Pcb Bancorp · NASDAQ:PCB
Pcb Bancorp — Q3 2020 Earnings Presentation
30 slides from Pcb Bancorp's earnings presentation, Oct 27, 2020
Slide 1: Earnings Results Third Quarter 2020
Earnings Results Third Quarter 2020 October 27, 2020
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation (and oral statements made regarding the subject of this presentation) contains certain “forward- looking statements” that are based on various facts and derived utilizing numerous important assumptions and are subject to known and unknown risks, uncertainties
Slide 3: Introduction
Introduction your Partner • Choice • Bank | 3
Slide 4: Franchise Footprint
Franchise Footprint • Servicing 6 of top 10 Korean-American MSAs in the U.S. through our branches and LPOs (1) (1) Based on total population projected for 2018 by S&P Global Market Intelligence. your Partner • Choice • Bank | 4
Slide 5: Equity Information
Equity Information As of October 23, 2020 Ticker PCB Market Cap $147.6 million Price Per Share $9.60 52 Week Range $7.97 - $17.55 Dividend Yield (Dividend Payout Ratio) 4.17% (40.4% 4Q19-3Q20) Number of Shares 15,379,538 Historical Quarterly Cash Dividend Per Share 0.1 20 0.1 00 25% 0.0 80 33% 0.0 6
Slide 6: Historical Performance
Historical Performance Held-For-Investment Loans ($bn) Deposits ($bn) 1.8 00 CAGR +14.5% 1.8 00 CAGR +12.0% 1.6 00 1.6 00 1.4 00 1.4 00 1.2 00 1.2 00 1.0 00 1.0 00 0.8 00 $1.58 0.8 00 $1.65 $1.45 $1.44 $1.48 $1.34 $1.25 0.6 00 $1.19 0.6 00 $1.09 $1.03 $0.94 0.4 00 $0.84 0.4 00 0.2 00 0.2 00 0.0 00 0
Slide 7: Historical Performance
Historical Performance Return on Average Assets Return on Average Equity 0.0 18 0.1 60 0.0 16 0.1 40 0.0 14 0.1 20 0.0 12 0.1 00 0.0 10 0.0 80 0.0 08 1.53% 14.26% 1.40% 0.0 60 13.10% 12.47% 12.00% 0.0 06 1.25% 1.25% 1.22% 10.88% 0.0 40 0.73% 0.0 04 6.10% 0.0 20 0.0 02 0.0 00 0.0 00 2015 2016 2017 20
Slide 8: COVID-19 Update
COVID-19 Update As of September 30, 2020 o SBA PPP Loans • 1,614 loans with aggregated contractual loan balance of $139.4 million • Origination fee income of $5.7 million and cost of $1.1 million o Loan Modification Related to COVID-19 • 154 customers for aggregated loan balance of $171.6 million o
Slide 9: Recent Financial Performance
Recent Financial Performance your Partner • Choice • Bank | 9
Slide 10: 3Q20 Highlights
3Q20 Highlights As of or For the Quarter Ended o Recorded a provision for loan losses ($ in thousands except per share data) 09/30/20 06/30/20 09/30/19 of $4.3 million in 3Q20 primarily due Income Statement Summary: to an increase in the economic Interest Income $ 19,620 $ 18,973 $ 23,687 uncertaint
Slide 11: Loan Overview
Loan Overview HFI Loan Trend HFI Loan Composition ($ in millions) September 30, 2020 Other Consumer Commercial and Industrial Residential Property 1% YoY +13.6% SBA PPP 13% 13% 1,80 0 9% $1,554 $1,579 1,60 0 Commercial Property - $1,451 $1,451 Commercial Property - $136 Owner Occupied $1,396 $1,390
Slide 12: Loan Interest Rate Mix
Loan Interest Rate Mix Interest Rate Mix(2) (1),(2) New Production by Rate Type ($ in millions) September 30, 2020 6.31% 200 .0 5.91% 6.02% 5.92% Variable (WA Rate: 4.10%) 6.00 % 52% 180 .0 5.20% 5.20% 5.00 % Fixed (WA Rate:4.96%) 4.15% 4.14% 35% 160 .0 Hybrid (WA Rate: 4.98%) 4.00 % 13% 140 .0 $87
Slide 13: SBA PPP Loans
SBA PPP Loans Summary of SBA PPP loans as of September 30, 2020: Unpaid Principal Balance (“UPB”) Remaining Balance of ($ in thousands) # of Loans Carrying Value 2-Year Maturity 5-Year Maturity Origination Fee Origination Cost $50K or Under 1,043 $ 21,551 $ 20,080 $ 1,671 $ 759 $ 559 Between $50K an
Slide 14: Loan Modification
Loan Modification As of September 30, 2020 Summary of loans with modifications related to the COVID-19 pandemic: Currently Modified Previously Carrying Value Weighted-Average Modified Accrued Accrued Payment Interest Interest Loan-to- Interest Carrying Interest ($ in thousands) Deferment Only Total
Slide 15: Loan Modification
Loan Modification From June 30, 2020 to September 30, 2020 Migration of loans with modifications related to the COVID-19 pandemic: Early Re- New Modification ($ in thousands) Jun-20 Termination Expired Modification Modification Type Change Amortization Sep-20 Commercial property Principal deferment
Slide 16: Credit Quality
Credit Quality Non-Performing Assets (“NPAs”) NPAs to Total Assets 6.0 ($ in millions) 0.3 0% 5.0 0.2 5% 4.0 0.2 0% 3.0 0.1 5% $4.5 $4.8 0.25% 0.24% 2.0 $4.0 0.1 0% 0.20% $2.8 0.16% 1.0 $1.7 $1.8 $1.8 0.0 5% 0.10% 0.11% 0.11% $1.1 0.06% 0.0 0.0 0% Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep
Slide 17: Loan Concentration
Loan Concentration Real Estate Loans – Commercial By Property Type Total Loans With Modification Related to COVID-19 % to Carrying Carrying Property ($ in thousands) Value % to Total LTV(1) Value % to Total Type Total LTV(1) Retail (More Than 50%) $ 185,050 18.5% 51.0% $ 22,656 16.4% 12.2% 46.5% Ind
Slide 18: Loan Concentration
Loan Concentration Commercial and Industrial Loans – By Industry Type Total, Excluding Loans with Modification SBA PPP Loans Related to COVID-19 SBA PPP Loans % to Carrying Carrying Industry Carrying ($ in thousands) Value % to Total Value % to Total Type Total Value % to Total General Manufacturing
Slide 19: Loan Concentration
Loan Concentration Geographic Concentration Commercial & Industrial, Real Estate - Commercial Real Estate – Residential Excluding SBA PPP SBA PPP Carrying Carrying Carrying Carrying ($ in thousands) Value % to Total Value % to Total Value % to Total Value % to Total California $ 833,879 83.4% $ 207,
Slide 20: Credit Quality vs. Peers
(1) Credit Quality vs. Peers (2) (3) NPAs / (Total Loans + OREO) Classified Assets to Total Assets September 30, 2020 September 30, 2020 1.4 0% Peer Data as of June 30, 2020 Peer Data as of June 30, 2020 2.0 0% 1.21% 1.87% 1.2 0% 1.8 0% 1.04% 1.6 0% 1.51% 1.0 0% 1.4 0% 0.8 0% 0.74% 1.2 0% 0.63% 1.0
Slide 21: Deposit Overview
Deposit Overview Deposit Trend Deposit Composition ($ in millions) September 30, 2020 Internet Time YoY +15.0% Deposits Retail Time Deposits Retail Other Interest- 2% 1,80 0 29% $1,647 $1,647 Bearing State and Brokered 23% Deposits Noninterest $1,444 $1,448 $1,447 $1,432 $1,479 $1,477 1,60 0 $172 $1
Slide 22: Maturity Schedule
Maturity Schedule Time Deposits State and Brokered Retail Time Deposits Internet Time Deposits Time Deposits Total ($ in thousands) Amount WA Rate Amount WA Rate Amount WA Rate Amount WA Rate Less Than 3 Month $ 107,427 1.69% $ 6,950 0.71% $ 137,000 0.67% $ 251,377 1.11% 3 to 6 Month 170,194 1.58% 7
Slide 23: Profitability
Profitability 15.0 Net Income & PTPP(1) Income Diluted EPS & Adjusted Diluted EPS(1) 13.0 ($ in millions) $0.61 $0.60 $0.63 $0.60 $10.0 $9.8 $9.6 $10.0 $0.57 $0.59 $0.56 $9.3 11.0 $8.6 $9.2 $0.51 9.0 $8.0 7.0 5.0 3.0 $6.7 $6.6 $6.6 $6.8 $0.41 $0.40 $0.40 $0.42 $4.2 $3.6 $3.4 $3.4 $0.26 $0.23 $0.22 $
Slide 24: Noninterest Income
Noninterest Income Noninterest Income Trend SBA Loan Sale Trend ($ in millions) ($ in millions) 9.1% 9.3% 9.0% 10.7% 5.0 70% 65. 00 6.2% 7.4% 7.6% 7.5% 10. 0% 62% 62% 55. 00 5.0 % 4.5 45. 00 6.5% 6.8% 8.0% 5.2% 5.3% 6.0% 5.3% 4.0% 0.0 % 60% 55% 35. 00 -5.0% 51% 4.0 25. 00 48% 15. 00 $26.2 $29.2 $27.
Slide 25: Noninterest Expense
Noninterest Expense (2) Noninterest Expense Trend Efficiency Ratio ($ in millions) 64.1% 70.0 0% 61.8% 62.4% 62.5% 61.9% 62.1% 61.1% 16.0 60.0 0% 3.0 0% 50.0 0% 2.52% 40.0 0% 14.0 2.43% 2.43% 2.48% 2.40% 2.39% 30.0 0% 52.6% 53.0% 53.0% 56.8% 53.0% 51.7% 2.5 0% 20.0 0% 50.4% 50.7% 12.0 10.0 0% 1.98%
Slide 26: Net Interest Margin
Net Interest Margin (1) Yield & Cost 7.00 % 6.34% 6.33% 6.39% 6.22% 5.85% 6.00 % 5.64% 5.00 % 4.73% 4.81% 4.33% 4.22% 4.17% 4.11% 3.96% 3.85% 4.00 % 3.43% 3.22% 3.00 % 2.06% 2.17% 2.13% 1.89% 1.99% 2.00 % 1.77% 1.17% 1.62% 1.69% 1.64% 0.92% 1.47% 1.53% 1.00 % 1.34% 0.85% 0.63% 0.00 % 4Q18 1Q19 2Q19
Slide 27: Capital Ratios & BV Per Share
Capital Ratios & BV Per Share Bank Regulatory Capital Ratios 15.5 0 BV Per Share 18.0 0% September 30, 2020 15.0 0 14.5 0 16.0 0% 14.0 0 13.5 0 $14.91 $14.58 $14.78 14.0 0% $14.30 $14.44 13.0 0 $13.98 $13.57 12.0 0% 12.5 0 $13.16 12.0 0 10.0 0% Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20
Slide 28: Non-GAAP Measures
Non-GAAP Measures Core Deposits Core Deposits are a non-GAAP measure that we use to measure the portion of our total deposits that are thought to be more stable, lower cost and reprice less frequently on average in a rising rate environment. We calculate core deposits as total deposits less time dep
Slide 29: Non-GAAP Measures
Non-GAAP Measures The following table reconciles core deposits to total deposits to its most comparable GAAP measure: ($ in thousands) 12/31/18 03/31/19 06/30/19 09/30/19 12/31/19 03/31/20 06/30/20 09/30/20 Total Deposits $ 1,443,753 $ 1,447,758 $ 1,446,526 $ 1,432,262 $ 1,479,307 $ 1,477,442 $ 1,64
Slide 30: Non-GAAP Measures
Non-GAAP Measures The following table reconciles PTPP income, and adjusted ROAA, ROAE and diluted EPS for PTPP to their most comparable GAAP measures: ($ in thousands) 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 Net Income (a)$ 6,732 $ 6,564 $ 6,601 $ 6,785 $ 4,158 $ 3,572 $ 3,367 $ 3,449 Add: Provision