EX-99.1 4 pcber20230727.htm EX-99.1 Document

Exhibit 99.1
pcbbancorpb.jpg
PCB Bancorp Reports Earnings of $7.5 million for Q2 2023
Los Angeles, California - July 27, 2023 - PCB Bancorp (the “Company”) (NASDAQ: PCB), the holding company of PCB Bank (the “Bank”), today reported net income of $7.5 million, or $0.52 per diluted common share, for the second quarter of 2023, compared with $10.3 million, or $0.70 per diluted common share, for the previous quarter and $9.1 million, or $0.60 per diluted common share, for the year-ago quarter.
Q2 2023 Highlights
•Net income totaled $7.5 million, or $0.52 per diluted common share, for the current quarter;
•Recorded a provision (reversal) for credit losses(1),(2) of $197 thousand for the current quarter compared with $(2.8) million for the previous quarter and $(109) thousand for the year-ago quarter;
•Allowance for Credit Losses (“ACL”)(1) on loans to loans held-for-investment ratio was 1.17% at June 30, 2023 compared with 1.18% at March 31, 2023 and 1.15% at June 30, 2022;
•Net interest income was $21.7 million for the current quarter compared with $22.4 million for the previous quarter and $21.4 million for the year-ago quarter. Net interest margin was 3.55% for the current quarter compared with 3.79% for the previous quarter and 4.01% for the year-ago quarter;
•Gain on sale of loans was $769 thousand for the current quarter compared with $1.3 million for the previous quarter and $2.0 million for the year-ago quarter;
•Total assets were $2.56 billion at June 30, 2023, an increase of $55.8 million, or 2.2%, from $2.50 billion at March 31, 2023, an increase of $136.3 million, or 5.6%, from $2.42 billion at December 31, 2022, and an increase of $211.8 million, or 9.0%, from $2.34 billion at June 30, 2022;
•Loans held-for-investment were $2.12 billion at June 30, 2023, an increase of $30.0 million, or 1.4%, from $2.09 billion at March 31, 2023, an increase of $76.4 million, or 3.7%, from $2.05 billion at December 31, 2022, and an increase of $289.4 million, or 15.8%, from $1.83 billion at June 30, 2022; and
•Total deposits were $2.19 billion at June 30, 2023, an increase of $46.5 million, or 2.2%, from $2.14 billion at March 31, 2023, an increase of $142.2 million, or 7.0%, from $2.05 billion at December 31, 2022, and an increase of $190.6 million, or 9.5%, from $2.00 billion at June 30, 2022.
“I am pleased with our solid results in the second quarter,” said Henry Kim, President and Chief Executive Officer. “In spite of the challenging macroeconomic environment, our continued focus on maintaining fundamentals in our institution provided stable level of liquidity, robust capital, and strong asset quality.”
“During the second quarter, our cash and cash equivalents to total assets increased to 8.7% of total assets and our deposit balances increased $46.5 million, or 2.2%. Several days after June 30, 2023, we established Borrower-in Custody Program with Federal Reserve Bank that provided an additional borrowing capacity of $268.9 million. Such additional borrowing capacity in combination of other borrowing capacities and cash and cash equivalent would have covered approximately 117.1% of deposits not covered by deposit insurance compared with 91.1% without the additional borrowing capacity at June 30, 2023.”
“Tangible common equity per share increased to $18.94 and our total capital ratio was 17.57%. Our loan balance increased 1.4% to $2.12 billion compared with $2.09 billion at March 31, 2023, and our asset quality continues to be strong with non-performing assets to total asset ratio of 0.15% and classified assets to total assets ratio of 0.27%.”
“Our commitment to deliver exceptional service with precise banking products to our customers and the opportunities to expand our geographical footprint gives us motivation to be excited about our prospects for continued growth in the second half of 2023 and beyond,” concluded Kim.
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(1)     Provision (reversal) for credit losses and ACL for reporting periods beginning with January 1, 2023 are presented under ASC 326, while prior period comparisons continue to be presented under legacy ASC 450 and ASC 310 in this release.
(2)    Provision for credit losses on off-balance sheet credit exposures of $36 thousand and $38 thousand, respectively, for the year-ago quarter and previous year-to-date period were recorded in Other Expense on Consolidated Statements of Income (Unaudited).
1

Financial Highlights (Unaudited)
($ in thousands, except per share data)
Three Months Ended
Six Months Ended
6/30/20233/31/2023
% Change
6/30/2022
% Change
6/30/20236/30/2022% Change
Net income$7,477 $10,297 (27.4)%$9,092 (17.8)%$17,774 $19,332 (8.1)%
Diluted earnings per common share$0.52 $0.70 (25.7)%$0.60 (13.3)%$1.22 $1.27 (3.9)%
Net interest income$21,717 $22,414 (3.1)%$21,351 1.7 %$44,131 $41,344 6.7 %
Provision (reversal) for credit losses (1)
197 (2,778)NM(109)NM(2,581)(1,300)98.5 %
Noninterest income2,657 3,021 (12.0)%3,648 (27.2)%5,678 8,934 (36.4)%
Noninterest expense13,627 13,754 (0.9)%12,245 11.3 %27,381 24,316 12.6 %
Return on average assets (2)
1.19 %1.69 %1.65 %1.44 %1.78 %
Return on average shareholders’ equity (2)
8.82 %12.46 %12.48 %10.62 %14.13 %
Return on average tangible common equity (“TCE”) (2),(3)
11.08 %15.70 %13.85 %13.35 %14.92 %
Net interest margin (2)
3.55 %3.79 %4.01 %3.67 %3.94 %
Efficiency ratio (4)
55.91 %54.08 %48.98 %54.97 %48.36 %
($ in thousands, except per share data)6/30/20233/31/2023% Change12/31/2022% Change6/30/2022% Change
Total assets
$2,556,345 $2,500,524 2.2 %$2,420,036 5.6 %$2,344,560 9.0 %
Net loans held-for-investment
2,097,560 2,067,748 1.4 %2,021,121 3.8 %1,811,939 15.8 %
Total deposits
2,188,232 2,141,689 2.2 %2,045,983 7.0 %1,997,607 9.5 %
Book value per common share (5)
$23.77 $23.56 $22.94 $22.36 
TCE per common share (3)
$18.94 $18.72 $18.21 $17.73 
Tier 1 leverage ratio (consolidated)
13.84 %13.90 %14.33 %15.37 %
Total shareholders’ equity to total assets13.32 %13.47 %13.86 %14.26 %
TCE to total assets (3), (6)
10.61 %10.71 %11.00 %11.31 %
(1)Provision for credit losses on off-balance sheet credit exposures of $36 thousand and $38 thousand, respectively, for the year-ago quarter and previous year-to-date period were recorded in Other Expense on Consolidated Statements of Income (Unaudited). See Provision (reversal) for credit losses included in the Result of Operations discussion for additional information.
(2)Ratios are presented on an annualized basis.
(3)Non-GAAP. See “Non-GAAP Measures” for reconciliation of this measure to its most comparable GAAP measure.
(4)Calculated by dividing noninterest expense by the sum of net interest income and noninterest income.
(5)Calculated by dividing total shareholders’ equity by the number of outstanding common shares.
(6)The Company did not have any intangible asset component for the presented periods.


2

Result of Operations (Unaudited)
Net Interest Income and Net Interest Margin
The following table presents the components of net interest income for the periods indicated:
Three Months Ended
Six Months Ended
($ in thousands)6/30/20233/31/2023
% Change
6/30/2022% Change6/30/20236/30/2022% Change
Interest income/expense on
Loans
$32,960 $31,229 5.5 %$21,243 55.2 %$64,189 $41,433 54.9 %
Investment securities
1,136 1,102 3.1 %668 70.1 %2,238 1,144 95.6 %
Other interest-earning assets
2,742 2,205 24.4 %535 412.5 %4,947 763 548.4 %
Total interest-earning assets
36,838 34,536 6.7 %22,446 64.1 %71,374 43,340 64.7 %
Interest-bearing deposits
15,121 11,913 26.9 %1,041 1,352.5 %27,034 1,891 1,329.6 %
Borrowings
— 209 (100.0)%54 (100.0)%209 105 99.0 %
Total interest-bearing liabilities
15,121 12,122 24.7 %1,095 1,280.9 %27,243 1,996 1,264.9 %
Net interest income
$21,717 $22,414 (3.1)%$21,351 1.7 %$44,131 $41,344 6.7 %
Average balance of
Loans
$2,097,489 $2,072,415 1.2 %$1,804,368 16.2 %$2,085,021 $1,788,958 16.5 %
Investment securities
142,136 142,079 — %135,324 5.0 %142,107 129,310 9.9 %
Other interest-earning assets
213,883 186,809 14.5 %195,633 9.3 %200,420 197,267 1.6 %
Total interest-earning assets
$2,453,508 $2,401,303 2.2 %$2,135,325 14.9 %$2,427,548 $2,115,535 14.7 %
Interest-bearing deposits
$1,527,522 $1,410,812 8.3 %$1,001,424 52.5 %$1,469,490 $1,017,629 44.4 %
Borrowings
— 15,811 (100.0)%11,132 (100.0)%7,862 10,768 (27.0)%
Total interest-bearing liabilities
$1,527,522 $1,426,623 7.1 %$1,012,556 50.9 %$1,477,352 $1,028,397 43.7 %
Total funding (1)
$2,155,649 $2,114,198 2.0 %$1,902,247 13.3 %$2,135,039 $1,893,691 12.7 %
Annualized average yield/cost of 
Loans
6.30 %6.11 %4.72 %6.21 %4.67 %
Investment securities
3.21 %3.15 %1.98 %3.18 %1.78 %
Other interest-earning assets
5.14 %4.79 %1.10 %4.98 %0.78 %
Total interest-earning assets6.02 %5.83 %4.22 %5.93 %4.13 %
Interest-bearing deposits
3.97 %3.42 %0.42 %3.71 %0.37 %
Borrowings
— %5.36 %1.95 %5.36 %1.97 %
Total interest-bearing liabilities3.97 %3.45 %0.43 %3.72 %0.39 %
Net interest margin3.55 %3.79 %4.01 %3.67 %3.94 %
Cost of total funding (1)
2.81 %2.33 %0.23 %2.57 %0.21 %
Supplementary information
Net accretion of discount on loans$751 $671 11.9 %$907 (17.2)%$1,422 $1,815 (21.7)%
Net amortization of deferred loan fees$247 $175 41.1 %$606 (59.2)%$422 $1,771 (76.2)%
(1)Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.

3

Loans. The increases in average yield for the current quarter and year-to-date period compared with the same periods of 2022 were primarily due to an increase in overall interest rates on loans from the rising interest rate environment, partially offset by decreases in net accretion of discount on loans and 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:
6/30/20233/31/202312/31/20226/30/2022
% 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
22.6 %4.64 %23.4 %4.64 %23.2 %4.51 %24.5 %4.35 %
Hybrid rate loans
39.2 %4.62 %39.0 %4.51 %39.1 %4.40 %37.0 %4.11 %
Variable rate loans
38.2 %8.39 %37.6 %8.23 %37.7 %7.86 %38.5 %5.12 %
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 securities and 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 were primarily due to an increased interest rate on cash held at the Federal Reserve Bank account.
Interest-Bearing Deposits. The increases in average cost for the current quarter and year-to-date period were primarily due to an increase in market rates and the migration of noninterest-bearing demand deposits to interest-bearing deposits attributable to the rising market rates. To retain existing and attract new customers, the Bank offers competitive rates on deposit products in the rising interest rate environment.
Provision (Reversal) for Credit Losses
The following table presents a composition of provision (reversal) for credit losses for the periods indicated:
Three Months Ended
Six Months Ended
($ in thousands)6/30/20233/31/2023
% Change
6/30/2022
% Change
6/30/20236/30/2022
% Change
Provision (reversal) for credit losses on loans$157 $(2,417)NM$(109)NM$(2,260)$(1,300)73.8 %
Provision (reversal) for credit losses on off-balance sheet credit exposure (1)
40 (361)NM36 11.1 %(321)38 NM
Total provision (reversal) for credit losses$197 $(2,778)NM$(73)NM$(2,581)$(1,262)104.5 %
(1)Provision for credit losses on off-balance sheet credit exposures for previous and year-ago quarters were recorded in Other Expense on Consolidated Statements of Income (Unaudited).
On January 1, 2023, the Company adopted the provisions of ASC 326 through the application of the modified retrospective transition approach. Provision (reversal) for credit losses and ACL for reporting periods beginning with January 1, 2023 are presented under ASC 326, while prior period comparisons continue to be presented under legacy ASC 450 and ASC 310 in this release. See CECL Adoption and Allowance for Credit Losses sections included in the Balance Sheet section of this release for additional information.
The reversal for credit losses for the current year-to-date period was primarily due to net recoveries and the improvement in the economic forecast.
4

Noninterest Income
The following table presents the components of noninterest income for the periods indicated:
Three Months Ended
Six Months Ended
($ in thousands)6/30/20233/31/2023
% Change
6/30/2022
% Change
6/30/20236/30/2022
% Change
Gain on sale of loans
$769 $1,309 (41.3)%$2,039 (62.3)%$2,078 $5,816 (64.3)%
Service charges and fees on deposits
369 344 7.3 %330 11.8 %713 633 12.6 %
Loan servicing income
868 860 0.9 %755 15.0 %1,728 1,455 18.8 %
Bank-owned life insurance income184 180 2.2 %175 5.1 %364 347 4.9 %
Other income
467 328 42.4 %349 33.8 %795 683 16.4 %
Total noninterest income
$2,657 $3,021 (12.0)%$3,648 (27.2)%$5,678 $8,934 (36.4)%
Gain on Sale of Loans. The following table presents information on gain on sale of loans for the periods indicated:
Three Months Ended
Six Months Ended
($ in thousands)6/30/20233/31/2023% Change6/30/2022% Change6/30/20236/30/2022% Change
Gain on sale of SBA loans
Sold loan balance
$16,762 $27,133 (38.2)%$38,442 (56.4)%$43,895 $78,125 (43.8)%
Premium received
1,209 2,041 (40.8)%2,600 (53.5)%3,250 6,806 (52.2)%
Gain recognized
769 1,309 (41.3)%2,039 (62.3)%2,078 5,816 (64.3)%

Loan Servicing Income. The following table presents information on loan servicing income for the periods indicated:
Three Months Ended
Six Months Ended
($ in thousands)6/30/20233/31/2023
% Change
6/30/2022
% Change
6/30/20236/30/2022
% Change
Loan servicing income
Servicing income received
$1,317 $1,284 2.6 %$1,287 2.3 %$2,601 $2,517 3.3 %
Servicing assets amortization
(449)(424)5.9 %(532)(15.6)%(873)(1,062)(17.8)%
Loan servicing income$868 $860 0.9 %$755 15.0 %$1,728 $1,455 18.8 %
Underlying loans at end of period
$539,160 $540,502 (0.2)%$537,990 0.2 %$539,160 $537,990 0.2 %
The Company services SBA loans and certain residential property loans sold to the secondary market.
5

Noninterest Expense
The following table presents the components of noninterest expense for the periods indicated:
Three Months Ended
Six Months Ended
($ in thousands)6/30/20233/31/2023% Change6/30/2022% Change6/30/20236/30/2022% Change
Salaries and employee benefits
$8,675 $8,928 (2.8)%$8,125 6.8 %$17,603 $16,720 5.3 %
Occupancy and equipment
1,919 1,896 1.2 %1,537 24.9 %3,815 2,934 30.0 %
Professional fees
772 732 5.5 %642 20.2 %1,504 1,045 43.9 %
Marketing and business promotion
203 372 (45.4)%310 (34.5)%575 517 11.2 %
Data processing
380 412 (7.8)%441 (13.8)%792 845 (6.3)%
Director fees and expenses
217 180 20.6 %182 19.2 %397 351 13.1 %
Regulatory assessments
382 155 146.5 %147 159.9 %537 288 86.5 %
Other expense1,079 1,079 — %861 25.3 %2,158 1,616 33.5 %
Total noninterest expense
$13,627 $13,754 (0.9)%$12,245 11.3 %$27,381 $24,316 12.6 %
Salaries and Employee Benefits. The decrease for the current quarter compared with the previous quarter was primarily due to decreases in vacation accrual and other employee benefit expenses, partially offset by increases in salaries and bonus accrual. The increases for the current quarter and year-to-date period compared with the same periods of 2022 were primarily due to increases in salaries and other employee benefit expense, partially offset by decreases in bonus and vacation accruals, and incentives tied to sales of SBA loans originated at loan production offices. The number of full-time equivalent employees was 272, 276 and 271 as of June 30, 2023, March 31, 2023 and June 30, 2022, respectively.
Occupancy and Equipment. The increases for the current quarter and year-to-date period compared with the same periods of 2022 were primarily due to new branch openings during the second half of 2022. The Company opened 3 new full-service branches in Dallas and Carrollton, Texas and Palisades Park, New Jersey.
Professional Fees. The increases for the current quarter and year-to-date period were primarily due to increases in internal audit and consulting fees.
Marketing and Business Promotion. The decreases for the current quarter compared with the previous and year-ago quarters were primarily due to the decreased marketing activities and advertisements.
Regulatory Assessments. The increases in the current quarter and year-to-date period were due to an increase in FDIC assessment rates and an adjustment of $113 thousand made for the previous quarter. The FDIC increased the initial base deposit insurance assessment rate schedules by two basis points beginning in the first quarterly assessment period of 2023.
Other Expense. The increases for the current quarter and year-to-date period compared with the same periods of 2022 were primarily due to increases in office expenses, other loan related expenses and armed guard expenses attributable to the branch network expansion. Provision for credit losses on off-balance credit exposures of $36 thousand and $38 thousand was included in other expense for the year-ago quarter and previous year-to-date period, respectively, while the current quarter and year-to-date period provision was included in provision (reversal) for credit losses.
6

Balance Sheet (Unaudited)
Total assets were $2.56 billion at June 30, 2023, an increase of $55.8 million, or 2.2%, from $2.50 billion at March 31, 2023, an increase of $136.3 million, or 5.6%, from $2.42 billion at December 31, 2022, and an increase of $211.8 million, or 9.0%, from $2.34 billion at June 30, 2022. The increases for the current quarter and year-to-date period were primarily due to increases in cash and cash equivalents and loans held-for-investment, partially offset by a decrease in loans held-for-sale.
CECL Adoption
On January 1, 2023, the Company adopted the provisions of ASC 326 through the application of the modified retrospective transition approach. The initial adjustment to the ACL reflects the expected lifetime credit losses associated with the composition of financial assets within in 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 $788 thousand. As a part of the adoption of ASC 326, the Company reviewed and revised certain loan segments for the Company’s ACL model. See Loan Segments Revision section of this release for a reconciliation of revised loan segments to legacy loan segments, which were utilized before the adoption of ASC 326.
Loans
The following table presents a composition of total loans (includes both loans held-for-sale and loans held-for-investment) as of the dates indicated:
($ in thousands)6/30/20233/31/2023% Change12/31/2022% Change6/30/2022% Change
Commercial real estate:
Commercial property$793,946 $780,282 1.8 %$772,020 2.8 %$692,817 14.6 %
Business property533,592 521,965 2.2 %526,513 1.3 %524,406 1.8 %
Multifamily124,029 127,012 (2.3)%124,751 (0.6)%118,339 4.8 %
Construction16,942 15,930 6.4 %17,054 (0.7)%12,595 34.5 %
Total commercial real estate1,468,509 1,445,189 1.6 %1,440,338 2.0 %1,348,157 8.9 %
Commercial and industrial272,278 267,674 1.7 %249,250 9.2 %204,369 33.2 %
Consumer:
Residential mortgage359,655 356,967 0.8 %333,726 7.8 %258,259 39.3 %
Other consumer21,985 22,612 (2.8)%22,749 (3.4)%22,225 (1.1)%
Total consumer381,640 379,579 0.5 %356,475 7.1 %280,484 36.1 %
Loans held-for-investment2,122,427 2,092,442 1.4 %2,046,063 3.7 %1,833,010 15.8 %
Loans held-for-sale13,065 14,352 (9.0)%22,811 (42.7)%9,627 35.7 %
Total loans
$2,135,492 $2,106,794 1.4 %$2,068,874 3.2 %$1,842,637 15.9 %
The increase in loans held-for-investment for the current quarter was primarily due to new funding and advances on lines of credit of $252.8 million, partially offset by pay-downs and pay-offs of $222.8 million. The increase for the current year-to-date period was primarily due to new funding and advances on lines of credit of $457.7 million and purchases of residential mortgage loans of $15.7 million, partially offset by pay-downs and pay-offs of $397.1 million.
The decrease in loans held-for-sale for the current quarter was primarily due to sales of $16.8 million, partially offset by new funding of $15.6 million. The decrease for the current year-to-date was primarily due to sales of $43.9 million and pay-downs and pay-offs of $4.1 million, partially offset by new funding of $38.3 million.
The following table presents a composition of off-balance sheet credit exposure as of the dates indicated:
($ in thousands)6/30/20233/31/2023% Change12/31/2022% Change6/30/2022% Change
Commercial property$11,118 $6,811 63.2 %$7,006 58.7 %$8,587 29.5 %
Business property9,487 12,307 (22.9)%8,396 13.0 %10,603 (10.5)%
Multifamily4,500 4,500 — %4,500 — %5,500 (18.2)%
Construction30,865 16,563 86.3 %18,211 69.5 %12,080 155.5 %
Commercial and industrial279,584 279,543 — %254,668 9.8 %221,580 26.2 %
Other consumer445 399 11.5 %692 (35.7)%1,086 (59.0)%
Total commitments to extend credit335,999 320,123 5.0 %293,473 14.5 %259,436 29.5 %
Letters of credit6,027 5,400 11.6 %5,392 11.8 %4,984 20.9 %
Total off-balance sheet credit exposure$342,026 $325,523 5.1 %$298,865 14.4 %$264,420 29.3 %

7

Credit Quality
The following table presents a summary of non-performing loans and assets, and classified assets as of the dates indicated:
($ in thousands)6/30/20233/31/2023% Change12/31/2022% Change6/30/2022% Change
Nonaccrual loans
Commercial real estate:
Commercial property$699 $— — %$— — %$— — %
Business property3,007 2,904 3.5 %2,985 0.7 %564 433.2 %
Total commercial real estate3,706 2,904 27.6 %2,985 24.2 %564 557.1 %
Commercial and industrial88 11 700.0 %— — %185 (52.4)%
Consumer:
Residential mortgage— — — %372 (100.0)%450 (100.0)%
Other consumer51 45 13.3 %3 1,600.0 %24 112.5 %
Total consumer51 45 13.3 %375 (86.4)%474 (89.2)%
Total nonaccrual loans held-for-investment
3,845 2,960 29.9 %3,360 14.4 %1,223 214.4 %
Loans past due 90 days or more and still accruing
— — — %— — %— — %
Non-performing loans (“NPLs”) held-for-investment3,845 2,960 29.9 %3,360 14.4 %1,223 214.4 %
NPLs held-for-sale— — — %4,000 (100.0)%— — %
Total NPLs3,845 2,960 29.9 %7,360 (47.8)%1,223 214.4 %
Other real estate owned (“OREO”)
— — — %— — %808 (100.0)%
Non-performing assets (“NPAs”)
$3,845 $2,960 29.9 %$7,360 (47.8)%$2,031 89.3 %
Loans past due and still accruing
Past due 30 to 59 days
$428 $779 (45.1)%$47 810.6 %$682 (37.2)%
Past due 60 to 89 days
— 13 (100.0)%87 (100.0)%— — %
Past due 90 days or more
— — — %— — %— — %
Total loans past due and still accruing
$428 $792 (46.0)%134 219.4 %$682 (37.2)%
Special mention loans$5,406 $5,527 (2.2)%$6,857 (21.2)%$6,313 (14.4)%
Classified assets
Classified loans held-for-investment$6,901 $6,060 13.9 %$6,211 11.1 %$3,980 73.4 %
Classified loans held-for-sale— — — %4,000 (100.0)%— — %
OREO
— — — %— — %808 (100.0)%
Classified assets
$6,901 $6,060 13.9 %$10,211 (32.4)%$4,788 44.1 %
NPLs held-for-investment to loans held-for-investment0.18 %0.14 %0.16 %0.07 %
NPAs to total assets
0.15 %0.12 %0.30 %0.09 %
Classified assets to total assets
0.27 %0.24 %0.42 %0.20 %
During the previous quarter, NPLs held-for-sale of $4.0 million were paid-off.

8

Allowance for Credit Losses
The following table presents activities in ACL for the periods indicated:
Three Months Ended
Six Months Ended
($ in thousands)6/30/20233/31/2023% Change6/30/2022% Change6/30/20236/30/2022% Change
ACL on loans
Balance at beginning of period$24,694 $24,942 (1.0)%$21,198 16.5 %$24,942 $22,381 11.4 %
Impact of ASC 326 adoption— 1,067 NM— NM1,067 — NM
Charge-offs(7)— — %(47)(85.1)%(7)(59)(88.1)%
Recoveries23 1,102 (97.9)%29 (20.7)%1,125 49 2,195.9 %
Provision (reversal) for credit losses on loans157 (2,417)NM(109)NM(2,260)(1,300)73.8 %
Balance at end of period$24,867 $24,694 0.7 %$21,071 18.0 %$24,867 $21,071 18.0 %
Percentage to loans held-for-investment at end of period1.17 %1.18 %1.15 %1.15 %
ACL on off-balance sheet credit exposure (1)
Balance at beginning of period$1,545 $299 416.7 %$216 615.3 %$299 $214 39.7 %
Impact of ASC 326 adoption— 1,607 NM— NM1,607 — NM
Provision (reversal) for credit losses on off-balance sheet credit exposure40 (361)NM36 11.1 %(321)38 NM
Balance at end of period$1,585 $1,545 2.6 %$252 529.0 %$1,585 $252 529.0 %
(1)ACL on off-balance sheet credit exposures was recorded in Accrued Interest Payable and Other Liabilities on Consolidated Balance Sheets (Unaudited).
Investment Securities
Total investment securities were $138.7 million at June 30, 2023, a decrease of $6.0 million, or 4.1%, from $144.7 million at March 31, 2023, a decrease of $3.2 million, or 2.2%, from $141.9 million at December 31, 2022, and a decrease of $394 thousand, or 0.3%, from $139.1 million at June 30, 2022. The decrease for the current quarter was primarily due to principal pay-downs and calls of $4.6 million, a fair value decrease of $2.3 million and net premium amortization of $59 thousand, partially offset by purchases of $1.0 million. The decrease for the current year-to-date period was primarily due to principal pay-downs and calls of $8.7 million, a fair value decrease of $312 thousand and net premium amortization of $116 thousand, partially offset by purchases of $5.9 million.

9

Deposits
The following table presents the Company’s deposit mix as of the dates indicated:
6/30/20233/31/202312/31/20226/30/2022
($ in thousands)Amount% to TotalAmount% to TotalAmount% to TotalAmount% to Total
Noninterest-bearing demand deposits
$635,329 29.0 %$653,970 30.5 %$734,989 35.9 %$988,454 49.5 %
Interest-bearing deposits
Savings
7,504 0.3 %7,584 0.4 %8,579 0.4 %14,686 0.7 %
NOW
16,993 0.8 %15,696 0.7 %11,405 0.6 %18,881 0.9 %
Retail money market accounts
464,655 21.1 %436,906 20.3 %494,749 24.1 %458,605 22.9 %
Brokered money market accounts
1 0.1 %1 0.1 %8 0.1 %1 0.1 %
Retail time deposits of
$250,000 or less
392,012 17.9 %356,049 16.6 %295,354 14.4 %235,956 11.8 %
More than $250,000
451,590 20.7 %454,464 21.3 %353,876 17.3 %186,024 9.3 %
State and brokered time deposits
220,148 10.1 %217,019 10.1 %147,023 7.2 %95,000 4.8 %
Total interest-bearing deposits
1,552,903 71.0 %1,487,719 69.5 %1,310,994 64.1 %1,009,153 50.5 %
Total deposits
$2,188,232 100.0 %$2,141,689 100.0 %$2,045,983 100.0 %$1,997,607 100.0 %
Estimated total deposits not covered by deposit insurance$1,034,148 47.3 %$1,019,689 47.6 %$1,062,111 51.9 %$1,199,502 60.0 %
The decrease in noninterest-bearing demand deposits was primarily due to strong deposit market competition and the migration of noninterest-bearing demand deposits to money market accounts and time deposits attributable to the rising market rates. To retain existing and attract new customers, the Bank offers competitive rates on deposit products in the rising interest rate environment.
The increase in retail time deposits for the current quarter was primarily due to new accounts of $107.9 million, renewals of the matured accounts of $88.8 million and balance increases of $4.9 million, partially offset by matured and closed accounts of $168.5 million. The increase for the current year-to-date period was primarily due to new accounts of $408.2 million, renewals of the matured accounts of $206.2 million and balance increases of $11.9 million, partially offset by matured and closed accounts of $431.9 million.
Liquidity
The following table presents a summary of the Company’s liquidity position as of June 30, 2023:
($ in thousands)6/30/202312/31/2022% Change
Cash and cash equivalents
$222,146 $147,031 51.1 %
Cash and cash equivalents to total assets
8.7 %6.1 %
Available borrowing capacity
FHLB advances
$625,115 $561,745 11.3 %
Federal Reserve Discount Window
30,285 23,902 26.7 %
Overnight federal funds lines
65,000 65,000 — %
Total
$720,400 $650,647 10.7 %
Total available borrowing capacity to total assets
28.2 %26.9 %
During the current year-to-date period, the Company increased cash and cash equivalents by $75.1 million, or 51.1%, to $222.1 million and available borrowing capacity by $69.8 million, or 10.7%, to $720.4 million. As of June 30, 2023, the Company's cash and cash equivalents and available borrowing capacity cover approximately 91.1% of deposits not covered by deposit insurance compared to 75.1% at December 31, 2022.
10

Shareholders’ Equity
Shareholders’ equity was $340.4 million at June 30, 2023, an increase of $3.6 million, or 1.1%, from $336.8 million at March 31, 2023, an increase of $5.0 million, or 1.5%, from $335.4 million at December 31, 2022, and an increase of $6.0 million, or 1.8%, from $334.4 million at June 30, 2022. The increase for the current quarter was primarily due to net income, partially offset by cash dividends declared on common stock of $2.6 million and an increase in other comprehensive loss of $1.6 million. The increase for the current year-to-date period was primarily due to net income, partially offset by cash dividend declared on common stock of $4.8 million, repurchase of 385,381 shares of common stock at a weighted-average price of $17.76, totaling $6.8 million, and cumulative effect adjustment upon adoption of ASC 326 of $1.9 million.
Stock Repurchase
On July 28, 2022, the Company’s Board of Directors approved a repurchase program authorizing for the repurchase of up to 5% of the Company’s outstanding common stock, which represented 747,938 shares, through February 1, 2023. On January 26, 2023, the Company announced the amendment to the repurchase program, which extended the program expiration from February 1, 2023 to February 1, 2024. The Company completed the repurchase program during the previous quarter. Under this repurchase program, the Company repurchased and retired 747,938 shares of common stock at a weighted-average price of $18.15 per share, totaling $13.6 million.
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 Emergency Capital Investment Program (“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.
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:
6/30/20233/31/202312/31/20226/30/2022Well Capitalized Requirements
PCB Bancorp
Common tier 1 capital (to risk-weighted assets)
13.12 %13.09 %13.29 %14.44 %N/A
Total capital (to risk-weighted assets)
17.57 %17.61 %17.83 %19.25 %N/A
Tier 1 capital (to risk-weighted assets)
16.34 %16.37 %16.62 %18.11 %N/A
Tier 1 capital (to average assets)
13.84 %13.90 %14.33 %15.37 %N/A
PCB Bank
Common tier 1 capital (to risk-weighted assets)
16.00 %16.03 %16.30 %17.79 %6.5 %
Total capital (to risk-weighted assets)
17.23 %17.27 %17.52 %18.92 %10.0 %
Tier 1 capital (to risk-weighted assets)
16.00 %16.03 %16.30 %17.79 %8.0 %
Tier 1 capital (to average assets)
13.55 %13.62 %14.05 %15.09 %5.0 %
11

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 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, 2022 and other filings the Company makes with the SEC, which are available at the SEC’s Internet site (http://www.sec.gov) or from the Company without charge. Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise, except as required by law.
Contact:
Timothy Chang
Executive Vice President & Chief Financial Officer
213-210-2000

12

PCB Bancorp and Subsidiary
Consolidated Balance Sheets (Unaudited)
($ in thousands, except share and per share data)
6/30/20233/31/2023% Change12/31/2022% Change6/30/2022% Change
Assets
Cash and due from banks
$22,159 $25,801 (14.1)%$23,202 (4.5)%$23,125 (4.2)%
Interest-bearing deposits in other financial institutions199,987 164,718 21.4 %123,829 61.5 %276,785 (27.7)%
Total cash and cash equivalents
222,146 190,519 16.6 %147,031 51.1 %299,910 (25.9)%
Securities available-for-sale, at fair value
138,673 144,665 (4.1)%141,863 (2.2)%139,067 (0.3)%
Loans held-for-sale
13,065 14,352 (9.0)%22,811 (42.7)%9,627 35.7 %
Loans held-for-investment2,122,427 2,092,442 1.4 %2,046,063 3.7 %1,833,010 15.8 %
Allowance for credit losses on loans(24,867)(24,694)0.7 %(24,942)(0.3)%(21,071)18.0 %
Net loans held-for-investment
2,097,560 2,067,748 1.4 %2,021,121 3.8 %1,811,939 15.8 %
Premises and equipment, net
6,394 6,473 (1.2)%6,916 (7.5)%3,633 76.0 %
Federal Home Loan Bank and other bank stock
12,716 10,183 24.9 %10,183 24.9 %10,183 24.9 %
Other real estate owned, net
— — — %— — %808 (100.0)%
Bank-owned life insurance30,428 30,244 0.6 %30,064 1.2 %29,705 2.4 %
Deferred tax assets, net
4,342 3,753 15.7 %3,115 39.4 %11,869 (63.4)%
Servicing assets
7,142 7,345 (2.8)%7,347 (2.8)%7,716 (7.4)%
Operating lease assets
5,182 5,854 (11.5)%6,358 (18.5)%6,512 (20.4)%
Accrued interest receivable
8,040 7,998 0.5 %7,472 7.6 %5,212 54.3 %
Other assets
10,657 11,390 (6.4)%15,755 (32.4)%8,379 27.2 %
Total assets
$2,556,345 $2,500,524 2.2 %$2,420,036 5.6 %$2,344,560 9.0 %
Liabilities
Deposits
Noninterest-bearing demand
$635,329 $653,970 (2.9)%$734,989 (13.6)%$988,454 (35.7)%
Savings, NOW and money market accounts
489,153 460,187 6.3 %514,741 (5.0)%492,173 (0.6)%
Time deposits of $250,000 or less
552,160 513,068 7.6 %382,377 44.4 %270,956 103.8 %
Time deposits of more than $250,000
511,590 514,464 (0.6)%413,876 23.6 %246,024 107.9 %
Total deposits
2,188,232 2,141,689 2.2 %2,045,983 7.0 %1,997,607 9.5 %
Federal Home Loan Bank advances
— — — %20,000 (100.0)%— — %
Operating lease liabilities
5,495 6,238 (11.9)%6,809 (19.3)%7,067 (22.2)%
Accrued interest payable and other liabilities
22,207 15,767 40.8 %11,802 88.2 %5,511 303.0 %
Total liabilities
2,215,934 2,163,694 2.4 %2,084,594 6.3 %2,010,185 10.2 %
Commitments and contingent liabilities
Shareholders’ equity
Preferred stock69,141 69,141 — %69,141 — %69,141 — %
Common stock143,686 143,356 0.2 %149,631 (4.0)%155,842 (7.8)%
Retained earnings
138,315 133,415 3.7 %127,181 8.8 %115,992 19.2 %
Accumulated other comprehensive loss, net(10,731)(9,082)18.2 %(10,511)2.1 %(6,600)62.6 %
Total shareholders’ equity
340,411 336,830 1.1 %335,442 1.5 %334,375 1.8 %
Total liabilities and shareholders’ equity
$2,556,345 $2,500,524 2.2 %$2,420,036 5.6 %$2,344,560 9.0 %
Outstanding common shares
14,318,890 14,297,870 14,625,474 14,956,760 
Book value per common share (1)
$23.77 $23.56 $22.94 $22.36 
TCE per common share (2)
$18.94 $18.72 $18.21 $17.73 
Total loan to total deposit ratio
97.59 %98.37 %101.12 %92.24 %
Noninterest-bearing deposits to total deposits
29.03 %30.54 %35.92 %49.48 %
(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
6/30/20233/31/2023% Change6/30/2022% Change6/30/20236/30/2022% Change
Interest and dividend income
Loans, including fees$32,960 $31,229 5.5 %$21,243 55.2 %$64,189 $41,433 54.9 %
Investment securities1,136 1,102 3.1 %668 70.1 %2,238 1,144 95.6 %
Other interest-earning assets2,742 2,205 24.4 %535 412.5 %4,947 763 548.4 %
Total interest income36,838 34,536 6.7 %22,446 64.1 %71,374 43,340 64.7 %
Interest expense
Deposits15,121 11,913 26.9 %1,041 1,352.5 %27,034 1,891 1,329.6 %
Other borrowings— 209 (100.0)%54 (100.0)%209 105 99.0 %
Total interest expense
15,121 12,122 24.7 %1,095 1,280.9 %27,243 1,996 1,264.9 %
Net interest income
21,717 22,414 (3.1)%21,351 1.7 %44,131 41,344 6.7 %
Provision (reversal) for credit losses197 (2,778)NM(109)NM(2,581)(1,300)98.5 %
Net interest income after provision (reversal) for credit losses21,520 25,192 (14.6)%21,460 0.3 %46,712 42,644 9.5 %
Noninterest income
Gain on sale of loans
769 1,309 (41.3)%2,039 (62.3)%2,078 5,816 (64.3)%
Service charges and fees on deposits
369 344 7.3 %330 11.8 %713 633 12.6 %
Loan servicing income
868 860 0.9 %755 15.0 %1,728 1,455 18.8 %
Bank-owned life insurance income184 180 2.2 %175 5.1 %364 347 4.9 %
Other income
467 328 42.4 %349 33.8 %795 683 16.4 %
Total noninterest income
2,657 3,021 (12.0)%3,648 (27.2)%5,678 8,934 (36.4)%
Noninterest expense
Salaries and employee benefits
8,675 8,928 (2.8)%8,125 6.8 %17,603 16,720 5.3 %
Occupancy and equipment
1,919 1,896 1.2 %1,537 24.9 %3,815 2,934 30.0 %
Professional fees
772 732 5.5 %642 20.2 %1,504 1,045 43.9 %
Marketing and business promotion
203 372 (45.4)%310 (34.5)%575 517 11.2 %
Data processing
380 412 (7.8)%441 (13.8)%792 845 (6.3)%
Director fees and expenses
217 180 20.6 %182 19.2 %397 351 13.1 %
Regulatory assessments
382 155 146.5 %147 159.9 %537 288 86.5 %
Other expense1,079 1,079 — %861 25.3 %2,158 1,616 33.5 %
Total noninterest expense
13,627 13,754 (0.9)%12,245 11.3 %27,381 24,316 12.6 %
Income before income taxes
10,550 14,459 (27.0)%12,863 (18.0)%25,009 27,262 (8.3)%
Income tax expense
3,073 4,162 (26.2)%3,771 (18.5)%7,235 7,930 (8.8)%
Net income
$7,477 $10,297 (27.4)%$9,092 (17.8)%$17,774 $19,332 (8.1)%
Earnings per common share
Basic
$0.52 $0.71 $0.61 $1.24 $1.29 
Diluted
$0.52 $0.70 $0.60 $1.22 $1.27 
Average common shares
Basic
14,271,200 14,419,155 14,883,768 14,344,769 14,865,990 
Diluted
14,356,776 14,574,929 15,122,452 14,468,981 15,138,493 
Dividend paid per common share
$0.18 $0.15 $0.15 $0.33 $0.30 
Return on average assets (1)
1.19 %1.69 %1.65 %1.44 %1.78 %
Return on average shareholders’ equity (1)
8.82 %12.46 %12.48 %10.62 %14.13 %
Return on average TCE (1), (2)
11.08 %15.70 %13.85 %13.35 %14.92 %
Efficiency ratio (3)
55.91 %54.08 %48.98 %54.97 %48.36 %
(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
6/30/20233/31/20236/30/2022
Average BalanceInterest Income/ Expense
Avg. Yield/Rate(6)
Average BalanceInterest Income/ Expense
Avg. Yield/Rate(6)
Average BalanceInterest Income/ Expense
Avg. Yield/Rate(6)
Assets
Interest-earning assets
Total loans (1)
$2,097,489 $32,960 6.30 %$2,072,415 $31,229 6.11 %$1,804,368 $21,243 4.72 %
Mortgage-backed securities
98,971 713 2.89 %97,578 683 2.84 %88,032 416 1.90 %
Collateralized mortgage obligation
26,228 262 4.01 %26,743 256 3.88 %25,929 125 1.93 %
SBA loan pool securities
8,364 81 3.88 %9,027 82 3.68 %11,164 43 1.54 %
Municipal bonds (2)
4,234 33 3.13 %4,221 34 3.27 %5,347 37 2.78 %
Corporate bonds4,339 47 4.34 %4,510 47 4.23 %4,852 47 3.89 %
Other interest-earning assets
213,883 2,742 5.14 %186,809 2,205 4.79 %195,633 535 1.10 %
Total interest-earning assets
2,453,508 36,838 6.02 %2,401,303 34,536 5.83 %2,135,325 22,446 4.22 %
Noninterest-earning assets
Cash and due from banks20,754 21,155 20,801 
ACL on loans(24,710)(26,757)(21,204)
Other assets
71,200 75,175 73,137 
Total noninterest-earning assets
67,244 69,573 72,734 
Total assets
$2,520,752 $2,470,876 $2,208,059 
Liabilities and Shareholders’ Equity
Interest-bearing liabilities
Deposits
NOW and money market accounts
$465,564 3,929 3.38 %$485,962 3,445 2.87 %$464,829 430 0.37 %
Savings
7,767 5 0.26 %8,099 5 0.25 %14,989 2 0.05 %
Time deposits
1,054,191 11,187 4.26 %916,751 8,463 3.74 %521,606 609 0.47 %
Total interest-bearing deposits
1,527,522 15,121 3.97 %1,410,812 11,913 3.42 %1,001,424 1,041 0.42 %
Other borrowings— — 0.00 %15,811 209 5.36 %11,132 54 1.95 %
Total interest-bearing liabilities
1,527,522 15,121 3.97 %1,426,623 12,122 3.45 %1,012,556 1,095 0.43 %
Noninterest-bearing liabilities
Noninterest-bearing demand
628,127 687,575 889,691 
Other liabilities
25,234 21,509 13,677 
Total noninterest-bearing liabilities
653,361 709,084 903,368 
Total liabilities
2,180,883 2,135,707 1,915,924 
Total shareholders’ equity
339,869 335,169 292,135 
Total liabilities and shareholders’ equity
$2,520,752 $2,470,876 $2,208,059 
Net interest income
$21,717 $22,414 $21,351 
Net interest spread (3)
2.05 %2.38 %3.79 %
Net interest margin (4)
3.55 %3.79 %4.01 %
Total deposits
$2,155,649 $15,121 2.81 %$2,098,387 $11,913 2.30 %$1,891,115 $1,041 0.22 %
Total funding (5)
$2,155,649 $15,121 2.81 %$2,114,198 $12,122 2.33 %$1,902,247 $1,095 0.23 %
(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.



15

PCB Bancorp and Subsidiary
Average Balance, Average Yield, and Average Rate (Unaudited)
($ in thousands)
Six Months Ended
6/30/20236/30/2022
Average BalanceInterest Income/ Expense
Avg. Yield/Rate(6)
Average BalanceInterest Income/ Expense
Avg. Yield/Rate(6)
Assets
Interest-earning assets
Total loans (1)
$2,085,021 $64,189 6.21 %$1,788,958 $41,433 4.67 %
Mortgage-backed securities
98,278 1,396 2.86 %86,138 723 1.69 %
Collateralized mortgage obligation
26,484 518 3.94 %22,106 173 1.58 %
SBA loan pool securities
8,693 163 3.78 %10,633 81 1.54 %
Municipal bonds (2)
4,228 67 3.20 %5,489 73 2.68 %
Corporate bonds4,424 94 4.28 %4,944 94 3.83 %
Other interest-earning assets
200,420 4,947 4.98 %197,267 763 0.78 %
Total interest-earning assets
2,427,548 71,374 5.93 %2,115,535 43,340 4.13 %
Noninterest-earning assets
Cash and due from banks20,953 20,594 
ACL on loans(25,727)(21,787)
Other assets
73,177 70,384 
Total noninterest-earning assets
68,403 69,191 
Total assets
$2,495,951 $2,184,726 
Liabilities and Shareholders’ Equity
Interest-bearing liabilities
Deposits
NOW and money market accounts
$475,707 7,374 3.13 %$448,496 743 0.33 %
Savings
7,932 10 0.25 %15,315 4 0.05 %
Time deposits
985,851 19,650 4.02 %553,818 1,144 0.42 %
Total interest-bearing deposits
1,469,490 27,034 3.71 %1,017,629 1,891 0.37 %
Other borrowings7,862 209 5.36 %10,768 105 1.97 %
Total interest-bearing liabilities
1,477,352 27,243 3.72 %1,028,397 1,996 0.39 %
Noninterest-bearing liabilities
Noninterest-bearing demand
657,687 865,294 
Other liabilities
23,382 15,194 
Total noninterest-bearing liabilities
681,069 880,488 
Total liabilities
2,158,421 1,908,885 
Total shareholders’ equity
337,530 275,841 
Total liabilities and shareholders’ equity
$2,495,951 $2,184,726 
Net interest income
$44,131 $41,344 
Net interest spread (3)
2.21 %3.74 %
Net interest margin (4)
3.67 %3.94 %
Total deposits
$2,127,177 $27,034 2.56 %$1,882,923 $1,891 0.20 %
Total funding (5)
$2,135,039 $27,243 2.57 %$1,893,691 $1,996 0.21 %
(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.
16

PCB Bancorp and Subsidiary
Loan Segments Revision (Unaudited)
($ in thousands)
As a part of the adoption of ASC 326, the Company reviewed and revised certain loan segments for the Company’s ACL model. Before the adoption of ASC 326, commercial property and SBA property loans were separately presented and represented 63.0% and 6.6% of loans held-for-investment at December 31, 2022, respectively. The Company re-divided these loan segments into commercial property (non-owner occupied), business property (owner occupied) and multifamily loans as these new loan segments are determined to share similar characteristics under the Company’s ACL model. In addition, four loan segments before the adoption of ASC 326 (commercial term loans, commercial lines of credit, SBA term loans and SBA PPP loans), which represented 12.2% of loans held-for-investment at December 31, 2022, are combined into a single loan segment, commercial and industrial loans, as these loans are determined to share similar risk characteristics under the Company’s ACL model. In this release, loan segments on loan related disclosures for prior period comparisons are revised accordingly in order to be comparable to the Company’s new loan segments.
The following table presents a reconciliation of revised loan segments to legacy loan segments, which were utilized before the adoption of ASC 326:
($ in thousands)6/30/20233/31/202312/31/20226/30/2022
Revision for commercial real estate loans
Revised loan segments:
Commercial property$793,946 $780,282 $772,020 $692,817 
Business property533,592 521,965 526,513 524,406 
Multifamily124,029 127,012 124,751 118,339 
Total$1,451,567 $1,429,259 $1,423,284 $1,335,562 
Legacy loan segments:
Commercial property$1,320,110 $1,300,719 $1,288,392 $1,204,142 
SBA property131,457 128,540 134,892 131,420 
Total$1,451,567 $1,429,259 $1,423,284 $1,335,562 
Revision for commercial and industrial loans
Revised loan segments:
Commercial and industrial$272,278 $267,674 $249,250 $204,369 
Legacy loan segments:
Commercial term$90,213 $91,740 $77,700 $73,885 
Commercial lines of credit165,162 159,268 154,142 111,916 
SBA commercial term15,900 15,566 16,211 16,985 
SBA PPP1,003 1,100 1,197 1,583 
Total$272,278 $267,674 $249,250 $204,369 
17

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
Six Months Ended
6/30/20233/31/20236/30/20226/30/20236/30/2022
Average total shareholders' equity(a)$339,869 $335,169 $292,135 $337,530 $275,841 
Less: average preferred stock(b)69,141 69,141 28,872.00 69,141 14,516 
Average TCE(c)=(a)-(b)$270,728 $266,028 $263,263 $268,389 $261,325 
Net income(d)$7,477 $10,297 $9,092 $17,774 $19,332 
Return on average shareholder's equity (1)
(d)/(a)8.82 %12.46 %12.48 %10.62 %14.13 %
Return on average TCE (1)
(d)/(c)11.08 %15.70 %13.85 %13.35 %14.92 %
(1) Annualized.
($ in thousands, except per share data)6/30/20233/31/202312/31/20226/30/2022
Total shareholders' equity(a)$340,411 $336,830 $335,442 $334,375 
Less: preferred stock(b)69,141 69,141 69,141 69,141 
TCE(c)=(a)-(b)$271,270 $267,689 $266,301 $265,234 
Outstanding common shares
(d)14,318,890 14,297,870 14,625,474 14,956,760 
Book value per common share(a)/(d)$23.77 $23.56 $22.94 $22.36 
TCE per common share(c)/(d)$18.94 $18.72 $18.21 $17.73 
Total assets(e)$2,556,345 $2,500,524 $2,420,036 $2,344,560 
Total shareholders' equity to total assets(a)/(e)13.32 %13.47 %13.86 %14.26 %
TCE to total assets(c)/(e)10.61 %10.71 %11.00 %11.31 %
18