LOS ANGELES--(BUSINESS WIRE)-- PCB Bancorp (the “Company”) (NASDAQ: PCB), the holding company of Pacific City Bank (the “Bank”), today reported net income of $6.8 million, or $0.42 per diluted common share for the third quarter of 2019, compared with $6.6 million, or $0.40 per diluted common share, for the previous quarter and $6.5 million, or $0.44 per diluted common share, for the year-ago quarter.
Q3 2019 Financial Highlights
- Net income totaled $6.8 million or $0.42 per diluted common share;
- Total assets were $1.70 billion at September 30, 2019, a decrease of $27.0 million, or 1.6%, from $1.73 billion at June 30, 2019, an increase of $2.4 million, or 0.1%, from $1.70 billion at December 31, 2018, and an increase of $35.7 million, or 2.1%, from $1.66 billion at September 30, 2018;
- Loans held-for-investment, net of deferred costs (fees), were $1.39 billion at September 30, 2019, a decrease of $5.7 million, or 0.4%, from $1.40 billion at June 30, 2019, an increase of $51.1 million, or 3.8%, from $1.34 billion at December 31, 2018, and an increase of $80.7 million, or 6.2%, from $1.31 billion at September 30, 2018;
- Total deposits were $1.43 billion at September 30, 2019, a decrease of $14.3 million, or 1.0%, from $1.45 billion at June 30, 2019, a decrease of $11.5 million, or 0.8%, from $1.44 billion at December 31, 2018 and an increase of $12.7 million, or 0.9%, from $1.42 billion at September 30, 2018;
- The Company repurchased 374,069 shares of its common stock totaling $6.1 million under the publicly announced $6.5 million share repurchase program through September 30, 2019; and
- The Company declared a cash dividend of $0.06 per common share.
“We are pleased to report another strong quarterly financial performance for the third quarter of 2019 highlighted by $6.8 million net income, or $0.42 per diluted common share,” stated Henry Kim, President and Chief Executive Officer. “In spite of the challenging environment of declining interest rates, we maintained a net interest margin of 4.11% during the third quarter of 2019. Year-to-date, we maintained a net interest margin of 4.16%.”
Financial Highlights (Unaudited)
Three Months Ended |
Nine Months Ended |
||||||||||||||||||||||||||||
($ in thousands, except per share data) |
9/30/2019 |
6/30/2019 |
% Change |
9/30/2018 |
% Change |
9/30/2019 |
9/30/2018 |
% Change |
|||||||||||||||||||||
Net income |
$ |
6,785 |
$ |
6,601 |
2.8 |
% |
$ |
6,543 |
3.7 |
% |
$ |
19,950 |
$ |
17,569 |
13.6 |
% |
|||||||||||||
Diluted earnings per common share |
$ |
0.42 |
$ |
0.40 |
5.0 |
% |
$ |
0.44 |
(4.5 |
)% |
$ |
1.23 |
$ |
1.25 |
(1.6 |
)% |
|||||||||||||
Net interest income |
$ |
17,529 |
$ |
17,692 |
(0.9 |
)% |
$ |
16,716 |
4.9 |
% |
$ |
52,374 |
$ |
47,892 |
9.4 |
% |
|||||||||||||
Provision (reversal) for loan losses |
(102 |
) |
394 |
(125.9 |
)% |
417 |
(124.5 |
)% |
207 |
937 |
(77.9 |
)% |
|||||||||||||||||
Noninterest income |
2,802 |
3,054 |
(8.3 |
)% |
2,580 |
8.6 |
% |
8,265 |
8,215 |
0.6 |
% |
||||||||||||||||||
Noninterest expense |
10,777 |
10,984 |
(1.9 |
)% |
9,520 |
13.2 |
% |
32,050 |
30,091 |
6.5 |
% |
||||||||||||||||||
Return on average assets (1) |
1.55 |
% |
1.52 |
% |
1.60 |
% |
1.55 |
% |
1.50 |
% |
|||||||||||||||||||
Return on average shareholders’ equity (1), (2) |
12.02 |
% |
12.01 |
% |
14.50 |
% |
12.15 |
% |
14.85 |
% |
|||||||||||||||||||
Net interest margin (1) |
4.11 |
% |
4.17 |
% |
4.17 |
% |
4.16 |
% |
4.19 |
% |
|||||||||||||||||||
Efficiency ratio (3) |
53.01 |
% |
52.95 |
% |
49.34 |
% |
52.85 |
% |
53.63 |
% |
|||||||||||||||||||
($ in thousands, except per share data) |
9/30/2019 |
6/30/2019 |
% Change |
12/31/2018 |
% Change |
9/30/2018 |
% Change |
||||||||||||||||||
Total assets |
$ |
1,699,446 |
$ |
1,726,486 |
(1.6 |
)% |
$ |
1,697,028 |
0.1 |
% |
$ |
1,663,787 |
2.1 |
% |
|||||||||||
Net loans held-for-investment |
1,376,736 |
1,382,229 |
(0.4 |
)% |
1,325,515 |
3.9 |
% |
1,296,027 |
6.2 |
% |
|||||||||||||||
Total deposits |
1,432,262 |
1,446,526 |
(1.0 |
)% |
1,443,753 |
(0.8 |
)% |
1,419,526 |
0.9 |
% |
|||||||||||||||
Book value per common share (2), (4) |
$ |
14.30 |
$ |
13.98 |
2.3 |
% |
$ |
13.16 |
8.7 |
% |
$ |
12.71 |
12.5 |
% |
|||||||||||
Tier 1 leverage ratio (consolidated) |
12.87 |
% |
12.74 |
% |
12.60 |
% |
12.59 |
% |
|||||||||||||||||
Total shareholders’ equity to total assets (2) |
13.22 |
% |
12.94 |
% |
12.39 |
% |
12.20 |
% |
|||||||||||||||||
(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 shareholders’ equity 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 |
Nine Months Ended |
|||||||||||||||||||||||||||||||||
($ in thousands) |
9/30/2019 |
6/30/2019 |
% Change |
9/30/2018 |
% Change |
9/30/2019 |
9/30/2018 |
% Change |
||||||||||||||||||||||||||
Interest income/expense on: |
||||||||||||||||||||||||||||||||||
Loans |
$ |
21,876 |
$ |
21,969 |
(0.4 |
)% |
$ |
19,699 |
11.1 |
% |
$ |
64,779 |
$ |
55,749 |
16.2 |
% |
||||||||||||||||||
Investment securities |
978 |
1,062 |
(7.9 |
)% |
931 |
5.0 |
% |
3,133 |
2,648 |
18.3 |
% |
|||||||||||||||||||||||
Other interest-earning assets |
833 |
999 |
(16.6 |
)% |
866 |
(3.8 |
)% |
2,757 |
2,071 |
33.1 |
% |
|||||||||||||||||||||||
Total interest-earning assets |
23,687 |
24,030 |
(1.4 |
)% |
21,496 |
10.2 |
% |
70,669 |
60,468 |
16.9 |
% |
|||||||||||||||||||||||
Interest-bearing deposits |
6,060 |
6,200 |
(2.3 |
)% |
4,643 |
30.5 |
% |
17,925 |
12,101 |
48.1 |
% |
|||||||||||||||||||||||
Borrowings |
98 |
138 |
(29.0 |
)% |
137 |
(28.5 |
)% |
370 |
475 |
(22.1 |
)% |
|||||||||||||||||||||||
Total interest-bearing liabilities |
6,158 |
6,338 |
(2.8 |
)% |
4,780 |
28.8 |
% |
18,295 |
12,576 |
45.5 |
% |
|||||||||||||||||||||||
Net interest income |
$ |
17,529 |
$ |
17,692 |
(0.9 |
)% |
$ |
16,716 |
4.9 |
% |
$ |
52,374 |
$ |
47,892 |
9.4 |
% |
||||||||||||||||||
Average balance of: |
||||||||||||||||||||||||||||||||||
Loans |
$ |
1,396,437 |
$ |
1,378,910 |
1.3 |
% |
$ |
1,280,352 |
9.1 |
% |
$ |
1,372,704 |
$ |
1,245,551 |
10.2 |
% |
||||||||||||||||||
Investment securities |
161,528 |
167,991 |
(3.8 |
)% |
154,020 |
4.9 |
% |
165,638 |
150,462 |
10.1 |
% |
|||||||||||||||||||||||
Other interest-earning assets |
135,774 |
154,661 |
(12.2 |
)% |
156,831 |
(13.4 |
)% |
143,616 |
132,483 |
8.4 |
% |
|||||||||||||||||||||||
Total interest-earning assets |
$ |
1,693,739 |
$ |
1,701,562 |
(0.5 |
)% |
$ |
1,591,203 |
6.4 |
% |
$ |
1,681,958 |
$ |
1,528,496 |
10.0 |
% |
||||||||||||||||||
Interest-bearing deposits |
$ |
1,126,376 |
$ |
1,143,678 |
(1.5 |
)% |
$ |
1,073,433 |
4.9 |
% |
$ |
1,128,606 |
$ |
1,038,019 |
8.7 |
% |
||||||||||||||||||
Borrowings |
20,326 |
30,166 |
(32.6 |
)% |
30,000 |
(32.2 |
)% |
26,820 |
36,557 |
(26.6 |
)% |
|||||||||||||||||||||||
Total interest-bearing liabilities |
$ |
1,146,702 |
$ |
1,173,844 |
(2.3 |
)% |
$ |
1,103,433 |
3.9 |
% |
$ |
1,155,426 |
$ |
1,074,576 |
7.5 |
% |
||||||||||||||||||
Annualized average yield/cost of: |
||||||||||||||||||||||||||||||||||
Loans |
6.22 |
% |
6.39 |
% |
6.10 |
% |
6.31 |
% |
5.98 |
% |
||||||||||||||||||||||||
Investment securities |
2.40 |
% |
2.54 |
% |
2.40 |
% |
2.53 |
% |
2.35 |
% |
||||||||||||||||||||||||
Other interest-earning assets |
2.43 |
% |
2.59 |
% |
2.19 |
% |
2.57 |
% |
2.09 |
% |
||||||||||||||||||||||||
Total interest-earning assets |
5.55 |
% |
5.66 |
% |
5.36 |
% |
5.62 |
% |
5.29 |
% |
||||||||||||||||||||||||
Interest-bearing deposits |
2.13 |
% |
2.17 |
% |
1.72 |
% |
2.12 |
% |
1.56 |
% |
||||||||||||||||||||||||
Borrowings |
1.91 |
% |
1.83 |
% |
1.81 |
% |
1.84 |
% |
1.74 |
% |
||||||||||||||||||||||||
Total interest-bearing liabilities |
2.13 |
% |
2.17 |
% |
1.72 |
% |
2.12 |
% |
1.56 |
% |
||||||||||||||||||||||||
Net interest margin |
4.11 |
% |
4.17 |
% |
4.17 |
% |
4.16 |
% |
4.19 |
% |
||||||||||||||||||||||||
Supplementary information |
||||||||||||||||||||||||||||||||||
Net accretion of discount (premium) on loans included in interest on loans |
$ |
1,031 |
$ |
1,194 |
(13.7 |
)% |
$ |
1,090 |
(5.4 |
)% |
$ |
3,083 |
$ |
3,057 |
0.9 |
% |
||||||||||||||||||
Loans. The decrease in average yield for the current quarter compared with the previous quarter was primarily due to the recent decreases in market rates. The increases in average yield for the three and nine months ended September 30, 2019 compared with the same periods of 2018 were primarily due to the rising interest rate environment in 2018 and higher 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:
9/30/2019 |
6/30/2019 |
12/31/2018 |
9/30/2018 |
|||||||||||||||||||||
% to Total Loans |
Weighted- Average Contractual Rate |
% to Total Loans |
Weighted- Average Contractual Rate |
% to Total Loans |
Weighted- Average Contractual Rate |
% to Total Loans |
Weighted- Average Contractual Rate |
|||||||||||||||||
Fixed rate loans |
40.5 |
% |
5.26 |
% |
37.8 |
% |
5.24 |
% |
34.4 |
% |
5.13 |
% |
32.3 |
% |
5.10 |
% |
||||||||
Variable rate loans |
59.5 |
% |
5.88 |
% |
62.2 |
% |
6.29 |
% |
65.6 |
% |
6.30 |
% |
67.7 |
% |
6.03 |
% |
||||||||
Investment Securities. The decrease in average yield for the current quarter compared with the previous quarter was primarily due to an increase in premium amortization from a higher prepayment trend in the current quarter. The increase in average yield for the nine months ended September 30, 2019 compared with the same periods of 2018 was primarily due to additional purchases of investment securities along with the rising interest rate environment in 2018 and higher market rates in 2019. The Company did not purchase any investment securities during the current quarter, but purchased new investment securities of $24.3 million during the last 12-month period.
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 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 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.
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 September 30, 2019.
Provision (Reversal) for Loan Losses
Provision (reversal) for loan losses was $(102) thousand for the current quarter compared with $394 thousand for the previous quarter and $417 thousand for the year-ago quarter. The reversal for the current quarter was primarily due to a decrease in loans held-for-investment as well as a decrease in historical loss rates and changes in qualitative adjustment factors. For the nine months ended September 30, 2019 and 2018, the Company recognized provision for loan losses of $207 thousand and $937 thousand, respectively. The Company recorded net charge-offs of $132 thousand for the current quarter compared with net charge-offs of $203 thousand for the previous quarter and net recoveries of $59 thousand for the year-ago quarter. For the nine months ended September 30, 2019 and 2018, the Company recorded net charge-offs of $280 thousand and $64 thousand, respectively.
Allowance for loan losses to total loans held-for-investment ratio was 0.94% at September 30, 2019, 0.96% at June 30, 2019, 0.98% at December 31, 2018, and 1.00% at September 30, 2018. The decrease in this ratio was primarily due to a decrease in historical loss rates and changes in qualitative adjustment factors.
Noninterest Income
The following table presents the components of noninterest income for the periods indicated:
Three Months Ended |
Nine Months Ended |
||||||||||||||||||||||||||||||||||||||
($ in thousands) |
9/30/2019 |
6/30/2019 |
% Change |
9/30/2018 |
% Change |
9/30/2019 |
9/30/2018 |
% Change |
|||||||||||||||||||||||||||||||
Gain on sale of loans |
1,540 |
1,891 |
(18.6 |
)% |
1,328 |
16.0 |
% |
4,551 |
4,477 |
1.7 |
% |
||||||||||||||||||||||||||||
Service charges and fees on deposits |
405 |
368 |
10.1 |
% |
377 |
7.4 |
% |
1,137 |
1,102 |
3.2 |
% |
||||||||||||||||||||||||||||
Loan servicing income |
534 |
492 |
8.5 |
% |
578 |
(7.6 |
)% |
1,657 |
1,789 |
(7.4 |
)% |
||||||||||||||||||||||||||||
Other income |
323 |
303 |
6.6 |
% |
297 |
8.8 |
% |
920 |
847 |
8.6 |
% |
||||||||||||||||||||||||||||
Total noninterest income |
$ |
2,802 |
$ |
3,054 |
(8.3 |
)% |
$ |
2,580 |
8.6 |
% |
$ |
8,265 |
$ |
8,215 |
0.6 |
% |
|||||||||||||||||||||||
Gain on Sale of Loans. The following table presents information on gain on sale of loans for the periods indicated:
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||||||||||||||||
($ in thousands) |
9/30/2019 |
6/30/2019 |
% Change |
9/30/2018 |
% Change |
9/30/2019 |
9/30/2018 |
% Change |
||||||||||||||||||||||||||
Gain on sale of SBA loans |
||||||||||||||||||||||||||||||||||
Sold loan balance |
$ |
22,186 |
$ |
29,168 |
(23.9 |
)% |
$ |
23,108 |
(4.0 |
)% |
$ |
72,537 |
$ |
65,591 |
10.6 |
% |
||||||||||||||||||
Premium received |
2,061 |
2,665 |
(22.7 |
)% |
1,915 |
7.6 |
% |
6,288 |
6,041 |
4.1 |
% |
|||||||||||||||||||||||
Gain recognized |
1,498 |
1,884 |
(20.5 |
)% |
1,306 |
14.7 |
% |
4,487 |
4,219 |
6.4 |
% |
|||||||||||||||||||||||
Gain on sale of residential property loans |
||||||||||||||||||||||||||||||||||
Sold loan balance |
$ |
4,661 |
$ |
375 |
1,142.9 |
% |
$ |
2,217 |
110.2 |
% |
$ |
7,432 |
$ |
10,899 |
(31.8 |
)% |
||||||||||||||||||
Gain recognized |
42 |
7 |
500.0 |
% |
22 |
90.9 |
% |
64 |
213 |
(70.0 |
)% |
|||||||||||||||||||||||
Gain on sale of other loans |
||||||||||||||||||||||||||||||||||
Sold loan balance |
$ |
— |
$ |
— |
— |
% |
$ |
— |
— |
% |
$ |
— |
$ |
1,084 |
(100.0 |
)% |
||||||||||||||||||
Gain recognized |
— |
— |
— |
% |
— |
— |
% |
— |
45 |
(100.0 |
)% |
|||||||||||||||||||||||
Service Charges and Fees on Deposits. The increases were primarily due to an increase in non-sufficient fund charges during the current quarter.
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. During the previous quarter, servicing asset amortization was increased from a higher prepayment trend. The following table presents information on loan servicing income for the periods indicated.
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||||||||||||||||
($ in thousands) |
9/30/2019 |
6/30/2019 |
% Change |
9/30/2018 |
% Change |
9/30/2019 |
9/30/2018 |
% Change |
||||||||||||||||||||||||||
Loan servicing income |
||||||||||||||||||||||||||||||||||
Servicing income received |
$ |
1,195 |
$ |
1,190 |
0.4 |
% |
$ |
1,265 |
(5.5 |
)% |
$ |
3,532 |
$ |
3,719 |
(5.0 |
)% |
||||||||||||||||||
Servicing assets amortization |
(661 |
) |
(698 |
) |
(5.3 |
)% |
(687 |
) |
(3.8 |
)% |
(1,875 |
) |
(1,930 |
) |
(2.8 |
)% |
||||||||||||||||||
Loan servicing income |
$ |
534 |
$ |
492 |
8.5 |
% |
$ |
578 |
(7.6 |
)% |
$ |
1,657 |
$ |
1,789 |
(7.4 |
)% |
||||||||||||||||||
Underlying loans at end of period |
$ |
493,923 |
$ |
504,094 |
(2.0 |
)% |
$ |
533,860 |
(7.5 |
)% |
$ |
493,923 |
$ |
533,860 |
(7.5 |
)% |
||||||||||||||||||
Other Income. The increases were primarily due to increases in wire and remittance fees, and debit card interchanges fees.
Noninterest Expense
The following table presents the components of noninterest expense for the periods indicated:
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||||||||||||||||
($ in thousands) |
9/30/2019 |
6/30/2019 |
% Change |
9/30/2018 |
% Change |
9/30/2019 |
9/30/2018 |
% Change |
||||||||||||||||||||||||||
Salaries and employee benefits |
$ |
6,901 |
$ |
6,600 |
4.6 |
% |
$ |
5,840 |
18.2 |
% |
$ |
20,123 |
$ |
18,239 |
10.3 |
% |
||||||||||||||||||
Occupancy and equipment |
1,408 |
1,407 |
0.1 |
% |
1,244 |
13.2 |
% |
4,128 |
3,634 |
13.6 |
% |
|||||||||||||||||||||||
Professional fees |
664 |
686 |
(3.2 |
)% |
213 |
211.7 |
% |
2,108 |
1,724 |
22.3 |
% |
|||||||||||||||||||||||
Marketing and business promotion |
292 |
529 |
(44.8 |
)% |
555 |
(47.4 |
)% |
1,049 |
1,484 |
(29.3 |
)% |
|||||||||||||||||||||||
Data processing |
348 |
338 |
3.0 |
% |
314 |
10.8 |
% |
1,004 |
911 |
10.2 |
% |
|||||||||||||||||||||||
Director fees and expenses |
188 |
185 |
1.6 |
% |
220 |
(14.5 |
)% |
562 |
661 |
(15.0 |
)% |
|||||||||||||||||||||||
Regulatory assessments |
— |
309 |
(100.0 |
)% |
192 |
(100.0 |
)% |
425 |
469 |
(9.4 |
)% |
|||||||||||||||||||||||
Other expenses |
976 |
930 |
4.9 |
% |
942 |
3.6 |
% |
2,651 |
2,969 |
(10.7 |
)% |
|||||||||||||||||||||||
Total noninterest expense |
$ |
10,777 |
$ |
10,984 |
(1.9 |
)% |
$ |
9,520 |
13.2 |
% |
$ |
32,050 |
$ |
30,091 |
6.5 |
% |
||||||||||||||||||
Salaries and Employee Benefits. Overall, the increases 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 three and nine months ended September 30, 2019 compared with same periods of 2018 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 increases for the three and nine months ended September 30, 2019 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, and a true-up of expenses that were directly related to the initial public offering during the year-ago quarter.
Regulatory Assessments. The decreases were primarily due to a small bank assessment credit from the FDIC during the current quarter, partially offset by an increase in assessment rate from the recent consent order relating to the Bank’s compliance with BSA/AML. The Company would have recognized regulatory assessments expense of $228 thousand without the small bank assessment credit for the current quarter. Regulatory assessments expense for the next quarter is also expected to be reduced by approximately $116 thousand, which is the remaining portion of small bank assessment credit that exceeded the current quarter expense. Regulatory assessment for the previous quarter included an adjustment made for the assessment rate increase for the first quarter of 2019.
Other Expenses. The decrease for the nine months ended September 30, 2019 compared with the same period of 2018 was primarily due to a $577 thousand reimbursement paid to the SBA during the second quarter of 2018, partially offset by increases in other loan related legal and office expenses.
Balance Sheet (Unaudited)
Loans
The following table presents a composition of total loans (includes both loans held-for-sale and loans held-for-investment, net of deferred costs (fees)) as of the dates indicated:
($ in thousands) |
9/30/2019 |
6/30/2019 |
% Change |
12/31/2018 |
% Change |
9/30/2018 |
% Change |
||||||||||||||||||
Real estate loans: |
|||||||||||||||||||||||||
Commercial property |
$ |
759,881 |
$ |
748,526 |
1.5 |
% |
$ |
709,409 |
7.1 |
% |
$ |
702,487 |
8.2 |
% |
|||||||||||
Residential property |
236,382 |
240,630 |
(1.8 |
)% |
233,816 |
1.1 |
% |
214,960 |
10.0 |
% |
|||||||||||||||
SBA property |
126,347 |
128,208 |
(1.5 |
)% |
120,939 |
4.5 |
% |
128,149 |
(1.4 |
)% |
|||||||||||||||
Construction |
17,175 |
22,455 |
(23.5 |
)% |
27,323 |
(37.1 |
)% |
28,838 |
(40.4 |
)% |
|||||||||||||||
Commercial and industrial loans: |
|||||||||||||||||||||||||
Commercial term |
105,433 |
105,651 |
(0.2 |
)% |
102,133 |
3.2 |
% |
96,017 |
9.8 |
% |
|||||||||||||||
Commercial lines of credit |
95,997 |
101,531 |
(5.5 |
)% |
91,994 |
4.4 |
% |
82,591 |
16.2 |
% |
|||||||||||||||
SBA commercial term |
25,326 |
24,762 |
2.3 |
% |
27,147 |
(6.7 |
)% |
28,493 |
(11.1 |
)% |
|||||||||||||||
Other consumer loans |
23,289 |
23,794 |
(2.1 |
)% |
25,921 |
(10.2 |
)% |
27,589 |
(15.6 |
)% |
|||||||||||||||
Loans held-for-investment |
1,389,830 |
1,395,557 |
(0.4 |
)% |
1,338,682 |
3.8 |
% |
1,309,124 |
6.2 |
% |
|||||||||||||||
Loans held-for-sale |
1,583 |
440 |
259.8 |
% |
5,781 |
(72.6 |
)% |
12,957 |
(87.8 |
)% |
|||||||||||||||
Total loans |
$ |
1,391,413 |
$ |
1,395,997 |
(0.3 |
)% |
$ |
1,344,463 |
3.5 |
% |
$ |
1,322,081 |
5.2 |
% |
|||||||||||
The decrease in loans held-for-investment for the current quarter was primarily due to pay-downs and pay-offs of $102.0 million, partially offset by new funding of $70.4 million and advances on lines of credit of $26.6 million. During the current quarter, new funding decreased by $38.8 million compared with the previous quarter primarily due to higher competition and pay-downs and pay-offs also increased by $14.9 million compared with the previous quarter. The increase for the nine months ended September 30, 2019 was primarily due to new funding of $252.9 million and advances on lines of credit of $80.5 million, partially offset by pay-downs and pay-offs of $280.8 million.
The increase in loans held-for-sale for the current quarter was primarily due to new funding of $27.5 million, partially offset by sales of $26.8 million. The decrease in loans held-for-sale for the nine months ended September 30, 2019 was primarily due to sales of $80.0 million, partially offset by new funding of $75.0 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) |
9/30/2019 |
6/30/2019 |
% Change |
12/31/2018 |
% Change |
9/30/2018 |
% Change |
||||||||||||||||||
Nonaccrual loans: |
|||||||||||||||||||||||||
Real estate loans: |
|||||||||||||||||||||||||
Commercial property |
$ |
— |
$ |
— |
— |
% |
$ |
— |
— |
% |
$ |
234 |
(100.0 |
)% |
|||||||||||
Residential property |
— |
— |
— |
% |
302 |
(100.0 |
)% |
— |
— |
% |
|||||||||||||||
SBA property |
1,441 |
1,372 |
5.0 |
% |
540 |
166.9 |
% |
970 |
48.6 |
% |
|||||||||||||||
Commercial and industrial loans: |
|||||||||||||||||||||||||
Commercial lines of credit |
327 |
— |
— |
% |
— |
— |
% |
— |
— |
% |
|||||||||||||||
SBA commercial term |
68 |
16 |
325.0 |
% |
203 |
(66.5 |
)% |
254 |
(73.2 |
)% |
|||||||||||||||
Consumer loans |
7 |
41 |
(82.9 |
)% |
16 |
(56.3 |
)% |
114 |
(93.9 |
)% |
|||||||||||||||
Total nonaccrual loans held-for-investment |
1,843 |
1,429 |
29.0 |
% |
1,061 |
73.7 |
% |
1,572 |
17.2 |
% |
|||||||||||||||
Loans past due 90 days or more and still accruing |
— |
— |
— |
% |
— |
— |
% |
— |
— |
% |
|||||||||||||||
Non-performing loans (“NPLs”) |
1,843 |
1,429 |
29.0 |
% |
1,061 |
73.7 |
% |
1,572 |
17.2 |
% |
|||||||||||||||
Other real estate owned (“OREO”) |
— |
395 |
(100.0 |
)% |
— |
— |
% |
— |
— |
% |
|||||||||||||||
Non-performing assets (“NPAs”) |
$ |
1,843 |
$ |
1,824 |
1.0 |
% |
$ |
1,061 |
73.7 |
% |
$ |
1,572 |
17.2 |
% |
|||||||||||
Loans past due and still accruing: |
|||||||||||||||||||||||||
Loans past due 30 to 59 days and still accruing |
$ |
664 |
$ |
804 |
(17.4 |
)% |
$ |
368 |
80.4 |
% |
$ |
337 |
97.0 |
% |
|||||||||||
Loans past due 60 to 89 days and still accruing |
59 |
5 |
1,080.0 |
% |
9 |
555.6 |
% |
426 |
(86.2 |
)% |
|||||||||||||||
Loans past due 90 days or more and still accruing |
— |
— |
— |
% |
— |
— |
% |
— |
— |
% |
|||||||||||||||
Total loans past due and still accruing |
$ |
723 |
$ |
809 |
(10.6 |
)% |
377 |
91.8 |
% |
$ |
763 |
(5.2 |
)% |
||||||||||||
Troubled debt restructurings (“TDRs”): |
|||||||||||||||||||||||||
Accruing TDRs |
$ |
713 |
$ |
391 |
82.4 |
% |
$ |
432 |
65.0 |
% |
$ |
467 |
52.7 |
% |
|||||||||||
Nonaccrual TDRs |
249 |
131 |
90.1 |
% |
131 |
90.1 |
% |
458 |
(45.6 |
)% |
|||||||||||||||
Total TDRs |
$ |
962 |
$ |
522 |
84.3 |
% |
$ |
563 |
70.9 |
% |
$ |
925 |
4.0 |
% |
|||||||||||
NPLs to loans held-for-investment |
0.13 |
% |
0.10 |
% |
0.08 |
% |
0.12 |
% |
|||||||||||||||||
NPAs to total assets |
0.11 |
% |
0.11 |
% |
0.06 |
% |
0.09 |
% |
|||||||||||||||||
Classified Assets
Classified loans were $7.9 million at September 30, 2019, an increase of $394 thousand, or 5.3%, from $7.5 million at June 30, 2019, an increase of $1.0 million, or 14.8%, from $6.9 million at December 31, 2018, and an increase of $1.6 million, or 26.4%, from $6.2 million at September 30, 2018.
Classified assets, which consist of classified loans and OREO, and the classified assets to total assets ratios were $7.9 million and 0.46%, respectively, at September 30, 2019, $7.9 million and 0.46%, respectively, at June 30, 2019, $6.9 million and 0.40%, respectively, at December 31, 2018, and $6.2 million and 0.37%, respectively, at September 30, 2018.
Investment Securities
Total investment securities were $156.2 million at September 30, 2019, a decrease of $9.0 million, or 5.5%, from $165.2 million at June 30, 2019, a decrease of $12.5 million, or 7.4%, from $168.8 million at December 31, 2018, and a decrease of $877 thousand, or 0.6%, from $157.1 million at September 30, 2018. The decrease for the current quarter was primarily due to principal pay-downs and calls of $9.2 million and net premium amortization of $234 thousand, partially offset by an increase in fair value of securities available-for-sale of $442 thousand. The decrease for the nine months ended September 30, 2019 was primarily due to principal pay-downs and calls of $23.6 million and net premium amortization of $641 thousand, partially offset by purchases of $8.4 million and an increase in fair value of securities available-for-sale of $3.3 million.
Deposits
The following table presents deposit mix as of the dates indicated:
9/30/2019 |
6/30/2019 |
12/31/2018 |
9/30/2018 |
|||||||||||||||||||||||||||||
($ in thousands) |
Amount |
% to Total |
Amount |
% to Total |
Amount |
% to Total |
Amount |
% to Total |
||||||||||||||||||||||||
Noninterest-bearing demand deposits |
$ |
353,448 |
24.7 |
% |
$ |
339,603 |
23.5 |
% |
$ |
329,270 |
22.8 |
% |
$ |
350,346 |
24.7 |
% |
||||||||||||||||
Interest-bearing deposits: |
||||||||||||||||||||||||||||||||
NOW |
16,108 |
1.1 |
% |
12,638 |
0.9 |
% |
24,683 |
1.7 |
% |
11,638 |
0.8 |
% |
||||||||||||||||||||
Money market accounts |
307,663 |
21.5 |
% |
311,865 |
21.6 |
% |
280,733 |
19.4 |
% |
263,704 |
18.6 |
% |
||||||||||||||||||||
Savings |
8,206 |
0.6 |
% |
6,844 |
0.5 |
% |
8,194 |
0.6 |
% |
8,417 |
0.6 |
% |
||||||||||||||||||||
Time deposits of $250,000 or less |
417,549 |
29.1 |
% |
453,286 |
31.2 |
% |
477,134 |
33.0 |
% |
476,370 |
33.5 |
% |
||||||||||||||||||||
Time deposits of more than $250,000 |
206,785 |
14.4 |
% |
204,780 |
14.2 |
% |
181,239 |
12.6 |
% |
161,551 |
11.4 |
% |
||||||||||||||||||||
State and brokered deposits |
122,503 |
8.6 |
% |
117,510 |
8.1 |
% |
142,500 |
9.9 |
% |
147,500 |
10.4 |
% |
||||||||||||||||||||
Total interest-bearing deposits |
1,078,814 |
75.3 |
% |
1,106,923 |
76.5 |
% |
1,114,483 |
77.2 |
% |
1,069,180 |
75.3 |
% |
||||||||||||||||||||
Total deposits |
$ |
1,432,262 |
100.0 |
% |
$ |
1,446,526 |
100.0 |
% |
$ |
1,443,753 |
100.0 |
% |
$ |
1,419,526 |
100.0 |
% |
||||||||||||||||
The decrease for the current quarter was primarily due to closed accounts of $103.0 million and net balance decreases of $2.1 million on existing accounts, partially offset by new accounts of $90.8 million. The increase for the nine months ended September 30, 2019 was primarily due to new accounts of $320.5 million, partially offset by closed accounts of $297.6 million and net balance decreases of $10.2 million on existing accounts. During the current quarter, the Company strategically reduced time deposits for balance sheet and earnings management. The Company also began utilizing brokered money market accounts in order to diversify its funding source and had a total outstanding balance of $10.0 million at September 30, 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 $224.6 million at September 30, 2019, an increase of $1.2 million, or 0.6%, from $223.4 million at June 30, 2019, an increase of $14.3 million, or 6.8%, from $210.3 million at December 31, 2018, and an increase of $21.7 million, or 10.7%, from $202.9 million at September 30, 2018. The increases were primarily due to retention of earnings and increases in other comprehensive income, share-based compensation expense 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 had repurchased 374,069 shares of its common stock totaling $6.1 million through September 30, 2019.
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:
9/30/2019 |
6/30/2019 |
12/31/2018 |
9/30/2018 |
|||||||||
PCB Bancorp |
||||||||||||
Common tier 1 capital (to risk-weighted assets) |
16.30 |
% |
16.20 |
% |
16.28 |
% |
16.08 |
% |
||||
Total capital (to risk-weighted assets) |
17.27 |
% |
17.18 |
% |
17.31 |
% |
17.12 |
% |
||||
Tier 1 capital (to risk-weighted assets) |
16.30 |
% |
16.20 |
% |
16.28 |
% |
16.08 |
% |
||||
Tier 1 capital (to average assets) |
12.87 |
% |
12.74 |
% |
12.60 |
% |
12.59 |
% |
||||
Pacific City Bank |
||||||||||||
Common tier 1 capital (to risk-weighted assets) |
16.11 |
% |
16.07 |
% |
16.19 |
% |
15.89 |
% |
||||
Total capital (to risk-weighted assets) |
17.08 |
% |
17.05 |
% |
17.21 |
% |
16.93 |
% |
||||
Tier 1 capital (to risk-weighted assets) |
16.11 |
% |
16.07 |
% |
16.19 |
% |
15.89 |
% |
||||
Tier 1 capital (to average assets) |
12.72 |
% |
12.64 |
% |
12.53 |
% |
12.45 |
% |
||||
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)
9/30/2019 |
6/30/2019 |
% Change |
12/31/2018 |
% Change |
9/30/2018 |
% Change |
|||||||||||||||||||||||
Assets |
|||||||||||||||||||||||||||||
Cash and due from banks |
$ |
22,546 |
$ |
19,080 |
18.2 |
% |
$ |
24,121 |
(6.5 |
)% |
$ |
27,532 |
(18.1 |
)% |
|||||||||||||||
Interest-bearing deposits in financial institutions |
99,366 |
114,205 |
(13.0 |
)% |
138,152 |
(28.1 |
)% |
136,524 |
(27.2 |
)% |
|||||||||||||||||||
Total cash and cash equivalents |
121,912 |
133,285 |
(8.5 |
)% |
162,273 |
(24.9 |
)% |
164,056 |
(25.7 |
)% |
|||||||||||||||||||
Securities available-for-sale, at fair value |
134,602 |
142,539 |
(5.6 |
)% |
146,991 |
(8.4 |
)% |
135,089 |
(0.4 |
)% |
|||||||||||||||||||
Securities held-to-maturity |
21,601 |
22,685 |
(4.8 |
)% |
21,760 |
(0.7 |
)% |
21,991 |
(1.8 |
)% |
|||||||||||||||||||
Total investment securities |
156,203 |
165,224 |
(5.5 |
)% |
168,751 |
(7.4 |
)% |
157,080 |
(0.6 |
)% |
|||||||||||||||||||
Loans held-for-sale |
1,583 |
440 |
259.8 |
% |
5,781 |
(72.6 |
)% |
12,957 |
(87.8 |
)% |
|||||||||||||||||||
Loans held-for-investment, net of deferred loan costs (fees) |
1,389,830 |
1,395,557 |
(0.4 |
)% |
1,338,682 |
3.8 |
% |
1,309,124 |
6.2 |
% |
|||||||||||||||||||
Allowance for loan losses |
(13,094 |
) |
(13,328 |
) |
(1.8 |
)% |
(13,167 |
) |
(0.6 |
)% |
(13,097 |
) |
— |
% |
|||||||||||||||
Net loans held-for-investment |
1,376,736 |
1,382,229 |
(0.4 |
)% |
1,325,515 |
3.9 |
% |
1,296,027 |
6.2 |
% |
|||||||||||||||||||
Premises and equipment, net |
4,008 |
4,334 |
(7.5 |
)% |
4,588 |
(12.6 |
)% |
4,615 |
(13.2 |
)% |
|||||||||||||||||||
Federal Home Loan Bank and other bank stock |
8,345 |
8,345 |
— |
% |
7,433 |
12.3 |
% |
7,433 |
12.3 |
% |
|||||||||||||||||||
Other real estate owned, net |
— |
395 |
(100.0 |
)% |
— |
— |
% |
— |
— |
% |
|||||||||||||||||||
Deferred tax assets, net |
3,389 |
3,241 |
4.6 |
% |
3,377 |
0.4 |
% |
4,209 |
(19.5 |
)% |
|||||||||||||||||||
Servicing assets |
6,899 |
7,230 |
(4.6 |
)% |
7,666 |
(10.0 |
)% |
8,114 |
(15.0 |
)% |
|||||||||||||||||||
Operating lease assets |
9,561 |
10,105 |
(5.4 |
)% |
— |
— |
% |
— |
— |
% |
|||||||||||||||||||
Accrued interest receivable and other assets |
10,810 |
11,658 |
(7.3 |
)% |
11,644 |
(7.2 |
)% |
9,296 |
16.3 |
% |
|||||||||||||||||||
Total assets |
$ |
1,699,446 |
$ |
1,726,486 |
(1.6 |
)% |
$ |
1,697,028 |
0.1 |
% |
$ |
1,663,787 |
2.1 |
% |
|||||||||||||||
Liabilities |
|||||||||||||||||||||||||||||
Deposits: |
|||||||||||||||||||||||||||||
Noninterest-bearing demand |
$ |
353,448 |
$ |
339,603 |
4.1 |
% |
$ |
329,270 |
7.3 |
% |
$ |
350,346 |
0.9 |
% |
|||||||||||||||
Savings, NOW and money market accounts |
341,980 |
331,357 |
3.2 |
% |
313,610 |
9.0 |
% |
283,759 |
20.5 |
% |
|||||||||||||||||||
Time deposits of $250,000 or less |
440,049 |
480,786 |
(8.5 |
)% |
519,634 |
(15.3 |
)% |
523,870 |
(16.0 |
)% |
|||||||||||||||||||
Time deposits of more than $250,000 |
296,785 |
294,780 |
0.7 |
% |
281,239 |
5.5 |
% |
261,551 |
13.5 |
% |
|||||||||||||||||||
Total deposits |
1,432,262 |
1,446,526 |
(1.0 |
)% |
1,443,753 |
(0.8 |
)% |
1,419,526 |
0.9 |
% |
|||||||||||||||||||
Federal Home Loan Bank advances |
20,000 |
35,000 |
(42.9 |
)% |
30,000 |
(33.3 |
)% |
30,000 |
(33.3 |
)% |
|||||||||||||||||||
Operating lease liabilities |
10,574 |
11,131 |
(5.0 |
)% |
— |
— |
% |
— |
— |
% |
|||||||||||||||||||
Accrued interest payable and other liabilities |
11,967 |
10,429 |
14.7 |
% |
12,979 |
(7.8 |
)% |
11,323 |
5.7 |
% |
|||||||||||||||||||
Total liabilities |
1,474,803 |
1,503,086 |
(1.9 |
)% |
1,486,732 |
(0.8 |
)% |
1,460,849 |
1.0 |
% |
|||||||||||||||||||
Commitments and contingent liabilities |
|||||||||||||||||||||||||||||
Shareholders’ equity |
|||||||||||||||||||||||||||||
Common stock, no par value |
169,224 |
174,135 |
(2.8 |
)% |
174,366 |
(2.9 |
)% |
174,653 |
(3.1 |
)% |
|||||||||||||||||||
Retained earnings |
54,768 |
48,927 |
11.9 |
% |
37,577 |
45.7 |
% |
31,325 |
74.8 |
% |
|||||||||||||||||||
Accumulated other comprehensive income (loss), net |
651 |
338 |
92.6 |
% |
(1,647 |
) |
(139.5 |
)% |
(3,040 |
) |
(121.4 |
)% |
|||||||||||||||||
Total shareholders’ equity |
224,643 |
223,400 |
0.6 |
% |
210,296 |
6.8 |
% |
202,938 |
10.7 |
% |
|||||||||||||||||||
Total liabilities and shareholders’ equity |
$ |
1,699,446 |
$ |
1,726,486 |
(1.6 |
)% |
$ |
1,697,028 |
0.1 |
% |
$ |
1,663,787 |
2.1 |
% |
|||||||||||||||
Outstanding common shares |
15,710,287 |
15,980,655 |
15,977,754 |
15,972,914 |
|||||||||||||||||||||||||
Book value per common share (1) |
$ |
14.30 |
$ |
13.98 |
$ |
13.16 |
$ |
12.71 |
|||||||||||||||||||||
Total loan to total deposit ratio |
97.15 |
% |
96.51 |
% |
93.12 |
% |
93.14 |
% |
|||||||||||||||||||||
Noninterest-bearing deposits to total deposits |
24.68 |
% |
23.48 |
% |
22.81 |
% |
24.68 |
% |
|||||||||||||||||||||
(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 |
Nine Months Ended |
||||||||||||||||||||||||||||||||
9/30/2019 |
6/30/2019 |
% Change |
9/30/2018 |
% Change |
9/30/2019 |
9/30/2018 |
% Change |
||||||||||||||||||||||||||
Interest income: |
|||||||||||||||||||||||||||||||||
Interest and fees on loans |
$ |
21,876 |
$ |
21,969 |
(0.4 |
)% |
$ |
19,699 |
11.1 |
% |
$ |
64,779 |
$ |
55,749 |
16.2 |
% |
|||||||||||||||||
Interest on investment securities |
978 |
1,062 |
(7.9 |
)% |
931 |
5.0 |
% |
3,133 |
2,648 |
18.3 |
% |
||||||||||||||||||||||
Interest and dividend on other interest-earning assets |
833 |
999 |
(16.6 |
)% |
866 |
(3.8 |
)% |
2,757 |
2,071 |
33.1 |
% |
||||||||||||||||||||||
Total interest income |
23,687 |
24,030 |
(1.4 |
)% |
21,496 |
10.2 |
% |
70,669 |
60,468 |
16.9 |
% |
||||||||||||||||||||||
Interest expense: |
|||||||||||||||||||||||||||||||||
Interest on deposits |
6,060 |
6,200 |
(2.3 |
)% |
4,643 |
30.5 |
% |
17,925 |
12,101 |
48.1 |
% |
||||||||||||||||||||||
Interest on other borrowings |
98 |
138 |
(29.0 |
)% |
137 |
(28.5 |
)% |
370 |
475 |
(22.1 |
)% |
||||||||||||||||||||||
Total interest expense |
6,158 |
6,338 |
(2.8 |
)% |
4,780 |
28.8 |
% |
18,295 |
12,576 |
45.5 |
% |
||||||||||||||||||||||
Net interest income |
17,529 |
17,692 |
(0.9 |
)% |
16,716 |
4.9 |
% |
52,374 |
47,892 |
9.4 |
% |
||||||||||||||||||||||
Provision (reversal) for loan losses |
(102 |
) |
394 |
(125.9 |
)% |
417 |
(124.5 |
)% |
207 |
937 |
(77.9 |
)% |
|||||||||||||||||||||
Net interest income after provision for loan losses |
17,631 |
17,298 |
1.9 |
% |
16,299 |
8.2 |
% |
52,167 |
46,955 |
11.1 |
% |
||||||||||||||||||||||
Noninterest income: |
|||||||||||||||||||||||||||||||||
Gain on sale of loans |
1,540 |
1,891 |
(18.6 |
)% |
1,328 |
16.0 |
% |
4,551 |
4,477 |
1.7 |
% |
||||||||||||||||||||||
Service charges and fees on deposits |
405 |
368 |
10.1 |
% |
377 |
7.4 |
% |
1,137 |
1,102 |
3.2 |
% |
||||||||||||||||||||||
Servicing income |
534 |
492 |
8.5 |
% |
578 |
(7.6 |
)% |
1,657 |
1,789 |
(7.4 |
)% |
||||||||||||||||||||||
Other income |
323 |
303 |
6.6 |
% |
297 |
8.8 |
% |
920 |
847 |
8.6 |
% |
||||||||||||||||||||||
Total noninterest income |
2,802 |
3,054 |
(8.3 |
)% |
2,580 |
8.6 |
% |
8,265 |
8,215 |
0.6 |
% |
||||||||||||||||||||||
Noninterest expense: |
|||||||||||||||||||||||||||||||||
Salaries and employee benefits |
6,901 |
6,600 |
4.6 |
% |
5,840 |
18.2 |
% |
20,123 |
18,239 |
10.3 |
% |
||||||||||||||||||||||
Occupancy and equipment |
1,408 |
1,407 |
0.1 |
% |
1,244 |
13.2 |
% |
4,128 |
3,634 |
13.6 |
% |
||||||||||||||||||||||
Professional fees |
664 |
686 |
(3.2 |
)% |
213 |
211.7 |
% |
2,108 |
1,724 |
22.3 |
% |
||||||||||||||||||||||
Marketing and business promotion |
292 |
529 |
(44.8 |
)% |
555 |
(47.4 |
)% |
1,049 |
1,484 |
(29.3 |
)% |
||||||||||||||||||||||
Data processing |
348 |
338 |
3.0 |
% |
314 |
10.8 |
% |
1,004 |
911 |
10.2 |
% |
||||||||||||||||||||||
Director fees and expenses |
188 |
185 |
1.6 |
% |
220 |
(14.5 |
)% |
562 |
661 |
(15.0 |
)% |
||||||||||||||||||||||
Regulatory assessments |
— |
309 |
(100.0 |
)% |
192 |
(100.0 |
)% |
425 |
469 |
(9.4 |
)% |
||||||||||||||||||||||
Other expenses |
976 |
930 |
4.9 |
% |
942 |
3.6 |
% |
2,651 |
2,969 |
(10.7 |
)% |
||||||||||||||||||||||
Total noninterest expense |
10,777 |
10,984 |
(1.9 |
)% |
9,520 |
13.2 |
% |
32,050 |
30,091 |
6.5 |
% |
||||||||||||||||||||||
Income before income taxes |
9,656 |
9,368 |
3.1 |
% |
9,359 |
3.2 |
% |
28,382 |
25,079 |
13.2 |
% |
||||||||||||||||||||||
Income tax expense |
2,871 |
2,767 |
3.8 |
% |
2,816 |
2.0 |
% |
8,432 |
7,510 |
12.3 |
% |
||||||||||||||||||||||
Net income |
$ |
6,785 |
$ |
6,601 |
2.8 |
% |
$ |
6,543 |
3.7 |
% |
$ |
19,950 |
$ |
17,569 |
13.6 |
% |
|||||||||||||||||
Earnings per common share |
|||||||||||||||||||||||||||||||||
Basic |
$ |
0.43 |
$ |
0.41 |
$ |
0.44 |
$ |
1.25 |
$ |
1.27 |
|||||||||||||||||||||||
Diluted |
$ |
0.42 |
$ |
0.40 |
$ |
0.44 |
$ |
1.23 |
$ |
1.25 |
|||||||||||||||||||||||
Average common shares outstanding |
|||||||||||||||||||||||||||||||||
Basic |
15,816,269 |
16,017,089 |
14,730,120 |
15,943,603 |
13,865,190 |
||||||||||||||||||||||||||||
Diluted |
16,099,598 |
16,330,039 |
14,924,546 |
16,231,848 |
14,051,561 |
||||||||||||||||||||||||||||
Dividend paid per common share |
$ |
0.06 |
$ |
0.06 |
$ |
0.03 |
$ |
0.17 |
$ |
0.09 |
|||||||||||||||||||||||
Return on average assets (1) |
1.55 |
% |
1.52 |
% |
1.60 |
% |
1.55 |
% |
1.50 |
% |
|||||||||||||||||||||||
Return on average shareholders’ equity (1), (2) |
12.02 |
% |
12.01 |
% |
14.50 |
% |
12.15 |
% |
14.85 |
% |
|||||||||||||||||||||||
Efficiency ratio (3) |
53.01 |
% |
52.95 |
% |
49.34 |
% |
52.85 |
% |
53.63 |
% |
|||||||||||||||||||||||
(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 |
|||||||||||||||||||||||||||||||||||||||||||||
9/30/2019 |
6/30/2019 |
9/30/2018 |
|||||||||||||||||||||||||||||||||||||||||||
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) |
$ |
1,396,437 |
$ |
21,876 |
6.22 |
% |
$ |
1,378,910 |
$ |
21,969 |
6.39 |
% |
$ |
1,280,352 |
$ |
19,699 |
6.10 |
% |
|||||||||||||||||||||||||||
Mortgage-backed securities |
84,052 |
521 |
2.46 |
% |
87,787 |
559 |
2.55 |
% |
69,592 |
414 |
2.36 |
% |
|||||||||||||||||||||||||||||||||
Collateralized mortgage obligation |
50,891 |
286 |
2.23 |
% |
53,027 |
325 |
2.46 |
% |
54,094 |
324 |
2.38 |
% |
|||||||||||||||||||||||||||||||||
SBA loan pool securities |
20,751 |
133 |
2.54 |
% |
21,297 |
140 |
2.64 |
% |
24,102 |
154 |
2.53 |
% |
|||||||||||||||||||||||||||||||||
Municipal bonds (2) |
5,834 |
38 |
2.58 |
% |
5,880 |
38 |
2.59 |
% |
6,232 |
39 |
2.48 |
% |
|||||||||||||||||||||||||||||||||
Other interest-earning assets |
135,774 |
833 |
2.43 |
% |
154,661 |
999 |
2.59 |
% |
156,831 |
866 |
2.19 |
% |
|||||||||||||||||||||||||||||||||
Total interest-earning assets |
1,693,739 |
23,687 |
5.55 |
% |
1,701,562 |
24,030 |
5.66 |
% |
1,591,203 |
21,496 |
5.36 |
% |
|||||||||||||||||||||||||||||||||
Noninterest-earning assets: |
|||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents |
18,927 |
18,342 |
18,596 |
||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses |
(13,273 |
) |
(13,163 |
) |
(12,774 |
) |
|||||||||||||||||||||||||||||||||||||||
Other assets |
35,564 |
35,843 |
26,828 |
||||||||||||||||||||||||||||||||||||||||||
Total noninterest-earning assets |
41,218 |
41,022 |
32,650 |
||||||||||||||||||||||||||||||||||||||||||
Total assets |
$ |
1,734,957 |
$ |
1,742,584 |
$ |
1,623,853 |
|||||||||||||||||||||||||||||||||||||||
Liabilities and Shareholders’ Equity |
|||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: |
|||||||||||||||||||||||||||||||||||||||||||||
Deposits: |
|||||||||||||||||||||||||||||||||||||||||||||
NOW and money market accounts |
$ |
351,581 |
1,432 |
1.62 |
% |
$ |
323,285 |
1,339 |
1.66 |
% |
$ |
269,514 |
834 |
1.23 |
% |
||||||||||||||||||||||||||||||
Savings |
7,043 |
6 |
0.34 |
% |
9,146 |
14 |
0.61 |
% |
8,717 |
6 |
0.27 |
% |
|||||||||||||||||||||||||||||||||
Time deposits |
767,752 |
4,622 |
2.39 |
% |
811,247 |
4,847 |
2.40 |
% |
795,202 |
3,803 |
1.90 |
% |
|||||||||||||||||||||||||||||||||
Total interest-bearing deposits |
1,126,376 |
6,060 |
2.13 |
% |
1,143,678 |
6,200 |
2.17 |
% |
1,073,433 |
4,643 |
1.72 |
% |
|||||||||||||||||||||||||||||||||
Federal Home Loan Bank advances |
20,326 |
98 |
1.91 |
% |
30,166 |
138 |
1.83 |
% |
30,000 |
137 |
1.81 |
% |
|||||||||||||||||||||||||||||||||
Total interest-bearing liabilities |
1,146,702 |
6,158 |
2.13 |
% |
1,173,844 |
6,338 |
2.17 |
% |
1,103,433 |
4,780 |
1.72 |
% |
|||||||||||||||||||||||||||||||||
Noninterest-bearing liabilities |
|||||||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing demand |
341,858 |
326,813 |
330,021 |
||||||||||||||||||||||||||||||||||||||||||
Other liabilities |
22,465 |
21,441 |
11,325 |
||||||||||||||||||||||||||||||||||||||||||
Total noninterest-bearing liabilities |
364,323 |
348,254 |
341,346 |
||||||||||||||||||||||||||||||||||||||||||
Total liabilities |
1,511,025 |
1,522,098 |
1,444,779 |
||||||||||||||||||||||||||||||||||||||||||
Total shareholders’ equity |
223,932 |
220,486 |
179,074 |
||||||||||||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity |
$ |
1,734,957 |
$ |
1,742,584 |
$ |
1,623,853 |
|||||||||||||||||||||||||||||||||||||||
Net interest income |
$ |
17,529 |
$ |
17,692 |
$ |
16,716 |
|||||||||||||||||||||||||||||||||||||||
Net interest spread (3) |
3.42 |
% |
3.49 |
% |
3.64 |
% |
|||||||||||||||||||||||||||||||||||||||
Net interest margin (4) |
4.11 |
% |
4.17 |
% |
4.17 |
% |
|||||||||||||||||||||||||||||||||||||||
Total deposits |
$ |
1,468,234 |
$ |
6,060 |
1.64 |
% |
$ |
1,470,491 |
$ |
6,200 |
1.69 |
% |
$ |
1,403,454 |
$ |
4,643 |
1.31 |
% |
|||||||||||||||||||||||||||
Total funding (5) |
$ |
1,488,560 |
$ |
6,158 |
1.64 |
% |
$ |
1,500,657 |
$ |
6,338 |
1.69 |
% |
$ |
1,433,454 |
$ |
4,780 |
1.32 |
% |
|||||||||||||||||||||||||||
(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)
Nine Months Ended |
||||||||||||||||||||||||||||||
9/30/2019 |
9/30/2018 |
|||||||||||||||||||||||||||||
Average Balance |
Interest Income/ Expense |
Avg. Yield/Rate |
Average Balance |
Interest Income/ Expense |
Avg. Yield/Rate |
|||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||||
Interest-earning assets: |
||||||||||||||||||||||||||||||
Total loans (1) |
$ |
1,372,704 |
$ |
64,779 |
6.31 |
% |
$ |
1,245,551 |
$ |
55,749 |
5.98 |
% |
||||||||||||||||||
Mortgage-backed securities |
85,452 |
1,629 |
2.55 |
% |
67,602 |
1,183 |
2.34 |
% |
||||||||||||||||||||||
Collateralized mortgage obligation |
52,927 |
969 |
2.45 |
% |
52,519 |
913 |
2.32 |
% |
||||||||||||||||||||||
SBA loan pool securities |
21,392 |
420 |
2.62 |
% |
23,887 |
432 |
2.42 |
% |
||||||||||||||||||||||
Municipal bonds (2) |
5,867 |
115 |
2.62 |
% |
6,454 |
120 |
2.49 |
% |
||||||||||||||||||||||
Other interest-earning assets |
143,616 |
2,757 |
2.57 |
% |
132,483 |
2,071 |
2.09 |
% |
||||||||||||||||||||||
Total interest-earning assets |
1,681,958 |
70,669 |
5.62 |
% |
1,528,496 |
60,468 |
5.29 |
% |
||||||||||||||||||||||
Noninterest-earning assets: |
||||||||||||||||||||||||||||||
Cash and cash equivalents |
18,650 |
19,145 |
||||||||||||||||||||||||||||
Allowance for loan losses |
(13,185 |
) |
(12,530 |
) |
||||||||||||||||||||||||||
Other assets |
35,370 |
27,115 |
||||||||||||||||||||||||||||
Total noninterest-earning assets |
40,835 |
33,730 |
||||||||||||||||||||||||||||
Total assets |
$ |
1,722,793 |
$ |
1,562,226 |
||||||||||||||||||||||||||
Liabilities and Shareholders’ Equity |
||||||||||||||||||||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||||||||||||
Deposits: |
||||||||||||||||||||||||||||||
NOW and money market accounts |
$ |
322,917 |
3,903 |
1.62 |
% |
$ |
282,221 |
2,367 |
1.12 |
% |
||||||||||||||||||||
Savings |
8,214 |
28 |
0.46 |
% |
8,696 |
18 |
0.28 |
% |
||||||||||||||||||||||
Time deposits |
797,475 |
13,994 |
2.35 |
% |
747,102 |
9,716 |
1.74 |
% |
||||||||||||||||||||||
Total interest-bearing deposits |
1,128,606 |
17,925 |
2.12 |
% |
1,038,019 |
12,101 |
1.56 |
% |
||||||||||||||||||||||
Federal Home Loan Bank advances |
26,820 |
370 |
1.84 |
% |
36,557 |
475 |
1.74 |
% |
||||||||||||||||||||||
Total interest-bearing liabilities |
1,155,426 |
18,295 |
2.12 |
% |
1,074,576 |
12,576 |
1.56 |
% |
||||||||||||||||||||||
Noninterest-bearing liabilities |
||||||||||||||||||||||||||||||
Noninterest-bearing demand |
325,704 |
319,697 |
||||||||||||||||||||||||||||
Other liabilities |
22,077 |
9,759 |
||||||||||||||||||||||||||||
Total noninterest-bearing liabilities |
347,781 |
329,456 |
||||||||||||||||||||||||||||
Total liabilities |
1,503,207 |
1,404,032 |
||||||||||||||||||||||||||||
Total shareholders’ equity |
219,586 |
158,194 |
||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity |
$ |
1,722,793 |
$ |
1,562,226 |
||||||||||||||||||||||||||
Net interest income |
$ |
52,374 |
$ |
47,892 |
||||||||||||||||||||||||||
Net interest spread (3) |
3.50 |
% |
3.73 |
% |
||||||||||||||||||||||||||
Net interest margin (4) |
4.16 |
% |
4.19 |
% |
||||||||||||||||||||||||||
Total deposits |
$ |
1,454,310 |
$ |
17,925 |
1.65 |
% |
$ |
1,357,716 |
$ |
12,101 |
1.19 |
% |
||||||||||||||||||
Total funding (5) |
$ |
1,481,130 |
$ |
18,295 |
1.65 |
% |
$ |
1,394,273 |
$ |
12,576 |
1.21 |
% |
||||||||||||||||||
(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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20191024005715/en/
Timothy Chang Executive Vice President & Chief Financial Officer 213-210-2000
Source: PCB Bancorp