PCB Bancorp Reports Earnings for Q3 2024

LOS ANGELES--(BUSINESS WIRE)--PCB Bancorp (the “Company”) (NASDAQ: PCB), the holding company of PCB Bank (the “Bank”), today reported net income available to common shareholders of $7.5 million, or $0.52 per diluted common share, for the third quarter of 2024, compared with $6.1 million, or $0.43 per diluted common share, for the previous quarter and $7.0 million, or $0.49 per diluted common share, for the year-ago quarter.

Q3 2024 Highlights

Net income available to common shareholders totaled $7.5 million, or $0.52 per diluted common share;
Recorded a provision for credit losses of $50 thousand for the current quarter compared with $259 thousand for the previous quarter and $751 thousand for the year-ago quarter;
Allowance for Credit Losses (“ACL”) on loans to loans held-for-investment ratio was 1.17% at September 30, 2024 compared with 1.17% at June 30, 2024, 1.19% at December 31, 2023 and 1.18% at September 30, 2023;
Net interest income was $22.7 million for the current quarter compared with $21.7 million for the previous quarter and $22.4 million for the year-ago quarter. Net interest margin was 3.25% for the current quarter compared with 3.16% for the previous quarter and 3.57% for the year-ago quarter;
Gain on sale of loans was $750 thousand for the current quarter compared with $763 thousand for the previous quarter and $689 thousand for the year-ago quarter;
Total assets were $2.89 billion at September 30, 2024, an increase of $36.9 million, or 1.3%, from $2.85 billion at June 30, 2024, an increase of $100.3 million, or 3.6%, from $2.79 billion at December 31, 2023 and an increase of $321.9 million, or 12.5%, from $2.57 billion at September 30, 2023;
Loans held-for-investment were $2.47 billion at September 30, 2024, an increase of $17.1 million, or 0.7%, from $2.45 billion at June 30, 2024, an increase of $142.7 million, or 6.1% from $2.32 billion at December 31, 2023, and an increase of $298.6 million, or 13.8%, from $2.17 billion at September 30, 2023; and
Total deposits were $2.46 billion at September 30, 2024, an increase of $53.4 million, or 2.2%, from $2.41 billion at June 30, 2024, an increase of $108.1 million, or 4.6%, from $2.35 billion at December 31, 2023, and an increase of $267.6 million, or 12.2%, from $2.19 billion at September 30, 2023.

“PCB’s third quarter was another solid quarter for us, highlighted by a 21.6% increase in net income available to common shareholders to $7.5 million that was benefited from our solid year-over-year loan growth combined with our expanded net interest margin,” said Henry Kim, President and Chief Executive Officer. “Additionally, we continue to maintain strong credit metrics, solid ACL, and robust capital ratios.”

“During the third quarter, our loan balance increased 0.8% to $2.5 billion, deposits increased 2.2% to $2.5 billion, and we maintained our ACL to loan ratio at 1.17%, while reducing our non-performing assets and classified assets to total assets ratios to 0.24% and 0.32%, respectively.”

Mr. Kim added, “As we look ahead to the fourth quarter and next year, our strategic expansion of our footprint and branch network optimizations will provide us with continued strong balance sheet growth with solid financial results.”

Financial Highlights (Unaudited)

($ in thousands, except per share data)	Three Months Ended													Nine Months Ended
($ in thousands, except per share data)	9/30/2024			6/30/2024			% Change		9/30/2023			% Change		9/30/2024			9/30/2023			% Change
Net income	$	7,814		$	6,281		24.4	%	$	7,023		11.3	%	$	18,780		$	24,797		(24.3	)%
Net income available to common shareholders	$	7,468		$	6,139		21.6	%	$	7,023		6.3	%	$	18,292		$	24,797		(26.2	)%
Diluted earnings per common share	$	0.52		$	0.43		20.9	%	$	0.49		6.1	%	$	1.27		$	1.71		(25.7	)%

Net interest income	$	22,719		$	21,735		4.5	%	$	22,449		1.2	%	$	65,453		$	66,580		(1.7	)%
Provision (reversal) for credit losses		50			259		(80.7	)%		751		(93.3	)%		1,399			(1,830	)	NM
Noninterest income		2,620			2,485		5.4	%		2,502		4.7	%		8,050			8,180		(1.6	)%
Noninterest expense		14,602			15,175		(3.8	)%		14,207		2.8	%		46,129			41,588		10.9	%

Return on average assets ⁽¹⁾		1.08	%		0.89	%				1.09	%				0.88	%		1.32	%
Return on average shareholders’ equity ⁽¹⁾		8.70	%		7.19	%				8.12	%				7.11	%		9.77	%
Return on average tangible common equity (“TCE”) ^(1),(2)		10.31	%		8.75	%				10.17	%				8.61	%		12.27	%
Net interest margin ⁽¹⁾		3.25	%		3.16	%				3.57	%				3.17	%		3.63	%
Efficiency ratio ⁽³⁾		57.63	%		62.65	%				56.94	%				62.76	%		55.63	%

($ in thousands, except per share data)	9/30/2024			6/30/2024			% Change		12/31/2023			% Change		9/30/2023			% Change
Total assets	$	2,889,833		$	2,852,964		1.3	%	$	2,789,506		3.6	%	$	2,567,974		12.5	%
Net loans held-for-investment		2,437,244			2,420,327		0.7	%		2,295,919		6.2	%		2,142,006		13.8	%
Total deposits		2,459,682			2,406,254		2.2	%		2,351,612		4.6	%		2,192,129		12.2	%
Book value per common share ⁽⁴⁾	$	25.39		$	24.80				$	24.46				$	23.87
TCE per common share⁽²⁾	$	20.55		$	19.95				$	19.62				$	19.05
Tier 1 leverage ratio (consolidated)		12.79	%		12.66	%				13.43	%				13.76	%
Total shareholders’ equity to total assets		12.54	%		12.39	%				12.51	%				13.31	%
TCE to total assets ^{(2), (5)}		10.14	%		9.97	%				10.03	%				10.62	%

(1)		Ratios are presented on an annualized basis.
(2)		Non-GAAP. See “Non-GAAP Measures” for reconciliation of this measure to its most comparable GAAP measure.
(3)		Calculated by dividing noninterest expense by the sum of net interest income and noninterest income.
(4)		Calculated by dividing total shareholders’ equity by the number of outstanding common shares.
(5)		The Company did not have any intangible asset component for the presented periods.

Result of Operations (Unaudited)

Net Interest Income and Net Interest Margin

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

	Three Months Ended													Nine Months Ended
($ in thousands)	9/30/2024			6/30/2024			% Change		9/30/2023			% Change		9/30/2024			9/30/2023			% Change
Interest income/expense on
Loans	$	42,115		$	40,626		3.7	%	$	34,651		21.5	%	$	121,992		$	98,840		23.4	%
Investment securities		1,384			1,310		5.6	%		1,170		18.3	%		3,940			3,408		15.6	%
Other interest-earning assets		2,499			3,009		(16.9	)%		3,031		(17.6	)%		8,566			7,978		7.4	%
Total interest-earning assets		45,998			44,945		2.3	%		38,852		18.4	%		134,498			110,226		22.0	%
Interest-bearing deposits		23,057			22,536		2.3	%		16,403		40.6	%		67,560			43,437		55.5	%
Borrowings		222			674		(67.1	)%		—		NM			1,485			209		610.5	%
Total interest-bearing liabilities		23,279			23,210		0.3	%		16,403		41.9	%		69,045			43,646		58.2	%
Net interest income	$	22,719		$	21,735		4.5	%	$	22,449		1.2	%	$	65,453		$	66,580		(1.7	)%
Average balance of
Loans	$	2,456,015		$	2,414,824		1.7	%	$	2,137,184		14.9	%	$	2,413,777		$	2,102,600		14.8	%
Investment securities		147,528			141,816		4.0	%		138,993		6.1	%		143,283			141,057		1.6	%
Other interest-earning assets		175,711			213,428		(17.7	)%		219,115		(19.8	)%		201,951			206,720		(2.3	)%
Total interest-earning assets	$	2,779,254		$	2,770,068		0.3	%	$	2,495,292		11.4	%	$	2,759,011		$	2,450,377		12.6	%
Interest-bearing deposits	$	1,893,006		$	1,863,623		1.6	%	$	1,561,582		21.2	%	$	1,861,395		$	1,500,523		24.0	%
Borrowings		15,848			48,462		(67.3	)%		—		NM			35,427			5,212		579.7	%
Total interest-bearing liabilities	$	1,908,854		$	1,912,085		(0.2	)%	$	1,561,582		22.2	%	$	1,896,822		$	1,505,735		26.0	%
Total funding ⁽¹⁾	$	2,443,615		$	2,447,593		(0.2	)%	$	2,188,320		11.7	%	$	2,434,504		$	2,152,993		13.1	%
Annualized average yield/cost of
Loans		6.82	%		6.77	%				6.43	%				6.75	%		6.29	%
Investment securities		3.73	%		3.72	%				3.34	%				3.67	%		3.23	%
Other interest-earning assets		5.66	%		5.67	%				5.49	%				5.67	%		5.16	%
Total interest-earning assets		6.58	%		6.53	%				6.18	%				6.51	%		6.01	%
Interest-bearing deposits		4.85	%		4.86	%				4.17	%				4.85	%		3.87	%
Borrowings		5.57	%		5.59	%				—	%				5.60	%		5.36	%
Total interest-bearing liabilities		4.85	%		4.88	%				4.17	%				4.86	%		3.88	%
Net interest margin		3.25	%		3.16	%				3.57	%				3.17	%		3.63	%
Cost of total funding ⁽¹⁾		3.79	%		3.81	%				2.97	%				3.79	%		2.71	%
Supplementary information
Net accretion of discount on loans	$	773		$	791		(2.3	)%	$	775		(0.3	)%	$	2,137		$	2,197		(2.7	)%
Net amortization of deferred loan fees	$	246		$	339		(27.4	)%	$	226		8.8	%	$	919		$	648		41.8	%

(1)

Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.

Loans. The increase in average yield for the current quarter was primarily due to a higher average loan rate throughout the current quarter, partially offset by a decrease in net amortization of deferred loan fees. The increase for the current year-to-date period was primarily due to increases in overall interest rates on loans and net amortization of deferred loan 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:

	9/30/2024				6/30/2024				12/31/2023				9/30/2023
	% 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	18.3	%	5.06	%	18.8	%	5.04	%	21.2	%	4.86	%	22.4	%	4.75	%
Hybrid rate loans	37.6	%	5.14	%	37.2	%	5.04	%	39.0	%	4.93	%	38.8	%	4.71	%
Variable rate loans	44.1	%	8.10	%	44.0	%	8.45	%	39.8	%	8.51	%	38.8	%	8.52	%

On September 18, 2024, the Federal Open Market Committee decreased the Fed Funds rate by 50 bps and this change resulted in an overall decrease in weighted-average contractual rates on variable rate loans in September 2024.

Investment Securities. The increases in average yield for the current quarter and year-to-date periods were primarily due to higher yield on newly purchased investment securities.

Other Interest-Earning Assets. The increases in average yield for the current quarter and year-to-date period compared with the same periods of 2023 were 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 increases in average cost for the current quarter and year-to-date period compared with the same periods of 2023 were 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													Nine Months Ended
($ in thousands)	9/30/2024			6/30/2024			% Change		9/30/2023			% Change		9/30/2024			9/30/2023			% Change
Provision (reversal) for credit losses on loans	$	193		$	329		(41.3	)%	$	822		(76.5	)%	$	1,444		$	(1,438	)	NM
Provision (reversal) for credit losses on off-balance sheet credit exposure		(143	)		(70	)	104.3	%		(71	)	101.4	%		(45	)		(392	)	(88.5	)%
Total provision (reversal) for credit losses	$	50		$	259		(80.7	)%	$	751		(93.3	)%	$	1,399		$	(1,830	)	NM

The provision for credit losses on loans for the current quarter was primarily due to an increase in loans held-for-investment.

Noninterest Income

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

	Three Months Ended										Nine Months Ended
($ in thousands)	9/30/2024		6/30/2024		% Change		9/30/2023		% Change		9/30/2024		9/30/2023		% Change
Gain on sale of loans	$	750	$	763	(1.7	)%	$	689	8.9	%	$	2,591	$	2,767	(6.4	)%
Service charges and fees on deposits		399		364	9.6	%		371	7.5	%		1,141		1,084	5.3	%
Loan servicing income		786		799	(1.6	)%		851	(7.6	)%		2,504		2,579	(2.9	)%
Bank-owned life insurance income		239		236	1.3	%		187	27.8	%		703		551	27.6	%
Other income		446		323	38.1	%		404	10.4	%		1,111		1,199	(7.3	)%
Total noninterest income	$	2,620	$	2,485	5.4	%	$	2,502	4.7	%	$	8,050	$	8,180	(1.6	)%

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)	9/30/2024		6/30/2024		% Change		9/30/2023		% Change		9/30/2024		9/30/2023		% Change
Gain on sale of SBA loans
Sold loan balance	$	13,506	$	13,619	(0.8	)%	$	17,697	(23.7	)%	$	46,539	$	61,592	(24.4	)%
Premium received		1,185		1,056	12.2	%		1,112	6.6	%		3,837		4,362	(12.0	)%
Gain recognized		750		763	(1.7	)%		689	8.9	%		2,591		2,767	(6.4	)%
Gain on sale of residential mortgage loans
Sold loan balance	$	676	$	—	NM		$	—	NM		$	676	$	—	NM
Gain recognized		—		—	—	%		—	—	%		—		—	—	%

Loan Servicing Income. The following table presents information on loan servicing income for the periods indicated:

	Three Months Ended					Nine Months Ended
($ in thousands)	9/30/2024	6/30/2024	% Change	9/30/2023	% Change	9/30/2024	9/30/2023	% Change
Loan servicing income
Servicing income received	$ 1,264	$ 1,318	(4.1) %	$ 1,321	(4.3) %	$ 3,875	$ 3,922	(1.2) %
Servicing assets amortization	(478)	(519)	(7.9) %	(470)	1.7 %	(1,371)	(1,343)	2.1 %
Loan servicing income	$ 786	$ 799	(1.6) %	$ 851	(7.6) %	$ 2,504	$ 2,579	(2.9) %
Underlying loans at end of period	$ 527,062	$ 527,458	(0.1) %	$ 536,424	(1.7) %	$ 527,062	$ 536,424	(1.7) %

The Company services SBA loans and certain residential property loans sold to the secondary market.

Noninterest Expense

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

	Three Months Ended										Nine Months Ended
($ in thousands)	9/30/2024		6/30/2024		% Change		9/30/2023		% Change		9/30/2024		9/30/2023		% Change
Salaries and employee benefits	$	8,801	$	9,225	(4.6	)%	$	8,572	2.7	%	$	27,244	$	26,175	4.1	%
Occupancy and equipment		2,261		2,300	(1.7	)%		1,964	15.1	%		6,919		5,779	19.7	%
Professional fees		599		973	(38.4	)%		685	(12.6	)%		2,656		2,189	21.3	%
Marketing and business promotion		667		318	109.7	%		980	(31.9	)%		1,304		1,555	(16.1	)%
Data processing		397		495	(19.8	)%		367	8.2	%		1,294		1,159	11.6	%
Director fees and expenses		226		221	2.3	%		152	48.7	%		679		549	23.7	%
Regulatory assessments		309		327	(5.5	)%		281	10.0	%		934		818	14.2	%
Other expense		1,342		1,316	2.0	%		1,206	11.3	%		5,099		3,364	51.6	%
Total noninterest expense	$	14,602	$	15,175	(3.8	)%	$	14,207	2.8	%	$	46,129	$	41,588	10.9	%

Salaries and Employee Benefits. The decrease for the current quarter compared with the previous quarter was primarily due to decreases in bonus and vacation accruals. The increase for the current year-to-date period was primarily due to increases in salaries, bonus accrual, incentives tied to sales of SBA loans originated at loan production offices, and other employee benefits, partially offset by a decrease in vacation accrual. The number of full-time equivalent employees was 264, 265 and 270 as of September 30, 2024, June 30, 2024 and September 30, 2023, respectively.

Occupancy and Equipment. The increases for the current quarter and year-to-date period compared with the same periods of 2023 were primarily due to an expansion of headquarters location in the second half of 2023 and a relocation of a regional office and two branches into one location in Orange County, California.

Professional Fees. During the first half of 2024, the Company incurred additional professional fees related to a core system conversion, which was completed in April 2024.

Marketing and Business Promotion. The increase for the current quarter compared with the previous quarter was primarily due to an increase in advertisements. The decrease for the current quarter and year-to-date period compared with the same periods of 2023 was primarily due to an increase in advertisements in 2023 periods for the Company’s 20th anniversary celebration.

Other Expense. The increase for the year-to-date period 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 during the previous quarter. The Company has retained a law firm specializing in SBA recovery demands to seek that SBA reconsider the evidence and allow the Company to recoup all or part of the reimbursement.

Balance Sheet (Unaudited)

Total assets were $2.89 billion at September 30, 2024, an increase of $36.9 million, or 1.3%, from $2.85 billion at June 30, 2024, an increase of $100.3 million, or 3.6%, from $2.79 billion at December 31, 2023, and an increase of $321.9 million, or 12.5%, from $2.57 billion at September 30, 2023. The increases for the current quarter and year-to-date period were primarily due to increases in loans held-for-investment and other assets. During the current quarter, the Company invested $5.0 million in a qualified affordable housing project for lower income tenants in California. The recorded investment amount of the investment is included in Other Assets on the Consolidated Balance Sheets (unaudited).

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)	9/30/2024		6/30/2024		% Change		12/31/2023		% Change		9/30/2023		% Change
Commercial real estate:
Commercial property	$	874,824	$	852,677	2.6	%	$	855,270	2.3	%	$	814,547	7.4	%
Business property		579,461		572,643	1.2	%		558,772	3.7	%		537,351	7.8	%
Multifamily		185,485		177,657	4.4	%		132,500	40.0	%		132,558	39.9	%
Construction		21,150		28,316	(25.3	)%		24,843	(14.9	)%		19,246	9.9	%
Total commercial real estate		1,660,920		1,631,293	1.8	%		1,571,385	5.7	%		1,503,702	10.5	%
Commercial and industrial		407,024		417,333	(2.5	)%		342,002	19.0	%		279,608	45.6	%
Consumer:
Residential mortgage		383,377		384,905	(0.4	)%		389,420	(1.6	)%		363,369	5.5	%
Other consumer		14,853		15,543	(4.4	)%		20,645	(28.1	)%		20,926	(29.0	)%
Total consumer		398,230		400,448	(0.6	)%		410,065	(2.9	)%		384,295	3.6	%
Loans held-for-investment		2,466,174		2,449,074	0.7	%		2,323,452	6.1	%		2,167,605	13.8	%
Loans held-for-sale		5,170		2,959	74.7	%		5,155	0.3	%		6,693	(22.8	)%
Total loans	$	2,471,344	$	2,452,033	0.8	%	$	2,328,607	6.1	%	$	2,174,298	13.7	%

SBA loans included in:
Loans held-for-investment	$	142,819	$	144,440	(1.1	)%	$	145,603	(1.9	)%	$	129,866	10.0	%
Loans held-for-sale	$	5,170	$	2,959	74.7	%	$	5,155	0.3	%	$	16,272	(68.2	)%

The increase in loans held-for-investment for the current quarter was primarily due to new funding and advances on lines of credit of $764.7 million, partially offset by pay-downs and pay-offs of $746.8 million. The increase for the current year-to-date period was primarily due to new funding and advances on lines of credit of $1.83 billion, partially offset by pay-downs and pay-offs of $1.69 billion.

The increase in loans held-for-sale for the current quarter was primarily due to new funding of $15.9 million and a loan transferred from loan held-for-investment of $676 thousand, partially offset by sales of $14.2 million, and pay-downs and pay-offs of $174 thousand. The increase for the current year-to-date period was primarily due to new funding of $48.3 million and a loan transferred from loan held-for-investment of $676 thousand, partially offset by sales of $47.2 million, and pay-downs and pay-offs of $1.8 million.

The following table presents a composition of off-balance sheet credit exposure as of the dates indicated:

($ in thousands)	9/30/2024		6/30/2024		% Change		12/31/2023		% Change		9/30/2023		% Change
Commercial property	$	3,291	$	6,309	(47.8	)%	$	11,634	(71.7	)%	$	9,827	(66.5	)%
Business property		12,441		11,607	7.2	%		9,899	25.7	%		8,388	48.3	%
Multifamily		—		1,800	(100.0	)%		1,800	(100.0	)%		1,800	(100.0	)%
Construction		17,810		22,030	(19.2	)%		23,739	(25.0	)%		29,293	(39.2	)%
Commercial and industrial		394,428		336,121	17.3	%		351,025	12.4	%		283,119	39.3	%
Other consumer		5,590		5,192	7.7	%		3,421	63.4	%		271	1,962.7	%
Total commitments to extend credit		433,560		383,059	13.2	%		401,518	8.0	%		332,698	30.3	%
Letters of credit		6,673		6,808	(2.0	)%		6,583	1.4	%		6,083	9.7	%
Total off-balance sheet credit exposure	$	440,233	$	389,867	12.9	%	$	408,101	7.9	%	$	338,781	29.9	%

Credit Quality

The following table presents a summary of non-performing loans and assets, and classified assets as of the dates indicated:

($ in thousands)	9/30/2024			6/30/2024			% Change		12/31/2023			% Change		9/30/2023			% Change
Nonaccrual loans
Commercial real estate:
Commercial property	$	1,633		$	1,804		(9.5	)%	$	958		70.5	%	$	686		138.0	%
Business property		2,367			2,440		(3.0	)%		2,865		(17.4	)%		2,964		(20.1	)%
Multifamily		2,038			2,038		—	%		—		NM			—		NM
Total commercial real estate		6,038			6,282		(3.9	)%		3,823		57.9	%		3,650		65.4	%
Commercial and industrial		124			112		10.7	%		68		82.4	%		72		72.2	%
Consumer:
Residential mortgage		414			1,100		(62.4	)%		—		NM			—		NM
Other consumer		38			6		533.3	%		25		52.0	%		8		375.0	%
Total consumer		452			1,106		(59.1	)%		25		1,708.0	%		8		5,550.0	%
Total nonaccrual loans held-for-investment		6,614			7,500		(11.8	)%		3,916		68.9	%		3,730		77.3	%
Loans past due 90 days or more and still accruing		—			—		—	%		—		—	%		—		—	%
Non-performing loans (“NPLs”)		6,614			7,500		(11.8	)%		3,916		68.9	%		3,730		77.3	%
NPLs held-for-sale		—			—		—	%		—		—	%		—		—	%
Total NPLs		6,614			7,500		(11.8	)%		3,916		68.9	%		3,730		77.3	%
Other real estate owned (“OREO”)		466			—		NM			2,558		(81.8	)%		—		NM
Non-performing assets (“NPAs”)	$	7,080		$	7,500		(5.6	)%	$	6,474		9.4	%	$	3,730		89.8	%
Loans past due and still accruing
Past due 30 to 59 days	$	2,973		$	2,245		32.4	%	$	1,394		113.3	%	$	654		354.6	%
Past due 60 to 89 days		21			41		(48.8	)%		34		(38.2	)%		54		(61.1	)%
Past due 90 days or more		—			—		—	%		—		—	%		—		—	%
Total loans past due and still accruing	$	2,994		$	2,286		31.0	%		1,428		109.7	%	$	708		322.9	%
Special mention loans	$	5,057		$	5,080		(0.5	)%	$	5,156		(1.9	)%	$	5,281		(4.2	)%
Classified assets
Classified loans held-for-investment	$	8,860		$	9,752		(9.1	)%	$	7,000		26.6	%	$	6,742		31.4	%
Classified loans held-for-sale		—			—		—	%		—		—	%		—		—	%
OREO		466			—		NM			2,558		(81.8	)%		—		NM
Classified assets	$	9,326		$	9,752		(4.4	)%	$	9,558		(2.4	)%	$	6,742		38.3	%
NPLs to loans held-for-investment		0.27	%		0.31	%				0.17	%				0.17	%
NPAs to total assets		0.24	%		0.26	%				0.23	%				0.15	%
Classified assets to total assets		0.32	%		0.34	%				0.34	%				0.26	%

Allowance for Credit Losses

The following table presents activities in ACL for the periods indicated:

	Three Months Ended					Nine Months Ended
($ in thousands)	9/30/2024	6/30/2024	% Change	9/30/2023	% Change	9/30/2024	9/30/2023	% Change
ACL on loans
Balance at beginning of period	$ 28,747	$ 28,332	1.5 %	$ 24,867	15.6 %	$ 27,533	$ 24,942	10.4 %
Impact of ASC 326 adoption	—	—	NM	—	NM	—	1,067	NM
Charge-offs	(111)	—	— %	(112)	(0.9) %	(296)	(119)	148.7 %
Recoveries	101	86	17.4 %	22	359.1 %	249	1,147	(78.3) %
Provision (reversal) for credit losses on loans	193	329	(41.3) %	822	(76.5) %	1,444	(1,438)	(200.4) %
Balance at end of period	$ 28,930	$ 28,747	0.6 %	$ 25,599	13.0 %	$ 28,930	$ 25,599	13.0 %
Percentage to loans held-for-investment at end of period	1.17 %	1.17 %		1.18 %		1.17 %	1.18 %
ACL on off-balance sheet credit exposure
Balance at beginning of period	$ 1,375	$ 1,445	(4.8) %	$ 1,585	(13.2) %	$ 1,277	$ 299	327.1 %
Impact of ASC 326 adoption	—	—	NM	—	NM	—	1,607	NM
Provision (reversal) for credit losses on off-balance sheet credit exposure	(143)	(70)	104.3 %	(71)	101.4 %	(45)	(392)	(88.5) %
Balance at end of period	$ 1,232	$ 1,375	(10.4) %	$ 1,514	(18.6) %	$ 1,232	$ 1,514	(18.6) %

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 reflected 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 $147.6 million at September 30, 2024, a decrease of $374 thousand, or 0.3%, from $148.0 million at June 30, 2024, but an increase of $4.3 million, 3.0%, from $143.3 million at December 31, 2023 and an increase of $8.4 million, or 6.0%, from $139.2 million at September 30, 2023. The decrease for the current quarter was primarily due to principal pay-downs of $5.6 million and net premium amortization of $41 thousand, partially offset by a fair value increase of $5.3 million. The increase for the current year-to-date period was primarily due to purchases of $14.8 million and a fair value increase of $3.5 million, partially offset by principal pay-downs of $13.9 million and net premium amortization of $123 thousand.

Deposits

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

	9/30/2024				6/30/2024				12/31/2023				9/30/2023
($ in thousands)	Amount		% to Total		Amount		% to Total		Amount		% to Total		Amount		% to Total
Noninterest-bearing demand deposits	$	540,068	22.0	%	$	543,538	22.6	%	$	594,673	25.3	%	$	611,021	27.9	%
Interest-bearing deposits
Savings		5,718	0.2	%		7,821	0.3	%		6,846	0.3	%		6,846	0.3	%
NOW		15,873	0.6	%		18,346	0.8	%		16,825	0.7	%		16,076	0.7	%
Retail money market accounts		470,347	19.1	%		457,760	18.9	%		397,531	16.8	%		436,115	19.8	%
Brokered money market accounts		1	0.1	%		1	0.1	%		1	0.1	%		1	0.1	%
Retail time deposits of
$250,000 or less		492,430	20.0	%		475,923	19.8	%		456,293	19.4	%		406,407	18.5	%
More than $250,000		580,166	23.6	%		559,832	23.2	%		515,702	21.9	%		454,406	20.8	%
State and brokered time deposits		355,079	14.4	%		343,033	14.3	%		363,741	15.5	%		261,257	11.9	%
Total interest-bearing deposits		1,919,614	78.0	%		1,862,716	77.4	%		1,756,939	74.7	%		1,581,108	72.1	%
Total deposits	$	2,459,682	100.0	%	$	2,406,254	100.0	%	$	2,351,612	100.0	%	$	2,192,129	100.0	%

Estimated total deposits not covered by deposit insurance	$	1,042,366	42.4	%	$	1,020,963	42.4	%	$	954,591	40.6	%	$	983,851	44.9	%

Total retail deposits were $2.10 billion at September 30, 2024, an increase of $41.4 million, or 2.0%, from $2.06 billion at June 30, 2024, an increase of $116.7 million, or 5.9%, from $1.99 billion at December 31, 2023, and an increase of $173.7 million, or 9.0%, from $1.93 billion at September 30, 2023.

The increase in retail time deposits for the current quarter was primarily due to new accounts of $76.6 million, renewals of the matured accounts of $117.9 million and balance increases of $9.5 million, partially offset by matured and closed accounts of $167.1 million. The increase for the current year-to-date period was primarily due to new accounts of $272.7 million, renewals of the matured accounts of $560.4 million and balance increases of $28.4 million, partially offset by matured and closed accounts of $760.8 million.

Liquidity

The following table presents a summary of the Company’s liquidity position as of the dates indicated:

($ in thousands)	9/30/2024			12/31/2023			% Change
Cash and cash equivalents	$	193,064		$	242,342		(20.3	)%
Cash and cash equivalents to total assets		6.7	%		8.7	%

Available borrowing capacity
FHLB advances	$	702,986		$	602,976		16.6	%
Federal Reserve Discount Window		578,713			528,893		9.4	%
Overnight federal funds lines		65,000			65,000		—	%
Total	$	1,346,699		$	1,196,869		12.5	%
Total available borrowing capacity to total assets		46.6	%		42.9	%

Shareholders’ Equity

Shareholders’ equity was $362.3 million at September 30, 2024, an increase of $8.8 million, or 2.5%, from $353.5 million at June 30, 2024, an increase of $13.4 million, or 3.8%, from $348.9 million at December 31, 2023, and an increase of $20.4 million, or 6.0%, from $341.9 million at September 30, 2023. The increase for the current quarter was primarily due to net income and a decrease in accumulated other comprehensive loss of $3.7 million, partially offset by cash dividends declared on common stock of $2.6 million and preferred stock dividends of $346 thousand. The increase for the current year-to-date period was primarily due to net income and a decrease in accumulated other comprehensive loss of $2.5 million, partially offset by cash dividends declared on common stock of $7.7 million, preferred stock dividends of $488 thousand, and repurchase of common stock of $222 thousand.

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. During the current year-to-date period, the Company repurchased and retired 14,947 shares of common stock at a weighted-average price of $14.88, totaling $222 thousand. As of September 30, 2024, the Company is authorized to purchase 577,777 additional shares under its current stock repurchase program, which expires on August 2, 2025.

Series C Preferred Stock

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 bore no dividend for the first 24 months following the investment date. Thereafter, the dividend rate will be determined quarterly 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 began paying quarterly dividends on the Series C Preferred Stock at an annualized dividend rate of 2% in the second quarter of 2024. The dividends totaled $346 thousand and $488 thousand for the current quarter and year-to-date period, respectively.

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:

	9/30/2024	6/30/2024	12/31/2023	9/30/2023	Well Capitalized Minimum Requirements
PCB Bancorp
Common tier 1 capital (to risk-weighted assets)	11.92 %	11.91 %	12.23 %	13.07 %	N/A
Total capital (to risk-weighted assets)	15.88 %	15.94 %	16.39 %	17.48 %	N/A
Tier 1 capital (to risk-weighted assets)	14.68 %	14.71 %	15.16 %	16.24 %	N/A
Tier 1 capital (to average assets)	12.79 %	12.66 %	13.43 %	13.76 %	N/A
PCB Bank
Common tier 1 capital (to risk-weighted assets)	14.33 %	14.38 %	14.85 %	15.87 %	6.5 %
Total capital (to risk-weighted assets)	15.54 %	15.60 %	16.07 %	17.11 %	10.0 %
Tier 1 capital (to risk-weighted assets)	14.33 %	14.38 %	14.85 %	15.87 %	8.0 %
Tier 1 capital (to average assets)	12.49 %	12.37 %	13.16 %	13.44 %	5.0 %

About PCB Bancorp

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

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan,” or words or phases of similar meaning. We caution that the forward-looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control, including but not limited to 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.

PCB Bancorp and Subsidiary Consolidated Balance Sheets (Unaudited) ($ in thousands, except share and per share data)
	9/30/2024			6/30/2024			% Change		12/31/2023			% Change		9/30/2023			% Change
Assets
Cash and due from banks	$	29,981		$	23,247		29.0	%	$	26,518		13.1	%	$	22,691		32.1	%
Interest-bearing deposits in other financial institutions		163,083			154,383		5.6	%		215,824		(24.4	)%		169,659		(3.9	)%
Total cash and cash equivalents		193,064			177,630		8.7	%		242,342		(20.3	)%		192,350		0.4	%
Securities available-for-sale, at fair value		147,635			148,009		(0.3	)%		143,323		3.0	%		139,218		6.0	%
Loans held-for-sale		5,170			2,959		74.7	%		5,155		0.3	%		6,693		(22.8	)%
Loans held-for-investment		2,466,174			2,449,074		0.7	%		2,323,452		6.1	%		2,167,605		13.8	%
Allowance for credit losses on loans		(28,930	)		(28,747	)	0.6	%		(27,533	)	5.1	%		(25,599	)	13.0	%
Net loans held-for-investment		2,437,244			2,420,327		0.7	%		2,295,919		6.2	%		2,142,006		13.8	%
Premises and equipment, net		8,414			8,923		(5.7	)%		5,999		40.3	%		6,229		35.1	%
Federal Home Loan Bank and other bank stock		14,042			14,042		—	%		12,716		10.4	%		12,716		10.4	%
Other real estate owned, net		466			—		NM			2,558		(81.8	)%		—		NM
Bank-owned life insurance		31,520			31,281		0.8	%		30,817		2.3	%		30,615		3.0	%
Deferred tax assets, net		—			—		—	%		—		—	%		4,486		(100.0	)%
Servicing assets		5,902			6,205		(4.9	)%		6,666		(11.5	)%		6,920		(14.7	)%
Operating lease assets		17,932			17,609		1.8	%		18,913		(5.2	)%		5,626		218.7	%
Accrued interest receivable		9,896			10,464		(5.4	)%		9,468		4.5	%		8,731		13.3	%
Other assets		18,548			15,515		19.5	%		15,630		18.7	%		12,384		49.8	%
Total assets	$	2,889,833		$	2,852,964		1.3	%	$	2,789,506		3.6	%	$	2,567,974		12.5	%
Liabilities
Deposits
Noninterest-bearing demand	$	540,068		$	543,538		(0.6	)%	$	594,673		(9.2	)%	$	611,021		(11.6	)%
Savings, NOW and money market accounts		491,939			483,928		1.7	%		421,203		16.8	%		459,038		7.2	%
Time deposits of $250,000 or less		787,509			758,956		3.8	%		760,034		3.6	%		607,664		29.6	%
Time deposits of more than $250,000		640,166			619,832		3.3	%		575,702		11.2	%		514,406		24.4	%
Total deposits		2,459,682			2,406,254		2.2	%		2,351,612		4.6	%		2,192,129		12.2	%
Other short-term borrowings		—			4,000		(100.0	)%		—		—	%		—		—	%
Federal Home Loan Bank advances		—			32,000		(100.0	)%		39,000		(100.0	)%		—		—	%
Deferred tax liabilities, net		1,168			577		102.4	%		876		33.3	%		—		NM
Operating lease liabilities		19,301			18,939		1.9	%		20,137		(4.2	)%		5,852		229.8	%
Accrued interest payable and other liabilities		47,382			37,725		25.6	%		29,009		63.3	%		28,141		68.4	%
Total liabilities		2,527,533			2,499,495		1.1	%		2,440,634		3.6	%		2,226,122		13.5	%
Commitments and contingent liabilities
Shareholders’ equity
Preferred stock		69,141			69,141		—	%		69,141		—	%		69,141		—	%
Common stock		142,926			142,698		0.2	%		142,563		0.3	%		143,401		(0.3	)%
Retained earnings		156,680			151,781		3.2	%		146,092		7.2	%		142,750		9.8	%
Accumulated other comprehensive loss, net		(6,447	)		(10,151	)	(36.5	)%		(8,924	)	(27.8	)%		(13,440	)	(52.0	)%
Total shareholders’ equity		362,300			353,469		2.5	%		348,872		3.8	%		341,852		6.0	%
Total liabilities and shareholders’ equity	$	2,889,833		$	2,852,964		1.3	%	$	2,789,506		3.6	%	$	2,567,974		12.5	%

Outstanding common shares		14,266,725			14,254,024					14,260,440					14,319,014
Book value per common share ⁽¹⁾	$	25.39		$	24.80				$	24.46				$	23.87
TCE per common share⁽²⁾	$	20.55		$	19.95				$	19.62				$	19.05
Total loan to total deposit ratio		100.47	%		101.90	%				99.02	%				99.19	%
Noninterest-bearing deposits to total deposits		21.96	%		22.59	%				25.29	%				27.87	%

(1)		The ratios are calculated by dividing total shareholders’ equity by the number of outstanding common shares. The Company did not have any intangible equity components for the presented periods.
(2)		Non-GAAP. See “Non-GAAP Measures” for reconciliation of this measure to its most comparable GAAP measure.

PCB Bancorp and Subsidiary Consolidated Statements of Income (Unaudited) ($ in thousands, except share and per share data)
	Three Months Ended													Nine Months Ended
	9/30/2024			6/30/2024			% Change		9/30/2023			% Change		9/30/2024			9/30/2023			% Change
Interest and dividend income
Loans, including fees	$	42,115		$	40,626		3.7	%	$	34,651		21.5	%	$	121,992		$	98,840		23.4	%
Investment securities		1,384			1,310		5.6	%		1,170		18.3	%		3,940			3,408		15.6	%
Other interest-earning assets		2,499			3,009		(16.9	)%		3,031		(17.6	)%		8,566			7,978		7.4	%
Total interest income		45,998			44,945		2.3	%		38,852		18.4	%		134,498			110,226		22.0	%
Interest expense
Deposits		23,057			22,536		2.3	%		16,403		40.6	%		67,560			43,437		55.5	%
Other borrowings		222			674		(67.1	)%		—		NM			1,485			209		610.5	%
Total interest expense		23,279			23,210		0.3	%		16,403		41.9	%		69,045			43,646		58.2	%
Net interest income		22,719			21,735		4.5	%		22,449		1.2	%		65,453			66,580		(1.7	)%
Provision (reversal) for credit losses		50			259		(80.7	)%		751		(93.3	)%		1,399			(1,830	)	NM
Net interest income after provision (reversal) for credit losses		22,669			21,476		5.6	%		21,698		4.5	%		64,054			68,410		(6.4	)%
Noninterest income
Gain on sale of loans		750			763		(1.7	)%		689		8.9	%		2,591			2,767		(6.4	)%
Service charges and fees on deposits		399			364		9.6	%		371		7.5	%		1,141			1,084		5.3	%
Loan servicing income		786			799		(1.6	)%		851		(7.6	)%		2,504			2,579		(2.9	)%
Bank-owned life insurance income		239			236		1.3	%		187		27.8	%		703			551		27.6	%
Other income		446			323		38.1	%		404		10.4	%		1,111			1,199		(7.3	)%
Total noninterest income		2,620			2,485		5.4	%		2,502		4.7	%		8,050			8,180		(1.6	)%
Noninterest expense
Salaries and employee benefits		8,801			9,225		(4.6	)%		8,572		2.7	%		27,244			26,175		4.1	%
Occupancy and equipment		2,261			2,300		(1.7	)%		1,964		15.1	%		6,919			5,779		19.7	%
Professional fees		599			973		(38.4	)%		685		(12.6	)%		2,656			2,189		21.3	%
Marketing and business promotion		667			318		109.7	%		980		(31.9	)%		1,304			1,555		(16.1	)%
Data processing		397			495		(19.8	)%		367		8.2	%		1,294			1,159		11.6	%
Director fees and expenses		226			221		2.3	%		152		48.7	%		679			549		23.7	%
Regulatory assessments		309			327		(5.5	)%		281		10.0	%		934			818		14.2	%
Other expense		1,342			1,316		2.0	%		1,206		11.3	%		5,099			3,364		51.6	%
Total noninterest expense		14,602			15,175		(3.8	)%		14,207		2.8	%		46,129			41,588		10.9	%
Income before income taxes		10,687			8,786		21.6	%		9,993		6.9	%		25,975			35,002		(25.8	)%
Income tax expense		2,873			2,505		14.7	%		2,970		(3.3	)%		7,195			10,205		(29.5	)%
Net income		7,814			6,281		24.4	%		7,023		11.3	%		18,780			24,797		(24.3	)%
Preferred stock dividends		346			142		143.7	%		—		NM			488			—		NM
Net income available to common shareholders	$	7,468		$	6,139		21.6	%	$	7,023		6.3	%	$	18,292		$	24,797		(26.2	)%
Earnings per common share
Basic	$	0.52		$	0.43				$	0.49				$	1.28		$	1.73
Diluted	$	0.52		$	0.43				$	0.49				$	1.27		$	1.71
Average common shares
Basic		14,241,014			14,237,083					14,294,802					14,237,851			14,327,930
Diluted		14,356,384			14,312,949					14,396,216					14,328,510			14,441,960
Dividend paid per common share	$	0.18		$	0.18				$	0.18				$	0.54		$	0.51
Return on average assets ⁽¹⁾		1.08	%		0.89	%				1.09	%				0.88	%		1.32	%
Return on average shareholders’ equity⁽¹⁾		8.70	%		7.19	%				8.12	%				7.11	%		9.77	%
Return on average TCE ^{(1), (2)}		10.31	%		8.75	%				10.17	%				8.61	%		12.27	%
Efficiency ratio⁽³⁾		57.63	%		62.65	%				56.94	%				62.76	%		55.63	%

(1)		Ratios are presented on an annualized basis.
(2)		Non-GAAP. See “Non-GAAP Measures” for reconciliation of this measure to its most comparable GAAP measure.
(3)		The ratios are calculated by dividing noninterest expense by the sum of net interest income and noninterest income.

PCB Bancorp and Subsidiary Average Balance, Average Yield, and Average Rate (Unaudited) ($ in thousands)
	Three Months Ended
	9/30/2024							6/30/2024							9/30/2023
	Average Balance			Interest Income/ Expense		Avg. Yield/Rate⁽⁶⁾		Average Balance			Interest Income/ Expense		Avg. Yield/Rate⁽⁶⁾		Average Balance			Interest Income/ Expense		Avg. Yield/Rate⁽⁶⁾
Assets
Interest-earning assets
Total loans ⁽¹⁾	$	2,456,015		$	42,115	6.82	%	$	2,414,824		$	40,626	6.77	%	$	2,137,184		$	34,651	6.43	%
Mortgage-backed securities		111,350			1,000	3.57	%		104,538			911	3.50	%		98,534			750	3.02	%
Collateralized mortgage obligation		22,661			244	4.28	%		22,992			249	4.36	%		24,959			262	4.16	%
SBA loan pool securities		6,571			69	4.18	%		6,891			74	4.32	%		7,842			81	4.10	%
Municipal bonds ⁽²⁾		2,698			24	3.54	%		3,238			29	3.60	%		3,602			30	3.30	%
Corporate bonds		4,248			47	4.40	%		4,157			47	4.55	%		4,056			47	4.60	%
Other interest-earning assets		175,711			2,499	5.66	%		213,428			3,009	5.67	%		219,115			3,031	5.49	%
Total interest-earning assets		2,779,254			45,998	6.58	%		2,770,068			44,945	6.53	%		2,495,292			38,852	6.18	%
Noninterest-earning assets
Cash and due from banks		24,098							23,057							21,298
ACL on loans		(28,797	)						(28,372	)						(24,869	)
Other assets		92,152							88,399							71,512
Total noninterest-earning assets		87,453							83,084							67,941
Total assets	$	2,866,707						$	2,853,152						$	2,563,233
Liabilities and Shareholders’ Equity
Interest-bearing liabilities
Deposits
NOW and money market accounts	$	496,158			5,129	4.11	%	$	473,557			4,876	4.14	%	$	481,341			4,398	3.62	%
Savings		6,204			4	0.26	%		6,899			4	0.23	%		7,197			4	0.22	%
Time deposits		1,390,644			17,924	5.13	%		1,383,167			17,656	5.13	%		1,073,044			12,001	4.44	%
Total interest-bearing deposits		1,893,006			23,057	4.85	%		1,863,623			22,536	4.86	%		1,561,582			16,403	4.17	%
Other borrowings		15,848			222	5.57	%		48,462			674	5.59	%		—			—	—	%
Total interest-bearing liabilities		1,908,854			23,279	4.85	%		1,912,085			23,210	4.88	%		1,561,582			16,403	4.17	%
Noninterest-bearing liabilities
Noninterest-bearing demand		534,761							535,508							626,738
Other liabilities		65,716							54,338							31,769
Total noninterest-bearing liabilities		600,477							589,846							658,507
Total liabilities		2,509,331							2,501,931							2,220,089
Total shareholders’ equity		357,376							351,221							343,144
Total liabilities and shareholders’ equity	$	2,866,707						$	2,853,152						$	2,563,233
Net interest income				$	22,719						$	21,735						$	22,449
Net interest spread⁽³⁾						1.73	%						1.65	%						2.01	%
Net interest margin ⁽⁴⁾						3.25	%						3.16	%						3.57	%
Total deposits	$	2,427,767		$	23,057	3.78	%	$	2,399,131		$	22,536	3.78	%	$	2,188,320		$	16,403	2.97	%
Total funding ⁽⁵⁾	$	2,443,615		$	23,279	3.79	%	$	2,447,593		$	23,210	3.81	%	$	2,188,320		$	16,403	2.97	%

(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.

PCB Bancorp and Subsidiary Average Balance, Average Yield, and Average Rate (Unaudited) ($ in thousands)
	Nine Months Ended
	9/30/2024							9/30/2023
	Average Balance			Interest Income/ Expense		Avg. Yield/Rate⁽⁶⁾		Average Balance			Interest Income/ Expense		Avg. Yield/Rate⁽⁶⁾
Assets
Interest-earning assets
Total loans ⁽¹⁾	$	2,413,777		$	121,992	6.75	%	$	2,102,600		$	98,840	6.29	%
Mortgage-backed securities		105,933			2,750	3.47	%		98,364			2,146	2.92	%
Collateralized mortgage obligation		23,137			747	4.31	%		25,970			780	4.02	%
SBA loan pool securities		6,925			221	4.26	%		8,406			244	3.88	%
Municipal bonds ⁽²⁾		3,077			81	3.52	%		4,017			97	3.23	%
Corporate bonds		4,211			141	4.47	%		4,300			141	4.38	%
Other interest-earning assets		201,951			8,566	5.67	%		206,720			7,978	5.16	%
Total interest-earning assets		2,759,011			134,498	6.51	%		2,450,377			110,226	6.01	%
Noninterest-earning assets
Cash and due from banks		22,845							21,069
ACL on loans		(28,251	)						(25,438	)
Other assets		89,784							72,616
Total noninterest-earning assets		84,378							68,247
Total assets	$	2,843,389						$	2,518,624
Liabilities and Shareholders’ Equity
Interest-bearing liabilities
Deposits
NOW and money market accounts	$	474,584			14,670	4.13	%	$	477,605			11,772	3.30	%
Savings		6,432			12	0.25	%		7,684			14	0.24	%
Time deposits		1,380,379			52,878	5.12	%		1,015,234			31,651	4.17	%
Total interest-bearing deposits		1,861,395			67,560	4.85	%		1,500,523			43,437	3.87	%
Other borrowings		35,427			1,485	5.60	%		5,212			209	5.36	%
Total interest-bearing liabilities		1,896,822			69,045	4.86	%		1,505,735			43,646	3.88	%
Noninterest-bearing liabilities
Noninterest-bearing demand		537,682							647,258
Other liabilities		56,019							26,208
Total noninterest-bearing liabilities		593,701							673,466
Total liabilities		2,490,523							2,179,201
Total shareholders’ equity		352,866							339,423
Total liabilities and shareholders’ equity	$	2,843,389						$	2,518,624
Net interest income				$	65,453						$	66,580
Net interest spread⁽³⁾						1.65	%						2.13	%
Net interest margin ⁽⁴⁾						3.17	%						3.63	%
Total deposits	$	2,399,077		$	67,560	3.76	%	$	2,147,781		$	43,437	2.70	%
Total funding ⁽⁵⁾	$	2,434,504		$	69,045	3.79	%	$	2,152,993		$	43,646	2.71	%

(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.

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									Nine Months Ended
($ in thousands)		9/30/2024			6/30/2024			9/30/2023			9/30/2024			9/30/2023
Average total shareholders' equity	(a)	$	357,376		$	351,221		$	343,144		$	352,866		$	339,423
Less: average preferred stock	(b)		69,141			69,141			69,141			69,141			69,141
Average TCE	(c)=(a)-(b)	$	288,235		$	282,080		$	274,003		$	283,725		$	270,282
Net income	(d)	$	7,814		$	6,281		$	7,023		$	18,780		$	24,797
Return on average shareholder's equity ⁽¹⁾	(d)/(a)		8.70	%		7.19	%		8.12	%		7.11	%		9.77	%
Net income available to common shareholders	(e)	$	7,468		$	6,139		$	7,023		$	18,292		$	24,797
Return on average TCE ⁽¹⁾	(e)/(c)		10.31	%		8.75	%		10.17	%		8.61	%		12.27	%

(1)

Annualized.

($ in thousands, except per share data)		9/30/2024			6/30/2024			12/31/2023			9/30/2023
Total shareholders' equity	(a)	$	362,300		$	353,469		$	348,872		$	341,852
Less: preferred stock	(b)		69,141			69,141			69,141			69,141
TCE	(c)=(a)-(b)	$	293,159		$	284,328		$	279,731		$	272,711
Outstanding common shares	(d)		14,266,725			14,254,024			14,260,440			14,319,014
Book value per common share	(a)/(d)	$	25.39		$	24.80		$	24.46		$	23.87
TCE per common share	(c)/(d)	$	20.55		$	19.95		$	19.62		$	19.05
Total assets	(e)	$	2,889,833		$	2,852,964		$	2,789,506		$	2,567,974
Total shareholders' equity to total assets	(a)/(e)		12.54	%		12.39	%		12.51	%		13.31	%
TCE to total assets	(c)/(e)		10.14	%		9.97	%		10.03	%		10.62	%