EX-99.1 2 pcbpr20240425earnings.htm EX-99.1 Document

Exhibit 99.1
pcbbancorp.jpg
PCB Bancorp Reports Earnings of $4.7 million for Q1 2024
Los Angeles, California - April 25, 2024 - PCB Bancorp (the “Company”) (NASDAQ: PCB), the holding company of PCB Bank (the “Bank”), today reported net income of $4.7 million, or $0.33 per diluted common share, for the first quarter of 2024, compared with $5.9 million, or $0.41 per diluted common share, for the previous quarter and $10.3 million, or $0.70 per diluted common share, for the year-ago quarter.
Q1 2024 Highlights
•Net income totaled $4.7 million, or $0.33 per diluted common share;
•Recorded a provision (reversal) for credit losses of $1.1 million for the current quarter compared with $1.7 million for the previous quarter and $(2.8) million for the year-ago quarter;
•Allowance for Credit Losses (“ACL”) on loans to loans held-for-investment ratio was 1.18% at March 31, 2024 compared with 1.19% at December 31, 2023 and 1.18% at March 31, 2023;
•Net interest income was $21.0 million for the current quarter compared with $21.9 million for the previous quarter and $22.4 million for the year-ago quarter. Net interest margin was 3.10% for the current quarter compared with 3.40% for the previous quarter and 3.79% for the year-ago quarter;
•Gain on sale of loans was $1.1 million for the current quarter compared with $803 thousand for the previous quarter and $1.3 million for the year-ago quarter;
•Total assets were $2.85 billion at March 31, 2024, an increase of $64.8 million, or 2.3%, from $2.79 billion at December 31, 2023, and an increase of $353.8 million, or 14.1%, from $2.50 billion at March 31, 2023;
•Loans held-for-investment were $2.40 billion at March 31, 2024, an increase of $74.5 million, or 3.2%, from $2.32 billion at December 31, 2023, and an increase of $305.5 million, or 14.6%, from $2.09 billion at March 31, 2023; and
•Total deposits were $2.40 billion at March 31, 2024, an increase of $51.2 million, or 2.2%, from $2.35 billion at December 31, 2023, and an increase of $261.2 million, or 12.2%, from $2.14 billion at March 31, 2023.
“PCB continued to deliver strong first quarter results with momentum in loan and deposit growth stemming from our ongoing focus on relationship banking and strategic expansions, while maintaining very strong credit metrics,” said Henry Kim, President and Chief Executive Officer. “Currently, we are successfully undergoing our core system conversion that will enhance operational efficiency, functionality, and customer experience.”
“Our first quarter net income of $4.7 million included a total of $1.8 million in non-recurring expenses consisting of core conversion charges of $1.0 million and a SBA recovery demand of $815 thousand. During the quarter loan balance increased 3.1% to $2.4 billion, deposit balance increased 2.2% to $2.4 billion, and we continued to maintain robust ACL to loans ratio of 1.18%, and non-performing assets and classified assets to total assets ratios of 0.17% and 0.27%, respectively. The persistently higher interest rate environment and its effect on our funding costs resulted in further compression in our net interest margin during the quarter. However, we feel that our funding costs have peaked in the first quarter and our net interest margin is at near the bottom.”
Mr. Kim added, “As we look ahead for the rest of the year, PCB continues to be well positioned to deliver solid financial results with strong balance sheet growth and maintain sound asset quality with robust capital levels that are above our peers to operate in uncertain economic circumstances.”
1

Financial Highlights (Unaudited)
($ in thousands, except per share data)
Three Months Ended
3/31/202412/31/2023
% Change
3/31/2023
% Change
Net income$4,685 $5,908 (20.7)%$10,297 (54.5)%
Diluted earnings per common share$0.33 $0.41 (19.5)%$0.70 (52.9)%
Net interest income$20,999 $21,924 (4.2)%$22,414 (6.3)%
Provision (reversal) for credit losses1,090 1,698 (35.8)%(2,778)NM
Noninterest income2,945 2,503 17.7 %3,021 (2.5)%
Noninterest expense16,352 14,469 13.0 %13,754 18.9 %
Return on average assets (1)
0.67 %0.89 %1.69 %
Return on average shareholders’ equity (1)
5.39 %6.82 %12.46 %
Return on average tangible common equity (“TCE”) (1),(2)
6.72 %8.54 %15.70 %
Net interest margin (1)
3.10 %3.40 %3.79 %
Efficiency ratio (3)
68.29 %59.23 %54.08 %
($ in thousands, except per share data)3/31/202412/31/2023% Change3/31/2023% Change
Total assets
$2,854,292 $2,789,506 2.3 %$2,500,524 14.1 %
Net loans held-for-investment
2,369,632 2,295,919 3.2 %2,067,748 14.6 %
Total deposits
2,402,840 2,351,612 2.2 %2,141,689 12.2 %
Book value per common share (4)
$24.54 $24.46 $23.56 
TCE per common share (2)
$19.69 $19.62 $18.72 
Tier 1 leverage ratio (consolidated)
12.73 %13.43 %13.90 %
Total shareholders’ equity to total assets12.26 %12.51 %13.47 %
TCE to total assets (2), (5)
9.84 %10.03 %10.71 %
(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.


2

Result of Operations (Unaudited)
Net Interest Income and Net Interest Margin
The following table presents the components of net interest income for the periods indicated:
Three Months Ended
($ in thousands)3/31/202412/31/2023
% Change
3/31/2023% Change
Interest income/expense on
Loans
$39,251 $37,189 5.5 %$31,229 25.7 %
Investment securities
1,246 1,271 (2.0)%1,102 13.1 %
Other interest-earning assets
3,058 2,491 22.8 %2,205 38.7 %
Total interest-earning assets
43,555 40,951 6.4 %34,536 26.1 %
Interest-bearing deposits
21,967 18,728 17.3 %11,913 84.4 %
Borrowings
589 299 97.0 %209 181.8 %
Total interest-bearing liabilities
22,556 19,027 18.5 %12,122 86.1 %
Net interest income
$20,999 $21,924 (4.2)%$22,414 (6.3)%
Average balance of
Loans
$2,370,027 $2,242,457 5.7 %$2,072,415 14.4 %
Investment securities
140,459 139,227 0.9 %142,079 (1.1)%
Other interest-earning assets
217,002 175,336 23.8 %186,809 16.2 %
Total interest-earning assets
$2,727,488 $2,557,020 6.7 %$2,401,303 13.6 %
Interest-bearing deposits
$1,827,209 $1,650,132 10.7 %$1,410,812 29.5 %
Borrowings
42,187 21,000 100.9 %15,811 166.8 %
Total interest-bearing liabilities
$1,869,396 $1,671,132 11.9 %$1,426,623 31.0 %
Total funding (1)
$2,412,207 $2,249,026 7.3 %$2,114,198 14.1 %
Annualized average yield/cost of 
Loans
6.66 %6.58 %6.11 %
Investment securities
3.57 %3.62 %3.15 %
Other interest-earning assets
5.67 %5.64 %4.79 %
Total interest-earning assets6.42 %6.35 %5.83 %
Interest-bearing deposits
4.84 %4.50 %3.42 %
Borrowings
5.62 %5.65 %5.36 %
Total interest-bearing liabilities4.85 %4.52 %3.45 %
Net interest margin3.10 %3.40 %3.79 %
Cost of total funding (1)
3.76 %3.36 %2.33 %
Supplementary information
Net accretion of discount on loans$573 $806 (28.9)%$671 (14.6)%
Net amortization of deferred loan fees$334 $449 (25.6)%$175 90.9 %
(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.

3

Loans. The increase in average yield for the current quarter was primarily due to increases in overall interest rates on loans, partially offset by decreases in accretion of discount on loans and prepayment fees.
The following table presents a composition of total loans by interest rate type accompanied with the weighted-average contractual rates as of the dates indicated:
3/31/202412/31/20233/31/2023
% to Total LoansWeighted-Average Contractual Rate% to Total LoansWeighted-Average Contractual Rate% to Total LoansWeighted-Average Contractual Rate
Fixed rate loans
20.0 %4.92 %21.2 %4.86 %23.4 %4.64 %
Hybrid rate loans
38.6 %5.01 %39.0 %4.93 %39.0 %4.51 %
Variable rate loans
41.4 %8.46 %39.8 %8.51 %37.6 %8.26 %
Investment Securities. The decrease in average yield for the current quarter compared with the previous quarter was primarily due to a decrease in average balance of net unrealized losses on investment securities. The increase for the current quarter compared with the year-ago quarter was primarily due to higher yield on newly purchased investment securities.
Other Interest-Earning Assets. The increase in average yield for the current quarter was primarily due to increases in interest rate on cash held at the Federal Reserve Bank and dividends received on Federal Home Loan Bank stock.
Interest-Bearing Deposits. The increase in average cost for the current quarter was primarily due to an increase in market rates.
Provision (Reversal) for Credit Losses
The following table presents a composition of provision (reversal) for credit losses for the periods indicated:
Three Months Ended
($ in thousands)3/31/202412/31/2023
% Change
3/31/2023
% Change
Provision (reversal) for credit losses on loans$922 $1,935 (52.4)%$(2,417)(138.1)%
Provision (reversal) for credit losses on off-balance sheet credit exposure168 (237)(170.9)%(361)NM
Total provision (reversal) for credit losses$1,090 $1,698 (35.8)%$(2,778)(139.2)%
The provision for credit losses on loans for the current quarter was primarily due to an increase in loan held-for-investment.
4

Noninterest Income
The following table presents the components of noninterest income for the periods indicated:
Three Months Ended
($ in thousands)3/31/202412/31/2023
% Change
3/31/2023
% Change
Gain on sale of loans
$1,078 $803 34.2 %$1,309 (17.6)%
Service charges and fees on deposits
378 391 (3.3)%344 9.9 %
Loan servicing income
919 751 22.4 %860 6.9 %
Bank-owned life insurance income228 202 12.9 %180 26.7 %
Other income
342 356 (3.9)%328 4.3 %
Total noninterest income
$2,945 $2,503 17.7 %$3,021 (2.5)%
Gain on Sale of Loans. The following table presents information on gain on sale of loans for the periods indicated:
Three Months Ended
($ in thousands)3/31/202412/31/2023% Change3/31/2023% Change
Gain on sale of SBA loans
Sold loan balance
$19,414 $20,751 (6.4)%$27,133 (28.4)%
Premium received
1,596 1,250 27.7 %2,041 (21.8)%
Gain recognized
1,078 803 34.2 %1,309 (17.6)%
Loan Servicing Income. The following table presents information on loan servicing income for the periods indicated:
Three Months Ended
($ in thousands)3/31/202412/31/2023
% Change
3/31/2023
% Change
Loan servicing income
Servicing income received
$1,293 $1,290 0.2 %$1,284 0.7 %
Servicing assets amortization
(374)(539)(30.6)%(424)(11.8)%
Loan servicing income$919 $751 22.4 %$860 6.9 %
Underlying loans at end of period
$540,039 $532,231 1.5 %$540,502 (0.1)%
The Company services SBA loans and certain residential property loans sold to the secondary market.
5

Noninterest Expense
The following table presents the components of noninterest expense for the periods indicated:
Three Months Ended
($ in thousands)3/31/202412/31/2023% Change3/31/2023% Change
Salaries and employee benefits
$9,218 $8,397 9.8 %$8,928 3.2 %
Occupancy and equipment
2,358 2,145 9.9 %1,896 24.4 %
Professional fees
1,084 898 20.7 %732 48.1 %
Marketing and business promotion
319 772 (58.7)%372 (14.2)%
Data processing
402 393 2.3 %412 (2.4)%
Director fees and expenses
232 207 12.1 %180 28.9 %
Regulatory assessments
298 285 4.6 %155 92.3 %
Other expense2,441 1,372 77.9 %1,079 126.2 %
Total noninterest expense
$16,352 $14,469 13.0 %$13,754 18.9 %
Salaries and Employee Benefits. The increase for the current quarter compared with the previous quarter was primarily due to increases in vacation accrual and other employee benefits. The increase for the current quarter compared with the year-ago quarter was primarily due to increases in salaries and incentives tied to sales of SBA loans originated at loan production offices, partially offset by decreases in bonus and vacation accruals. The number of full-time equivalent employees was 272, 270 and 276 as of March 31, 2024, December 31, 2023 and March 31, 2023, respectively.
Occupancy and Equipment. The increase for the current quarter was primarily due to an expansion of headquarters location in the second half of 2023 and the preparation of a relocation of a regional office and two branches into one location in Orange County, California.
Professional Fees. The increase for the current quarter was primarily due to increases in professional fees related to a core system conversion that was completed in April 2024.
Marketing and Business Promotion. The decrease for the current quarter compared with the previous quarter was primarily due to the Company’s 20th anniversary celebration during the previous quarter.
Other Expense. The increase for the current quarter was primarily due to a termination charge for the legacy core system of $508 thousand and an expense of $815 thousand for a reimbursement for an SBA loan guarantee previously paid by the SBA on a loan originated in 2014 that subsequently defaulted and was ultimately determined to be ineligible for the SBA guaranty. The Company retained the legal services of a law firm specializing on matters equivalent to our recovery demand for SBA to reconsider all the evidences in order for us to recoup it ranging from partial to full amount.
6

Balance Sheet (Unaudited)
Total assets were $2.85 billion at March 31, 2024, an increase of $64.8 million, or 2.3%, from $2.79 billion at December 31, 2023, and an increase of $353.8 million, or 14.1%, from $2.50 billion at March 31, 2023. The increase for the current quarter was primarily due to increases in loans held-for-investment.
Loans
The following table presents a composition of total loans (includes both loans held-for-sale and loans held-for-investment) as of the dates indicated:
($ in thousands)3/31/202412/31/2023% Change3/31/2023% Change
Commercial real estate:
Commercial property$874,300 $855,270 2.2 %$780,282 12.0 %
Business property578,903 558,772 3.6 %521,965 10.9 %
Multifamily131,742 132,500 (0.6)%127,012 3.7 %
Construction29,212 24,843 17.6 %15,930 83.4 %
Total commercial real estate1,614,157 1,571,385 2.7 %1,445,189 11.7 %
Commercial and industrial371,934 342,002 8.8 %267,674 39.0 %
Consumer:
Residential mortgage389,888 389,420 0.1 %356,967 9.2 %
Other consumer21,985 20,645 6.5 %22,612 (2.8)%
Total consumer411,873 410,065 0.4 %379,579 8.5 %
Loans held-for-investment2,397,964 2,323,452 3.2 %2,092,442 14.6 %
Loans held-for-sale3,256 5,155 (36.8)%14,352 (77.3)%
Total loans
$2,401,220 $2,328,607 3.1 %$2,106,794 14.0 %
SBA loans included in:
Loans held-for-investment$148,316 $145,603 1.9 %$144,106 2.9 %
Loans held-for-sale$3,256 $5,155 (36.8)%$14,352 (77.3)%
The increase in loans held-for-investment for the current quarter was primarily due to new funding and advances on lines of credit of $468.6 million, partially offset by pay-downs and pay-offs of $393.9 million. The decrease in loans held-for-sale for the current quarter was primarily due to sales of $19.4 million, and pay-downs and pay-offs of $1.6 million, partially offset by new funding of $19.1 million.

The following table presents a composition of off-balance sheet credit exposure as of the dates indicated:
($ in thousands)3/31/202412/31/2023% Change3/31/2023% Change
Commercial property$8,687 $11,634 (25.3)%$6,811 27.5 %
Business property10,196 9,899 3.0 %12,307 (17.2)%
Multifamily1,800 1,800 — %4,500 (60.0)%
Construction22,895 23,739 (3.6)%16,563 38.2 %
Commercial and industrial384,034 351,025 9.4 %279,543 37.4 %
Other consumer992 3,421 (71.0)%399 148.6 %
Total commitments to extend credit428,604 401,518 6.7 %320,123 33.9 %
Letters of credit6,558 6,583 (0.4)%5,400 21.4 %
Total off-balance sheet credit exposure$435,162 $408,101 6.6 %$325,523 33.7 %
7

Credit Quality
The following table presents a summary of non-performing loans and assets, and classified assets as of the dates indicated:
($ in thousands)3/31/202412/31/2023% Change3/31/2023% Change
Nonaccrual loans
Commercial real estate:
Commercial property$932 $958 (2.7)%$— NM
Business property3,455 2,865 20.6 %2,904 19.0 %
Total commercial real estate4,387 3,823 14.8 %2,904 51.1 %
Commercial and industrial111 68 63.2 %11 909.1 %
Consumer:
Residential mortgage436 — NM— NM
Other consumer6 25 (76.0)%45 (86.7)%
Total consumer442 25 1,668.0 %45 882.2 %
Total nonaccrual loans held-for-investment
4,940 3,916 26.1 %2,960 66.9 %
Loans past due 90 days or more and still accruing
— — — %— — %
Non-performing loans (“NPLs”) 4,940 3,916 26.1 %2,960 66.9 %
Other real estate owned (“OREO”)
— 2,558 (100.0)%— — %
Non-performing assets (“NPAs”)
$4,940 $6,474 (23.7)%$2,960 66.9 %
Loans past due and still accruing
Past due 30 to 59 days
$3,412 $1,394 144.8 %$779 338.0 %
Past due 60 to 89 days
1,103 34 3,144.1 %13 8,384.6 %
Past due 90 days or more
— — — %— — %
Total loans past due and still accruing
$4,515 $1,428 216.2 %$792 470.1 %
Special mention loans$1,101 $5,156 (78.6)%$5,527 (80.1)%
Classified assets
Classified loans held-for-investment$7,771 $7,000 11.0 %$6,060 28.2 %
OREO
— 2,558 (100.0)%— — %
Classified assets
$7,771 $9,558 (18.7)%$6,060 28.2 %
NPLs to loans held-for-investment0.21 %0.17 %0.14 %
NPAs to total assets
0.17 %0.23 %0.12 %
Classified assets to total assets
0.27 %0.34 %0.24 %
During the previous quarter, the Company recognized an OREO of $2.6 million by transferring a SBA 7(a) loan, of which its guaranteed portion was previously sold. The Company’s exposure was 25% of the OREO and the SBA was entitled to 75% of the sale price upon the sale of property. The Company sold the property and recognized a gain of $13 thousand during the current quarter.
Allowance for Credit Losses
The following table presents activities in ACL for the periods indicated:
Three Months Ended
($ in thousands)3/31/202412/31/2023% Change3/31/2023% Change
ACL on loans
Balance at beginning of period$27,533 $25,599 7.6 %$24,942 10.4 %
Impact of ASC 326 adoption— — NM1,067 NM
Charge-offs(185)(13)1,323.1 %— NM
Recoveries62 12 416.7 %1,102 (94.4)%
Provision (reversal) for credit losses on loans922 1,935 (52.4)%(2,417)NM
Balance at end of period$28,332 $27,533 2.9 %$24,694 14.7 %
Percentage to loans held-for-investment at end of period1.18 %1.19 %1.18 %
ACL on off-balance sheet credit exposure
Balance at beginning of period$1,277 $1,514 (15.7)%$299 327.1 %
Impact of ASC 326 adoption— — NM1,607 NM
Provision (reversal) for credit losses on off-balance sheet credit exposure168 (237)NM(361)NM
Balance at end of period$1,445 $1,277 13.2 %$1,545 (6.5)%
8

On January 1, 2023, the Company adopted the provisions of ASC 326 through the application of the modified retrospective transition approach. The initial adjustment to the ACL reflects the expected lifetime credit losses associated with the composition of financial assets within the scope of ASC 326 as of January 1, 2023, as well as management’s current expectation of future economic conditions. The Company recorded a net decrease of $1.9 million to the beginning balance of retained earnings as of January 1, 2023 for the cumulative effect adjustment, reflecting an initial adjustment to the ACL on loans of $1.1 million and the ACL on off-balance sheet credit exposures of $1.6 million, net of related deferred tax assets arising from temporary differences of $788 thousand.
Investment Securities
Total investment securities were $138.2 million at March 31, 2024, a decrease of $5.2 million, or 3.6%, from $143.3 million at December 31, 2023, and a decrease of $6.5 million, or 4.5%, from $144.7 million at March 31, 2023. The decrease for the current quarter was primarily due to a fair value decrease of $1.6 million, principal pay-downs of $3.5 million and net premium amortization of $41 thousand.
Deposits
The following table presents the Company’s deposit mix as of the dates indicated:
3/31/202412/31/20233/31/2023
($ in thousands)Amount% to TotalAmount% to TotalAmount% to Total
Noninterest-bearing demand deposits
$538,380 22.4 %$594,673 25.3 %$653,970 30.5 %
Interest-bearing deposits
Savings
6,153 0.3 %6,846 0.3 %7,584 0.4 %
NOW
16,232 0.7 %16,825 0.7 %15,696 0.7 %
Retail money market accounts
461,221 19.0 %397,531 16.8 %436,906 20.3 %
Brokered money market accounts
1 0.1 %1 0.1 %1 0.1 %
Retail time deposits of
$250,000 or less
471,528 19.6 %456,293 19.4 %356,049 16.6 %
More than $250,000
549,550 22.9 %515,702 21.9 %454,464 21.3 %
State and brokered time deposits
359,775 15.0 %363,741 15.5 %217,019 10.1 %
Total interest-bearing deposits
1,864,460 77.6 %1,756,939 74.7 %1,487,719 69.5 %
Total deposits
$2,402,840 100.0 %$2,351,612 100.0 %$2,141,689 100.0 %
Estimated total deposits not covered by deposit insurance$1,017,696 42.4 %$947,294 40.3 %$1,019,689 47.6 %
Total retail deposits were $2.04 billion at March 31, 2024, an increase of $55.2 million, or 2.8%, from $1.99 billion at December 31, 2023, and an increase of $118.4 million, or 6.2%, from $1.92 billion at March 31, 2023.
The decrease in noninterest-bearing demand deposits was primarily due to strong deposit market competition and the migration to interest-bearing deposits. To retain existing and attract new customers, the Bank offers competitive rates on deposit products.
The increase in retail time deposits for the current quarter was primarily due to new accounts of $123.2 million, renewals of the matured accounts of $259.1 million and balance increases of $8.7 million, partially offset by matured and closed accounts of $341.9 million.
Liquidity
The following table presents a summary of the Company’s liquidity position as of March 31, 2024:
($ in thousands)3/31/202412/31/2023% Change
Cash and cash equivalents
$239,791 $242,342 (1.1)%
Cash and cash equivalents to total assets
8.4 %8.7 %
Available borrowing capacity
FHLB advances
$642,726 $602,976 6.6 %
Federal Reserve Discount Window
574,245 528,893 8.6 %
Overnight federal funds lines
65,000 65,000 — %
Total
$1,281,971 $1,196,869 7.1 %
Total available borrowing capacity to total assets
44.9 %42.9 %
9

Shareholders’ Equity
Shareholders’ equity was $350.0 million at March 31, 2024, an increase of $1.1 million, or 0.3%, from $348.9 million at December 31, 2023, and an increase of $13.2 million, or 3.9%, from $336.8 million at March 31, 2023. The increase for the current quarter was primarily due to net income, partially offset by an increase in other comprehensive loss of $1.2 million and cash dividends declared on common stock of $2.6 million.
Stock Repurchases
In 2023, the Company repurchased and retired 512,657 shares of common stock at a weighted-average price of $17.22, totaling $8.8 million. The Company did not repurchase any shares of common stock during the current quarter. As of March 31, 2024, the Company is authorized to purchase 592,724 additional shares under the 2023 stock repurchase program, which expires on August 2, 2024.
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”). The 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 of up to 2%. After the tenth anniversary of the investment date, the dividend rate will be fixed based on the average annual amount of lending in years 2 through 10.
The Company expects to pay the initial quarterly dividend at an annualized dividend rate of 2% beginning in the second quarter of 2024.
Capital Ratios
Based on the Federal Reserve’s Small Bank Holding Company policy, the Company is not currently subject to consolidated minimum capital measurements. At such time as the Company reaches the $3 billion asset level, it will be subject to consolidated capital requirements independent of the Bank. For comparison purposes, the Company’s capital ratios are included in following table, which presents capital ratios for the Company and the Bank as of the dates indicated:
3/31/202412/31/20233/31/2023Well Capitalized Requirements
PCB Bancorp
Common tier 1 capital (to risk-weighted assets)
11.88 %12.23 %13.09 %N/A
Total capital (to risk-weighted assets)
15.93 %16.39 %17.61 %N/A
Tier 1 capital (to risk-weighted assets)
14.71 %15.16 %16.37 %N/A
Tier 1 capital (to average assets)
12.73 %13.43 %13.90 %N/A
PCB Bank
Common tier 1 capital (to risk-weighted assets)
14.37 %14.85 %16.03 %6.5 %
Total capital (to risk-weighted assets)
15.59 %16.07 %17.27 %10.0 %
Tier 1 capital (to risk-weighted assets)
14.37 %14.85 %16.03 %8.0 %
Tier 1 capital (to average assets)
12.44 %13.16 %13.62 %5.0 %
10

About PCB Bancorp
PCB Bancorp is the bank holding company for PCB Bank, a California state chartered bank, offering a full suite of commercial banking services to small to medium-sized businesses, individuals and professionals, primarily in Southern California, and predominantly in Korean-American and other minority communities.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan,” or words or phases of similar meaning. We caution that the forward-looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control, including but not limited to the health of the national and local economies including the impact to the Company and its customers resulting from changes to, and the level of, inflation and interest rates; the Company’s ability to maintain and grow its deposit base; loan demand and continued portfolio performance; the impact of adverse developments at other banks, including bank failures, that impact general sentiment regarding the stability and liquidity of banks that could affect the Company’s liquidity, financial performance and stock price; changes to valuations of the Company’s assets and liabilities including the allowance for credit losses, earning assets, and intangible assets; changes to the availability of liquidity sources including borrowing lines and the ability to pledge or sell certain assets; the Company's ability to attract and retain skilled employees; customers' service expectations; cyber security risks; the Company's ability to successfully deploy new technology; acquisitions and branch and loan production office expansions; operational risks including the ability to detect and prevent errors and fraud; the effectiveness of the Company’s enterprise risk management framework; costs related to litigation; changes in laws, rules, regulations, or interpretations to which the Company is subject; the effects of severe weather events, pandemics, other public health crises, acts of war or terrorism, and other external events on our business. These and other important factors are detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and other filings the Company makes with the SEC, which are available at the SEC’s Internet site (http://www.sec.gov) or from the Company without charge. Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise, except as required by law.
Contact:
Timothy Chang
Executive Vice President & Chief Financial Officer
213-210-2000

11

PCB Bancorp and Subsidiary
Consolidated Balance Sheets (Unaudited)
($ in thousands, except share and per share data)
3/31/202412/31/2023% Change3/31/2023% Change
Assets
Cash and due from banks
$29,432 $26,518 11.0 %$25,801 14.1 %
Interest-bearing deposits in other financial institutions210,359 215,824 (2.5)%164,718 27.7 %
Total cash and cash equivalents
239,791 242,342 (1.1)%190,519 25.9 %
Securities available-for-sale, at fair value
138,170 143,323 (3.6)%144,665 (4.5)%
Loans held-for-sale
3,256 5,155 (36.8)%14,352 (77.3)%
Loans held-for-investment2,397,964 2,323,452 3.2 %2,092,442 14.6 %
Allowance for credit losses on loans(28,332)(27,533)2.9 %(24,694)14.7 %
Net loans held-for-investment
2,369,632 2,295,919 3.2 %2,067,748 14.6 %
Premises and equipment, net
8,892 5,999 48.2 %6,473 37.4 %
Federal Home Loan Bank and other bank stock
12,716 12,716 — %10,183 24.9 %
Other real estate owned, net
— 2,558 (100.0)%— — %
Bank-owned life insurance31,045 30,817 0.7 %30,244 2.6 %
Deferred tax assets, net
— — — %3,753 (100.0)%
Servicing assets
6,544 6,666 (1.8)%7,345 (10.9)%
Operating lease assets
18,255 18,913 (3.5)%5,854 211.8 %
Accrued interest receivable
10,394 9,468 9.8 %7,998 30.0 %
Other assets
15,597 15,630 (0.2)%11,390 36.9 %
Total assets
$2,854,292 $2,789,506 2.3 %$2,500,524 14.1 %
Liabilities
Deposits
Noninterest-bearing demand
$538,380 $594,673 (9.5)%$653,970 (17.7)%
Savings, NOW and money market accounts
483,607 421,203 14.8 %460,187 5.1 %
Time deposits of $250,000 or less
771,303 760,034 1.5 %513,068 50.3 %
Time deposits of more than $250,000
609,550 575,702 5.9 %514,464 18.5 %
Total deposits
2,402,840 2,351,612 2.2 %2,141,689 12.2 %
Federal Home Loan Bank advances
50,000 39,000 28.2 %— NM
Deferred tax liabilities, net266 876 (69.6)%— NM
Operating lease liabilities
19,555 20,137 (2.9)%6,238 213.5 %
Accrued interest payable and other liabilities
31,626 29,009 9.0 %15,767 100.6 %
Total liabilities
2,504,287 2,440,634 2.6 %2,163,694 15.7 %
Commitments and contingent liabilities
Shareholders’ equity
Preferred stock69,141 69,141 — %69,141 — %
Common stock142,734 142,563 0.1 %143,356 (0.4)%
Retained earnings
148,209 146,092 1.4 %133,415 11.1 %
Accumulated other comprehensive loss, net(10,079)(8,924)12.9 %(9,082)11.0 %
Total shareholders’ equity
350,005 348,872 0.3 %336,830 3.9 %
Total liabilities and shareholders’ equity
$2,854,292 $2,789,506 2.3 %$2,500,524 14.1 %
Outstanding common shares
14,263,791 14,260,440 14,297,870 
Book value per common share (1)
$24.54 $24.46 $23.56 
TCE per common share (2)
$19.69 $19.62 $18.72 
Total loan to total deposit ratio
99.93 %99.02 %98.37 %
Noninterest-bearing deposits to total deposits
22.41 %25.29 %30.54 %
(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.
12

PCB Bancorp and Subsidiary
Consolidated Statements of Income (Unaudited)
($ in thousands, except share and per share data)
Three Months Ended
3/31/202412/31/2023% Change3/31/2023% Change
Interest and dividend income
Loans, including fees$39,251 $37,189 5.5 %$31,229 25.7 %
Investment securities1,246 1,271 (2.0)%1,102 13.1 %
Other interest-earning assets3,058 2,491 22.8 %2,205 38.7 %
Total interest income43,555 40,951 6.4 %34,536 26.1 %
Interest expense
Deposits21,967 18,728 17.3 %11,913 84.4 %
Other borrowings589 299 97.0 %209 181.8 %
Total interest expense
22,556 19,027 18.5 %12,122 86.1 %
Net interest income
20,999 21,924 (4.2)%22,414 (6.3)%
Provision (reversal) for credit losses1,090 1,698 (35.8)%(2,778)NM
Net interest income after provision (reversal) for credit losses19,909 20,226 (1.6)%25,192 (21.0)%
Noninterest income
Gain on sale of loans
1,078 803 34.2 %1,309 (17.6)%
Service charges and fees on deposits
378 391 (3.3)%344 9.9 %
Loan servicing income
919 751 22.4 %860 6.9 %
Bank-owned life insurance income228 202 12.9 %180 26.7 %
Other income
342 356 (3.9)%328 4.3 %
Total noninterest income
2,945 2,503 17.7 %3,021 (2.5)%
Noninterest expense
Salaries and employee benefits
9,218 8,397 9.8 %8,928 3.2 %
Occupancy and equipment
2,358 2,145 9.9 %1,896 24.4 %
Professional fees
1,084 898 20.7 %732 48.1 %
Marketing and business promotion
319 772 (58.7)%372 (14.2)%
Data processing
402 393 2.3 %412 (2.4)%
Director fees and expenses
232 207 12.1 %180 28.9 %
Regulatory assessments
298 285 4.6 %155 92.3 %
Other expense2,441 1,372 77.9 %1,079 126.2 %
Total noninterest expense
16,352 14,469 13.0 %13,754 18.9 %
Income before income taxes
6,502 8,260 (21.3)%14,459 (55.0)%
Income tax expense
1,817 2,352 (22.7)%4,162 (56.3)%
Net income
$4,685 $5,908 (20.7)%$10,297 (54.5)%
Earnings per common share
Basic
$0.33 $0.41 $0.71 
Diluted
$0.33 $0.41 $0.70 
Average common shares
Basic
14,235,419 14,223,831 14,419,155 
Diluted
14,330,204 14,316,581 14,574,929 
Dividend paid per common share
$0.18 $0.18 $0.15 
Return on average assets (1)
0.67 %0.89 %1.69 %
Return on average shareholders’ equity (1)
5.39 %6.82 %12.46 %
Return on average TCE (1), (2)
6.72 %8.54 %15.70 %
Efficiency ratio (3)
68.29 %59.23 %54.08 %
(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.
13

PCB Bancorp and Subsidiary
Average Balance, Average Yield, and Average Rate (Unaudited)
($ in thousands)
Three Months Ended
3/31/202412/31/20233/31/2023
Average BalanceInterest Income/ Expense
Avg. Yield/Rate(6)
Average BalanceInterest Income/ Expense
Avg. Yield/Rate(6)
Average BalanceInterest Income/ Expense
Avg. Yield/Rate(6)
Assets
Interest-earning assets
Total loans (1)
$2,370,027 $39,251 6.66 %$2,242,457 $37,189 6.58 %$2,072,415 $31,229 6.11 %
Mortgage-backed securities
101,852 839 3.31 %100,500 855 3.38 %97,578 683 2.84 %
Collateralized mortgage obligation
23,763 254 4.30 %23,970 259 4.29 %26,743 256 3.88 %
SBA loan pool securities
7,317 78 4.29 %7,453 81 4.31 %9,027 82 3.68 %
Municipal bonds (2)
3,300 28 3.41 %3,110 29 3.70 %4,221 34 3.27 %
Corporate bonds4,227 47 4.47 %4,194 47 4.45 %4,510 47 4.23 %
Other interest-earning assets
217,002 3,058 5.67 %175,336 2,491 5.64 %186,809 2,205 4.79 %
Total interest-earning assets
2,727,488 43,555 6.42 %2,557,020 40,951 6.35 %2,401,303 34,536 5.83 %
Noninterest-earning assets
Cash and due from banks21,365 23,034 21,155 
ACL on loans(27,577)(25,663)(26,757)
Other assets
88,532 87,759 75,175 
Total noninterest-earning assets
82,320 85,130 69,573 
Total assets
$2,809,808 $2,642,150 $2,470,876 
Liabilities and Shareholders’ Equity
Interest-bearing liabilities
Deposits
NOW and money market accounts
$453,801 4,665 4.13 %$450,408 4,418 3.89 %$485,962 3,445 2.87 %
Savings
6,196 4 0.26 %6,947 4 0.23 %8,099 5 0.25 %
Time deposits
1,367,212 17,298 5.09 %1,192,777 14,306 4.76 %916,751 8,463 3.74 %
Total interest-bearing deposits
1,827,209 21,967 4.84 %1,650,132 18,728 4.50 %1,410,812 11,913 3.42 %
Other borrowings42,187 589 5.62 %21,000 299 5.65 %15,811 209 5.36 %
Total interest-bearing liabilities
1,869,396 22,556 4.85 %1,671,132 19,027 4.52 %1,426,623 12,122 3.45 %
Noninterest-bearing liabilities
Noninterest-bearing demand
542,811 577,894 687,575 
Other liabilities
47,957 49,389 21,509 
Total noninterest-bearing liabilities
590,768 627,283 709,084 
Total liabilities
2,460,164 2,298,415 2,135,707 
Total shareholders’ equity
349,644 343,735 335,169 
Total liabilities and shareholders’ equity
$2,809,808 $2,642,150 $2,470,876 
Net interest income
$20,999 $21,924 $22,414 
Net interest spread (3)
1.57 %1.83 %2.38 %
Net interest margin (4)
3.10 %3.40 %3.79 %
Total deposits
$2,370,020 $21,967 3.73 %$2,228,026 $18,728 3.33 %$2,098,387 $11,913 2.30 %
Total funding (5)
$2,412,207 $22,556 3.76 %$2,249,026 $19,027 3.36 %$2,114,198 $12,122 2.33 %
(1)Total loans include both loans held-for-sale and loans held-for-investment.
(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.





14

PCB Bancorp and Subsidiary
Non-GAAP Measures
($ in thousands)
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 shareholders’ 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. These non-GAAP measures should not be viewed as substitutes for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP 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
3/31/202412/31/20233/31/2023
Average total shareholders' equity(a)$349,644 $343,735 $335,169 
Less: average preferred stock(b)69,141 69,141 69,141 
Average TCE(c)=(a)-(b)$280,503 $274,594 $266,028 
Net income(d)$4,685 $5,908 $10,297 
Return on average shareholder's equity (1)
(d)/(a)5.39 %6.82 %12.46 %
Return on average TCE (1)
(d)/(c)6.72 %8.54 %15.70 %
(1) Annualized.
($ in thousands, except per share data)3/31/202412/31/20233/31/2023
Total shareholders' equity(a)$350,005 $348,872 $336,830 
Less: preferred stock(b)69,141 69,141 69,141 
TCE(c)=(a)-(b)$280,864 $279,731 $267,689 
Outstanding common shares
(d)14,263,791 14,260,440 14,297,870 
Book value per common share(a)/(d)$24.54 $24.46 $23.56 
TCE per common share(c)/(d)$19.69 $19.62 $18.72 
Total assets(e)$2,854,292 $2,789,506 $2,500,524 
Total shareholders' equity to total assets(a)/(e)12.26 %12.51 %13.47 %
TCE to total assets(c)/(e)9.84 %10.03 %10.71 %
15