

 

33.2

%

Net interest income

 

$

16,660

 

 

$

17,529

 

 

(5.0

)%

 

$

17,856

 

 

(6.7

)%

 

$

69,034

 

 

$

65,748

 

 

5.0

%

Average balance of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

1,415,781

 

 

$

1,396,437

 

 

1.4

%

 

$

1,319,403

 

 

7.3

%

 

$

1,383,562

 

 

$

1,264,166

 

 

9.4

%

Investment securities

 

146,454

 

 

161,528

 

 

(9.3

)%

 

165,554

 

 

(11.5

)%

 

160,803

 

 

154,266

 

 

4.2

%

Other interest-earning assets

 

108,919

 

 

135,774

 

 

(19.8

)%

 

152,894

 

 

(28.8

)%

 

134,870

 

 

137,627

 

 

(2.0

)%

Total interest-earning assets

 

$

1,671,154

 

 

$

1,693,739

 

 

(1.3

)%

 

$

1,637,851

 

 

2.0

%

 

$

1,679,235

 

 

$

1,556,059

 

 

7.9

%

Interest-bearing deposits

 

$

1,097,957

 

 

$

1,126,376

 

 

(2.5

)%

 

$

1,100,517

 

 

(0.2

)%

 

$

1,120,880

 

 

$

1,053,773

 

 

6.4

%

Borrowings

 

21,141

 

 

20,326

 

 

4.0

%

 

30,000

 

 

(29.5

)%

 

25,388

 

 

34,904

 

 

(27.3

)%

Total interest-bearing liabilities

 

$

1,119,098

 

 

$

1,146,702

 

 

(2.4

)%

 

$

1,130,517

 

 

(1.0

)%

 

$

1,146,268

 

 

$

1,088,677

 

 

5.3

%

Annualized average yield/cost of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

5.85

%

 

6.22

%

 

 

 

6.34

%

 

 

 

6.19

%

 

6.08

%

 

 

Investment securities

 

2.23

%

 

2.40

%

 

 

 

2.58

%

 

 

 

2.46

%

 

2.41

%

 

 

Other interest-earning assets

 

2.06

%

 

2.43

%

 

 

 

2.77

%

 

 

 

2.46

%

 

2.28

%

 

 

Total interest-earning assets

 

5.29

%

 

5.55

%

 

 

 

5.63

%

 

 

 

5.53

%

 

5.38

%

 

 

Interest-bearing deposits

 

1.99

%

 

2.13

%

 

 

 

1.89

%

 

 

 

2.09

%

 

1.65

%

 

 

Borrowings

 

1.91

%

 

1.91

%

 

 

 

1.80

%

 

 

 

1.86

%

 

1.75

%

 

 

Total interest-bearing liabilities

 

1.99

%

 

2.13

%

 

 

 

1.89

%

 

 

 

2.09

%

 

1.65

%

 

 

Net interest margin

 

3.96

%

 

4.11

%

 

 

 

4.33

%

 

 

 

4.11

%

 

4.23

%

 

 

Supplementary information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net accretion of discount (premium) on loans included in interest on loans

 

$

938

 

 

$

1,031

 

 

(9.0

)%

 

$

1,340

 

 

(30.0

)%

 

$

4,022

 

 

$

4,397

 

 

(8.5

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans. The decreases in average yield for the current quarter compared with the previous and year-ago quarters were primarily due to the lower market rates. The increase in average yield for the current year compared with the previous year was primarily due to the rising interest rate environment in 2018 and higher average market rates in 2019. The Company had benefited from its high proportion of variable rate loans that had repriced along with such interest rate environment; however, the Company strategically had increased the proportion of fixed rate loans throughout the current year in order to better-position its balance sheet to match the current and potential future interest rate environment.

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:

 

 

12/31/2019

 

9/30/2019

 

12/31/2018

 

 

% to Total

Loans

 

Weighted-

Average

Contractual

Rate

 

% to Total

Loans

 

Weighted-

Average

Contractual

Rate

 

% to Total

Loans

 

Weighted-

Average

Contractual

Rate

Fixed rate loans

 

43.4

%

 

5.20

%

 

40.5

%

 

5.26

%

 

34.4

%

 

5.13

%

Variable rate loans

 

56.6

%

 

5.51

%

 

59.5

%

 

5.88

%

 

65.6

%

 

6.30

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Securities. The decreases in average yield for the current quarter compared with the previous and year-ago quarters were primarily due to an increase in premium amortization from a higher prepayment trend in the current quarter. The increase in average yield for the current year compared with the previous year was primarily due to additional purchases of investment securities along with the higher average market rates in 2019. During the current year, the Company purchased $14.1 million of investment securities.

Other Interest-Earning Assets. The average yield on other interest-bearing assets is closely related to the changes in market rates, as the Company maintains most of its cash at the Federal Reserve Bank account. The decreases in average yield for the current quarter compared with the previous and year-ago quarters were primarily due to the lower market rates. The increase in average yield for the current year compared with the previous year was primarily due to the rising interest rate environment in 2018 and higher average market rates in 2019. The average balance for the current quarter decreased as loan growth was mainly supported by the Company’s cash on deposit at the Federal Reserve Bank.

Interest-Bearing Deposits. The decrease in average cost for the current quarter compared with the previous quarter was primarily due to the recent decreases in market rates; however, the impact was smaller than the change in average yield on interest-earning assets due to high competition in the Company’s deposit target markets. The increase in average cost for the current year compared with the previous year was primarily due to the higher average market rates in 2019.

Borrowings. The Company had fixed rate term advances from FHLB of $20.0 million with a weighted average rate of 1.92% and original maturity terms ranging from 3 to 5 years at December 31, 2019.

Provision (Reversal) for Loan Losses

Provision (reversal) for loan losses was $4.0 million for the current quarter compared with $(102) thousand for the previous quarter and $294 thousand for the year-ago quarter. For the current and previous years, the Company recognized provision for loan losses of $4.2 million and $1.2 million, respectively. The increase was primarily due to an increase in charge-offs in the current quarter with the increase in associated historical loss rates and organic loan growth for the current quarter.

During the current quarter, due to the borrower's financial hardship, the Company recorded a charge-off of $2.5 million on a commercial line of credit, which was originated in 2011, with an outstanding balance of $4.0 million at the time of charge-off. This line had an outstanding balance of $1.6 million at December 31, 2019 and the management believes that the remaining outstanding balance is well collateralized. Due to the increased charge-offs, the reserve for unfunded commitments also increased to $301 thousand at December 31, 2019 from $146 thousand at September 30, 2019 and $139 thousand at December 31, 2018. Provision for unfunded loan commitments was $155 thousand for the current quarter compared with $5 thousand for the previous quarter and $17 thousand for the year-ago quarter. For the current and previous years, the Company recognized provision for unfunded loan commitments of $162 thousand and $18 thousand, respectively.

The Company recorded net charge-offs of $2.7 million for the current quarter compared with $132 thousand for the previous quarter and $223 thousand for the year-ago quarter. For the current and previous years, the Company recorded net charge-offs of $3.0 million and $288 thousand, respectively.

Allowance for loan losses to total loans held-for-investment ratio was 0.99% at December 31, 2019, 0.94% at September 30, 2019, and 0.98% at December 31, 2018. The increase in this ratio was primarily due to an increase in historical loss rates due to the aforementioned charge-off.

Noninterest Income

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

 

 

Three Months Ended

 

Year Ended

($ in thousands)

 

12/31/2019

 

9/30/2019

 

% Change

 

12/31/2018

 

% Change

 

12/31/2019

 

12/31/2018

 

% Change

Gain on sale of loans

 

1,445

 

 

1,540

 

 

(6.2

)%

 

1,083

 

 

33.4

%

 

5,996

 

 

5,560

 

 

7.8

%

Gain on sale of securities available-for-sale

 

786

 

 

 

 

%

 

 

 

%

 

786

 

 

 

 

%

Service charges and fees on deposits

 

407

 

 

405

 

 

0.5

%

 

398

 

 

2.3

%

 

1,544

 

 

1,500

 

 

2.9

%

Loan servicing income

 

652

 

 

534

 

 

22.1

%

 

371

 

 

75.7

%

 

2,309

 

 

2,160

 

 

6.9

%

Other income

 

314

 

 

323

 

 

(2.8

)%

 

387

 

 

(18.9

)%

 

1,234

 

 

1,234

 

 

%

Total noninterest income

 

$

3,604

 

 

$

2,802

 

 

28.6

%

 

$

2,239

 

 

61.0

%

 

$

11,869

 

 

$

10,454

 

 

13.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

12/31/2019

 

9/30/2019

 

% Change

 

12/31/2018

 

% Change

 

12/31/2019

 

12/31/2018

 

% Change

Gain on sale of SBA loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sold loan balance

 

$

27,072

 

 

$

22,186

 

 

22.0

%

 

$

26,158

 

 

3.5

%

 

$

99,609

 

 

$

91,700

 

 

8.6

%

Premium received

 

2,067

 

 

2,061

 

 

0.3

%

 

1,630

 

 

26.8

%

 

8,355

 

 

7,671

 

 

8.9

%

Gain recognized

 

1,428

 

 

1,498

 

 

(4.7

)%

 

1,059

 

 

34.8

%

 

5,915

 

 

5,278

 

 

12.1

%

Gain on sale of residential property loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sold loan balance

 

$

2,636

 

 

$

4,661

 

 

(43.4

)%

 

$

702

 

 

275.5

%

 

$

10,068

 

 

$

11,601

 

 

(13.2

)%

Gain recognized

 

17

 

 

42

 

 

(59.5

)%

 

6

 

 

183.3

%

 

81

 

 

220

 

 

(63.2

)%

Gain on sale of other loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sold loan balance

 

$

 

 

$

 

 

%

 

$

1,028

 

 

(100.0

)%

 

$

 

 

$

2,112

 

 

(100.0

)%

Gain recognized

 

 

 

 

 

%

 

18

 

 

(100.0

)%

 

 

 

62

 

 

(100.0

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on Sale of Securities Available-For-Sale. The Company sold securities available-for-sale of $32.8 million during the current quarter.

Service Charges and Fees on Deposits. The increases were primarily due to increases in the balance of transaction based deposit accounts.

Loan Servicing Income. The Company services SBA loans and certain residential property loans that are sold to the secondary market. The increase for the current quarter compared with the previous quarter was primarily due to a decrease in servicing asset amortization due to slow-down of prepayment speed. The following table presents information on loan servicing income for the periods indicated.

 

 

Three Months Ended

 

Year Ended

($ in thousands)

 

12/31/2019

 

9/30/2019

 

% Change

 

12/31/2018

 

% Change

 

12/31/2019

 

12/31/2018

 

% Change

Loan servicing income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Servicing income received

 

$

1,159

 

 

$

1,195

 

 

(3.0

)%

 

$

1,206

 

 

(3.9

)%

 

$

4,691

 

 

$

4,925

 

 

(4.8

)%

Servicing assets amortization

 

(507

)

 

(661

)

 

(23.3

)%

 

(835

)

 

(39.3

)%

 

(2,382

)

 

(2,765

)

 

(13.9

)%

Loan servicing income

 

$

652

 

 

$

534

 

 

22.1

%

 

$

371

 

 

75.7

%

 

$

2,309

 

 

$

2,160

 

 

6.9

%

Underlying loans at end of period

 

$

498,616

 

 

$

493,923

 

 

1.0

%

 

$

506,657

 

 

(1.6

)%

 

$

498,616

 

 

$

506,657

 

 

(1.6

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expense

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

 

 

Three Months Ended

 

Year Ended

($ in thousands)

 

12/31/2019

 

9/30/2019

 

% Change

 

12/31/2018

 

% Change

 

12/31/2019

 

12/31/2018

 

% Change

Salaries and employee benefits

 

$

6,016

 

 

$

6,901

 

 

(12.8

)%

 

$

6,234

 

 

(3.5

)%

 

$

26,139

 

 

$

24,473

 

 

6.8

%

Occupancy and equipment

 

1,417

 

 

1,408

 

 

0.6

%

 

1,358

 

 

4.3

%

 

5,545

 

 

4,992

 

 

11.1

%

Professional fees

 

622

 

 

664

 

 

(6.3

)%

 

452

 

 

37.6

%

 

2,730

 

 

2,176

 

 

25.5

%

Marketing and business promotion

 

501

 

 

292

 

 

71.6

%

 

526

 

 

(4.8

)%

 

1,550

 

 

2,010

 

 

(22.9

)%

Data processing

 

361

 

 

348

 

 

3.7

%

 

309

 

 

16.8

%

 

1,365

 

 

1,220

 

 

11.9

%

Director fees and expenses

 

189

 

 

188

 

 

0.5

%

 

281

 

 

(32.7

)%

 

751

 

 

942

 

 

(20.3

)%

Regulatory assessments

 

126

 

 

 

 

%

 

75

 

 

68.0

%

 

551

 

 

544

 

 

1.3

%

Other expenses

 

1,033

 

 

976

 

 

5.8

%

 

900

 

 

14.8

%

 

3,684

 

 

3,869

 

 

(4.8

)%

Total noninterest expense

 

$

10,265

 

 

$

10,777

 

 

(4.8

)%

 

$

10,135

 

 

1.3

%

 

$

42,315

 

 

$

40,226

 

 

5.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and Employee Benefits. The decrease for the current quarter compared with the previous quarter was primarily due to a decrease in bonus accrual of $896 thousand during the current quarter. The increases for the current quarter and year compared with the same periods of 2018 were primarily due to increases in salary and employee benefits, partially offset by a decrease in bonus accrual of $836 thousand. Overall increases in salaries and employee benefits were primarily due to the hiring of new experienced employees with higher salaries in order to support the expansion of the Company's infrastructure for being a public company and to enhance the controls and processes on Bank Secrecy Act and Anti-Money Laundering (“BSA/AML”) compliance.

Occupancy and Equipment. The increases for the current quarter and year were primarily due to an establishment of new loan production office in Artesia, California in December 2018 and an increase in equipment maintenance expense.

Professional Fees. The decrease for the current quarter compared with the previous quarter was primarily due to a decrease in expense related to the Bank's BSA/AML compliance review, partially offset by increases in audit and other professional fees. The increases for the current quarter and year compared with the same periods of 2018 were primarily due to increases in audit and other professional fees for being a public company and expense related to enhancement of the Bank's controls and processes on BSA/AML compliance programs, partially offset by decreases in legal and professional fees attributed to the portion of expenses related the Company's initial public offering in 2018 that were not capitalized.

Director Fees and Expenses. The decrease was primarily due to a fewer number of directors for the current year.

Regulatory Assessments. The increase for the current year compared with the previous year was primary due to an increase in assessment rate from the consent order relating to the Bank’s compliance with BSA/AML, partially offset by a small bank assessment credit from the FDIC during the current year. The Company would have recognized regulatory assessments expense of $242 thousand and $228 thousand, respectively, for the current and previous quarters without the small bank assessment credit.

Other Expenses. The decrease in the current year compared with the previous year was primarily due to a $577 thousand reimbursement paid to the SBA in 2018, partially offset by increases in other loan related legal and office expenses as well as an increase in provision for unfunded loan commitments.

Balance Sheet (Unaudited)

Loans

The following table presents a composition of total loans (includes both loans held-for-sale and loans held-for-investment, net of deferred costs (fees)) as of the dates indicated:

($ in thousands)

 

12/31/2019

 

9/30/2019

 

% Change

 

12/31/2018

 

% Change

Real estate loans:

 

 

 

 

 

 

 

 

 

 

Commercial property

 

$

803,014

 

 

$

759,881

 

 

5.7

%

 

$

709,409

 

 

13.2

%

Residential property

 

235,046

 

 

236,382

 

 

(0.6

)%

 

233,816

 

 

0.5

%

SBA property

 

129,837

 

 

126,347

 

 

2.8

%

 

120,939

 

 

7.4

%

Construction

 

19,164

 

 

17,175

 

 

11.6

%

 

27,323

 

 

(29.9

)%

Commercial and industrial loans:

 

 

 

 

 

 

 

 

 

 

Commercial term

 

103,380

 

 

105,433

 

 

(1.9

)%

 

102,133

 

 

1.2

%

Commercial lines of credit

 

111,768

 

 

95,997

 

 

16.4

%

 

91,994

 

 

21.5

%

SBA commercial term

 

25,332

 

 

25,326

 

 

%

 

27,147

 

 

(6.7

)%

Other consumer loans

 

23,290

 

 

23,289

 

 

%

 

25,921

 

 

(10.2

)%

Loans held-for-investment

 

1,450,831

 

1,389,830

 

4.4

%

 

1,338,682

 

8.4

%

Loans held-for-sale

 

1,975

 

1,583

 

24.8

%

 

5,781

 

(65.8

)%

Total loans

 

$

1,452,806

 

 

$

1,391,413

 

 

4.4

%

 

$

1,344,463

 

 

8.1

%

 

 

 

 

 

 

 

 

 

 

 

 

The increase in loans held-for-investment for the current quarter was primarily due to new funding of $128.1 million and advances on lines of credit of $26.6 million, partially offset by pay-downs and pay-offs of $90.6 million. The increase for the current year was primarily due to new funding of $381.0 million and advances on lines of credit of $109.2 million, partially offset by pay-downs and pay-offs of $373.6 million.

The increase in loans held-for-sale for the current quarter was primarily due to new funding of $30.1 million, partially offset by sales of $29.7 million. The decrease in loans held-for-sale for the current year was primarily due to sales of $109.7 million, partially offset by new funding of $105.2 million and a loan transferred from loans held-for-investment of $824 thousand.

Credit Quality

The following table presents compositions of non-performing loans and non-performing assets as of the dates indicated:

($ in thousands)

 

12/31/2019

 

9/30/2019

 

% Change

 

12/31/2018

 

% Change

Nonaccrual loans:

 

 

 

 

 

 

 

 

 

 

Real estate loans:

 

 

 

 

 

 

 

 

 

 

Residential property

 

$

 

 

$

 

 

%

 

$

302

 

 

(100.0

)%

SBA property

 

442

 

1,441

 

(69.3

)%

 

540

 

(18.1

)%

Commercial and industrial loans:

 

 

 

 

 

 

 

 

 

 

Commercial lines of credit

 

1,888

 

327

 

477.4

%

 

 

%

SBA commercial term

 

159

 

68

 

133.8

%

 

203

 

(21.7

)%

Consumer loans

 

48

 

7

 

585.7

%

 

16

 

200.0

%

Total nonaccrual loans held-for-investment

 

2,537

 

1,843

 

37.7

%

 

1,061

 

139.1

%

Loans past due 90 days or more and still accruing

 

287

 

 

%

 

 

%

Non-performing loans (“NPLs”)

 

2,824

 

1,843

 

53.2

%

 

1,061

 

166.2

%

Other real estate owned (“OREO”)

 

 

 

%

 

 

%

Non-performing assets (“NPAs”)

 

$

2,824

 

 

$

1,843

 

 

53.2

%

 

$

1,061

 

 

166.2

%

Loans past due and still accruing:

 

 

 

 

 

 

 

 

 

 

Loans past due 30 to 59 days and still accruing

 

$

893

 

 

$

664

 

 

34.5

%

 

$

368

 

 

142.7

%

Loans past due 60 to 89 days and still accruing

 

925

 

59

 

1,467.8

%

 

9

 

10,177.8

%

Loans past due 90 days or more and still accruing

 

287

 

 

%

 

 

%

Total loans past due and still accruing

 

$

2,105

 

 

$

723

 

 

191.1

%

 

377

 

458.4

%

Troubled debt restructurings (“TDRs”):

 

 

 

 

 

 

 

 

 

Accruing TDRs

 

$

700

 

 

$

713

 

 

(1.8

)%

 

$

432

 

 

62.0

%

Nonaccrual TDRs

 

121

 

249

 

(51.4

)%

 

131

 

(7.6

)%

Total TDRs

 

$

821

 

 

$

962

 

 

(14.7

)%

 

$

563

 

 

45.8

%

NPLs to loans held-for-investment

 

0.19

%

 

0.13

%

 

 

 

0.08

%

 

 

NPAs to total assets

 

0.16

%

 

0.11

%

 

 

 

0.06

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The increase of nonaccrual commercial lines of credit was primarily due to the line with an outstanding balance of $1.6 million, which had the charge-off of $2.5 million during the current quarter.

The increase of total loans past due and still accruing during the current quarter was primarily due to two SBA property loans with an aggregated outstanding balance of $793 thousand and a residential property loan with a outstanding balance of $698 thousand that became past due during the current quarter. The Company also had a SBA commercial term loan past due 90 days or more and still accruing, which management believes that the loan is well secured and the Bank is in the process of collection.

Classified Assets

Classified loans were $8.9 million at December 31, 2019, an increase of $984 thousand, or 12.5%, from $7.9 million at September 30, 2019 and an increase of $2.0 million, or 29.1%, from $6.9 million at December 31, 2018.

Classified assets, which consist of classified loans and OREO, and the classified assets to total assets ratios were $8.9 million and 0.51%, respectively, at December 31, 2019, $7.9 million and 0.46%, respectively, at September 30, 2019, and $6.9 million and 0.40%, respectively, at December 31, 2018.

Investment Securities

Total investment securities were $117.7 million at December 31, 2019, a decrease of $38.5 million, or 24.6%, from $156.2 million at September 30, 2019 and a decrease of $51.0 million, or 30.2%, from $168.8 million at December 31, 2018. The decrease for the current quarter was primarily due to the sale of $32.8 million of securities available-for-sale, as well as principal pay-downs and calls of $10.2 million and net premium amortization of $242 thousand, and a decrease in fair value of securities available-for-sale of $1.0 million, partially offset by purchases of $5.7 million. The decrease for the current year was primarily due to the sale of $32.8 million of securities available-for-sale, as well as principal pay-downs and calls of $33.7 million and net premium amortization of $883 thousand, partially offset by purchases of $14.1 million and an increase in fair value of securities available-for-sale of $2.3 million.

Deposits

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

 

 

12/31/2019

 

9/30/2019

 

12/31/2018

($ in thousands)

 

Amount

 

% to Total

 

Amount

 

% to Total

 

Amount

 

% to Total

Noninterest-bearing demand deposits

 

$

360,039

 

 

24.3

%

 

$

353,448

 

 

24.7

%

 

$

329,270

 

 

22.8

%

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

NOW

 

17,673

 

 

1.2

%

 

16,108

 

 

1.1

%

 

24,683

 

 

1.7

%

Money market accounts

 

307,980

 

 

20.8

%

 

307,663

 

 

21.5

%

 

280,733

 

 

19.4

%

Savings

 

6,492

 

 

0.4

%

 

8,206

 

 

0.6

%

 

8,194

 

 

0.6

%

Time deposits of $250,000 or less

 

405,004

 

 

27.5

%

 

417,549

 

 

29.1

%

 

477,134

 

 

33.0

%

Time deposits of more than $250,000

 

199,726

 

 

13.5

%

 

206,785

 

 

14.4

%

 

181,239

 

 

12.6

%

State and brokered deposits

 

182,393

 

 

12.3

%

 

122,503

 

 

8.6

%

 

142,500

 

 

9.9

%

Total interest-bearing deposits

 

1,119,268

 

 

75.7

%

 

1,078,814

 

 

75.3

%

 

1,114,483

 

 

77.2

%

Total deposits

 

$

1,479,307

 

 

100.0

%

 

$

1,432,262

 

 

100.0

%

 

$

1,443,753

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

The increase for the current quarter was primarily due to new accounts of $232.0 million and net balance increases of $10.9 million on existing accounts, partially offset by closed accounts of $195.9 million. The increase for the current year was primarily due to new accounts of $552.5 million and net balance increases of $766 thousand on existing accounts, partially offset by closed accounts of $493.5 million. The Company began utilizing brokered money market accounts in order to diversify its funding source during the previous quarter and had a total outstanding balance of $10.0 million and $30.0 million, respectively, at September 30, 2019 and December 31, 2019.

Operating Lease Assets and Liabilities

On January 1, 2019, the Company adopted Accounting Standard Update (“ASU”) 2016-02, “Leases (Topic 842),” and all subsequent ASUs that are related to Topic 842. The Company adopted this ASU using the optional transition method with a cumulative effect adjustment to retained earnings without restating prior financial statements for comparable amounts. As a result, the Company recognized right-of-use assets and liabilities of $9.6 million and $10.6 million, respectively, with a cumulative effect adjustment of $53 thousand to retained earnings at the date of adoption.

Shareholders’ Equity

Shareholders’ equity was $226.8 million at December 31, 2019, an increase of $2.2 million, or 1.0%, from $224.6 million at September 30, 2019 and an increase of $16.5 million, or 7.9%, from $210.3 million at December 31, 2018. The increase for the current quarter was primarily due to retention of earnings, an increase in stock options exercised, partially offset by repurchase of common stock, cash dividends paid on common stock and a decrease in accumulated other comprehensive income (loss). The increases for the current year were primarily due to retention of earnings and increases in accumulated other comprehensive income and stock options exercised, partially offset by repurchase of common stock and cash dividends paid on common stock.

On March 28, 2019, the Company’s Board of Directors approved the repurchase of up to $6.5 million of the Company’s common stock through March 27, 2020. The Company completed this program in October 2019 and had repurchased 396,715 shares.

On November 22, 2019, the Company’s Board of Directors approved a new $6.5 million stock repurchase program to commence upon the opening of the Company’s trading window for the first quarter of 2020 and continue through November 20, 2021.

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 and market’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.

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:

 

 

12/31/2019

 

9/30/2019

 

12/31/2018

PCB Bancorp

 

 

 

 

 

 

Common tier 1 capital (to risk-weighted assets)

 

15.87

%

 

16.30

%

 

16.28

%

Total capital (to risk-weighted assets)

 

16.90

%

 

17.27

%

 

17.31

%

Tier 1 capital (to risk-weighted assets)

 

15.87

%

 

16.30

%

 

16.28

%

Tier 1 capital (to average assets)

 

13.23

%

 

12.87

%

 

12.60

%

Pacific City Bank

 

 

 

 

 

 

Common tier 1 capital (to risk-weighted assets)

 

15.68

%

 

16.11

%

 

16.19

%

Total capital (to risk-weighted assets)

 

16.71

%

 

17.08

%

 

17.21

%

Tier 1 capital (to risk-weighted assets)

 

15.68

%

 

16.11

%

 

16.19

%

Tier 1 capital (to average assets)

 

13.06

%

 

12.72

%

 

12.53

%

 

 

 

 

 

 

 

 

About PCB Bancorp

PCB Bancorp, formerly known as Pacific City Financial Corporation, is the bank holding company for Pacific City Bank, a California state chartered bank, offering a full suite of commercial banking services to small to medium-sized businesses, individuals and professionals, primarily in Southern California, and predominantly in Korean-American and other minority communities.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as ‘‘may,’’ “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan,” or words or phases of similar meaning. We caution that the forward-looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control. 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)

 

 

12/31/2019

 

9/30/2019

 

% Change

 

12/31/2018

 

% Change

Assets

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

17,808

 

 

$

22,546

 

 

(21.0

)%

 

$

24,121

 

 

(26.2

)%

Interest-bearing deposits in financial institutions

 

128,420

 

99,366

 

29.2

%

 

138,152

 

(7.0

)%

Total cash and cash equivalents

 

146,228

 

121,912

 

19.9

%

 

162,273

 

(9.9

)%

Securities available-for-sale, at fair value

 

97,566

 

134,602

 

(27.5

)%

 

146,991

 

(33.6

)%

Securities held-to-maturity

 

20,154

 

21,601

 

(6.7

)%

 

21,760

 

(7.4

)%

Total investment securities

 

117,720

 

156,203

 

(24.6

)%

 

168,751

 

(30.2

)%

Loans held-for-sale

 

1,975

 

1,583

 

24.8

%

 

5,781

 

(65.8

)%

Loans held-for-investment, net of deferred loan costs (fees)

 

1,450,831

 

1,389,830

 

4.4

%

 

1,338,682

 

8.4

%

Allowance for loan losses

 

(14,380

)

 

(13,094

)

 

9.8

%

 

(13,167

)

 

9.2

%

Net loans held-for-investment

 

1,436,451

 

1,376,736

 

4.3

%

 

1,325,515

 

8.4

%

Premises and equipment, net

 

3,760

 

4,008

 

(6.2

)%

 

4,588

 

(18.0

)%

Federal Home Loan Bank and other bank stock

 

8,345

 

8,345

 

%

 

7,433

 

12.3

%

Deferred tax assets, net

 

5,288

 

3,389

 

56.0

%

 

3,377

 

56.6

%

Servicing assets

 

6,798

 

6,899

 

(1.5

)%

 

7,666

 

(11.3

)%

Operating lease assets

 

8,991

 

9,561

 

(6.0

)%

 

 

%

Accrued interest receivable and other assets

 

10,772

 

10,810

 

(0.4

)%

 

11,644

 

(7.5

)%

Total assets

 

$

1,746,328

 

 

$

1,699,446

 

 

2.8

%

 

$

1,697,028

 

 

2.9

%

Liabilities

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

360,039

 

 

$

353,448

 

 

1.9

%

 

$

329,270

 

 

9.3

%

Savings, NOW and money market accounts

 

362,179

 

341,980

 

5.9

%

 

313,610

 

15.5

%

Time deposits of $250,000 or less

 

467,363

 

440,049

 

6.2

%

 

519,634

 

(10.1

)%

Time deposits of more than $250,000

 

289,726

 

296,785

 

(2.4

)%

 

281,239

 

3.0

%

Total deposits

 

1,479,307

 

1,432,262

 

3.3

%

 

1,443,753

 

2.5

%

Federal Home Loan Bank advances

 

20,000

 

20,000

 

%

 

30,000

 

(33.3

)%

Operating lease liabilities

 

9,990

 

10,574

 

(5.5

)%

 

 

%

Accrued interest payable and other liabilities

 

10,197

 

11,967

 

(14.8

)%

 

12,979

 

(21.4

)%

Total liabilities

 

1,519,494

 

1,474,803

 

3.0

%

 

1,486,732

 

2.2

%

Commitments and contingent liabilities

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

 

 

 

 

Common stock, no par value

 

169,221

 

169,224

 

%

 

174,366

 

(3.0

)%

Retained earnings

 

57,670

 

54,768

 

5.3

%

 

37,577

 

53.5

%

Accumulated other comprehensive income (loss), net

 

(57

)

 

651

 

(108.8

)%

 

(1,647

)

 

(96.5

)%

Total shareholders’ equity

 

226,834

 

224,643

 

1.0

%

 

210,296

 

7.9

%

Total liabilities and shareholders’ equity

 

$

1,746,328

 

 

$

1,699,446

 

 

2.8

%

 

$

1,697,028

 

 

2.9

%

 

 

 

 

 

 

 

 

 

 

 

Outstanding common shares

 

15,707,016

 

15,710,287

 

 

 

15,977,754

 

 

Book value per common share (1)

 

$

14.44

 

 

$

14.30

 

 

 

 

$

13.16

 

 

 

Total loan to total deposit ratio

 

98.21

%

 

97.15

%

 

 

 

93.12

%

 

 

Noninterest-bearing deposits to total deposits

 

24.34

%

 

24.68

%

 

 

 

22.81

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

Year Ended

 

12/31/2019

 

9/30/2019

 

% Change

 

12/31/2018

 

% Change

 

12/31/2019

 

12/31/2018

 

% Change

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

$

20,888

 

 

$

21,876

 

 

(4.5

)%

 

$

21,088

 

 

(0.9

)%

 

$

85,667

 

 

$

76,837

 

 

11.5

%

Interest on investment securities

823

 

 

978

 

 

(15.8

)%

 

1,076

 

 

(23.5

)%

 

3,956

 

 

3,724

 

 

6.2

%

Interest and dividend on other interest-earning assets

565

 

 

833

 

 

(32.2

)%

 

1,067

 

 

(47.0

)%

 

3,322

 

 

3,138

 

 

5.9

%

Total interest income

22,276

 

 

23,687

 

 

(6.0

)%

 

23,231

 

 

(4.1

)%

 

92,945

 

 

83,699

 

 

11.0

%

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

5,514

 

 

6,060

 

 

(9.0

)%

 

5,239

 

 

5.2

%

 

23,439

 

 

17,340

 

 

35.2

%

Interest on other borrowings

102

 

 

98

 

 

4.1

%

 

136

 

 

(25.0

)%

 

472

 

 

611

 

 

(22.7

)%

Total interest expense

5,616

 

 

6,158

 

 

(8.8

)%

 

5,375

 

 

4.5

%

 

23,911

 

 

17,951

 

 

33.2

%

Net interest income

16,660

 

 

17,529

 

 

(5.0

)%

 

17,856

 

 

(6.7

)%

 

69,034

 

 

65,748

 

 

5.0

%

Provision (reversal) for loan losses

4,030

 

 

(102

)

 

NM

 

294

 

 

1,270.7

%

 

4,237

 

 

1,231

 

 

244.2

%

Net interest income after provision (reversal) for loan losses

12,630

 

 

17,631

 

 

(28.4

)%

 

17,562

 

 

(28.1

)%

 

64,797

 

 

64,517

 

 

0.4

%

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of loans

1,445

 

 

1,540

 

 

(6.2

)%

 

1,083

 

 

33.4

%

 

5,996

 

 

5,560

 

 

7.8

%

Gain on sale of securities available-for-sale

786

 

 

 

 

%

 

 

 

%

 

786

 

 

 

 

%

Service charges and fees on deposits

407

 

 

405

 

 

0.5

%

 

398

 

 

2.3

%

 

1,544

 

 

1,500

 

 

2.9

%

Servicing income

652

 

 

534

 

 

22.1

%

 

371

 

 

75.7

%

 

2,309

 

 

2,160

 

 

6.9

%

Other income

314

 

 

323

 

 

(2.8

)%

 

387

 

 

(18.9

)%

 

1,234

 

 

1,234

 

 

%

Total noninterest income

3,604

 

 

2,802

 

 

28.6

%

 

2,239

 

 

61.0

%

 

11,869

 

 

10,454

 

 

13.5

%

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

6,016

 

 

6,901

 

 

(12.8

)%

 

6,234

 

 

(3.5

)%

 

26,139

 

 

24,473

 

 

6.8

%

Occupancy and equipment

1,417

 

 

1,408

 

 

0.6

%

 

1,358

 

 

4.3

%

 

5,545

 

 

4,992

 

 

11.1

%

Professional fees

622

 

 

664

 

 

(6.3

)%

 

452

 

 

37.6

%

 

2,730

 

 

2,176

 

 

25.5

%

Marketing and business promotion

501

 

 

292

 

 

71.6

%

 

526

 

 

(4.8

)%

 

1,550

 

 

2,010

 

 

(22.9

)%

Data processing

361

 

 

348

 

 

3.7

%

 

309

 

 

16.8

%

 

1,365

 

 

1,220

 

 

11.9

%

Director fees and expenses

189

 

 

188

 

 

0.5

%

 

281

 

 

(32.7

)%

 

751

 

 

942

 

 

(20.3

)%

Regulatory assessments

126

 

 

 

 

%

 

75

 

 

68.0

%

 

551

 

 

544

 

 

1.3

%

Other expenses

1,033

 

 

976

 

 

5.8

%

 

900

 

 

14.8

%

 

3,684

 

 

3,869

 

 

(4.8

)%

Total noninterest expense

10,265

 

 

10,777

 

 

(4.8

)%

 

10,135

 

 

1.3

%

 

42,315

 

 

40,226

 

 

5.2

%

Income before income taxes

5,969

 

 

9,656

 

 

(38.2

)%

 

9,666

 

 

(38.2

)%

 

34,351

 

 

34,745

 

 

(1.1

)%

Income tax expense

1,811

 

 

2,871

 

 

(36.9

)%

 

2,934

 

 

(38.3

)%

 

10,243

 

 

10,444

 

 

(1.9

)%

Net income

$

4,158

 

 

$

6,785

 

 

(38.7

)%

 

$

6,732

 

 

(38.2

)%

 

$

24,108

 

 

$

24,301

 

 

(0.8

)%

Earnings per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.26

 

 

$

0.43

 

 

 

 

$

0.42

 

 

 

 

$

1.52

 

 

$

1.69

 

 

 

Diluted

$

0.26

 

 

$

0.42

 

 

 

 

$

0.41

 

 

 

 

$

1.49

 

 

$

1.65

 

 

 

Average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

15,665,010

 

 

15,816,269

 

 

 

 

15,975,387

 

 

 

 

15,873,383

 

 

14,397,075

 

 

 

Diluted

15,948,793

 

 

16,099,598

 

 

 

 

16,244,837

 

 

 

 

16,172,282

 

 

14,691,370

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend paid per common share

$

0.08

 

 

$

0.06

 

 

 

 

$

0.03

 

 

 

 

$

0.25

 

 

$

0.12

 

 

 

Return on average assets (1)

0.96

%

 

1.55

%

 

 

 

1.60

%

 

 

 

1.40

%

 

1.53

%

 

 

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

7.25

%

 

12.02

%

 

 

 

12.92

%

 

 

 

10.88

%

 

14.26

%

 

 

Efficiency ratio (3)

50.66

%

 

53.01

%

 

 

 

50.44

%

 

 

 

52.30

%

 

52.79

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

12/31/2019

 

9/30/2019

 

12/31/2018

 

 

Average
Balance

 

Interest
Income/
Expense

 

Avg.
Yield/
Rate

 

Average
Balance

 

Interest
Income/
Expense

 

Avg.
Yield/
Rate

 

Average
Balance

 

Interest
Income/
Expense

 

Avg.
Yield/
Rate

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans (1)

 

$

1,415,781

 

 

$

20,888

 

 

5.85

%

 

$

1,396,437

 

 

$

21,876

 

 

6.22

%

 

$

1,319,403

 

 

$

21,088

 

 

6.34

%

Mortgage-backed securities

 

75,121

 

 

452

 

 

2.39

%

 

84,052

 

 

521

 

 

2.46

%

 

80,967

 

 

534

 

 

2.62

%

Collateralized mortgage obligation

 

47,032

 

 

216

 

 

1.82

%

 

50,891

 

 

286

 

 

2.23

%

 

55,666

 

 

359

 

 

2.56

%

SBA loan pool securities

 

18,572

 

 

116

 

 

2.48

%

 

20,751

 

 

133

 

 

2.54

%

 

23,029

 

 

144

 

 

2.48

%

Municipal bonds (2)

 

5,729

 

 

39

 

 

2.70

%

 

5,834

 

 

38

 

 

2.58

%

 

5,892

 

 

39

 

 

2.63

%

Other interest-earning assets

 

108,919

 

 

565

 

 

2.06

%

 

135,774

 

 

833

 

 

2.43

%

 

152,894

 

 

1,067

 

 

2.77

%

Total interest-earning assets

 

1,671,154

 

 

22,276

 

 

5.29

%

 

1,693,739

 

 

23,687

 

 

5.55

%

 

1,637,851

 

 

23,231

 

 

5.63

%

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

18,507

 

 

 

 

 

 

18,927

 

 

 

 

 

 

18,882

 

 

 

 

 

Allowance for loan losses

 

(13,232

)

 

 

 

 

 

(13,273

)

 

 

 

 

 

(12,935

)

 

 

 

 

Other assets

 

33,941

 

 

 

 

 

 

35,564

 

 

 

 

 

 

25,972

 

 

 

 

 

Total noninterest-earning assets

 

39,216

 

 

 

 

 

 

41,218

 

 

 

 

 

 

31,919

 

 

 

 

 

Total assets

 

$

1,710,370

 

 

 

 

 

 

$

1,734,957

 

 

 

 

 

 

$

1,669,770

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

$

349,282

 

 

1,259

 

 

1.43

%

 

$

351,581

 

 

1,432

 

 

1.62

%

 

$

301,700

 

 

1,110

 

 

1.46

%

Savings

 

7,227

 

 

4

 

 

0.22

%

 

7,043

 

 

6

 

 

0.34

%

 

8,364

 

 

8

 

 

0.38

%

Time deposits

 

741,448

 

 

4,251

 

 

2.27

%

 

767,752

 

 

4,622

 

 

2.39

%

 

790,453

 

 

4,121

 

 

2.07

%

Total interest-bearing deposits

 

1,097,957

 

 

5,514

 

 

1.99

%

 

1,126,376

 

 

6,060

 

 

2.13

%

 

1,100,517

 

 

5,239

 

 

1.89

%

Federal Home Loan Bank advances

 

21,141

 

 

102

 

 

1.91

%

 

20,326

 

 

98

 

 

1.91

%

 

30,000

 

 

136

 

 

1.80

%

Total interest-bearing liabilities

 

1,119,098

 

 

5,616

 

 

1.99

%

 

1,146,702

 

 

6,158

 

 

2.13

%

 

1,130,517

 

 

5,375

 

 

1.89

%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

341,683

 

 

 

 

 

 

341,858

 

 

 

 

 

 

320,232

 

 

 

 

 

Other liabilities

 

22,117

 

 

 

 

 

 

22,465

 

 

 

 

 

 

12,281

 

 

 

 

 

Total noninterest-bearing liabilities

 

363,800

 

 

 

 

 

 

364,323

 

 

 

 

 

 

332,513

 

 

 

 

 

Total liabilities

 

1,482,898

 

 

 

 

 

 

1,511,025

 

 

 

 

 

 

1,463,030

 

 

 

 

 

Total shareholders’ equity

 

227,472

 

 

 

 

 

 

223,932

 

 

 

 

 

 

206,740

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

1,710,370

 

 

 

 

 

 

$

1,734,957

 

 

 

 

 

 

$

1,669,770

 

 

 

 

 

Net interest income

 

 

 

$

16,660

 

 

 

 

 

 

$

17,529

 

 

 

 

 

 

$

17,856

 

 

 

Net interest spread (3)

 

 

 

 

 

3.30

%

 

 

 

 

 

3.42

%

 

 

 

 

 

3.74

%

Net interest margin (4)

 

 

 

 

 

3.96

%

 

 

 

 

 

4.11

%

 

 

 

 

 

4.33

%

Total deposits

 

$

1,439,640

 

 

$

5,514

 

 

1.52

%

 

$

1,468,234

 

 

$

6,060

 

 

1.64

%

 

$

1,420,749

 

 

$

5,239

 

 

1.46

%

Total funding (5)

 

$

1,460,781

 

 

$

5,616

 

 

1.53

%

 

$

1,488,560

 

 

$

6,158

 

 

1.64

%

 

$

1,450,749

 

 

$

5,375

 

 

1.47

%

 

(1)

Total loans include both loans held-for-sale and loans held-for-investment, net of deferred loan costs (fees).

(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

Average Balance, Average Yield, and Average Rate (Unaudited)

($ in thousands)

 

 

Year Ended

 

 

12/31/2019

 

12/31/2018

 

 

Average
Balance

 

Interest
Income/
Expense

 

Avg.
Yield/
Rate

 

Average
Balance

 

Interest
Income/
Expense

 

Avg.
Yield/
Rate

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Total loans (1)

 

$

1,383,562

 

 

$

85,667

 

 

6.19

%

 

$

1,264,166

 

 

$

76,837

 

 

6.08

%

Mortgage-backed securities

 

82,848

 

 

2,081

 

 

2.51

%

 

70,971

 

 

1,717

 

 

2.42

%

Collateralized mortgage obligation

 

51,441

 

 

1,185

 

 

2.30

%

 

53,312

 

 

1,272

 

 

2.39

%

SBA loan pool securities

 

20,681

 

 

536

 

 

2.59

%

 

23,671

 

 

576

 

 

2.43

%

Municipal bonds (2)

 

5,833

 

 

154

 

 

2.64

%

 

6,312

 

 

159

 

 

2.52

%

Other interest-earning assets

 

134,870

 

 

3,322

 

 

2.46

%

 

137,627

 

 

3,138

 

 

2.28

%

Total interest-earning assets

 

1,679,235

 

 

92,945

 

 

5.53

%

 

1,556,059

 

 

83,699

 

 

5.38

%

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

18,614

 

 

 

 

 

 

19,079

 

 

 

 

 

Allowance for loan losses

 

(13,197

)

 

 

 

 

 

(12,632

)

 

 

 

 

Other assets

 

35,010

 

 

 

 

 

 

26,827

 

 

 

 

 

Total noninterest-earning assets

 

40,427

 

 

 

 

 

 

33,274

 

 

 

 

 

Total assets

 

$

1,719,662

 

 

 

 

 

 

$

1,589,333

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

$

329,562

 

 

5,162

 

 

1.57

%

 

$

287,131

 

 

3,477

 

 

1.21

%

Savings

 

7,965

 

 

32

 

 

0.40

%

 

8,613

 

 

26

 

 

0.30

%

Time deposits

 

783,353

 

 

18,245

 

 

2.33

%

 

758,029

 

 

13,837

 

 

1.83

%

Total interest-bearing deposits

 

1,120,880

 

 

23,439

 

 

2.09

%

 

1,053,773

 

 

17,340

 

 

1.65

%

Federal Home Loan Bank advances

 

25,388

 

 

472

 

 

1.86

%

 

34,904

 

 

611

 

 

1.75

%

Total interest-bearing liabilities

 

1,146,268

 

 

23,911

 

 

2.09

%

 

1,088,677

 

 

17,951

 

 

1.65

%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

329,731

 

 

 

 

 

 

319,832

 

 

 

 

 

Other liabilities

 

22,087

 

 

 

 

 

 

10,395

 

 

 

 

 

Total noninterest-bearing liabilities

 

351,818

 

 

 

 

 

 

330,227

 

 

 

 

 

Total liabilities

 

1,498,086

 

 

 

 

 

 

1,418,904

 

 

 

 

 

Total shareholders’ equity

 

221,576

 

 

 

 

 

 

170,429

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

1,719,662

 

 

 

 

 

 

$

1,589,333

 

 

 

 

 

Net interest income

 

 

 

$

69,034

 

 

 

 

 

 

$

65,748

 

 

 

Net interest spread (3)

 

 

 

 

 

3.44

%

 

 

 

 

 

3.73

%

Net interest margin (4)

 

 

 

 

 

4.11

%

 

 

 

 

 

4.23

%

Total deposits

 

$

1,450,611

 

 

$

23,439

 

 

1.62

%

 

$

1,373,605

 

 

$

17,340

 

 

1.26

%

Total funding (5)

 

$

1,475,999

 

 

$

23,911

 

 

1.62

%

 

$

1,408,509

 

 

$

17,951

 

 

1.27

%

 

(1)

 

 Total loans include both loans held-for-sale and loans held-for-investment, net of deferred loan costs (fees).

(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.

 

Contacts

Timothy Chang
Executive Vice President & Chief Financial Officer
213-210-2000

Contacts

Timothy Chang
Executive Vice President & Chief Financial Officer
213-210-2000