PCB Bancorp Reports Earnings of $3.4 Million for Q3 2020
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LOS ANGELES--(BUSINESS WIRE)-- PCB Bancorp (the “Company”) (NASDAQ: PCB), the holding company of Pacific City Bank (the “Bank”), today reported net income of $3.4 million, or $0.22 per diluted common share for the third quarter of 2020, compared with $3.4 million, or $0.22 per diluted common share, for the previous quarter and $6.8 million, or $0.42 per diluted common share, for the year-ago quarter.
Q3 2020 Highlights
-
Net income totaled $3.4 million or $0.22 per diluted common share;
- The Company recorded a provision for loan losses of $4.3 million primarily due to an increase in the economic uncertainty due to the COVID-19 pandemic.
- Allowance for loan losses to total loans held-for-investment ratio was 1.55% at September 30, 2020 compared with 1.30% at June 30, 2020 and 0.94% at September 30, 2019. Excluding U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans, allowance for loan losses to total loans held-for-investment ratio was 1.70% and 1.43% at September 30, 2020 and June 30, 2020, respectively.
- Net interest margin was 3.43% for the third quarter of 2020 compared with 3.22% for the previous quarter and 4.11% for the year-ago quarter.
- Total assets were $2.02 billion at September 30, 2020, an increase of $410 thousand from $2.02 billion at June 30, 2020, an increase of $274.9 million, or 15.7%, from $1.75 billion at December 31, 2019, and an increase of $321.7 million, or 18.9%, from $1.70 billion at September 30, 2019;
-
Loans held-for-investment, net of deferred costs (fees), were $1.58 billion at September 30, 2020, an increase of $25.2 million, or 1.6%, from $1.55 billion at June 30, 2020, an increase of $128.0 million, or 8.8%, from $1.45 billion at December 31, 2019, and an increase of $189.0 million, or 13.6%, from $1.39 billion at September 30, 2019;
- SBA PPP loans totaled $136.4 million and $133.7 million at September 30, 2020 and June 30, 2020, respectively.
- Loans with modifications related to COVID-19 totaled $171.6 million at September 30, 2020 compared with $484.0 million at June 30, 2020.
- Total deposits were $1.65 billion at September 30, 2020, an increase of $177 thousand from $1.65 billion at June 30, 2020, an increase of $167.8 million, or 11.3%, from $1.48 billion at December 31, 2019, and an increase of $214.8 million, or 15.0%, from $1.43 billion at September 30, 2019;
- The consent order with the Federal Deposit Insurance Corporation (“FDIC”) and California Department of Financial Protection and Innovation (“CDFPI”, formerly California Department of Business Oversight) related to the Bank's Bank Secrecy Act and Anti-Money Laundering (“BSA/AML”) compliance was terminated; and
- The Company declared and paid a cash dividend of $0.10 per common share for the third quarter of 2020 compared with $0.10 per common share for the second quarter of 2020 and $0.06 per common share for the third quarter of 2019.
“We continued to successfully manage the challenging environment as evidenced by earning $3.4 million of net income while building additional $4.3 million of allowance for loan losses related to the economic impact of the COVID-19 pandemic in the third quarter to bring it to 1.70% of total loans held-for-investment, excluding SBA PPP loans,” commented Henry Kim, President and Chief Executive Officer. “We expanded our net interest margin to 3.43% in the third quarter compared with 3.22% in the second quarter primarily by reducing 0.25% in cost of total interest-bearing liabilities. In addition, we continued to gradually reduce our excess liquidity that was accumulated at the onset of the COVID-19 pandemic.”
“Our asset quality remained stable as we continued to help navigate our borrowers manage through the impact of the COVID-19 pandemic. Our loans with modifications related to the COVID-19 pandemic decreased to 11.9% of total loans held-for-investment at September 30, 2020 compared with 34.1% at June 30, 2020.”
“During the quarter, the FDIC and CDFPI also terminated the consent order related to the Bank’s BSA/AML compliance program by our successful resolution of the deficiencies and enhancement of our program. We believe we are successfully managing the current challenging environment and remain confident in our strategy to continue supporting our customers while delivering consistent financial performance.”
Financial Highlights (Unaudited)
($ in thousands, except per share data) |
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||||||||||||||
|
9/30/2020 |
|
6/30/2020 |
|
% Change |
|
9/30/2019 |
|
% Change |
|
9/30/2020 |
|
9/30/2019 |
|
% Change |
||||||||||||||
Net income |
|
$ |
3,449 |
|
|
$ |
3,367 |
|
|
2.4 |
% |
|
$ |
6,785 |
|
|
(49.2 |
)% |
|
$ |
10,388 |
|
|
$ |
19,950 |
|
|
(47.9 |
)% |
Diluted earnings per common share |
|
$ |
0.22 |
|
|
$ |
0.22 |
|
|
— |
% |
|
$ |
0.42 |
|
|
(47.6 |
)% |
|
$ |
0.67 |
|
|
$ |
1.23 |
|
|
(45.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net interest income |
|
$ |
16,853 |
|
|
$ |
15,363 |
|
|
9.7 |
% |
|
$ |
17,529 |
|
|
(3.9 |
)% |
|
$ |
48,782 |
|
|
$ |
52,374 |
|
|
(6.9 |
)% |
Provision (reversal) for loan losses |
|
4,326 |
|
|
3,855 |
|
|
12.2 |
% |
|
(102 |
) |
|
NM |
|
|
11,077 |
|
|
207 |
|
|
5251.2 |
% |
|||||
Noninterest income |
|
2,272 |
|
|
2,918 |
|
|
(22.1 |
)% |
|
2,802 |
|
|
(18.9 |
)% |
|
7,216 |
|
|
8,265 |
|
|
(12.7 |
)% |
|||||
Noninterest expense |
|
9,886 |
|
|
9,696 |
|
|
2.0 |
% |
|
10,777 |
|
|
(8.3 |
)% |
|
30,149 |
|
|
32,050 |
|
|
(5.9 |
)% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Return on average assets (1) |
|
0.69 |
% |
|
0.69 |
% |
|
|
|
1.55 |
% |
|
|
|
0.73 |
% |
|
1.55 |
% |
|
|
||||||||
Return on average shareholders’ equity (1), (2) |
|
5.98 |
% |
|
5.98 |
% |
|
|
|
12.02 |
% |
|
|
|
6.10 |
% |
|
12.15 |
% |
|
|
||||||||
Net interest margin (1) |
|
3.43 |
% |
|
3.22 |
% |
|
|
|
4.11 |
% |
|
|
|
3.49 |
% |
|
4.16 |
% |
|
|
||||||||
Efficiency ratio (3) |
|
51.69 |
% |
|
53.04 |
% |
|
|
|
53.01 |
% |
|
|
|
53.84 |
% |
|
52.85 |
% |
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
($ in thousands, except per share data) |
|
9/30/2020 |
|
6/30/2020 |
|
% Change |
|
12/31/2019 |
|
% Change |
|
9/30/2019 |
|
% Change |
|||||||||||
Total assets |
|
$ |
2,021,187 |
|
|
$ |
2,020,777 |
|
|
— |
% |
|
$ |
1,746,328 |
|
|
15.7 |
% |
|
$ |
1,699,446 |
|
|
18.9 |
% |
Net loans held-for-investment |
|
1,554,258 |
|
|
1,533,341 |
|
|
1.4 |
% |
|
1,436,451 |
|
|
8.2 |
% |
|
1,376,736 |
|
|
12.9 |
% |
||||
Total deposits |
|
1,647,107 |
|
|
1,646,930 |
|
|
— |
% |
|
1,479,307 |
|
|
11.3 |
% |
|
1,432,262 |
|
|
15.0 |
% |
||||
Book value per common share (2), (4) |
|
$ |
14.91 |
|
|
$ |
14.78 |
|
|
0.9 |
% |
|
$ |
14.44 |
|
|
3.3 |
% |
|
$ |
14.30 |
|
|
4.3 |
% |
Tier 1 leverage ratio (consolidated) |
|
11.40 |
% |
|
11.49 |
% |
|
|
|
13.23 |
% |
|
|
|
12.87 |
% |
|
|
|||||||
Total shareholders’ equity to total assets (2) |
|
11.35 |
% |
|
11.24 |
% |
|
|
|
12.99 |
% |
|
|
|
13.22 |
% |
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
(1) |
Ratios are presented on an annualized basis. |
|
(2) |
The Company did not have any intangible equity components for the presented periods. |
|
(3) |
The ratios are calculated by dividing noninterest expense by the sum of net interest income and noninterest income. |
|
(4) |
The ratios are calculated by dividing total shareholders’ equity by the number of outstanding common shares. |
COVID-19 Pandemic
The ongoing COVID-19 pandemic, and governmental and societal responses thereto, have had a severe impact on recent global economic and market conditions, including significant disruption of, and volatility in, financial markets; global supply chain disruptions; and the institution of social distancing and shelter-in-place requirements that have resulted in temporary closures of many businesses, lost revenues, and increased unemployment throughout the U.S., but also specifically in California, where most of the Company’s operations and a large majority of its customers are located.
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 its customers, 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. SBA PPP loans totaled $136.4 million (1,614 loans) and loans with modifications related to the COVID-19 pandemic totaled $171.6 million (154 loan customers) as of September 30, 2020.
In addition, the Company has been monitoring its liquidity and capital closely. As of September 30, 2020, the Company maintained $257.4 million, or 12.7% of total assets, of cash and cash equivalents and $419.9 million, or 20.8% of total assets, of available borrowing capacity. All regulatory capital ratios were also well above the regulatory well capitalized requirements as of September 30, 2020, while establishing additional allowance for loan losses of $4.3 million and $11.1 million, respectively, for the current quarter and year for the increase in risks associated with economic and business conditions as a result of the COVID-19 pandemic.
At this time, the Company cannot estimate the long term impact of the COVID-19 pandemic, but these conditions impacted and are expected to impact its business, results of operations, and financial condition negatively.
Result of Operations (Unaudited)
Net Interest Income and Net Interest Margin
The following table presents the components of net interest income for the periods indicated:
|
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||||||||||||||
($ in thousands) |
|
9/30/2020 |
|
6/30/2020 |
|
% Change |
|
9/30/2019 |
|
% Change |
|
9/30/2020 |
|
9/30/2019 |
|
% Change |
|||||||||||||
Interest income/expense on: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loans |
|
$ |
18,938 |
|
|
$ |
18,273 |
|
|
3.6 |
% |
|
$ |
21,876 |
|
|
(13.4 |
)% |
|
$ |
57,617 |
|
|
$ |
64,779 |
|
|
(11.1 |
)% |
Investment securities |
|
515 |
|
|
539 |
|
|
(4.5 |
)% |
|
978 |
|
|
(47.3 |
)% |
|
1,698 |
|
|
3,133 |
|
|
(45.8 |
)% |
|||||
Other interest-earning assets |
|
167 |
|
|
161 |
|
|
3.7 |
% |
|
833 |
|
|
(80.0 |
)% |
|
938 |
|
|
2,757 |
|
|
(66.0 |
)% |
|||||
Total interest-earning assets |
|
19,620 |
|
|
18,973 |
|
|
3.4 |
% |
|
23,687 |
|
|
(17.2 |
)% |
|
60,253 |
|
|
70,669 |
|
|
(14.7 |
)% |
|||||
Interest-bearing deposits |
|
2,599 |
|
|
3,409 |
|
|
(23.8 |
)% |
|
6,060 |
|
|
(57.1 |
)% |
|
11,000 |
|
|
17,925 |
|
|
(38.6 |
)% |
|||||
Borrowings |
|
168 |
|
|
201 |
|
|
(16.4 |
)% |
|
98 |
|
|
71.4 |
% |
|
471 |
|
|
370 |
|
|
27.3 |
% |
|||||
Total interest-bearing liabilities |
|
2,767 |
|
|
3,610 |
|
|
(23.4 |
)% |
|
6,158 |
|
|
(55.1 |
)% |
|
11,471 |
|
|
18,295 |
|
|
(37.3 |
)% |
|||||
Net interest income |
|
$ |
16,853 |
|
|
$ |
15,363 |
|
|
9.7 |
% |
|
$ |
17,529 |
|
|
(3.9 |
)% |
|
$ |
48,782 |
|
|
$ |
52,374 |
|
|
(6.9 |
)% |
Average balance of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loans |
|
$ |
1,564,704 |
|
|
$ |
1,554,011 |
|
|
0.7 |
% |
|
$ |
1,396,437 |
|
|
12.0 |
% |
|
$ |
1,524,628 |
|
|
$ |
1,372,704 |
|
|
11.1 |
% |
Investment securities |
|
128,212 |
|
|
120,336 |
|
|
6.5 |
% |
|
161,528 |
|
|
(20.6 |
)% |
|
122,371 |
|
|
165,638 |
|
|
(26.1 |
)% |
|||||
Other interest-earning assets |
|
260,426 |
|
|
245,447 |
|
|
6.1 |
% |
|
135,774 |
|
|
91.8 |
% |
|
221,698 |
|
|
143,616 |
|
|
54.4 |
% |
|||||
Total interest-earning assets |
|
$ |
1,953,342 |
|
|
$ |
1,919,794 |
|
|
1.7 |
% |
|
$ |
1,693,739 |
|
|
15.3 |
% |
|
$ |
1,868,697 |
|
|
$ |
1,681,958 |
|
|
11.1 |
% |
Interest-bearing deposits |
|
$ |
1,063,962 |
|
|
$ |
1,109,307 |
|
|
(4.1 |
)% |
|
$ |
1,126,376 |
|
|
(5.5 |
)% |
|
$ |
1,100,855 |
|
|
$ |
1,128,606 |
|
|
(2.5 |
)% |
Borrowings |
|
130,000 |
|
|
130,330 |
|
|
(0.3 |
)% |
|
20,326 |
|
|
539.6 |
% |
|
95,276 |
|
|
26,820 |
|
|
255.2 |
% |
|||||
Total interest-bearing liabilities |
|
$ |
1,193,962 |
|
|
$ |
1,239,637 |
|
|
(3.7 |
)% |
|
$ |
1,146,702 |
|
|
4.1 |
% |
|
$ |
1,196,131 |
|
|
$ |
1,155,426 |
|
|
3.5 |
% |
Total funding (1) |
|
$ |
1,746,217 |
|
|
$ |
1,713,812 |
|
|
1.9 |
% |
|
$ |
1,488,560 |
|
|
17.3 |
% |
|
$ |
1,661,765 |
|
|
$ |
1,481,130 |
|
|
12.2 |
% |
Annualized average yield/cost of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loans |
|
4.81 |
% |
|
4.73 |
% |
|
|
|
6.22 |
% |
|
|
|
5.05 |
% |
|
6.31 |
% |
|
|
||||||||
Investment securities |
|
1.60 |
% |
|
1.80 |
% |
|
|
|
2.40 |
% |
|
|
|
1.85 |
% |
|
2.53 |
% |
|
|
||||||||
Other interest-earning assets |
|
0.26 |
% |
|
0.26 |
% |
|
|
|
2.43 |
% |
|
|
|
0.57 |
% |
|
2.57 |
% |
|
|
||||||||
Total interest-earning assets |
|
4.00 |
% |
|
3.97 |
% |
|
|
|
5.55 |
% |
|
|
|
4.31 |
% |
|
5.62 |
% |
|
|
||||||||
Interest-bearing deposits |
|
0.97 |
% |
|
1.24 |
% |
|
|
|
2.13 |
% |
|
|
|
1.33 |
% |
|
2.12 |
% |
|
|
||||||||
Borrowings |
|
0.51 |
% |
|
0.62 |
% |
|
|
|
1.91 |
% |
|
|
|
0.66 |
% |
|
1.84 |
% |
|
|
||||||||
Total interest-bearing liabilities |
|
0.92 |
% |
|
1.17 |
% |
|
|
|
2.13 |
% |
|
|
|
1.28 |
% |
|
2.12 |
% |
|
|
||||||||
Net interest margin |
|
3.43 |
% |
|
3.22 |
% |
|
|
|
4.11 |
% |
|
|
|
3.49 |
% |
|
4.16 |
% |
|
|
||||||||
Cost of total funding (1) |
|
0.63 |
% |
|
0.85 |
% |
|
|
|
1.64 |
% |
|
|
|
0.92 |
% |
|
1.65 |
% |
|
|
||||||||
Supplementary information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net accretion of discount on loans included in interest on loans |
|
$ |
743 |
|
|
$ |
530 |
|
|
40.2 |
% |
|
$ |
1,031 |
|
|
(27.9 |
)% |
|
$ |
2,301 |
|
|
$ |
3,083 |
|
|
(25.4 |
)% |
Net amortization of deferred loan fees (costs) |
|
$ |
1,218 |
|
|
$ |
649 |
|
|
87.7 |
% |
|
$ |
118 |
|
|
932.2 |
% |
|
$ |
1,988 |
|
|
$ |
327 |
|
|
508.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(1) |
Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding. |
Loans. The increase in average balance for the current quarter and year compared with the same periods of 2019 was primarily due to the SBA PPP loan production in the previous quarter as well as an increase in commercial property loans. The increase in average yield for the current quarter compared with the previous quarter was primarily due to an increase in net accretion of discount on loans from the increase in loan payoffs and an increase in amortization of net deferred fees on SBA PPP loans. The decreases in average yield for the current quarter and year compared with the same periods of 2019 were primarily due to the lower market rates, the low interest rate on SBA PPP loans, and a decrease in net accretion of discount.
The following table presents a composition of total loans by interest rate type accompanied with the weighted-average contractual rates as of the dates indicated:
|
|
9/30/2020 |
|
6/30/2020 |
|
12/31/2019 |
|
9/30/2019 |
||||||||||||||||
|
|
% to Total
|
|
Weighted-
|
|
% to Total
|
|
Weighted-
|
|
% to Total
|
|
Weighted-
|
|
% to Total
|
|
Weighted-
|
||||||||
Fixed rate loans |
|
40.6 |
% |
|
4.12 |
% |
|
38.4 |
% |
|
4.18 |
% |
|
28.2 |
% |
|
5.29 |
% |
|
24.2 |
% |
|
5.40 |
% |
Hybrid rate loans |
|
12.2 |
% |
|
4.98 |
% |
|
13.3 |
% |
|
4.99 |
% |
|
15.2 |
% |
|
5.03 |
% |
|
16.3 |
% |
|
5.04 |
% |
Variable rate loans |
|
47.2 |
% |
|
4.10 |
% |
|
48.3 |
% |
|
4.11 |
% |
|
56.6 |
% |
|
5.51 |
% |
|
59.5 |
% |
|
5.88 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Investment Securities. The decrease in average yield for the current quarter compared with the previous quarter was primarily due to new investment securities purchased under the lower market rates. The decreases in average yield for the current quarter and year compared with the same periods of 2019 were primarily due to the new investment securities purchased, as well as sales of securities available-for-sale of $32.8 million with a weighted-average book yield of 3.02% during the fourth quarter of 2019. During the current quarter and year, and past 12-month period, the Company purchased investment securities of $12.2 million, $36.6 million and $42.4 million, respectively.
Other Interest-Earning Assets. The decreases in average yield for the current quarter and year compared with the same periods of 2019 were primarily due to the lower market rates. The increases in average balance for the current quarter and year compared with the same periods of 2019 were primarily due to increases in deposits and other borrowings during the current quarter and year as the Company maintains most of its cash at the Federal Reserve Bank account. See the balance change discussion for the current quarter in “Deposits” under the “Balance Sheet” discussion.
Interest-Bearing Deposits. The decreases in average cost for the current quarter and year were primarily due to the continuing decreases in market rates.
Borrowings. The Company maintained a higher balance of Federal Home Loan Bank (“FHLB”) advances during the current year as a part of the Company’s liquidity management. At September 30, 2020, the Company had a total outstanding FHLB advances of $130.0 million with a weighted-average rate of 0.51%.
Provision (reversal) for Loan Losses
Provision (reversal) for loan losses was $4.3 million for the current quarter compared with $3.9 million for the previous quarter and $(102) thousand for the year-ago quarter. For the nine months ended September 30, 2020 and 2019, provision for loan losses was $11.1 million and $207 thousand, respectively. The provision was primarily driven by the increase in risks associated with economic and business conditions as a result of the COVID-19 pandemic, which required an additional provision for loan losses of $4.3 million and $11.1 million for the current quarter and year, respectively. The Company recorded net charge-offs of $28 thousand for the current quarter compared with $281 thousand for the previous quarter and $132 thousand for the year-ago quarter. For the nine months ended September 30, 2020 and 2019, the Company recorded net charge-offs of $911 thousand and $280 thousand, respectively.
The following table presents allowance for loan losses to total loans held-for-investment ratio for the dates indicated:
|
|
9/30/2020 |
|
6/30/2020 |
|
12/31/2019 |
|
9/30/2019 |
||||||||
Total loans held-for-investment |
|
$ |
1,578,804 |
|
|
$ |
1,553,589 |
|
|
$ |
1,450,831 |
|
|
$ |
1,389,830 |
|
Less: SBA PPP loans |
|
136,418 |
|
|
133,675 |
|
|
— |
|
|
— |
|
||||
Total loans held-for-investment, excluding SBA PPP loans |
|
$ |
1,442,386 |
|
|
$ |
1,419,914 |
|
|
$ |
1,450,831 |
|
|
$ |
1,389,830 |
|
Allowance for loan losses |
|
$ |
24,546 |
|
|
$ |
20,248 |
|
|
$ |
14,380 |
|
|
$ |
13,094 |
|
Allowance for loan losses to total loans held-for-investment |
|
1.55 |
% |
|
1.30 |
% |
|
0.99 |
% |
|
0.94 |
% |
||||
Allowance for loan losses to total loans held-for-investment, excluding SBA PPP loans |
|
1.70 |
% |
|
1.43 |
% |
|
0.99 |
% |
|
0.94 |
% |
||||
|
|
|
|
|
|
|
|
|
||||||||
Noninterest Income
The following table presents the components of noninterest income for the periods indicated:
|
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||||||||||||||
($ in thousands) |
|
9/30/2020 |
|
6/30/2020 |
|
% Change |
|
9/30/2019 |
|
% Change |
|
9/30/2020 |
|
9/30/2019 |
|
% Change |
|||||||||||||
Gain on sale of loans |
|
$ |
821 |
|
|
$ |
1,498 |
|
|
(45.2 |
)% |
|
$ |
1,540 |
|
|
(46.7 |
)% |
|
$ |
3,044 |
|
|
$ |
4,551 |
|
|
(33.1 |
)% |
Service charges and fees on deposits |
|
280 |
|
|
275 |
|
|
1.8 |
% |
|
405 |
|
|
(30.9 |
)% |
|
945 |
|
|
1,137 |
|
|
(16.9 |
)% |
|||||
Loan servicing income |
|
856 |
|
|
902 |
|
|
(5.1 |
)% |
|
534 |
|
|
60.3 |
% |
|
2,312 |
|
|
1,657 |
|
|
39.5 |
% |
|||||
Other income |
|
315 |
|
|
243 |
|
|
29.6 |
% |
|
323 |
|
|
(2.5 |
)% |
|
915 |
|
|
920 |
|
|
(0.5 |
)% |
|||||
Total noninterest income |
|
$ |
2,272 |
|
|
$ |
2,918 |
|
|
(22.1 |
)% |
|
$ |
2,802 |
|
|
(18.9 |
)% |
|
$ |
7,216 |
|
|
$ |
8,265 |
|
|
(12.7 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gain on Sale of Loans. The following table presents information on gain on sale of loans for the periods indicated:
|
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||||||||||||||
($ in thousands) |
|
9/30/2020 |
|
6/30/2020 |
|
% Change |
|
9/30/2019 |
|
% Change |
|
9/30/2020 |
|
9/30/2019 |
|
% Change |
|||||||||||||
Gain on sale of SBA loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Sold loan balance |
|
$ |
8,582 |
|
|
$ |
27,066 |
|
|
(68.3 |
)% |
|
$ |
22,186 |
|
|
(61.3 |
)% |
|
$ |
47,363 |
|
|
$ |
72,537 |
|
|
(34.7 |
)% |
Premium received |
|
917 |
|
|
2,042 |
|
|
(55.1 |
)% |
|
2,061 |
|
|
(55.5 |
)% |
|
4,015 |
|
|
6,288 |
|
|
(36.1 |
)% |
|||||
Gain recognized |
|
689 |
|
|
1,448 |
|
|
(52.4 |
)% |
|
1,498 |
|
|
(54.0 |
)% |
|
2,841 |
|
|
4,487 |
|
|
(36.7 |
)% |
|||||
Gain on sale of residential property loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Sold loan balance |
|
$ |
16,585 |
|
|
$ |
6,118 |
|
|
171.1 |
% |
|
$ |
4,661 |
|
|
255.8 |
% |
|
$ |
24,782 |
|
|
$ |
7,432 |
|
|
233.4 |
% |
Gain recognized |
|
132 |
|
|
50 |
|
|
164.0 |
% |
|
42 |
|
|
214.3 |
% |
|
203 |
|
|
64 |
|
|
217.2 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
The Company maintained SBA loans held-for-sale of $26.8 million and residential property loans held-for-sale of $4.0 million at September 30, 2020. All of these loans held-for-sale were sold subsequent to the balance sheet date.
Loan Servicing Income. The Company services SBA loans and certain residential property loans that are sold to the secondary market. The increases for current quarter and year compared with the same period of 2019 were primarily due to a decrease in servicing asset amortization from a lower loan payoffs. The following table presents information on loan servicing income for the periods indicated.
|
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||||||||||||||
($ in thousands) |
|
9/30/2020 |
|
6/30/2020 |
|
% Change |
|
9/30/2019 |
|
% Change |
|
9/30/2020 |
|
9/30/2019 |
|
% Change |
|||||||||||||
Loan servicing income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Servicing income received |
|
$ |
1,244 |
|
|
$ |
1,294 |
|
|
(3.9 |
)% |
|
$ |
1,195 |
|
|
4.1 |
% |
|
$ |
3,696 |
|
|
$ |
3,532 |
|
|
4.6 |
% |
Servicing assets amortization |
|
(388 |
) |
|
(392 |
) |
|
(1.0 |
)% |
|
(661 |
) |
|
(41.3 |
)% |
|
(1,384 |
) |
|
(1,875 |
) |
|
(26.2 |
)% |
|||||
Loan servicing income |
|
$ |
856 |
|
|
$ |
902 |
|
|
(5.1 |
)% |
|
$ |
534 |
|
|
60.3 |
% |
|
$ |
2,312 |
|
|
$ |
1,657 |
|
|
39.5 |
% |
Underlying loans at end of period |
|
$ |
484,651 |
|
|
$ |
494,000 |
|
|
(1.9 |
)% |
|
$ |
493,923 |
|
|
(1.9 |
)% |
|
$ |
484,651 |
|
|
$ |
493,923 |
|
|
(1.9 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Noninterest Expense
The following table presents the components of noninterest expense for the periods indicated:
|
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||||||||||||||
($ in thousands) |
|
9/30/2020 |
|
6/30/2020 |
|
% Change |
|
9/30/2019 |
|
% Change |
|
9/30/2020 |
|
9/30/2019 |
|
% Change |
|||||||||||||
Salaries and employee benefits |
|
$ |
6,438 |
|
|
$ |
5,761 |
|
|
11.8 |
% |
|
$ |
6,901 |
|
|
(6.7 |
)% |
|
$ |
18,750 |
|
|
$ |
20,123 |
|
|
(6.8 |
)% |
Occupancy and equipment |
|
1,416 |
|
|
1,400 |
|
|
1.1 |
% |
|
1,408 |
|
|
0.6 |
% |
|
4,196 |
|
|
4,128 |
|
|
1.6 |
% |
|||||
Professional fees |
|
325 |
|
|
509 |
|
|
(36.1 |
)% |
|
664 |
|
|
(51.1 |
)% |
|
1,631 |
|
|
2,108 |
|
|
(22.6 |
)% |
|||||
Marketing and business promotion |
|
193 |
|
|
548 |
|
|
(64.8 |
)% |
|
292 |
|
|
(33.9 |
)% |
|
920 |
|
|
1,049 |
|
|
(12.3 |
)% |
|||||
Data processing |
|
373 |
|
|
366 |
|
|
1.9 |
% |
|
348 |
|
|
7.2 |
% |
|
1,097 |
|
|
1,004 |
|
|
9.3 |
% |
|||||
Director fees and expenses |
|
125 |
|
|
107 |
|
|
16.8 |
% |
|
188 |
|
|
(33.5 |
)% |
|
453 |
|
|
562 |
|
|
(19.4 |
)% |
|||||
Regulatory assessments |
|
267 |
|
|
242 |
|
|
10.3 |
% |
|
— |
|
|
— |
% |
|
728 |
|
|
425 |
|
|
71.3 |
% |
|||||
Other expenses |
|
749 |
|
|
763 |
|
|
(1.8 |
)% |
|
976 |
|
|
(23.3 |
)% |
|
2,374 |
|
|
2,651 |
|
|
(10.4 |
)% |
|||||
Total noninterest expense |
|
$ |
9,886 |
|
|
$ |
9,696 |
|
|
2.0 |
% |
|
$ |
10,777 |
|
|
(8.3 |
)% |
|
$ |
30,149 |
|
|
$ |
32,050 |
|
|
(5.9 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Salaries and Employee Benefits. The increase for the current quarter compared with the previous quarter was primarily due to a direct loan origination cost of $1.1 million related to SBA PPP loan production during the previous quarter, which offsets the recognition of salaries and benefits expense, partially offset by a decrease in vacation accrual. The decrease for the current quarter compared with the year-ago quarter was primarily due to a decrease in bonus accrual, partially offset by increases in wages and other employee benefits. The decrease for the current year compared with the previous year was primarily due to the increase in direct loan origination cost related to the SBA PPP loan production and a decrease in bonus accrual, partially offset by increases in wages, other employee benefits, and vacation accrual.
Professional Fees. The decreases for the current quarter and year compared with the same periods of 2019 were primarily due to a decrease in expenses related to the BSA/AML compliance enhancements. During the current quarter, the consent order related to the Bank's BSA/AML was terminated.
Marketing and business promotion. The decrease for the current quarter compared with the previous quarter was primarily due to a decrease in advertisement.
Regulatory Assessments. The increases for the current quarter and year compared with the same periods of 2019 were primarily due to a small bank credit received from the FDIC during the year-ago quarter, as well as an increase in balance sheet. The Company would have recognized regulatory assessments expense of $228 thousand without the small bank credit for the year-ago quarter.
Balance Sheet (Unaudited)
Loans
The following table presents a composition of total loans (includes both loans held-for-sale and loans held-for-investment, net of deferred costs (fees)) as of the dates indicated:
($ in thousands) |
|
9/30/2020 |
|
6/30/2020 |
|
% Change |
|
12/31/2019 |
|
% Change |
|
9/30/2019 |
|
% Change |
|||||||||||
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial property |
|
$ |
853,708 |
|
|
$ |
813,409 |
|
|
5.0 |
% |
|
$ |
803,014 |
|
|
6.3 |
% |
|
$ |
759,881 |
|
|
12.3 |
% |
Residential property |
|
212,804 |
|
|
223,923 |
|
|
(5.0 |
)% |
|
235,046 |
|
|
(9.5 |
)% |
|
236,382 |
|
|
(10.0 |
)% |
||||
SBA property |
|
128,038 |
|
|
122,675 |
|
|
4.4 |
% |
|
129,837 |
|
|
(1.4 |
)% |
|
126,347 |
|
|
1.3 |
% |
||||
Construction |
|
19,803 |
|
|
20,432 |
|
|
(3.1 |
)% |
|
19,164 |
|
|
3.3 |
% |
|
17,175 |
|
|
15.3 |
% |
||||
Commercial and industrial loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial term |
|
90,867 |
|
|
98,936 |
|
|
(8.2 |
)% |
|
103,380 |
|
|
(12.1 |
)% |
|
105,433 |
|
|
(13.8 |
)% |
||||
Commercial lines of credit |
|
92,222 |
|
|
96,339 |
|
|
(4.3 |
)% |
|
111,768 |
|
|
(17.5 |
)% |
|
95,997 |
|
|
(3.9 |
)% |
||||
SBA commercial term |
|
23,011 |
|
|
22,650 |
|
|
1.6 |
% |
|
25,332 |
|
|
(9.2 |
)% |
|
25,326 |
|
|
(9.1 |
)% |
||||
SBA PPP |
|
136,418 |
|
|
133,675 |
|
|
2.1 |
% |
|
— |
|
|
— |
% |
|
— |
|
|
— |
% |
||||
Other consumer loans |
|
21,933 |
|
|
21,550 |
|
|
1.8 |
% |
|
23,290 |
|
|
(5.8 |
)% |
|
23,289 |
|
|
(5.8 |
)% |
||||
Loans held-for-investment |
|
1,578,804 |
|
|
1,553,589 |
|
|
1.6 |
% |
|
1,450,831 |
|
|
8.8 |
% |
|
1,389,830 |
|
|
13.6 |
% |
||||
Loans held-for-sale |
|
30,878 |
|
|
4,102 |
|
|
652.8 |
% |
|
1,975 |
|
|
1,463.4 |
% |
|
1,583 |
|
|
1,850.6 |
% |
||||
Total loans |
|
$ |
1,609,682 |
|
|
$ |
1,557,691 |
|
|
3.3 |
% |
|
$ |
1,452,806 |
|
|
10.8 |
% |
|
$ |
1,391,413 |
|
|
15.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
The increase in loans held-for-investment for the current quarter was primarily due to new funding of $61.0 million and advances on lines of credit of $20.5 million, partially offset by pay-downs and pay-offs of $56.1 million. The increase for the current year was primarily due to new funding of $295.3 million and advances on lines of credit of $77.0 million, partially offset by pay-downs and pay-offs of $242.3 million.
The increase in loans held-for-sale for the current quarter was primarily due to new funding of $51.9 million, partially offset by sales of $25.2 million. The increase for the current year was primarily due to new funding of $100.5 million, partially offset by sales of $72.1 million.
The following table presents a composition of commitments to extend credit as of the dates indicated:
($ in thousands) |
|
9/30/2020 |
|
6/30/2020 |
|
% Change |
|
12/31/2019 |
|
% Change |
|
9/30/2019 |
|
% Change |
|||||||||||
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial property |
|
$ |
17,621 |
|
|
$ |
16,962 |
|
|
3.9 |
% |
|
$ |
15,836 |
|
|
11.3 |
% |
|
$ |
17,519 |
|
|
0.6 |
% |
SBA property |
|
— |
|
|
220 |
|
|
(100.0 |
)% |
|
1,405 |
|
|
(100.0 |
)% |
|
1,523 |
|
|
(100.0 |
)% |
||||
Construction |
|
15,366 |
|
|
16,451 |
|
|
(6.6 |
)% |
|
11,557 |
|
|
33.0 |
% |
|
10,254 |
|
|
49.9 |
% |
||||
Commercial and industrial loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial term |
|
1,000 |
|
|
1,000 |
|
|
— |
% |
|
1,243 |
|
|
(19.5 |
)% |
|
1,826 |
|
|
(45.2 |
)% |
||||
Commercial lines of credit |
|
173,080 |
|
|
159,753 |
|
|
8.3 |
% |
|
140,690 |
|
|
23.0 |
% |
|
139,412 |
|
|
24.2 |
% |
||||
SBA commercial term |
|
— |
|
|
— |
|
|
— |
% |
|
762 |
|
|
(100.0 |
)% |
|
391 |
|
|
(100.0 |
)% |
||||
Other consumer loans |
|
75 |
|
|
45 |
|
|
66.7 |
% |
|
115 |
|
|
(34.8 |
)% |
|
25 |
|
|
200.0 |
% |
||||
Total commitments to extend credit |
|
$ |
207,142 |
|
|
$ |
194,431 |
|
|
6.5 |
% |
|
$ |
171,608 |
|
|
20.7 |
% |
|
$ |
170,950 |
|
|
21.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
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) |
|
9/30/2020 |
|
6/30/2020 |
|
% Change |
|
12/31/2019 |
|
% Change |
|
9/30/2019 |
|
% Change |
|||||||||||
Nonaccrual loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
SBA property |
|
$ |
923 |
|
|
$ |
1,351 |
|
|
(31.7 |
)% |
|
$ |
442 |
|
|
108.8 |
% |
|
$ |
1,441 |
|
|
(35.9 |
)% |
Commercial and industrial loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial lines of credit |
|
1,525 |
|
|
1,968 |
|
|
(22.5 |
)% |
|
1,888 |
|
|
(19.2 |
)% |
|
327 |
|
|
366.4 |
% |
||||
SBA commercial term |
|
378 |
|
|
381 |
|
|
(0.8 |
)% |
|
159 |
|
|
137.7 |
% |
|
68 |
|
|
455.9 |
% |
||||
Other consumer loans |
|
67 |
|
|
70 |
|
|
(4.3 |
)% |
|
48 |
|
|
39.6 |
% |
|
7 |
|
|
857.1 |
% |
||||
Total nonaccrual loans held-for-investment |
|
2,893 |
|
|
3,770 |
|
|
(23.3 |
)% |
|
2,537 |
|
|
14.0 |
% |
|
1,843 |
|
|
57.0 |
% |
||||
Loans past due 90 days or more and still accruing |
|
699 |
|
|
696 |
|
|
0.4 |
% |
|
287 |
|
|
143.6 |
% |
|
— |
|
|
— |
% |
||||
Non-performing loans (“NPLs”) |
|
3,592 |
|
|
4,466 |
|
|
(19.6 |
)% |
|
2,824 |
|
|
27.2 |
% |
|
1,843 |
|
|
94.9 |
% |
||||
Other real estate owned (“OREO”) |
|
376 |
|
|
376 |
|
|
— |
% |
|
— |
|
|
— |
% |
|
— |
|
|
— |
% |
||||
Non-performing assets (“NPAs”) |
|
$ |
3,968 |
|
|
$ |
4,842 |
|
|
(18.1 |
)% |
|
$ |
2,824 |
|
|
40.5 |
% |
|
$ |
1,843 |
|
|
115.3 |
% |
Loans past due and still accruing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Past due 30 to 59 days |
|
$ |
298 |
|
|
$ |
311 |
|
|
(4.2 |
)% |
|
$ |
893 |
|
|
(66.6 |
)% |
|
$ |
664 |
|
|
(55.1 |
)% |
Past due 60 to 89 days |
|
3 |
|
|
113 |
|
|
(97.3 |
)% |
|
925 |
|
|
(99.7 |
)% |
|
59 |
|
|
(94.9 |
)% |
||||
Past due 90 days or more |
|
699 |
|
|
696 |
|
|
0.4 |
% |
|
287 |
|
|
143.6 |
% |
|
— |
|
|
— |
% |
||||
Total loans past due and still accruing |
|
$ |
1,000 |
|
|
$ |
1,120 |
|
|
(10.7 |
)% |
|
2,105 |
|
|
(52.5 |
)% |
|
$ |
723 |
|
|
38.3 |
% |
|
Troubled debt restructurings (“TDRs”): |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accruing TDRs |
|
$ |
649 |
|
|
$ |
669 |
|
|
(3.0 |
)% |
|
$ |
700 |
|
|
(7.3 |
)% |
|
$ |
713 |
|
|
(9.0 |
)% |
Nonaccrual TDRs |
|
38 |
|
|
40 |
|
|
(5.0 |
)% |
|
121 |
|
|
(68.6 |
)% |
|
249 |
|
|
(84.7 |
)% |
||||
Total TDRs |
|
$ |
687 |
|
|
$ |
709 |
|
|
(3.1 |
)% |
|
$ |
821 |
|
|
(16.3 |
)% |
|
$ |
962 |
|
|
(28.6 |
)% |
Criticized loans |
|
$ |
4,746 |
|
|
$ |
71 |
|
|
6,584.5 |
% |
|
$ |
1,783 |
|
|
166.2 |
% |
|
$ |
1,763 |
|
|
169.2 |
% |
Classified assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Classified loans |
|
$ |
4,860 |
|
|
$ |
5,809 |
|
|
(16.3 |
)% |
|
$ |
8,862 |
|
|
(45.2 |
)% |
|
$ |
7,878 |
|
|
(38.3 |
)% |
OREO |
|
376 |
|
|
376 |
|
|
— |
% |
|
— |
|
|
— |
% |
|
— |
|
|
— |
% |
||||
Classified assets |
|
$ |
5,236 |
|
|
$ |
6,185 |
|
|
(15.3 |
)% |
|
$ |
8,862 |
|
|
(40.9 |
)% |
|
$ |
7,878 |
|
|
(33.5 |
)% |
NPLs to loans held-for-investment |
|
0.23 |
% |
|
0.29 |
% |
|
|
|
0.19 |
% |
|
|
|
0.13 |
% |
|
|
|||||||
NPAs to total assets |
|
0.20 |
% |
|
0.24 |
% |
|
|
|
0.16 |
% |
|
|
|
0.11 |
% |
|
|
|||||||
Classified assets to total assets |
|
0.26 |
% |
|
0.31 |
% |
|
|
|
0.51 |
% |
|
|
|
0.46 |
% |
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
The Company had a residential property loan past due 90 days or more and still accruing at September 30, 2020 and June 30, 2020, which management believes that the loan is well secured and the Bank is in the process of collection.
Loan Modifications Related to the COVID-19 Pandemic
The Company 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 (“CARES Act”) Act. Therefore, the modified loans were not considered TDRs. The following table presents a summary of loans with modifications related to the COVID-19 pandemic by portfolio segment as of September 30, 2020:
|
|
Modification Type |
|
|
|
Weighted-
|
|
Accrued
|
|||||||||||
($ in thousands) |
|
Payment
|
|
Interest Only |
|
Total |
|
|
|||||||||||
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial property |
|
$ |
135,165 |
|
|
$ |
2,397 |
|
|
$ |
137,562 |
|
|
4.49 |
% |
|
$ |
3,048 |
|
Residential property |
|
19,233 |
|
|
— |
|
|
19,233 |
|
|
4.91 |
% |
|
519 |
|
||||
Commercial and industrial loans: |
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial term |
|
11,797 |
|
|
2,960 |
|
|
14,757 |
|
|
4.29 |
% |
|
309 |
|
||||
SBA commercial term |
|
— |
|
|
72 |
|
|
72 |
|
|
5.25 |
% |
|
1 |
|
||||
Total |
|
$ |
166,195 |
|
|
$ |
5,429 |
|
|
$ |
171,624 |
|
|
4.52 |
% |
|
$ |
3,877 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Investment Securities
During the previous quarter, the Company transferred securities held-to-maturity to securities available-for-sale as a part of the Company’s liquidity management plan in response to the COVID-19 pandemic. The Company transferred all of securities held-to-maturity of $18.8 million to securities available-for-sale, which resulted in a pre-tax increase to accumulated other comprehensive income of $787 thousand.
Total investment securities were $129.0 million at September 30, 2020, an increase of $933 thousand, or 0.7%, from $128.0 million at June 30, 2020 and an increase of $11.3 million, or 9.6%, from $117.7 million at December 31, 2019, but a decrease of $27.2 million, or 17.4%, from $156.2 million at September 30, 2019.
The increase for the current quarter was primarily due to purchases of $12.2 million, partially offset by principal pay-downs and calls of $11.1 million and net premium amortization of $243 thousand. The increase for the current year was primarily due to purchases of $36.6 million and an increase in fair value of securities available-for-sale of $2.8 million, partially offset by principal pay-downs and calls of $27.6 million and net premium amortization of $656 thousand.
Deposits
The following table presents the Company’s deposit mix as of the dates indicated:
|
|
9/30/2020 |
|
6/30/2020 |
|
12/31/2019 |
|
9/30/2019 |
||||||||||||||||||||
($ in thousands) |
|
Amount |
|
% to Total |
|
Amount |
|
% to Total |
|
Amount |
|
% to Total |
|
Amount |
|
% to Total |
||||||||||||
Noninterest-bearing demand deposits |
|
$ |
576,086 |
|
|
35.0 |
% |
|
$ |
551,415 |
|
|
33.5 |
% |
|
$ |
360,039 |
|
|
24.3 |
% |
|
$ |
353,448 |
|
|
24.7 |
% |
Interest-bearing deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Savings |
|
11,124 |
|
|
0.7 |
% |
|
8,258 |
|
|
0.5 |
% |
|
6,492 |
|
|
0.4 |
% |
|
8,206 |
|
|
0.6 |
% |
||||
NOW |
|
21,726 |
|
|
1.3 |
% |
|
21,173 |
|
|
1.3 |
% |
|
17,673 |
|
|
1.2 |
% |
|
16,108 |
|
|
1.1 |
% |
||||
Retail money market accounts |
|
344,939 |
|
|
20.9 |
% |
|
339,444 |
|
|
20.6 |
% |
|
307,980 |
|
|
20.8 |
% |
|
307,663 |
|
|
21.5 |
% |
||||
Brokered money market accounts |
|
30,001 |
|
|
1.9 |
% |
|
10 |
|
|
0.1 |
% |
|
30,034 |
|
|
2.0 |
% |
|
10,003 |
|
|
0.7 |
% |
||||
Retail time deposits of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
$250,000 or less |
|
312,171 |
|
|
18.9 |
% |
|
347,382 |
|
|
21.0 |
% |
|
405,004 |
|
|
27.5 |
% |
|
417,549 |
|
|
29.1 |
% |
||||
More than $250,000 |
|
167,208 |
|
|
10.2 |
% |
|
170,180 |
|
|
10.3 |
% |
|
199,726 |
|
|
13.5 |
% |
|
206,785 |
|
|
14.4 |
% |
||||
Time deposits from internet rate service providers |
|
31,852 |
|
|
1.9 |
% |
|
37,068 |
|
|
2.3 |
% |
|
— |
|
|
— |
% |
|
— |
|
|
— |
% |
||||
State and brokered time deposits |
|
152,000 |
|
|
9.2 |
% |
|
172,000 |
|
|
10.4 |
% |
|
152,359 |
|
|
10.3 |
% |
|
112,500 |
|
|
7.9 |
% |
||||
Total interest-bearing deposits |
|
1,071,021 |
|
|
65.0 |
% |
|
1,095,515 |
|
|
66.5 |
% |
|
1,119,268 |
|
|
75.7 |
% |
|
1,078,814 |
|
|
75.3 |
% |
||||
Total deposits |
|
$ |
1,647,107 |
|
|
100.0 |
% |
|
$ |
1,646,930 |
|
|
100.0 |
% |
|
$ |
1,479,307 |
|
|
100.0 |
% |
|
$ |
1,432,262 |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
The increase in noninterest-bearing demand deposits for the current quarter was primarily due to the deposit increases from customers with SBA PPP loans and SBA Economic Injury Disaster Loans, as well as the overall liquid deposit market. A total of $117.3 million of SBA PPP loans were funded through the Bank's noninterest-bearing demand deposits and deposit customers also received $93.5 million of SBA Economic Injury Disaster Loans during the past 6-month period.
The decrease in retail time deposits for the current quarter was primarily due to matured and closed accounts of $157.4 million, partially offset by new accounts of $24.1 million and renewals of the matured accounts of $91.9 million. The decrease in retail time deposits for the current year was primarily due to matured and closed accounts of $515.5 million, partially offset by new accounts of $73.8 million and renewals of the matured accounts of $305.1 million.
Liquidity
The following table presents a summary of the Company’s liquidity position as of September 30, 2020:
($ in thousands) |
|
9/30/2020 |
||
Cash and cash equivalents |
|
$ |
257,382 |
|
Cash and cash equivalents to total assets |
|
12.7 |
% |
|
|
|
|
||
Available borrowing capacity: |
|
|
||
FHLB advances |
|
$ |
321,067 |
|
Federal Reserve Discount Window |
|
33,801 |
|
|
Overnight federal funds lines |
|
65,000 |
|
|
Total |
|
$ |
419,868 |
|
Total available borrowing capacity to total assets |
|
20.8 |
% |
|
|
|
|
||
Shareholders’ Equity
Shareholders’ equity was $229.3 million at September 30, 2020, an increase of $2.1 million, or 0.9%, from $227.2 million at June 30, 2020, an increase of $2.5 million, or 1.1%, from $226.8 million at December 31, 2019, and an increase of $4.7 million, or 2.1%, from $224.6 million at September 30, 2019. The increase for the current quarter was primarily due to net income, partially offset by cash dividend declared on common stock of $1.5 million. The increase for the current year was primarily due to net income and an increase in accumulated other comprehensive income, partially offset by repurchases of common stock of $6.5 million (repurchased and retired 428,474 shares) and cash dividend declared on common stock of $4.6 million.
Capital Ratios
Based on changes to the Federal Reserve’s definition of a “Small Bank Holding Company” that increased the threshold to $3 billion in assets in August 2018, the Company is not currently subject to separate minimum capital measurements. At such time as the Company reaches the $3 billion asset level, it will again be subject to capital measurements independent of the Bank. For comparison purposes, the Company’s ratios are included in following discussion. The following table presents capital ratios for the Company and the Bank as of dates indicated:
|
|
9/30/2020 |
|
6/30/2020 |
|
12/31/2019 |
|
9/30/2019 |
|
Well
|
|||||
PCB Bancorp |
|
|
|
|
|
|
|
|
|
|
|||||
Common tier 1 capital (to risk-weighted assets) |
|
15.60 |
% |
|
15.83 |
% |
|
15.87 |
% |
|
16.30 |
% |
|
N/A |
|
Total capital (to risk-weighted assets) |
|
16.86 |
% |
|
17.09 |
% |
|
16.90 |
% |
|
17.27 |
% |
|
N/A |
|
Tier 1 capital (to risk-weighted assets) |
|
15.60 |
% |
|
15.83 |
% |
|
15.87 |
% |
|
16.30 |
% |
|
N/A |
|
Tier 1 capital (to average assets) |
|
11.40 |
% |
|
11.49 |
% |
|
13.23 |
% |
|
12.87 |
% |
|
N/A |
|
Pacific City Bank |
|
|
|
|
|
|
|
|
|
|
|||||
Common tier 1 capital (to risk-weighted assets) |
|
15.34 |
% |
|
15.58 |
% |
|
15.68 |
% |
|
16.11 |
% |
|
6.5 |
% |
Total capital (to risk-weighted assets) |
|
16.60 |
% |
|
16.83 |
% |
|
16.71 |
% |
|
17.08 |
% |
|
10.0 |
% |
Tier 1 capital (to risk-weighted assets) |
|
15.34 |
% |
|
15.58 |
% |
|
15.68 |
% |
|
16.11 |
% |
|
8.0 |
% |
Tier 1 capital (to average assets) |
|
11.21 |
% |
|
11.30 |
% |
|
13.06 |
% |
|
12.72 |
% |
|
5.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|||||
About PCB Bancorp
PCB Bancorp, formerly known as Pacific City Financial Corporation, is the bank holding company for Pacific City Bank, a California state chartered bank, offering a full suite of commercial banking services to small to medium-sized businesses, individuals and professionals, primarily in Southern California, and predominantly in Korean-American and other minority communities.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as ‘‘may,’’ “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan,” or words or phases of similar meaning. We caution that the forward-looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control, including but not limited to our borrowers' actual payment performance as loan deferrals related to the COVID-19 pandemic expire, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to COVID-19 pandemic, including the potential adverse impact of loan modifications and payment deferrals implemented consistent with recent regulatory guidance, and the general economic uncertainty caused by the COVID-19 pandemic, and government and societal responses thereto. These and other important factors are detailed in various securities law filings made periodically by the Company, copies of which are available from the Company without charge. Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements. Any forward-looking statements presented herein are made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise, except as required by law.
PCB Bancorp and Subsidiary |
|||||||||||||||||||||||||
Consolidated Balance Sheets (Unaudited) |
|||||||||||||||||||||||||
($ in thousands, except share and per share data) |
|||||||||||||||||||||||||
|
|
9/30/2020 |
|
6/30/2020 |
|
% Change |
|
12/31/2019 |
|
% Change |
|
9/30/2019 |
|
% Change |
|||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash and due from banks |
|
$ |
13,572 |
|
|
$ |
18,255 |
|
|
(25.7 |
)% |
|
$ |
17,808 |
|
|
(23.8 |
)% |
|
$ |
22,546 |
|
|
(39.8 |
)% |
Interest-bearing deposits in financial institutions |
|
243,810 |
|
|
289,348 |
|
|
(15.7 |
)% |
|
128,420 |
|
|
89.9 |
% |
|
99,366 |
|
|
145.4 |
% |
||||
Total cash and cash equivalents |
|
257,382 |
|
|
307,603 |
|
|
(16.3 |
)% |
|
146,228 |
|
|
76.0 |
% |
|
121,912 |
|
|
111.1 |
% |
||||
Securities available-for-sale, at fair value |
|
128,982 |
|
|
128,049 |
|
|
0.7 |
% |
|
97,566 |
|
|
32.2 |
% |
|
134,602 |
|
|
(4.2 |
)% |
||||
Securities held-to-maturity |
|
— |
|
|
— |
|
|
— |
% |
|
20,154 |
|
|
(100.0 |
)% |
|
21,601 |
|
|
(100.0 |
)% |
||||
Total investment securities |
|
128,982 |
|
|
128,049 |
|
|
0.7 |
% |
|
117,720 |
|
|
9.6 |
% |
|
156,203 |
|
|
(17.4 |
)% |
||||
Loans held-for-sale |
|
30,878 |
|
|
4,102 |
|
|
652.8 |
% |
|
1,975 |
|
|
1,463.4 |
% |
|
1,583 |
|
|
1,850.6 |
% |
||||
Loans held-for-investment, net of deferred loan costs (fees) |
|
1,578,804 |
|
|
1,553,589 |
|
|
1.6 |
% |
|
1,450,831 |
|
|
8.8 |
% |
|
1,389,830 |
|
|
13.6 |
% |
||||
Allowance for loan losses |
|
(24,546 |
) |
|
(20,248 |
) |
|
21.2 |
% |
|
(14,380 |
) |
|
70.7 |
% |
|
(13,094 |
) |
|
87.5 |
% |
||||
Net loans held-for-investment |
|
1,554,258 |
|
|
1,533,341 |
|
|
1.4 |
% |
|
1,436,451 |
|
|
8.2 |
% |
|
1,376,736 |
|
|
12.9 |
% |
||||
Premises and equipment, net |
|
4,355 |
|
|
4,542 |
|
|
(4.1 |
)% |
|
3,760 |
|
|
15.8 |
% |
|
4,008 |
|
|
8.7 |
% |
||||
Federal Home Loan Bank and other bank stock |
|
8,447 |
|
|
8,447 |
|
|
— |
% |
|
8,345 |
|
|
1.2 |
% |
|
8,345 |
|
|
1.2 |
% |
||||
Other real estate owned, net |
|
376 |
|
|
376 |
|
|
— |
% |
|
— |
|
|
— |
% |
|
— |
|
|
— |
% |
||||
Deferred tax assets, net |
|
7,454 |
|
|
6,347 |
|
|
17.4 |
% |
|
5,288 |
|
|
41.0 |
% |
|
3,389 |
|
|
119.9 |
% |
||||
Servicing assets |
|
6,166 |
|
|
6,399 |
|
|
(3.6 |
)% |
|
6,798 |
|
|
(9.3 |
)% |
|
6,899 |
|
|
(10.6 |
)% |
||||
Operating lease assets |
|
7,329 |
|
|
7,843 |
|
|
(6.6 |
)% |
|
8,991 |
|
|
(18.5 |
)% |
|
9,561 |
|
|
(23.3 |
)% |
||||
Accrued interest receivable |
|
11,246 |
|
|
9,498 |
|
|
18.4 |
% |
|
5,136 |
|
|
119.0 |
% |
|
4,906 |
|
|
129.2 |
% |
||||
Other assets |
|
4,314 |
|
|
4,230 |
|
|
2.0 |
% |
|
5,636 |
|
|
(23.5 |
)% |
|
5,904 |
|
|
(26.9 |
)% |
||||
Total assets |
|
$ |
2,021,187 |
|
|
$ |
2,020,777 |
|
|
— |
% |
|
$ |
1,746,328 |
|
|
15.7 |
% |
|
$ |
1,699,446 |
|
|
18.9 |
% |
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Noninterest-bearing demand |
|
$ |
576,086 |
|
|
$ |
551,415 |
|
|
4.5 |
% |
|
$ |
360,039 |
|
|
60.0 |
% |
|
$ |
353,448 |
|
|
63.0 |
% |
Savings, NOW and money market accounts |
|
407,790 |
|
|
368,885 |
|
|
10.5 |
% |
|
362,179 |
|
|
12.6 |
% |
|
341,980 |
|
|
19.2 |
% |
||||
Time deposits of $250,000 or less |
|
406,023 |
|
|
466,450 |
|
|
(13.0 |
)% |
|
467,363 |
|
|
(13.1 |
)% |
|
440,049 |
|
|
(7.7 |
)% |
||||
Time deposits of more than $250,000 |
|
257,208 |
|
|
260,180 |
|
|
(1.1 |
)% |
|
289,726 |
|
|
(11.2 |
)% |
|
296,785 |
|
|
(13.3 |
)% |
||||
Total deposits |
|
1,647,107 |
|
|
1,646,930 |
|
|
— |
% |
|
1,479,307 |
|
|
11.3 |
% |
|
1,432,262 |
|
|
15.0 |
% |
||||
Federal Home Loan Bank advances |
|
130,000 |
|
|
130,000 |
|
|
— |
% |
|
20,000 |
|
|
550.0 |
% |
|
20,000 |
|
|
550.0 |
% |
||||
Operating lease liabilities |
|
8,204 |
|
|
8,758 |
|
|
(6.3 |
)% |
|
9,990 |
|
|
(17.9 |
)% |
|
10,574 |
|
|
(22.4 |
)% |
||||
Accrued interest payable and other liabilities |
|
6,537 |
|
|
7,856 |
|
|
(16.8 |
)% |
|
10,197 |
|
|
(35.9 |
)% |
|
11,967 |
|
|
(45.4 |
)% |
||||
Total liabilities |
|
1,791,848 |
|
|
1,793,544 |
|
|
(0.1 |
)% |
|
1,519,494 |
|
|
17.9 |
% |
|
1,474,803 |
|
|
21.5 |
% |
||||
Commitments and contingent liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Shareholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Common stock, no par value |
|
163,960 |
|
|
163,759 |
|
|
0.1 |
% |
|
169,221 |
|
|
(3.1 |
)% |
|
169,224 |
|
|
(3.1 |
)% |
||||
Retained earnings |
|
63,443 |
|
|
61,532 |
|
|
3.1 |
% |
|
57,670 |
|
|
10.0 |
% |
|
54,768 |
|
|
15.8 |
% |
||||
Accumulated other comprehensive income (loss), net |
|
1,936 |
|
|
1,942 |
|
|
(0.3 |
)% |
|
(57 |
) |
|
NM |
|
|
651 |
|
|
197.4 |
% |
||||
Total shareholders’ equity |
|
229,339 |
|
|
227,233 |
|
|
0.9 |
% |
|
226,834 |
|
|
1.1 |
% |
|
224,643 |
|
|
2.1 |
% |
||||
Total liabilities and shareholders’ equity |
|
$ |
2,021,187 |
|
|
$ |
2,020,777 |
|
|
— |
% |
|
$ |
1,746,328 |
|
|
15.7 |
% |
|
$ |
1,699,446 |
|
|
18.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Outstanding common shares |
|
15,379,538 |
|
|
15,377,935 |
|
|
|
|
15,707,016 |
|
|
|
|
15,710,287 |
|
|
|
|||||||
Book value per common share (1) |
|
$ |
14.91 |
|
|
$ |
14.78 |
|
|
|
|
$ |
14.44 |
|
|
|
|
$ |
14.30 |
|
|
|
|||
Total loan to total deposit ratio |
|
97.73 |
% |
|
94.58 |
% |
|
|
|
98.21 |
% |
|
|
|
97.15 |
% |
|
|
|||||||
Noninterest-bearing deposits to total deposits |
|
34.98 |
% |
|
33.48 |
% |
|
|
|
24.34 |
% |
|
|
|
24.68 |
% |
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
(1) |
The ratios are calculated by dividing total shareholders’ equity by the number of outstanding common shares. The Company did not have any intangible equity components for the presented periods. |
PCB Bancorp and Subsidiary |
|||||||||||||||||||||||||||||
Consolidated Statements of Income (Unaudited) |
|||||||||||||||||||||||||||||
($ in thousands, except share and per share data) |
|||||||||||||||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||||||||||||||
|
|
9/30/2020 |
|
6/30/2020 |
|
% Change |
|
9/30/2019 |
|
% Change |
|
9/30/2020 |
|
9/30/2019 |
|
% Change |
|||||||||||||
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Interest and fees on loans |
|
$ |
18,938 |
|
|
$ |
18,273 |
|
|
3.6 |
% |
|
$ |
21,876 |
|
|
(13.4 |
)% |
|
$ |
57,617 |
|
|
$ |
64,779 |
|
|
(11.1 |
)% |
Interest on investment securities |
|
515 |
|
|
539 |
|
|
(4.5 |
)% |
|
978 |
|
|
(47.3 |
)% |
|
1,698 |
|
|
3,133 |
|
|
(45.8 |
)% |
|||||
Interest and dividend on other interest-earning assets |
|
167 |
|
|
161 |
|
|
3.7 |
% |
|
833 |
|
|
(80.0 |
)% |
|
938 |
|
|
2,757 |
|
|
(66.0 |
)% |
|||||
Total interest income |
|
19,620 |
|
|
18,973 |
|
|
3.4 |
% |
|
23,687 |
|
|
(17.2 |
)% |
|
60,253 |
|
|
70,669 |
|
|
(14.7 |
)% |
|||||
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Interest on deposits |
|
2,599 |
|
|
3,409 |
|
|
(23.8 |
)% |
|
6,060 |
|
|
(57.1 |
)% |
|
11,000 |
|
|
17,925 |
|
|
(38.6 |
)% |
|||||
Interest on other borrowings |
|
168 |
|
|
201 |
|
|
(16.4 |
)% |
|
98 |
|
|
71.4 |
% |
|
471 |
|
|
370 |
|
|
27.3 |
% |
|||||
Total interest expense |
|
2,767 |
|
|
3,610 |
|
|
(23.4 |
)% |
|
6,158 |
|
|
(55.1 |
)% |
|
11,471 |
|
|
18,295 |
|
|
(37.3 |
)% |
|||||
Net interest income |
|
16,853 |
|
|
15,363 |
|
|
9.7 |
% |
|
17,529 |
|
|
(3.9 |
)% |
|
48,782 |
|
|
52,374 |
|
|
(6.9 |
)% |
|||||
Provision (reversal) for loan losses |
|
4,326 |
|
|
3,855 |
|
|
12.2 |
% |
|
(102 |
) |
|
NM |
|
|
11,077 |
|
|
207 |
|
|
5,251.2 |
% |
|||||
Net interest income after provision (reversal) for loan losses |
|
12,527 |
|
|
11,508 |
|
|
8.9 |
% |
|
17,631 |
|
|
(28.9 |
)% |
|
37,705 |
|
|
52,167 |
|
|
(27.7 |
)% |
|||||
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gain on sale of loans |
|
821 |
|
|
1,498 |
|
|
(45.2 |
)% |
|
1,540 |
|
|
(46.7 |
)% |
|
3,044 |
|
|
4,551 |
|
|
(33.1 |
)% |
|||||
Service charges and fees on deposits |
|
280 |
|
|
275 |
|
|
1.8 |
% |
|
405 |
|
|
(30.9 |
)% |
|
945 |
|
|
1,137 |
|
|
(16.9 |
)% |
|||||
Loan servicing income |
|
856 |
|
|
902 |
|
|
(5.1 |
)% |
|
534 |
|
|
60.3 |
% |
|
2,312 |
|
|
1,657 |
|
|
39.5 |
% |
|||||
Other income |
|
315 |
|
|
243 |
|
|
29.6 |
% |
|
323 |
|
|
(2.5 |
)% |
|
915 |
|
|
920 |
|
|
(0.5 |
)% |
|||||
Total noninterest income |
|
2,272 |
|
|
2,918 |
|
|
(22.1 |
)% |
|
2,802 |
|
|
(18.9 |
)% |
|
7,216 |
|
|
8,265 |
|
|
(12.7 |
)% |
|||||
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Salaries and employee benefits |
|
6,438 |
|
|
5,761 |
|
|
11.8 |
% |
|
6,901 |
|
|
(6.7 |
)% |
|
18,750 |
|
|
20,123 |
|
|
(6.8 |
)% |
|||||
Occupancy and equipment |
|
1,416 |
|
|
1,400 |
|
|
1.1 |
% |
|
1,408 |
|
|
0.6 |
% |
|
4,196 |
|
|
4,128 |
|
|
1.6 |
% |
|||||
Professional fees |
|
325 |
|
|
509 |
|
|
(36.1 |
)% |
|
664 |
|
|
(51.1 |
)% |
|
1,631 |
|
|
2,108 |
|
|
(22.6 |
)% |
|||||
Marketing and business promotion |
|
193 |
|
|
548 |
|
|
(64.8 |
)% |
|
292 |
|
|
(33.9 |
)% |
|
920 |
|
|
1,049 |
|
|
(12.3 |
)% |
|||||
Data processing |
|
373 |
|
|
366 |
|
|
1.9 |
% |
|
348 |
|
|
7.2 |
% |
|
1,097 |
|
|
1,004 |
|
|
9.3 |
% |
|||||
Director fees and expenses |
|
125 |
|
|
107 |
|
|
16.8 |
% |
|
188 |
|
|
(33.5 |
)% |
|
453 |
|
|
562 |
|
|
(19.4 |
)% |
|||||
Regulatory assessments |
|
267 |
|
|
242 |
|
|
10.3 |
% |
|
— |
|
|
— |
% |
|
728 |
|
|
425 |
|
|
71.3 |
% |
|||||
Other expenses |
|
749 |
|
|
763 |
|
|
(1.8 |
)% |
|
976 |
|
|
(23.3 |
)% |
|
2,374 |
|
|
2,651 |
|
|
(10.4 |
)% |
|||||
Total noninterest expense |
|
9,886 |
|
|
9,696 |
|
|
2.0 |
% |
|
10,777 |
|
|
(8.3 |
)% |
|
30,149 |
|
|
32,050 |
|
|
(5.9 |
)% |
|||||
Income before income taxes |
|
4,913 |
|
|
4,730 |
|
|
3.9 |
% |
|
9,656 |
|
|
(49.1 |
)% |
|
14,772 |
|
|
28,382 |
|
|
(48.0 |
)% |
|||||
Income tax expense |
|
1,464 |
|
|
1,363 |
|
|
7.4 |
% |
|
2,871 |
|
|
(49.0 |
)% |
|
4,384 |
|
|
8,432 |
|
|
(48.0 |
)% |
|||||
Net income |
|
$ |
3,449 |
|
|
$ |
3,367 |
|
|
2.4 |
% |
|
$ |
6,785 |
|
|
(49.2 |
)% |
|
$ |
10,388 |
|
|
$ |
19,950 |
|
|
(47.9 |
)% |
Earnings per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Basic |
|
$ |
0.22 |
|
|
$ |
0.22 |
|
|
|
|
$ |
0.43 |
|
|
|
|
$ |
0.67 |
|
|
$ |
1.25 |
|
|
|
|||
Diluted |
|
$ |
0.22 |
|
|
$ |
0.22 |
|
|
|
|
$ |
0.42 |
|
|
|
|
$ |
0.67 |
|
|
$ |
1.23 |
|
|
|
|||
Average shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Basic |
|
15,343,888 |
|
|
15,337,405 |
|
|
|
|
15,816,269 |
|
|
|
|
15,395,475 |
|
|
15,943,603 |
|
|
|
||||||||
Diluted |
|
15,377,531 |
|
|
15,373,655 |
|
|
|
|
16,099,598 |
|
|
|
|
15,466,207 |
|
|
16,231,848 |
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Dividend paid per common share |
|
$ |
0.10 |
|
|
$ |
0.10 |
|
|
|
|
$ |
0.06 |
|
|
|
|
$ |
0.20 |
|
|
$ |
0.17 |
|
|
|
|||
Return on average assets (1) |
|
0.69 |
% |
|
0.69 |
% |
|
|
|
1.55 |
% |
|
|
|
0.73 |
% |
|
1.55 |
% |
|
|
||||||||
Return on average shareholders’ equity (1), (2) |
|
5.98 |
% |
|
5.98 |
% |
|
|
|
12.02 |
% |
|
|
|
6.10 |
% |
|
12.15 |
% |
|
|
||||||||
Efficiency ratio (3) |
|
51.69 |
% |
|
53.04 |
% |
|
|
|
53.01 |
% |
|
|
|
53.84 |
% |
|
52.85 |
% |
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(1) |
Ratios are presented on an annualized basis. |
|
(2) |
The Company did not have any intangible equity components for the presented periods. |
|
(3) |
The ratios are calculated by dividing noninterest expense by the sum of net interest income and noninterest income. |
PCB Bancorp and Subsidiary |
|||||||||||||||||||||||||||||||||
Average Balance, Average Yield, and Average Rate (Unaudited) |
|||||||||||||||||||||||||||||||||
($ in thousands) |
|||||||||||||||||||||||||||||||||
|
|
Three Months Ended |
|||||||||||||||||||||||||||||||
|
|
9/30/2020 |
|
6/30/2020 |
|
9/30/2019 |
|||||||||||||||||||||||||||
|
|
Average
|
|
Interest
|
|
Avg.
|
|
Average
|
|
Interest
|
|
Avg.
|
|
Average
|
|
Interest
|
|
Avg.
|
|||||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total loans (1) |
|
$ |
1,564,704 |
|
|
$ |
18,938 |
|
|
4.81 |
% |
|
$ |
1,554,011 |
|
|
$ |
18,273 |
|
|
4.73 |
% |
|
$ |
1,396,437 |
|
|
$ |
21,876 |
|
|
6.22 |
% |
Mortgage-backed securities |
|
75,832 |
|
|
339 |
|
|
1.78 |
% |
|
63,692 |
|
|
317 |
|
|
2.00 |
% |
|
84,052 |
|
|
521 |
|
|
2.46 |
% |
||||||
Collateralized mortgage obligation |
|
33,393 |
|
|
82 |
|
|
0.98 |
% |
|
37,745 |
|
|
122 |
|
|
1.30 |
% |
|
50,891 |
|
|
286 |
|
|
2.23 |
% |
||||||
SBA loan pool securities |
|
12,996 |
|
|
57 |
|
|
1.74 |
% |
|
13,189 |
|
|
62 |
|
|
1.89 |
% |
|
20,751 |
|
|
133 |
|
|
2.54 |
% |
||||||
Municipal bonds (2) |
|
5,991 |
|
|
37 |
|
|
2.46 |
% |
|
5,710 |
|
|
38 |
|
|
2.68 |
% |
|
5,834 |
|
|
38 |
|
|
2.58 |
% |
||||||
Other interest-earning assets |
|
260,426 |
|
|
167 |
|
|
0.26 |
% |
|
245,447 |
|
|
161 |
|
|
0.26 |
% |
|
135,774 |
|
|
833 |
|
|
2.43 |
% |
||||||
Total interest-earning assets |
|
1,953,342 |
|
|
19,620 |
|
|
4.00 |
% |
|
1,919,794 |
|
|
18,973 |
|
|
3.97 |
% |
|
1,693,739 |
|
|
23,687 |
|
|
5.55 |
% |
||||||
Noninterest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cash and cash equivalents |
|
17,094 |
|
|
|
|
|
|
16,031 |
|
|
|
|
|
|
18,927 |
|
|
|
|
|
||||||||||||
Allowance for loan losses |
|
(21,268 |
) |
|
|
|
|
|
(17,320 |
) |
|
|
|
|
|
(13,273 |
) |
|
|
|
|
||||||||||||
Other assets |
|
42,446 |
|
|
|
|
|
|
37,959 |
|
|
|
|
|
|
35,564 |
|
|
|
|
|
||||||||||||
Total noninterest-earning assets |
|
38,272 |
|
|
|
|
|
|
36,670 |
|
|
|
|
|
|
41,218 |
|
|
|
|
|
||||||||||||
Total assets |
|
$ |
1,991,614 |
|
|
|
|
|
|
$ |
1,956,464 |
|
|
|
|
|
|
$ |
1,734,957 |
|
|
|
|
|
|||||||||
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
NOW and money market accounts |
|
$ |
365,093 |
|
|
391 |
|
|
0.43 |
% |
|
$ |
371,992 |
|
|
548 |
|
|
0.59 |
% |
|
$ |
351,581 |
|
|
1,432 |
|
|
1.62 |
% |
|||
Savings |
|
9,517 |
|
|
2 |
|
|
0.08 |
% |
|
6,966 |
|
|
3 |
|
|
0.17 |
% |
|
7,043 |
|
|
6 |
|
|
0.34 |
% |
||||||
Time deposits |
|
689,352 |
|
|
2,206 |
|
|
1.27 |
% |
|
730,349 |
|
|
2,858 |
|
|
1.57 |
% |
|
767,752 |
|
|
4,622 |
|
|
2.39 |
% |
||||||
Total interest-bearing deposits |
|
1,063,962 |
|
|
2,599 |
|
|
0.97 |
% |
|
1,109,307 |
|
|
3,409 |
|
|
1.24 |
% |
|
1,126,376 |
|
|
6,060 |
|
|
2.13 |
% |
||||||
Federal Home Loan Bank advances |
|
130,000 |
|
|
168 |
|
|
0.51 |
% |
|
130,330 |
|
|
201 |
|
|
0.62 |
% |
|
20,326 |
|
|
98 |
|
|
1.91 |
% |
||||||
Total interest-bearing liabilities |
|
1,193,962 |
|
|
2,767 |
|
|
0.92 |
% |
|
1,239,637 |
|
|
3,610 |
|
|
1.17 |
% |
|
1,146,702 |
|
|
6,158 |
|
|
2.13 |
% |
||||||
Noninterest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Noninterest-bearing demand |
|
552,255 |
|
|
|
|
|
|
474,175 |
|
|
|
|
|
|
341,858 |
|
|
|
|
|
||||||||||||
Other liabilities |
|
15,934 |
|
|
|
|
|
|
16,198 |
|
|
|
|
|
|
22,465 |
|
|
|
|
|
||||||||||||
Total noninterest-bearing liabilities |
|
568,189 |
|
|
|
|
|
|
490,373 |
|
|
|
|
|
|
364,323 |
|
|
|
|
|
||||||||||||
Total liabilities |
|
1,762,151 |
|
|
|
|
|
|
1,730,010 |
|
|
|
|
|
|
1,511,025 |
|
|
|
|
|
||||||||||||
Total shareholders’ equity |
|
229,463 |
|
|
|
|
|
|
226,454 |
|
|
|
|
|
|
223,932 |
|
|
|
|
|
||||||||||||
Total liabilities and shareholders’ equity |
|
$ |
1,991,614 |
|
|
|
|
|
|
$ |
1,956,464 |
|
|
|
|
|
|
$ |
1,734,957 |
|
|
|
|
|
|||||||||
Net interest income |
|
|
|
$ |
16,853 |
|
|
|
|
|
|
$ |
15,363 |
|
|
|
|
|
|
$ |
17,529 |
|
|
|
|||||||||
Net interest spread (3) |
|
|
|
|
|
3.08 |
% |
|
|
|
|
|
2.80 |
% |
|
|
|
|
|
3.42 |
% |
||||||||||||
Net interest margin (4) |
|
|
|
|
|
3.43 |
% |
|
|
|
|
|
3.22 |
% |
|
|
|
|
|
4.11 |
% |
||||||||||||
Total deposits |
|
$ |
1,616,217 |
|
|
$ |
2,599 |
|
|
0.64 |
% |
|
$ |
1,583,482 |
|
|
$ |
3,409 |
|
|
0.87 |
% |
|
$ |
1,468,234 |
|
|
$ |
6,060 |
|
|
1.64 |
% |
Total funding (5) |
|
$ |
1,746,217 |
|
|
$ |
2,767 |
|
|
0.63 |
% |
|
$ |
1,713,812 |
|
|
$ |
3,610 |
|
|
0.85 |
% |
|
$ |
1,488,560 |
|
|
$ |
6,158 |
|
|
1.64 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
(1) |
Total loans include both loans held-for-sale and loans held-for-investment, net of deferred loan costs (fees). |
|
(2) |
The yield on municipal bonds has not been computed on a tax-equivalent basis. |
|
(3) |
Net interest spread is calculated by subtracting average rate on interest-bearing liabilities from average yield on interest-earning assets. |
|
(4) |
Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets. |
|
(5) |
Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding. |
PCB Bancorp and Subsidiary |
||||||||||||||||||||||
Average Balance, Average Yield, and Average Rate, Continued (Unaudited) |
||||||||||||||||||||||
($ in thousands) |
||||||||||||||||||||||
|
|
Nine Months Ended |
||||||||||||||||||||
|
|
9/30/2020 |
|
9/30/2019 |
||||||||||||||||||
|
|
Average
|
|
Interest
|
|
Avg.
|
|
Average
|
|
Interest
|
|
Avg.
|
||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total loans (1) |
|
$ |
1,524,628 |
|
|
$ |
57,617 |
|
|
5.05 |
% |
|
$ |
1,372,704 |
|
|
$ |
64,779 |
|
|
6.31 |
% |
Mortgage-backed securities |
|
65,713 |
|
|
985 |
|
|
2.00 |
% |
|
85,452 |
|
|
1,629 |
|
|
2.55 |
% |
||||
Collateralized mortgage obligation |
|
37,500 |
|
|
402 |
|
|
1.43 |
% |
|
52,927 |
|
|
969 |
|
|
2.45 |
% |
||||
SBA loan pool securities |
|
13,351 |
|
|
198 |
|
|
1.98 |
% |
|
21,392 |
|
|
420 |
|
|
2.62 |
% |
||||
Municipal bonds (2) |
|
5,807 |
|
|
113 |
|
|
2.60 |
% |
|
5,867 |
|
|
115 |
|
|
2.62 |
% |
||||
Other interest-earning assets |
|
221,698 |
|
|
938 |
|
|
0.57 |
% |
|
143,616 |
|
|
2,757 |
|
|
2.57 |
% |
||||
Total interest-earning assets |
|
1,868,697 |
|
|
60,253 |
|
|
4.31 |
% |
|
1,681,958 |
|
|
70,669 |
|
|
5.62 |
% |
||||
Noninterest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents |
|
17,324 |
|
|
|
|
|
|
18,650 |
|
|
|
|
|
||||||||
Allowance for loan losses |
|
(17,676 |
) |
|
|
|
|
|
(13,185 |
) |
|
|
|
|
||||||||
Other assets |
|
38,255 |
|
|
|
|
|
|
35,370 |
|
|
|
|
|
||||||||
Total noninterest-earning assets |
|
37,903 |
|
|
|
|
|
|
40,835 |
|
|
|
|
|
||||||||
Total assets |
|
$ |
1,906,600 |
|
|
|
|
|
|
$ |
1,722,793 |
|
|
|
|
|
||||||
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NOW and money market accounts |
|
$ |
367,222 |
|
|
2,058 |
|
|
0.75 |
% |
|
$ |
322,917 |
|
|
3,903 |
|
|
1.62 |
% |
||
Savings |
|
7,706 |
|
|
8 |
|
|
0.14 |
% |
|
8,214 |
|
|
28 |
|
|
0.46 |
% |
||||
Time deposits |
|
725,927 |
|
|
8,934 |
|
|
1.64 |
% |
|
797,475 |
|
|
13,994 |
|
|
2.35 |
% |
||||
Total interest-bearing deposits |
|
1,100,855 |
|
|
11,000 |
|
|
1.33 |
% |
|
1,128,606 |
|
|
17,925 |
|
|
2.12 |
% |
||||
Federal Home Loan Bank advances |
|
95,276 |
|
|
471 |
|
|
0.66 |
% |
|
26,820 |
|
|
370 |
|
|
1.84 |
% |
||||
Total interest-bearing liabilities |
|
1,196,131 |
|
|
11,471 |
|
|
1.28 |
% |
|
1,155,426 |
|
|
18,295 |
|
|
2.12 |
% |
||||
Noninterest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Noninterest-bearing demand |
|
465,634 |
|
|
|
|
|
|
325,704 |
|
|
|
|
|
||||||||
Other liabilities |
|
17,493 |
|
|
|
|
|
|
22,077 |
|
|
|
|
|
||||||||
Total noninterest-bearing liabilities |
|
483,127 |
|
|
|
|
|
|
347,781 |
|
|
|
|
|
||||||||
Total liabilities |
|
1,679,258 |
|
|
|
|
|
|
1,503,207 |
|
|
|
|
|
||||||||
Total shareholders’ equity |
|
227,342 |
|
|
|
|
|
|
219,586 |
|
|
|
|
|
||||||||
Total liabilities and shareholders’ equity |
|
$ |
1,906,600 |
|
|
|
|
|
|
$ |
1,722,793 |
|
|
|
|
|
||||||
Net interest income |
|
|
|
$ |
48,782 |
|
|
|
|
|
|
$ |
52,374 |
|
|
|
||||||
Net interest spread (3) |
|
|
|
|
|
3.03 |
% |
|
|
|
|
|
3.50 |
% |
||||||||
Net interest margin (4) |
|
|
|
|
|
3.49 |
% |
|
|
|
|
|
4.16 |
% |
||||||||
Total deposits |
|
$ |
1,566,489 |
|
|
$ |
11,000 |
|
|
0.94 |
% |
|
$ |
1,454,310 |
|
|
$ |
17,925 |
|
|
1.65 |
% |
Total funding (5) |
|
$ |
1,661,765 |
|
|
$ |
11,471 |
|
|
0.92 |
% |
|
$ |
1,481,130 |
|
|
$ |
18,295 |
|
|
1.65 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(1) |
Total loans include both loans held-for-sale and loans held-for-investment, net of deferred loan costs (fees). |
|
(2) |
The yield on municipal bonds has not been computed on a tax-equivalent basis. |
|
(3) |
Net interest spread is calculated by subtracting average rate on interest-bearing liabilities from average yield on interest-earning assets. |
|
(4) |
Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets. |
|
(5) |
Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20201027005344/en/
Timothy Chang
Executive Vice President & Chief Financial Officer
213-210-2000
Source: PCB Bancorp
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