EX-99.1 2 pcber20220728.htm EX-99.1 Document

Exhibit 99.1

pcbbancorpb.jpg
PCB Bancorp Reports Earnings of $9.1 million for Q2 2022 and Announces Name Change of its Subsidiary, Pacific City Bank, to PCB Bank
Los Angeles, California - July 28, 2022 - PCB Bancorp (the “Company”) (NASDAQ: PCB), the holding company of Pacific City Bank (the “Bank”), today reported net income of $9.1 million, or $0.60 per diluted common share, for the second quarter of 2022, compared with $10.2 million, or $0.67 per diluted common share, for the previous quarter and $9.8 million, or $0.64 per diluted common share, for the year-ago quarter.
The Company also announced that the Bank will change its name to PCB Bank, effective August 25, 2022. In addition, the Company introduced a new logo, which will also be utilized by the Bank after its name change.
Q2 2022 Highlights
•Net income totaled $9.1 million, or $0.60 per diluted common share, for the current quarter;
◦The Company recorded a reversal for loan losses of $109 thousand for the current quarter compared with $1.2 million for the previous quarter and $934 thousand for the year-ago quarter.
◦Allowance for loan losses (“Allowance”) to loans held-for-investment(1) ratio was 1.15% at June 30, 2022 compared with 1.22% at March 31, 2022, 1.29% at December 31, 2021 and 1.45% at June 30, 2021. Adjusted Allowance to loans held-for-investment ratio(2) was 1.15% at June 30, 2022 compared with 1.23% at March 31, 2022, 1.34% at December 31, 2021 and 1.62% at June 30, 2021.
◦Net interest income was $21.4 million for the current quarter compared with $20.0 million for the previous quarter and $19.0 million for the year-ago quarter. Net interest margin was 4.01% for the current quarter compared with 3.87% for the previous quarter and 3.83% for the year-ago quarter.
◦Gain on sale of loans was $2.0 million for the current quarter compared with $3.8 million for the previous quarter and $4.0 million for the year-ago quarter.
•Total assets were $2.34 billion at June 30, 2022, an increase of $144.8 million, or 6.6%, from $2.20 billion at March 31, 2022, an increase of $194.8 million, or 9.1%, from $2.15 billion at December 31, 2021, and an increase of $284.6 million, or 13.8%, from $2.06 billion at June 30, 2021;
•Loans held-for-investment were $1.83 billion at June 30, 2022, an increase of $90.1 million, or 5.2%, from $1.74 billion at March 31, 2022, an increase of $100.8 million, or 5.8%, from $1.73 billion at December 31, 2021, and an increase of $113.4 million, or 6.6%, from $1.72 billion at June 30, 2021;
◦SBA PPP loans totaled $1.6 million, $22.9 million, $65.3 million, and $181.0 million at June 30, 2022, March 31, 2022, December 31, 2021, and June 30, 2021, respectively.
◦The Company had no loans under modified terms related to COVID-19 at June 30, 2022, March 31, 2022, and December 31, 2021. Loans under modified terms related to the COVID-19 pandemic totaled $16.2 million at June 30, 2021.
•Total deposits were $2.00 billion at June 30, 2022, an increase of $87.2 million, or 4.6%, from $1.91 billion at March 31, 2022, an increase of $130.5 million, or 7.0%, from $1.87 billion at December 31, 2021, and an increase of $200.0 million, or 11.1%, from $1.80 billion at June 30, 2021; and
•On May 24, 2022, the Company issued 69,141 shares of preferred stock in exchange for a capital investment of $69.1 million from the U.S. Department of Treasury (the “Treasury”) under the Emergency Capital Investment Program (“ECIP”).
-------------------------------------------------------------------------------------
(1)     Loans held-for-investment are presented net of deferred fees and costs in this press release.
(2)     Adjusted Allowance to loans held-for-investment ratio is a non-GAAP measure, which excludes U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans from loans held-for-investment. See “Non-GAAP Measures” for reconciliation of this measure to its most comparable GAAP measure.
1

“We are pleased with another solid financial performance for the second quarter of 2022,” stated Henry Kim, President and Chief Executive Officer. “We continued to maintain an asset-sensitive balance sheet and executed another quarterly performance of a well-balanced deposit and loan growth combined with a record net interest income.”
“During the second quarter of 2022, our deposits increased at an annualized rate of 18% and we funded $161 million in loans held-for-investment, resulting in a 26% annualized growth rate, excluding SBA PPP loans. Our outstanding credit quality continued as demonstrated by our non-performing assets to loans held-for-investment ratio of 0.09% and classified assets to total assets ratio of 0.20%. Our net interest margin expanded 14 basis points quarter-over-quarter to 4.01% for the second quarter while we maintained our efficiency rate at 49%.”
“As we look ahead to the second half of this year, in spite of the challenging economic outlook ahead, we will remain opportunistic with our strong capital position and continue to invest in our franchise value by expanding our footprint. We are on schedule to open two new full-service branches in Dallas, Texas and a new full-service branch in Palisades Park, New Jersey during the third quarter of this year,” concluded Kim.
Financial Highlights (Unaudited)
($ in thousands, except per share data)
Three Months Ended
Six Months Ended
6/30/20223/31/2022
% Change
6/30/2021
% Change
6/30/20226/30/2021% Change
Net income$9,092 $10,240 (11.2)%$9,844 (7.6)%$19,332 $18,404 5.0 %
Diluted earnings per common share$0.60 $0.67 (10.4)%$0.64 (6.3)%$1.27 $1.19 6.7 %
Net interest income$21,351 $19,993 6.8 %$18,996 12.4 %$41,344 $36,815 12.3 %
Reversal for loan losses(109)(1,191)(90.8)%(934)(88.3)%(1,300)(2,081)(37.5)%
Noninterest income3,648 5,286 (31.0)%5,151 (29.2)%8,934 8,008 11.6 %
Noninterest expense12,245 12,071 1.4 %11,139 9.9 %24,316 20,808 16.9 %
Return on average assets (1)
1.65 %1.92 %1.96 %1.78 %1.85 %
Return on average shareholders’ equity (1)
12.48 %16.01 %16.49 %14.13 %15.59 %
Return on average tangible common equity (“TCE”) (2)
13.85 %16.01 %16.49 %14.92 %15.59 %
Net interest margin (1)
4.01 %3.87 %3.83 %3.94 %3.77 %
Efficiency ratio (3)
48.98 %47.75 %46.13 %48.36 %46.42 %
($ in thousands, except per share data)6/30/20223/31/2022% Change12/31/2021% Change6/30/2021% Change
Total assets
$2,344,560 $2,199,742 6.6 %$2,149,735 9.1 %$2,060,003 13.8 %
Net loans held-for-investment
1,811,939 1,721,757 5.2 %1,709,824 6.0 %1,694,767 6.9 %
Total deposits
1,997,607 1,910,379 4.6 %1,867,134 7.0 %1,797,648 11.1 %
Book value per common share (4)
$22.36 $17.47 $17.24 $16.09 
TCE per common share (2)
$17.73 $17.47 $17.24 $16.09 
Tier 1 leverage ratio (consolidated)
15.37 %12.22 %12.11 %11.76 %
Total shareholders’ equity to total assets14.26 %11.87 %11.92 %11.60 %
TCE to total assets (2), (5)
11.31 %11.87 %11.92 %11.60 %
(1)Ratios are presented on an annualized basis.
(2)Non-GAAP. See “Non-GAAP Measures” for reconciliation of this measure to its most comparable GAAP measure.
(3)Calculated by dividing noninterest expense by the sum of net interest income and noninterest income.
(4)Calculated by dividing total shareholders’ equity by the number of outstanding common shares.
(5)The Company did not have any intangible asset component for the presented periods.


2

COVID-19 Pandemic
The ongoing COVID-19 pandemic, and governmental and societal responses thereto, have had a severe impact on global economic and market conditions. The U.S. government has enacted a number of monetary and fiscal policies to provide fiscal stimulus and relief in order to mitigate the impact of the COVID-19 pandemic. However, the COVID-19 pandemic continues to be a challenge to public health, including the emergence of new variants, and impact global economic and market conditions, including global supply chain disruptions and high inflation.
Since the beginning of the crisis, the Company has taken a number of steps to protect the safety of its employees and to support its customers. The Company has enabled its staff to work remotely and established safety measures within its bank premises and branches for both employees and customers. In order to support its customers, the Company has been in close contact with them, assessing the level of impact on their businesses, and putting a process in place to evaluate each client’s specific situation and provide relief programs where appropriate, including SBA PPP loans and loan modifications related to the COVID-19 pandemic.
At this time, the Company cannot estimate the long term impact of the COVID-19 pandemic, but these conditions are expected to continue to impact its business, results of operations, and financial condition negatively.
3

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
Six Months Ended
($ in thousands)6/30/20223/31/2022
% Change
6/30/2021% Change6/30/20226/30/2021% Change
Interest income/expense on
Loans
$21,243 $20,190 5.2 %$19,511 8.9 %$41,433 $38,255 8.3 %
Investment securities
668 476 40.3 %375 78.1 %1,144 735 55.6 %
Other interest-earning assets
535 228 134.6 %165 224.2 %763 319 139.2 %
Total interest-earning assets
22,446 20,894 7.4 %20,051 11.9 %43,340 39,309 10.3 %
Interest-bearing deposits
1,041 850 22.5 %1,000 4.1 %1,891 2,311 (18.2)%
Borrowings
54 51 5.9 %55 (1.8)%105 183 (42.6)%
Total interest-bearing liabilities
1,095 901 21.5 %1,055 3.8 %1,996 2,494 (20.0)%
Net interest income
$21,351 $19,993 6.8 %$18,996 12.4 %$41,344 $36,815 12.3 %
Average balance of
Loans
$1,804,368 $1,773,376 1.7 %$1,691,704 6.7 %$1,788,958 $1,666,808 7.3 %
Investment securities
135,324 123,230 9.8 %132,249 2.3 %129,310 128,073 1.0 %
Other interest-earning assets
195,633 198,918 (1.7)%164,710 18.8 %197,267 176,864 11.5 %
Total interest-earning assets
$2,135,325 $2,095,524 1.9 %$1,988,663 7.4 %$2,115,535 $1,971,745 7.3 %
Interest-bearing deposits
$1,001,424 $1,034,012 (3.2)%$1,026,937 (2.5)%$1,017,629 $1,040,316 (2.2)%
Borrowings
11,132 10,400 7.0 %19,012 (41.4)%10,768 47,128 (77.2)%
Total interest-bearing liabilities
$1,012,556 $1,044,412 (3.1)%$1,045,949 (3.2)%$1,028,397 $1,087,444 (5.4)%
Total funding (1)
$1,902,247 $1,885,038 0.9 %$1,766,054 7.7 %$1,893,691 $1,751,346 8.1 %
Annualized average yield/cost of 
Loans
4.72 %4.62 %4.63 %4.67 %4.63 %
Investment securities
1.98 %1.57 %1.14 %1.78 %1.16 %
Other interest-earning assets
1.10 %0.46 %0.40 %0.78 %0.36 %
Total interest-earning assets4.22 %4.04 %4.04 %4.13 %4.02 %
Interest-bearing deposits
0.42 %0.33 %0.39 %0.37 %0.45 %
Borrowings
1.95 %1.99 %1.16 %1.97 %0.78 %
Total interest-bearing liabilities0.43 %0.35 %0.40 %0.39 %0.46 %
Net interest margin4.01 %3.87 %3.83 %3.94 %3.77 %
Cost of total funding (1)
0.23 %0.19 %0.24 %0.21 %0.29 %
Supplementary information
Net accretion of discount on loans$907 $908 (0.1)%$1,012 (10.4)%$1,815 $1,757 3.3 %
Net amortization of deferred loan fees$606 $1,165 (48.0)%$1,459 (58.5)%$1,771 $2,679 (33.9)%
(1)Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.

4

Loans. The increases in average yield for the current quarter and year-to-date period were primarily due to an increase in overall interest rates on loans from the rising interest rate environment, partially offset by a decrease in net amortization of deferred loan fees from the decreased amount of SBA PPP loan payoffs.
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:
6/30/20223/31/202212/31/20216/30/2021
% to Total LoansWeighted-Average Contractual Rate% to Total LoansWeighted-Average Contractual Rate% to Total LoansWeighted-Average Contractual Rate% to Total LoansWeighted-Average Contractual Rate
Fixed rate loans
24.5 %4.35 %26.7 %4.25 %28.4 %3.98 %33.9 %3.56 %
Hybrid rate loans
37.0 %4.11 %31.5 %4.07 %29.1 %4.16 %22.5 %4.52 %
Variable rate loans
38.5 %5.12 %41.8 %4.14 %42.5 %3.95 %43.6 %3.99 %
Investment Securities. The increases in average yield for the current quarter and year-to-date period were primarily due to a decrease in net amortization of premiums on mortgage-backed securities and collateralized mortgage obligations.
Other Interest-Earning Assets. The increases in average yield for the current quarter and year-to-date period were primarily due to an increased interest rate on cash held at the Federal Reserve Bank (“FRB”) account. The increases in average balance for the current quarter and year-to-date period compared with the same periods of 2021 were primarily due to an increase in deposits and the ECIP capital investment, partially offset by an increase in loans. The Company maintains most of its cash at the FRB account.
Interest-Bearing Deposits. The increases in average cost for the current quarter compared with the previous and year-ago quarters were primarily due to an increase in market rates. The decrease in average cost for the current year-to-date period compared with the previous year-to-date period was primarily due to the lower interest rates on time deposits opened throughout 2021.
Borrowings. The increase in average cost for the current quarter compared with the year-ago quarter was primarily due to matured borrowings with lower interest rates during 2021. At June 30, 2022, the Company had no FHLB advances.
Reversal for Loan Losses
Reversal for loan losses was $109 thousand for the current quarter compared with $1.2 million for the previous quarter and $934 thousand for the year-ago quarter. For the current and previous year-to-date periods, reversal for loan losses was $1.3 million and $2.1 million, respectively. The reversals for the current quarter and year-to-date period were primarily due to a decrease in qualitative adjustment factor allocations related to economic implications of the COVID-19 pandemic. The Company recorded net charge-offs (recoveries) of $18 thousand for the current quarter compared with $(8) thousand for the previous quarter and $(309) thousand for the year-ago quarter. For the current and previous year-to-date periods, the Company recorded net charge-offs (recoveries) of $10 thousand and $(460) thousand, respectively.
Adjusted Allowance to loans held-for-investment ratio(1) was 1.15%, 1.23%, 1.34%, and 1.62% at June 30, 2022, March 31, 2022, December 31, 2021, and June 30, 2021, respectively.
-------------------------------------------------------------------------------------
(1)     Adjusted Allowance to loans held-for-investment ratio is a non-GAAP measure, which excludes SBA PPP loans from loans held-for-investment. See “Non-GAAP Measures” for reconciliation of this measure to its most comparable GAAP measure.
5

Noninterest Income
The following table presents the components of noninterest income for the periods indicated:
Three Months Ended
Six Months Ended
($ in thousands)6/30/20223/31/2022
% Change
6/30/2021
% Change
6/30/20226/30/2021
% Change
Gain on sale of loans
$2,039 $3,777 (46.0)%$3,967 (48.6)%$5,816 $5,289 10.0 %
Service charges and fees on deposits
330 303 8.9 %302 9.3 %633 595 6.4 %
Loan servicing income
755 700 7.9 %545 38.5 %1,455 1,427 2.0 %
Bank-owned life insurance income175 172 1.7 %— — %347 — — %
Other income
349 334 4.5 %337 3.6 %683 697 (2.0)%
Total noninterest income
$3,648 $5,286 (31.0)%$5,151 (29.2)%$8,934 $8,008 11.6 %
Gain on Sale of Loans. The following table presents information on gain on sale of loans for the periods indicated:
Three Months Ended
Six Months Ended
($ in thousands)6/30/20223/31/2022% Change6/30/2021% Change6/30/20226/30/2021% Change
Gain on sale of SBA loans
Sold loan balance
$38,442 $39,683 (3.1)%$34,107 12.7 %$78,125 $45,026 73.5 %
Premium received
2,600 4,206 (38.2)%4,172 (37.7)%6,806 5,481 24.2 %
Gain recognized
2,039 3,777 (46.0)%3,954 (48.4)%5,816 5,149 13.0 %
Gain on sale of residential property loans
Sold loan balance
$— $— — %$1,615 (100.0)%$— $9,522 (100.0)%
Gain recognized
— — — %13 (100.0)%— 140 (100.0)%
The decrease in gain on sale of SBA loans was primarily due to reduced premiums received in the secondary market.
Loan Servicing Income. The following table presents information on loan servicing income for the periods indicated:
Three Months Ended
Six Months Ended
($ in thousands)6/30/20223/31/2022
% Change
6/30/2021
% Change
6/30/20226/30/2021
% Change
Loan servicing income
Servicing income received
$1,287 $1,230 4.6 %$1,124 14.5 %$2,517 $2,397 5.0 %
Servicing assets amortization
(532)(530)0.4 %(579)(8.1)%(1,062)(970)9.5 %
Loan servicing income
$755 $700 7.9 %$545 38.5 %$1,455 $1,427 2.0 %
Underlying loans at end of period
$537,990 $531,183 1.3 %$492,130 9.3 %$537,990 $492,130 9.3 %
The Company services SBA loans and certain residential property loans that are sold to the secondary market.

6

Noninterest Expense
The following table presents the components of noninterest expense for the periods indicated:
Three Months Ended
Six Months Ended
($ in thousands)6/30/20223/31/2022% Change6/30/2021% Change6/30/20226/30/2021% Change
Salaries and employee benefits
$8,125 $8,595 (5.5)%$7,125 14.0 %$16,720 $13,307 25.6 %
Occupancy and equipment
1,537 1,397 10.0 %1,388 10.7 %2,934 2,759 6.3 %
Professional fees
642 403 59.3 %658 (2.4)%1,045 1,152 (9.3)%
Marketing and business promotion
310 207 49.8 %516 (39.9)%517 654 (20.9)%
Data processing
441 404 9.2 %396 11.4 %845 773 9.3 %
Director fees and expenses
182 169 7.7 %151 20.5 %351 289 21.5 %
Regulatory assessments
147 141 4.3 %179 (17.9)%288 387 (25.6)%
Other expense861 755 14.0 %726 18.6 %1,616 1,487 8.7 %
Total noninterest expense
$12,245 $12,071 1.4 %$11,139 9.9 %$24,316 $20,808 16.9 %
Salaries and Employee Benefits. The decrease in the current quarter compared with the previous quarter was primarily due to decreases in incentives tied to the sales of Loan Production Offices (“LPO”) originated SBA loans and vacation accrual, increases in loan origination cost, which offsets the recognition of salaries, partially offset by an increase in salaries from the increased number of employees. The increase in the current quarter compared with the year-ago quarter was primarily due to an increase in salaries from the annual merit increase and the increase in number of employees, partially offset by a decrease in incentives tied to the sales of LPO originated SBA loans and an increase in loan origination cost. The increase for the current year-to-date period compared with the previous year-to-date period was primarily due to increases in salaries, the incentives tied to sales of LPO originated SBA loans, and other employee benefit expenses, and a decrease in loan origination cost.
Total loan origination cost included in salaries and employee benefits were $461 thousand, $365 thousand, and $399 thousand for the current, previous, and year-ago quarters, respectively, and $826 thousand and $1.4 million for the current and previous year-to-date periods, respectively. The Company recognized a higher loan origination cost for the previous year-to-date period primarily due to the SBA PPP loan production in the first quarter of 2021. The number of full-time equivalent employees was 271, 256, and 248 as of June 30, 2022, March 31, 2022, and June 30, 2021, respectively.
Professional Fees. The increase for the current quarter compared with the previous quarter was primarily to increases in internal audit and other professional fees. The decrease for the current year-to-date period compared with the previous year-to-date period was primarily due to a decrease in internal audit fees.
Marketing and Business Promotion. The increase for the current quarter compared with the previous quarter was primarily due to increases in marketing activities and advertisement. The decreases for the current quarter and year-to-date period compared with the same periods of 2021 were primarily due to a decrease in advertisement, partially offset by an increase in marketing activities.
Director Fees and Expenses. The increases for the current quarter and year-to-date periods compared with the same periods of 2021 were primarily due to a new director appointed during the fourth quarter of 2021.
Regulatory Assessments. The decrease for the current quarter and year-to-date periods compared with the same periods of 2021 were primarily due to a decrease in assessment rate.

7

Balance Sheet (Unaudited)
Total assets were $2.34 billion at June 30, 2022, an increase of $144.8 million, or 6.6%, from $2.20 billion at March 31, 2022, an increase of $194.8 million, or 9.1%, from $2.15 billion at December 31, 2021, and an increase of $284.6 million, or 13.8%, from $2.06 billion at June 30, 2021. The increases for the current quarter and year-to-date period were primarily due to increases in cash and cash equivalents, securities available-for-sale, and loans held-for-investment, supported by an increase in deposits and the ECIP capital investment.
The following table presents a composition of total loans (includes both loans held-for-sale and loans held-for-investment) as of the dates indicated:
($ in thousands)6/30/20223/31/2022% Change12/31/2021% Change6/30/2021% Change
Real estate loans
Commercial property
$1,204,142 $1,150,101 4.7 %$1,105,843 8.9 %$997,918 20.7 %
Residential property
258,259 215,132 20.0 %209,485 23.3 %196,983 31.1 %
SBA property
131,420 129,400 1.6 %129,661 1.4 %124,251 5.8 %
Construction
12,595 9,522 32.3 %8,252 52.6 %13,475 (6.5)%
Commercial and industrial loans
Commercial term
73,885 69,836 5.8 %73,438 0.6 %74,503 (0.8)%
Commercial lines of credit
111,916 107,406 4.2 %100,936 10.9 %90,286 24.0 %
SBA commercial term
16,985 16,880 0.6 %17,640 (3.7)%19,614 (13.4)%
SBA PPP
1,583 22,926 (93.1)%65,329 (97.6)%181,019 (99.1)%
Other consumer loans
22,225 21,752 2.2 %21,621 2.8 %21,607 2.9 %
Loans held-for-investment
1,833,010 1,742,955 5.2 %1,732,205 5.8 %1,719,656 6.6 %
Loans held-for-sale
9,627 18,340 (47.5)%37,026 (74.0)%11,255 (14.5)%
Total loans
$1,842,637 $1,761,295 4.6 %$1,769,231 4.1 %$1,730,911 6.5 %
The increase in loans held-for-investment for the current quarter was primarily due to new funding of $160.9 million and advances on lines of credit of $40.1 million, partially offset by pay-downs and pay-offs of $110.9 million. The increase for the current year-to-date period was primarily due to new funding of $278.9 million and advances of lines of credit of $69.3 million, partially offset by pay-downs and pay-offs of $247.3 million. SBA PPP loans of $21.3 million and $63.7 million were paid off through regular payments or forgiveness from SBA during the current quarter and year-to-date period, respectively.
The decrease in loans held-for-sale for the current quarter was primarily due to sales of $38.4 million, partially offset by new funding of $29.9 million. The decrease for the current year-to-date period was primarily due to sales of $78.1 million, partially offset by new funding of $51.1 million.
The following table presents a composition of commitments to extend credit as of the dates indicated:
($ in thousands)6/30/20223/31/2022% Change12/31/2021% Change6/30/2021% Change
Real estate loans
Commercial property
$20,425 $21,195 (3.6)%$20,194 1.1 %$15,277 33.7 %
SBA property
4,265 3,142 35.7 %3,068 39.0 %6,191 (31.1)%
Construction
12,080 6,528 85.0 %5,180 133.2 %6,233 93.8 %
Commercial and industrial loans
Commercial term
2,347 2,674 (12.2)%1,097 113.9 %2,950 (20.4)%
Commercial lines of credit
218,850 175,742 24.5 %169,000 29.5 %164,648 32.9 %
SBA commercial term
383 950 (59.7)%149 157.0 %— — %
Other consumer loans
1,086 1,080 0.6 %595 82.5 %118 820.3 %
Total commitments to extend credit
$259,436 $211,311 22.8 %$199,283 30.2 %$195,417 32.8 %

8

Credit Quality
The following table presents a summary of non-performing loans, non-performing assets and classified assets as of the dates indicated:
($ in thousands)6/30/20223/31/2022% Change12/31/2021% Change6/30/2021% Change
Nonaccrual loans
Real estate loans
Residential property
$450 $461 (2.4)%$— — %$— — %
SBA property
564 733 (23.1)%746 (24.4)%781 (27.8)%
Commercial and industrial loans
SBA commercial term
185 199 (7.0)%213 (13.1)%600 (69.2)%
Other consumer loans
24 25 (4.0)%35 (31.4)%65 (63.1)%
Total nonaccrual loans held-for-investment
1,223 1,418 (13.8)%994 23.0 %1,446 (15.4)%
Loans past due 90 days or more and still accruing
— — — %— — %— — %
Non-performing loans (“NPLs”)
1,223 1,418 (13.8)%994 23.0 %1,446 (15.4)%
Other real estate owned (“OREO”)
808 — — %— — %— — %
Non-performing assets (“NPAs”)
$2,031 $1,418 43.2 %$994 104.3 %$1,446 40.5 %
Loans past due and still accruing
Past due 30 to 59 days
$682 $119 473.1 %$549 24.2 %$227 200.4 %
Past due 60 to 89 days
— 1 (100.0)%5 (100.0)%— — %
Past due 90 days or more
— — — %— — %— — %
Total loans past due and still accruing
$682 $120 468.3 %554 23.1 %$227 200.4 %
Troubled debt restructurings (“TDRs”)
Accruing TDRs
$555 $565 (1.8)%$576 (3.6)%$605 (8.3)%
Nonaccrual TDRs
10 15 (33.3)%17 (41.2)%30 (66.7)%
Total TDRs
$565 $580 (2.6)%$593 (4.7)%$635 (11.0)%
Special mention loans$6,313 $5,562 13.5 %$18,092 (65.1)%$18,238 (65.4)%
Classified assets
Classified loans
$3,980 $5,377 (26.0)%$5,168 (23.0)%$9,666 (58.8)%
OREO
808 — — %— — %— — %
Classified assets
$4,788 $5,377 (11.0)%$5,168 (7.4)%$9,666 (50.5)%
NPLs to loans held-for-investment
0.07 %0.08 %0.06 %0.08 %
NPAs to total assets
0.09 %0.06 %0.05 %0.07 %
Classified assets to total assets
0.20 %0.24 %0.24 %0.47 %
Loan Modifications Related to the COVID-19 Pandemic
The Company had provided modifications, including interest only payments or payment deferrals, to customers that were adversely affected by the COVID-19 pandemic. The loan modifications met all criteria under the Coronavirus Aid, Relief, and Economic Security Act. Therefore, the modified loans were not considered TDRs. As of June 30, 2022 and March 31, 2022, the Company had no loans under modified terms related to the COVID-19 pandemic. Total loans under modified terms related to the COVID-19 pandemic totaled $16.2 million at June 30, 2021.
The Company had classified the loans that were granted modifications related to the COVID-19 pandemic in excess of 6 months on a cumulative basis as special mention or classified. Special mention and classified loans included $4.0 million and $1.5 million, respectively, at June 30, 2022, $4.1 million and $2.7 million, respectively, at March 31, 2022, $15.6 million and $2.7 million, respectively, December 31, 2021, and $16.4 million and $6.2 million, respectively, at June 30, 2021, of the loans that were granted such modifications.
9

Investment Securities
Total investment securities were $139.1 million at June 30, 2022, an increase of $7.7 million, or 5.9%, from $131.3 million at March 31, 2022, an increase of $15.9 million, or 12.9%, from $123.2 million at December 31, 2021, and an increase of $3.6 million, or 2.6%, from $135.5 million at June 30, 2021. The increase for the current quarter was primarily due to purchases of $18.1 million, partially offset by principal pay-downs and calls of $6.2 million, a fair value decrease of $4.1 million, and net premium amortization of $97 thousand. The increase for the current year-to-date period was primarily due to purchases of $38.0 million, partially offset by principal pay-downs and calls of $12.3 million, a fair value decrease of $9.6 million, and net premium amortization of $232 thousand.
Deposits
The following table presents the Company’s deposit mix as of the dates indicated:
6/30/20223/31/202212/31/20216/30/2021
($ in thousands)Amount% to TotalAmount% to TotalAmount% to TotalAmount% to Total
Noninterest-bearing demand deposits
$988,454 49.5 %$891,797 46.7 %$830,383 44.5 %$795,741 44.3 %
Interest-bearing deposits
Savings
14,686 0.7 %15,037 0.8 %16,299 0.9 %11,671 0.6 %
NOW
18,881 0.9 %17,543 0.9 %20,185 1.1 %21,725 1.2 %
Retail money market accounts
458,605 22.9 %431,057 22.5 %386,041 20.5 %358,575 19.9 %
Brokered money market accounts
1 0.1 %1 0.1 %1 0.1 %4 0.1 %
Retail time deposits of
$250,000 or less
235,956 11.8 %246,100 12.8 %256,956 13.8 %271,531 15.1 %
More than $250,000
186,024 9.3 %173,844 9.1 %172,269 9.2 %173,401 9.6 %
State and brokered time deposits
95,000 4.8 %135,000 7.1 %185,000 9.9 %165,000 9.2 %
Total interest-bearing deposits
1,009,153 50.5 %1,018,582 53.3 %1,036,751 55.5 %1,001,907 55.7 %
Total deposits
$1,997,607 100.0 %$1,910,379 100.0 %$1,867,134 100.0 %$1,797,648 100.0 %
The increases in noninterest-bearing demand deposits and retail money market accounts for the current quarter and year-to-date period were primarily due to the overall liquid deposit market.
The increase in retail time deposits for the current quarter was primarily due to new accounts of $68.8 million, renewals of the matured accounts of $154.0 million and balance increases of $4.4 million, partially offset by matured and closed accounts of $225.2 million. The decrease for the current year was primarily due to matured and closed accounts of $413.7 million, partially offset by new accounts of $99.4 million, renewals of the matured accounts of $297.6 million and balance increases of $9.5 million.
Liquidity
The following table presents a summary of the Company’s liquidity position as of June 30, 2022:
($ in thousands)6/30/2022
Cash and cash equivalents
$299,910 
Cash and cash equivalents to total assets
12.8 %
Available borrowing capacity
FHLB advances
$549,920 
Federal Reserve Discount Window
21,955 
Overnight federal funds lines
65,000 
Total
$636,875 
Total available borrowing capacity to total assets
27.2 %

10

Shareholders’ Equity
Shareholders’ equity was $334.4 million at June 30, 2022, an increase of $73.3 million, or 28.1%, from $261.1 million at March 31, 2022, an increase of $78.1 million, or 30.5%, from $256.3 million at December 31, 2021, and an increase of $95.4 million, or 39.9%, from $238.9 million at June 30, 2021. The increases for the current quarter and year-to-date period were primarily due to net income and issuance of preferred stock (as discussed below), partially offset by cash dividends declared on common stock and a decrease in accumulated other comprehensive income (loss). The Company declared cash dividends of $2.2 million and $4.5 million for the current quarter and year-to-date period, respectively.
Stock Repurchase
On April 8, 2021, the Company’s Board of Directors approved a repurchase program authorizing the repurchase of up to 5% of the Company’s outstanding common stock as of the date of the board meeting, which represented 775,000 shares, through September 7, 2021. The Company repurchased and retired 680,269 shares of common stock totaling $10.9 million at a weighted-average price of $15.99 per share under this program.
Issuance of Preferred Stock Under the Emergency Capital Investment Program
On May 24, 2022, the Company issued 69,141 shares of Senior Non-Cumulative Perpetual Preferred Stock, Series C, liquidation preference of $1,000 per share (“Series C Preferred Stock”) for the capital investment of $69.1 million from the U.S. Treasury under the ECIP. ECIP investment is treated as tier 1 capital for regulatory capital purposes.
The Series C Preferred Stock bears no dividend for the first 24 months following the investment date. Thereafter, the dividend rate will be adjusted based on the lending growth criteria listed in the terms of the ECIP investment with an annual dividend rate up to 2%. After the tenth anniversary of the investment date, the dividend rate will be fixed based on average annual amount of lending in years 2 through 10. Dividends will be payable quarterly in arrears on March 15, June 15, September 15, and December 15.
The Series C Preferred Stock may be redeemed at the option of the Company on or after the fifth anniversary of issuance (or earlier in the event of loss of regulatory capital treatment), subject to the approval of the appropriate federal banking regulator and in accordance with the federal banking agencies’ regulatory capital regulations.
Established by the Consolidated Appropriations Act, 2021, the ECIP was created to encourage low- and moderate-income community financial institutions and minority depository institutions to provide loans, grants, and forbearance for small businesses, minority-owned businesses, and consumers, especially low-income and underserved communities, including persistent poverty counties, that may be disproportionately impacted by the economic effect of the COVID-19 pandemic by providing direct and indirect capital investments in low- and moderate-income community financial institutions.
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:
6/30/20223/31/202212/31/20216/30/2021Well Capitalized Requirements
PCB Bancorp
Common tier 1 capital (to risk-weighted assets)
14.44 %14.77 %14.79 %15.17 %N/A
Total capital (to risk-weighted assets)
19.25 %15.97 %16.04 %16.43 %N/A
Tier 1 capital (to risk-weighted assets)
18.11 %14.77 %14.79 %15.17 %N/A
Tier 1 capital (to average assets)
15.37 %12.22 %12.11 %11.76 %N/A
Pacific City Bank
Common tier 1 capital (to risk-weighted assets)
17.79 %14.43 %14.48 %14.88 %6.5 %
Total capital (to risk-weighted assets)
18.92 %15.63 %15.73 %16.13 %10.0 %
Tier 1 capital (to risk-weighted assets)
17.79 %14.43 %14.48 %14.88 %8.0 %
Tier 1 capital (to average assets)
15.09 %11.94 %11.85 %11.53 %5.0 %

11

Name Change of Pacific City Bank to PCB Bank
On August 25, 2022, the Pacific City Bank will change its name to PCB Bank. In addition, the Company introduced a new logo, which will also be utilized by the Bank after its name change. In accordance with the name change, the Bank will update its website, branch signage and marketing collateral.
“As we continued to grow and expand our national presence, we felt that now is a good time to announce our new name which is better suited to the broad geographic reach of our institution now and in the future,” stated Henry Kim, President and Chief Executive Officer.
About PCB Bancorp
PCB Bancorp 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, including but not limited to general economic uncertainty in the United States and abroad, the impact of inflation, changes in interest rates (including actions taken by the Federal Reserve to address inflation), deposit flows, and real estate values, and their corresponding impact on our customers, and the network and data incident discovered on August 30, 2021. 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.
Contact:
Timothy Chang
Executive Vice President & Chief Financial Officer
213-210-2000

12

PCB Bancorp and Subsidiary
Consolidated Balance Sheets (Unaudited)
($ in thousands, except share and per share data)
6/30/20223/31/2022% Change12/31/2021% Change6/30/2021% Change
Assets
Cash and due from banks
$23,125 $19,693 17.4 %$15,222 51.9 %$18,417 25.6 %
Interest-bearing deposits in other financial institutions276,785 230,519 20.1 %188,063 47.2 %156,204 77.2 %
Total cash and cash equivalents
299,910 250,212 19.9 %203,285 47.5 %174,621 71.7 %
Securities available-for-sale, at fair value
139,067 131,345 5.9 %123,198 12.9 %135,479 2.6 %
Loans held-for-sale
9,627 18,340 (47.5)%37,026 (74.0)%11,255 (14.5)%
Loans held-for-investment1,833,010 1,742,955 5.2 %1,732,205 5.8 %1,719,656 6.6 %
Allowance for loan losses
(21,071)(21,198)(0.6)%(22,381)(5.9)%(24,889)(15.3)%
Net loans held-for-investment
1,811,939 1,721,757 5.2 %1,709,824 6.0 %1,694,767 6.9 %
Premises and equipment, net
3,633 3,106 17.0 %3,098 17.3 %3,576 1.6 %
Federal Home Loan Bank and other bank stock
10,183 8,577 18.7 %8,577 18.7 %8,577 18.7 %
Other real estate owned, net
808 — — %— — %— — %
Bank-owned life insurance29,705 29,530 0.6 %29,358 1.2 %— — %
Deferred tax assets, net
11,869 11,895 (0.2)%10,824 9.7 %7,892 50.4 %
Servicing assets
7,716 7,533 2.4 %7,269 6.1 %6,482 19.0 %
Operating lease assets
6,512 6,511 — %6,786 (4.0)%6,595 (1.3)%
Accrued interest receivable
5,212 5,050 3.2 %5,368 (2.9)%6,741 (22.7)%
Other assets
8,379 5,886 42.4 %5,122 63.6 %4,018 108.5 %
Total assets
$2,344,560 $2,199,742 6.6 %$2,149,735 9.1 %$2,060,003 13.8 %
Liabilities
Deposits
Noninterest-bearing demand
$988,454 $891,797 10.8 %$830,383 19.0 %$795,741 24.2 %
Savings, NOW and money market accounts
492,173 463,638 6.2 %422,526 16.5 %391,975 25.6 %
Time deposits of $250,000 or less
270,956 281,100 (3.6)%341,956 (20.8)%336,531 (19.5)%
Time deposits of more than $250,000
246,024 273,844 (10.2)%272,269 (9.6)%273,401 (10.0)%
Total deposits
1,997,607 1,910,379 4.6 %1,867,134 7.0 %1,797,648 11.1 %
Federal Home Loan Bank advances
— 10,000 (100.0)%10,000 (100.0)%10,000 (100.0)%
Operating lease liabilities
7,067 7,176 (1.5)%7,444 (5.1)%7,338 (3.7)%
Accrued interest payable and other liabilities
5,511 11,129 (50.5)%8,871 (37.9)%6,076 (9.3)%
Total liabilities
2,010,185 1,938,684 3.7 %1,893,449 6.2 %1,821,062 10.4 %
Commitments and contingent liabilities
Shareholders’ equity
Preferred stock69,141 — — %— — %— — %
Common stock155,842 155,614 0.1 %154,992 0.5 %154,796 0.7 %
Retained earnings
115,992 109,142 6.3 %101,140 14.7 %83,002 39.7 %
Accumulated other comprehensive income (loss), net(6,600)(3,698)NM154 NM1,143 NM
Total shareholders’ equity
334,375 261,058 28.1 %256,286 30.5 %238,941 39.9 %
Total liabilities and shareholders’ equity
$2,344,560 $2,199,742 6.6 %$2,149,735 9.1 %$2,060,003 13.8 %
Outstanding common shares
14,956,760 14,944,663 14,865,825 14,854,315 
Book value per common share (1)
$22.36 $17.47 $17.24 $16.09 
TCE per common share (2)
$17.73 $17.47 $17.24 $16.09 
Total loan to total deposit ratio
92.24 %92.20 %94.76 %96.29 %
Noninterest-bearing deposits to total deposits
49.48 %46.68 %44.47 %44.27 %
(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.
13

PCB Bancorp and Subsidiary
Consolidated Statements of Income (Unaudited)
($ in thousands, except share and per share data)
Three Months Ended
Six Months Ended
6/30/20223/31/2022% Change6/30/2021% Change6/30/20226/30/2021% Change
Interest and dividend income
Loans, including fees$21,243 $20,190 5.2 %$19,511 8.9 %$41,433 $38,255 8.3 %
Investment securities668 476 40.3 %375 78.1 %1,144 735 55.6 %
Other interest-earning assets535 228 134.6 %165 224.2 %763 319 139.2 %
Total interest income22,446 20,894 7.4 %20,051 11.9 %43,340 39,309 10.3 %
Interest expense
Deposits1,041 850 22.5 %1,000 4.1 %1,891 2,311 (18.2)%
Other borrowings54 51 5.9 %55 (1.8)%105 183 (42.6)%
Total interest expense
1,095 901 21.5 %1,055 3.8 %1,996 2,494 (20.0)%
Net interest income
21,351 19,993 6.8 %18,996 12.4 %41,344 36,815 12.3 %
Reversal for loan losses(109)(1,191)(90.8)%(934)(88.3)%(1,300)(2,081)(37.5)%
Net interest income after reversal for loan losses21,460 21,184 1.3 %19,930 7.7 %42,644 38,896 9.6 %
Noninterest income
Gain on sale of loans
2,039 3,777 (46.0)%3,967 (48.6)%5,816 5,289 10.0 %
Service charges and fees on deposits
330 303 8.9 %302 9.3 %633 595 6.4 %
Loan servicing income
755 700 7.9 %545 38.5 %1,455 1,427 2.0 %
Bank-owned life insurance income175 172 1.7 %— — %347 — — %
Other income
349 334 4.5 %337 3.6 %683 697 (2.0)%
Total noninterest income
3,648 5,286 (31.0)%5,151 (29.2)%8,934 8,008 11.6 %
Noninterest expense
Salaries and employee benefits
8,125 8,595 (5.5)%7,125 14.0 %16,720 13,307 25.6 %
Occupancy and equipment
1,537 1,397 10.0 %1,388 10.7 %2,934 2,759 6.3 %
Professional fees
642 403 59.3 %658 (2.4)%1,045 1,152 (9.3)%
Marketing and business promotion
310 207 49.8 %516 (39.9)%517 654 (20.9)%
Data processing
441 404 9.2 %396 11.4 %845 773 9.3 %
Director fees and expenses
182 169 7.7 %151 20.5 %351 289 21.5 %
Regulatory assessments
147 141 4.3 %179 (17.9)%288 387 (25.6)%
Other expense861 755 14.0 %726 18.6 %1,616 1,487 8.7 %
Total noninterest expense
12,245 12,071 1.4 %11,139 9.9 %24,316 20,808 16.9 %
Income before income taxes
12,863 14,399 (10.7)%13,942 (7.7)%27,262 26,096 4.5 %
Income tax expense
3,771 4,159 (9.3)%4,098 (8.0)%7,930 7,692 3.1 %
Net income
$9,092 $10,240 (11.2)%$9,844 (7.6)%$19,332 $18,404 5.0 %
Earnings per common share
Basic
$0.61 $0.69 $0.65 $1.29 $1.20 
Diluted
$0.60 $0.67 $0.64 $1.27 $1.19 
Average common shares
Basic
14,883,768 14,848,014 15,115,561 14,865,990 15,249,210 
Diluted
15,122,452 15,141,693 15,309,873 15,138,493 15,425,308 
Dividend paid per common share
$0.15 $0.15 $0.10 $0.30 $0.20 
Return on average assets (1)
1.65 %1.92 %1.96 %1.78 %1.85 %
Return on average shareholders’ equity (1)
12.48 %16.01 %16.49 %14.13 %15.59 %
Return on average TCE (1), (2)
13.85 %16.01 %16.49 %14.92 %15.59 %
Efficiency ratio (3)
48.98 %47.75 %46.13 %48.36 %46.42 %
(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.
14

PCB Bancorp and Subsidiary
Average Balance, Average Yield, and Average Rate (Unaudited)
($ in thousands)
Three Months Ended
6/30/20223/31/20226/30/2021
Average BalanceInterest Income/ Expense
Avg. Yield/Rate(6)
Average BalanceInterest Income/ Expense
Avg. Yield/Rate(6)
Average BalanceInterest Income/ Expense
Avg. Yield/Rate(6)
Assets
Interest-earning assets
Total loans (1)
$1,804,368 $21,243 4.72 %$1,773,376 $20,190 4.62 %$1,691,704 $19,511 4.63 %
Mortgage-backed securities
88,032 416 1.90 %84,223 307 1.48 %92,732 233 1.01 %
Collateralized mortgage obligation
25,929 125 1.93 %18,242 48 1.07 %22,929 54 0.94 %
SBA loan pool securities
11,164 43 1.54 %10,095 38 1.53 %10,828 51 1.89 %
Municipal bonds (2)
5,347 37 2.78 %5,632 36 2.59 %5,760 37 2.58 %
Corporate bonds4,852 47 3.89 %5,038 47 3.78 %— — — %
Other interest-earning assets
195,633 535 1.10 %198,918 228 0.46 %164,710 165 0.40 %
Total interest-earning assets
2,135,325 22,446 4.22 %2,095,524 20,894 4.04 %1,988,663 20,051 4.04 %
Noninterest-earning assets
Cash and due from banks20,801 20,385 19,080 
Allowance for loan losses
(21,204)(22,377)(25,559)
Other assets
73,137 67,600 36,605 
Total noninterest-earning assets
72,734 65,608 30,126 
Total assets
$2,208,059 $2,161,132 $2,018,789 
Liabilities and Shareholders’ Equity
Interest-bearing liabilities
Deposits
NOW and money market accounts
$464,829 430 0.37 %$431,981 313 0.29 %$400,314 317 0.32 %
Savings
14,989 2 0.05 %15,644 2 0.05 %11,588 1 0.03 %
Time deposits
521,606 609 0.47 %586,387 535 0.37 %615,035 682 0.44 %
Total interest-bearing deposits
1,001,424 1,041 0.42 %1,034,012 850 0.33 %1,026,937 1,000 0.39 %
Other borrowings11,132 54 1.95 %10,400 51 1.99 %19,012 55 1.16 %
Total interest-bearing liabilities
1,012,556 1,095 0.43 %1,044,412 901 0.35 %1,045,949 1,055 0.40 %
Noninterest-bearing liabilities
Noninterest-bearing demand
889,691 840,626 720,105 
Other liabilities
13,677 16,727 13,287 
Total noninterest-bearing liabilities
903,368 857,353 733,392 
Total liabilities
1,915,924 1,901,765 1,779,341 
Total shareholders’ equity
292,135 259,367 239,448 
Total liabilities and shareholders’ equity
$2,208,059 $2,161,132 $2,018,789 
Net interest income
$21,351 $19,993 $18,996 
Net interest spread (3)
3.79 %3.69 %3.64 %
Net interest margin (4)
4.01 %3.87 %3.83 %
Total deposits
$1,891,115 $1,041 0.22 %$1,874,638 $850 0.18 %$1,747,042 $1,000 0.23 %
Total funding (5)
$1,902,247 $1,095 0.23 %$1,885,038 $901 0.19 %$1,766,054 $1,055 0.24 %
(1)Total loans include both loans held-for-sale and loans held-for-investment, net of deferred loan fees and costs.
(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.


15

PCB Bancorp and Subsidiary
Average Balance, Average Yield, and Average Rate (Unaudited)
($ in thousands)
Six Months Ended
6/30/20226/30/2021
Average BalanceInterest Income/ Expense
Avg. Yield/Rate(6)
Average BalanceInterest Income/ Expense
Avg. Yield/Rate(6)
Assets
Interest-earning assets
Total loans (1)
$1,788,958 $41,433 4.67 %$1,666,808 $38,255 4.63 %
Mortgage-backed securities
86,138 723 1.69 %87,140 448 1.04 %
Collateralized mortgage obligation
22,106 173 1.58 %23,903 111 0.94 %
SBA loan pool securities
10,633 81 1.54 %11,248 103 1.85 %
Municipal bonds (2)
5,489 73 2.68 %5,782 73 2.55 %
Corporate bonds4,944 94 3.83 %— — — %
Other interest-earning assets
197,267 763 0.78 %176,864 319 0.36 %
Total interest-earning assets
2,115,535 43,340 4.13 %1,971,745 39,309 4.02 %
Noninterest-earning assets
Cash and due from banks20,594 19,076 
Allowance for loan losses
(21,787)(26,211)
Other assets
70,384 38,481 
Total noninterest-earning assets
69,191 31,346 
Total assets
$2,184,726 $2,003,091 
Liabilities and Shareholders’ Equity
Interest-bearing liabilities
Deposits
NOW and money market accounts
$448,496 743 0.33 %$403,948 650 0.32 %
Savings
15,315 4 0.05 %11,101 2 0.04 %
Time deposits
553,818 1,144 0.42 %625,267 1,659 0.54 %
Total interest-bearing deposits
1,017,629 1,891 0.37 %1,040,316 2,311 0.45 %
Other borrowings10,768 105 1.97 %47,128 183 0.78 %
Total interest-bearing liabilities
1,028,397 1,996 0.39 %1,087,444 2,494 0.46 %
Noninterest-bearing liabilities
Noninterest-bearing demand
865,294 663,902 
Other liabilities
15,194 13,618 
Total noninterest-bearing liabilities
880,488 677,520 
Total liabilities
1,908,885 1,764,964 
Total shareholders’ equity
275,841 238,127 
Total liabilities and shareholders’ equity
$2,184,726 $2,003,091 
Net interest income
$41,344 $36,815 
Net interest spread (3)
3.74 %3.56 %
Net interest margin (4)
3.94 %3.77 %
Total deposits
$1,882,923 $1,891 0.20 %$1,704,218 $2,311 0.27 %
Total funding (5)
$1,893,691 $1,996 0.21 %$1,751,346 $2,494 0.29 %
(1)Total loans include both loans held-for-sale and loans held-for-investment, net of deferred loan fees and costs.
(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.


16

PCB Bancorp and Subsidiary
Non-GAAP Measures
($ in thousands)

Adjusted allowance for loan losses to loans held-for-investment ratio
Adjusted Allowance to loans held-for-investment ratio is calculated by removing SBA PPP loans from loans held-for-investment from the Allowance to loans held-for-investment ratio calculation. The SBA launched the PPP to provide a direct incentive for small businesses to keep their workers on the payroll in response to the COVID-19 pandemic. The SBA guarantees 100% of the PPP loans made to eligible borrowers, and the loans are eligible to be forgiven if certain conditions are met, at which point the SBA will make payments to the Bank for the forgiven amounts. The SBA guarantee on PPP loans cannot be separated from the loan and therefore is not a separate unit of account. The Company considered the SBA guarantee in the Allowance evaluation and determined that it is not required to reserve an Allowance on SBA PPP loans. Management believes this non-GAAP measure enhances comparability to prior periods and provide supplemental information regarding the Company’s credit trends. This disclosure should not be viewed as a substitute for results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. The following tables provide reconciliations of the non-GAAP measure with financial measure defined by GAAP.
($ in thousands)6/30/20223/31/202212/31/20216/30/2021
Loans held-for-investment(a)$1,833,010 $1,742,955 $1,732,205 $1,719,656 
Less: SBA PPP loans(b)1,583 22,926 65,329 181,019 
Loans held-for-investment, excluding SBA PPP loans(c)=(a)-(b)$1,831,427 $1,720,029 $1,666,876 $1,538,637 
Allowance(d)$21,071 $21,198 $22,381 $24,889 
Allowance to loans held-for-investment ratio(d)/(a)1.15 %1.22 %1.29 %1.45 %
Adjusted Allowance to loans held-for-investment ratio(d)/(c)1.15 %1.23 %1.34 %1.62 %
Return on average tangible common equity, tangible common equity per common share and tangible common equity to total assets ratios
The Company's TCE is calculated by subtracting preferred stock from stockholders’ equity. The Company does not have any intangible assets for the presented periods. Return on average TCE, TCE per common share, and TCE to total assets constitute supplemental financial information determined by methods other than in accordance with GAAP. These non-GAAP measures are used by management in its analysis of the Company's performance. This disclosure should not be viewed as a substitute for results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. The following tables provide reconciliations of the non-GAAP measures with financial measures defined by GAAP.
($ in thousands)
Three Months Ended
Six Months Ended
6/30/20223/31/20226/30/20216/30/20226/30/2021
Average total shareholders' equity(a)$292,135 $259,367 $239,448 $275,841 $238,127 
Less: average preferred stock(b)28,872 — — 14,516 — 
Average TCE(c)=(a)-(b)$263,263 $259,367 $239,448 $261,325 $238,127 
Net income(d)$9,092 $10,240 $9,844 $19,332 $18,404 
Return on average shareholder's equity (1)
(d)/(a)12.48 %16.01 %16.49 %14.13 %15.59 %
Return on average TCE (1)
(d)/(c)13.85 %16.01 %16.49 %14.92 %15.59 %
(1) Annualized.
($ in thousands, except per share data)6/30/20223/31/202212/31/20216/30/2021
Total shareholders' equity(a)$334,375 $261,058 $256,286 $238,941 
Less: preferred stock(b)69,141 — — — 
TCE(c)=(a)-(b)$265,234 $261,058 $256,286 $238,941 
Outstanding common shares
(d)14,956,760 14,944,663 14,865,825 14,854,315 
Book value per common share(a)/(d)$22.36 $17.47 $17.24 $16.09 
TCE per common share(c)/(d)$17.73 $17.47 $17.24 $16.09 
Total assets(e)$2,344,560 $2,199,742 $2,149,735 $2,060,003 
Total shareholders' equity to total assets(a)/(e)14.26 %11.87 %11.92 %11.60 %
TCE to total assets(c)/(e)11.31 %11.87 %11.92 %11.60 %
17