Attached files
| file | filename |
|---|---|
| 8-K - 8-K - PCB BANCORP | pcb-20210128.htm |
| EX-99.2 - EX-99.2 - PCB BANCORP | pcbinvestordeckq420.htm |
Exhibit 99.1
PCB Bancorp Reports Earnings of $5.8 million for Q4 2020 and Declares $0.10 Quarterly Cash Dividend
Los Angeles, California - January 28, 2021 - PCB Bancorp (the “Company”) (NASDAQ: PCB), the holding company of Pacific City Bank (the “Bank”), today reported net income of $5.8 million, or $0.38 per diluted common share for the fourth quarter of 2020, compared with $3.4 million, or $0.22 per diluted common share, for the previous quarter and $4.2 million, or $0.26 per diluted common share, for the year-ago quarter.
Q4 2020 Highlights
•Net income totaled $5.8 million or $0.38 per diluted common share;
◦The Company recorded a provision for loan losses of $2.1 million primarily due to increases in special mention and classified loans as a result of the ongoing COVID-19 pandemic.
◦Allowance for loan losses to total loans held-for-investment ratio was 1.67% at December 31, 2020 compared with 1.55% at September 30, 2020 and 0.99% at December 31, 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 1.83% and 1.70% at December 31, 2020 and September 30, 2020, respectively.
◦Net interest margin was 3.64% for the fourth quarter of 2020 compared with 3.43% for the previous quarter and 3.96% for the year-ago quarter.
•Total assets were $1.92 billion at December 31, 2020, a decrease of $98.3 million, or 4.9%, from $2.02 billion at September 30, 2020, but an increase of $176.5 million, or 10.1%, from $1.75 billion at December 31, 2019;
•Loans held-for-investment, net of deferred costs (fees), were $1.58 billion at December 31, 2020, an increase of $4.8 million, or 0.3%, from $1.58 billion at September 30, 2020 and an increase of $132.7 million, or 9.1%, from $1.45 billion at December 31, 2019;
◦SBA PPP loans totaled $135.7 million and $136.4 million at December 31, 2020 and September 30, 2020, respectively.
◦Loans under modified terms related to COVID-19 totaled $36.1 million at December 31, 2020 compared with $171.6 million at September 30, 2020.
•Total deposits were $1.59 billion at December 31, 2020, a decrease of $52.3 million from $1.65 billion at September 30, 2020, but an increase of $115.5 million, or 7.8%, from $1.48 billion at December 31, 2019;
•The Company declared and paid a cash dividend of $0.10 per common share for the fourth quarter of 2020 compared with $0.10 per common share for the third quarter of 2020 and $0.08 per common share for the fourth quarter of 2019.
“In a year of the most challenging financial environment since the great financial crisis, I am proud of the way we have immediately responded to the needs of our valued customers by modifying their loans proactively at the onset of COVID-19 pandemic, and originating more than 1,600 PPP loans totaling $140 million. We have successfully managed to end the year stronger by delivering a solid fourth quarter net income of $5.8 million, or $0.38 per diluted common share. We have also continuously elevated our allowance coverage ratio to 1.67% in spite of reducing modified loans under the CARES Act to $36.1 million, or 2.5% of our loan balance (excluding SBA PPP loans), and maintaining a solid credit portfolio where nonperforming assets were 0.24% of total assets at year-end,” commented Henry Kim, President and Chief Executive Officer.
“As a result of reduction in the cost of our deposits and gradual reduction of our excess liquidity that was accumulated at the onset of COVID-19 pandemic, our net interest margin expanded to 3.64% in the fourth quarter compared with 3.43% in the third quarter.”
“Looking ahead, with additional government economic assistance programs and a wider distribution of the vaccines, I am confident that our solid balance sheet combined with strong capital levels that is complemented by our robust allowance coverage ratio will safely lead our institution pass this unprecedented period and deliver even more value to our shareholders.”
1
Financial Highlights (Unaudited)
| ($ in thousands, except per share data) | Three Months Ended | Year Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
| 12/31/2020 | 9/30/2020 | % Change | 12/31/2019 | % Change | 12/31/2020 | 12/31/2019 | % Change | |||||||||||||||||||||||||||||||||||||||||||
Net income | $ | 5,787 | $ | 3,449 | 67.8 | % | $ | 4,158 | 39.2 | % | $ | 16,175 | $ | 24,108 | (32.9) | % | ||||||||||||||||||||||||||||||||||
Diluted earnings per common share | $ | 0.38 | $ | 0.22 | 72.7 | % | $ | 0.26 | 46.2 | % | $ | 1.04 | $ | 1.49 | (30.2) | % | ||||||||||||||||||||||||||||||||||
Net interest income | $ | 17,407 | $ | 16,853 | 3.3 | % | $ | 16,660 | 4.5 | % | $ | 66,189 | $ | 69,034 | (4.1) | % | ||||||||||||||||||||||||||||||||||
| Provision for loan losses | 2,142 | 4,326 | (50.5) | % | 4,030 | (46.8) | % | 13,219 | 4,237 | 212.0 | % | |||||||||||||||||||||||||||||||||||||||
Noninterest income | 4,524 | 2,272 | 99.1 | % | 3,604 | 25.5 | % | 11,740 | 11,869 | (1.1) | % | |||||||||||||||||||||||||||||||||||||||
Noninterest expense | 11,550 | 9,886 | 16.8 | % | 10,265 | 12.5 | % | 41,699 | 42,315 | (1.5) | % | |||||||||||||||||||||||||||||||||||||||
Return on average assets (1) | 1.19 | % | 0.69 | % | 0.96 | % | 0.84 | % | 1.40 | % | ||||||||||||||||||||||||||||||||||||||||
Return on average shareholders’ equity (1), (2) | 9.92 | % | 5.98 | % | 7.25 | % | 7.08 | % | 10.88 | % | ||||||||||||||||||||||||||||||||||||||||
Net interest margin (1) | 3.64 | % | 3.43 | % | 3.96 | % | 3.53 | % | 4.11 | % | ||||||||||||||||||||||||||||||||||||||||
Efficiency ratio (3) | 52.67 | % | 51.69 | % | 50.66 | % | 53.51 | % | 52.30 | % | ||||||||||||||||||||||||||||||||||||||||
| ($ in thousands, except per share data) | 12/31/2020 | 9/30/2020 | % Change | 12/31/2019 | % Change | |||||||||||||||||||||||||||
Total assets | $ | 1,922,853 | $ | 2,021,187 | (4.9) | % | $ | 1,746,328 | 10.1 | % | ||||||||||||||||||||||
Net loans held-for-investment | 1,557,068 | 1,554,258 | 0.2 | % | 1,436,451 | 8.4 | % | |||||||||||||||||||||||||
Total deposits | 1,594,851 | 1,647,107 | (3.2) | % | 1,479,307 | 7.8 | % | |||||||||||||||||||||||||
Book value per common share (2), (4) | $ | 15.19 | $ | 14.91 | 1.9 | % | $ | 14.44 | 5.2 | % | ||||||||||||||||||||||
Tier 1 leverage ratio (consolidated) | 11.94 | % | 11.40 | % | 13.23 | % | ||||||||||||||||||||||||||
Total shareholders’ equity to total assets (2) | 12.16 | % | 11.35 | % | 12.99 | % | ||||||||||||||||||||||||||
(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 $135.7 million (1,585 loans) and loans under modified terms related to the COVID-19 pandemic totaled $36.1 million (39 loan customers) as of December 31, 2020. During the current quarter, the Company received SBA PPP forgiveness of $1.8 million for 57 SBA PPP loans. On January 13, 2021, SBA began accepting applications for second draw PPP loans. The Company is accepting applications and will continue to receive applications as long as funding remains available.
In addition, the Company has been monitoring its liquidity and capital closely. As of December 31, 2020, the Company maintained $194.1 million, or 10.1% of total assets, of cash and cash equivalents and $526.1 million, or 27.4% of total assets, of available borrowing capacity. All regulatory capital ratios were also well above the regulatory well capitalized requirements as of December 31, 2020, while establishing provision for loan losses of $13.2 million for the current year.
At this time, the Company cannot estimate the long term impact of the COVID-19 pandemic, but these conditions impacted and are expected to impact its business, results of operations, and financial condition negatively.
2
Result of Operations (Unaudited)
Net Interest Income and Net Interest Margin
The following table presents the components of net interest income for the periods indicated:
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 12/31/2020 | 9/30/2020 | % Change | 12/31/2019 | % Change | 12/31/2020 | 12/31/2019 | % Change | ||||||||||||||||||||||||||||||||||||||||||
Interest income/expense on: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | $ | 18,929 | $ | 18,938 | — | % | $ | 20,888 | (9.4) | % | $ | 76,546 | $ | 85,667 | (10.6) | % | ||||||||||||||||||||||||||||||||||
Investment securities | 429 | 515 | (16.7) | % | 823 | (47.9) | % | 2,127 | 3,956 | (46.2) | % | |||||||||||||||||||||||||||||||||||||||
Other interest-earning assets | 150 | 167 | (10.2) | % | 565 | (73.5) | % | 1,088 | 3,322 | (67.2) | % | |||||||||||||||||||||||||||||||||||||||
Total interest-earning assets | 19,508 | 19,620 | (0.6) | % | 22,276 | (12.4) | % | 79,761 | 92,945 | (14.2) | % | |||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits | 1,958 | 2,599 | (24.7) | % | 5,514 | (64.5) | % | 12,958 | 23,439 | (44.7) | % | |||||||||||||||||||||||||||||||||||||||
Borrowings | 143 | 168 | (14.9) | % | 102 | 40.2 | % | 614 | 472 | 30.1 | % | |||||||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 2,101 | 2,767 | (24.1) | % | 5,616 | (62.6) | % | 13,572 | 23,911 | (43.2) | % | |||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 17,407 | $ | 16,853 | 3.3 | % | $ | 16,660 | 4.5 | % | $ | 66,189 | $ | 69,034 | (4.1) | % | ||||||||||||||||||||||||||||||||||
Average balance of: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | $ | 1,592,705 | $ | 1,564,704 | 1.8 | % | $ | 1,415,781 | 12.5 | % | $ | 1,541,740 | $ | 1,383,562 | 11.4 | % | ||||||||||||||||||||||||||||||||||
Investment securities | 123,785 | 128,212 | (3.5) | % | 146,454 | (15.5) | % | 122,726 | 160,803 | (23.7) | % | |||||||||||||||||||||||||||||||||||||||
Other interest-earning assets | 187,592 | 260,426 | (28.0) | % | 108,919 | 72.2 | % | 213,124 | 134,870 | 58.0 | % | |||||||||||||||||||||||||||||||||||||||
Total interest-earning assets | $ | 1,904,082 | $ | 1,953,342 | (2.5) | % | $ | 1,671,154 | 13.9 | % | $ | 1,877,590 | $ | 1,679,235 | 11.8 | % | ||||||||||||||||||||||||||||||||||
Interest-bearing deposits | $ | 1,050,369 | $ | 1,063,962 | (1.3) | % | $ | 1,097,957 | (4.3) | % | $ | 1,088,164 | $ | 1,120,880 | (2.9) | % | ||||||||||||||||||||||||||||||||||
Borrowings | 91,467 | 130,000 | (29.6) | % | 21,141 | 332.7 | % | 94,319 | 25,388 | 271.5 | % | |||||||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | $ | 1,141,836 | $ | 1,193,962 | (4.4) | % | $ | 1,119,098 | 2.0 | % | $ | 1,182,483 | $ | 1,146,268 | 3.2 | % | ||||||||||||||||||||||||||||||||||
Total funding (1) | $ | 1,691,758 | $ | 1,746,217 | (3.1) | % | $ | 1,460,781 | 15.8 | % | $ | 1,669,303 | $ | 1,475,999 | 13.1 | % | ||||||||||||||||||||||||||||||||||
Annualized average yield/cost of: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | 4.73 | % | 4.81 | % | 5.85 | % | 4.96 | % | 6.19 | % | ||||||||||||||||||||||||||||||||||||||||
Investment securities | 1.38 | % | 1.60 | % | 2.23 | % | 1.73 | % | 2.46 | % | ||||||||||||||||||||||||||||||||||||||||
Other interest-earning assets | 0.32 | % | 0.26 | % | 2.06 | % | 0.51 | % | 2.46 | % | ||||||||||||||||||||||||||||||||||||||||
| Total interest-earning assets | 4.08 | % | 4.00 | % | 5.29 | % | 4.25 | % | 5.53 | % | ||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits | 0.74 | % | 0.97 | % | 1.99 | % | 1.19 | % | 2.09 | % | ||||||||||||||||||||||||||||||||||||||||
Borrowings | 0.62 | % | 0.51 | % | 1.91 | % | 0.65 | % | 1.86 | % | ||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 0.73 | % | 0.92 | % | 1.99 | % | 1.15 | % | 2.09 | % | ||||||||||||||||||||||||||||||||||||||||
| Net interest margin | 3.64 | % | 3.43 | % | 3.96 | % | 3.53 | % | 4.11 | % | ||||||||||||||||||||||||||||||||||||||||
Cost of total funding (1) | 0.49 | % | 0.63 | % | 1.53 | % | 0.81 | % | 1.62 | % | ||||||||||||||||||||||||||||||||||||||||
Supplementary information | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net accretion of discount on loans | $ | 991 | $ | 743 | 33.4 | % | $ | 938 | 5.7 | % | $ | 3,292 | $ | 4,022 | (18.2) | % | ||||||||||||||||||||||||||||||||||
| Net amortization of deferred loan fees (costs) | $ | 913 | $ | 1,218 | (25.0) | % | $ | 125 | 630.4 | % | $ | 2,901 | $ | 452 | 541.8 | % | ||||||||||||||||||||||||||||||||||
(1)Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.
Loans. The decrease in average yield for the current quarter compared with the previous quarter was primarily due to a decrease in net amortization of deferred loan fees and lower interest rates on new loans, partially offset by an increase in net accretion of discount from an increase in loan payoffs. 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, partially offset by an increase in net amortization of deferred fees on SBA PPP loans. The increase in average balance for the current quarter compared with the previous quarter was primarily due to an increase in commercial property loans. The increases in average balance for the current quarter and year compared with the same periods of 2019 were primarily due to the SBA PPP loan production as well as an increase in commercial property loans.
3
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:
| 12/31/2020 | 9/30/2020 | 12/31/2019 | ||||||||||||||||||||||||||||||||||||
| % to Total Loans | Weighted-Average Contractual Rate | % to Total Loans | Weighted-Average Contractual Rate | % to Total Loans | Weighted-Average Contractual Rate | |||||||||||||||||||||||||||||||||
Fixed rate loans | 31.7 | % | 3.86 | % | 32.0 | % | 3.92 | % | 20.6 | % | 5.34 | % | ||||||||||||||||||||||||||
Hybrid rate loans | 20.8 | % | 4.82 | % | 20.8 | % | 4.93 | % | 22.8 | % | 5.07 | % | ||||||||||||||||||||||||||
Variable rate loans | 47.5 | % | 4.06 | % | 47.2 | % | 4.10 | % | 56.6 | % | 5.51 | % | ||||||||||||||||||||||||||
Investment Securities. The decrease in average yield for the current quarter compared with the previous quarter was primarily due to new investment securities purchased at lower market rates and an increase in premium amortization on mortgage backed securities. 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, the Company purchased investment securities of $2.7 million and $39.4 million, respectively.
Other Interest-Earning Assets. The increase in average yield for the current quarter compared with the previous quarter was primarily due to a decrease in proportion of interest-bearing deposits in other financial institutions that had an average yield of 0.10%. 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. For additional detail, please see the 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 increase in average cost for the current quarter compared with the previous quarter was primarily due to matured borrowings with lower interest rates during the current quarter. During the current quarter, FHLB advances of $50.0 million with a weighted-average rate of 0.26% matured. During the current year, the Company maintained a higher balance of Federal Home Loan Bank (“FHLB”) advances as a part of the Company’s liquidity management plan. At December 31, 2020, the Company had a total outstanding FHLB advances of $80.0 million with a weighted-average rate of 0.67%.
Provision for Loan Losses
Provision for loan losses was $2.1 million for the current quarter compared with $4.3 million for the previous quarter and $4.0 million for the year-ago quarter. For the years ended December 31, 2020 and 2019, provision for loan losses was $13.2 million and $4.2 million, respectively. The provision for the current quarter was primarily due to increases in special mention and classified loans as a result of the ongoing COVID-19 pandemic. The provision for the current year was primarily driven by the increase in risks associated with economic and business conditions, as well as the increases in special mention and classified loans, as a result of the COVID-19 pandemic. The Company recorded net charge-offs of $178 thousand for the current quarter compared with $28 thousand for the previous quarter and $2.7 million for the year-ago quarter. For the years ended December 31, 2020 and 2019, the Company recorded net charge-offs of $1.1 million and $3.0 million, respectively.
The following table presents allowance for loan losses to total loans held-for-investment ratio for the dates indicated:
| ($ in thousands) | 12/31/2020 | 9/30/2020 | 12/31/2019 | |||||||||||||||||
| Total loans held-for-investment | $ | 1,583,578 | $ | 1,578,804 | $ | 1,450,831 | ||||||||||||||
| Less: SBA PPP loans | 135,654 | 136,418 | — | |||||||||||||||||
| Total loans held-for-investment, excluding SBA PPP loans | $ | 1,447,924 | $ | 1,442,386 | $ | 1,450,831 | ||||||||||||||
| Allowance for loan losses | $ | 26,510 | $ | 24,546 | $ | 14,380 | ||||||||||||||
| Allowance for loan losses to total loans held-for-investment | 1.67 | % | 1.55 | % | 0.99 | % | ||||||||||||||
| Allowance for loan losses to total loans held-for-investment, excluding SBA PPP loans | 1.83 | % | 1.70 | % | 0.99 | % | ||||||||||||||
4
Noninterest Income
The following table presents the components of noninterest income for the periods indicated:
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 12/31/2020 | 9/30/2020 | % Change | 12/31/2019 | % Change | 12/31/2020 | 12/31/2019 | % Change | ||||||||||||||||||||||||||||||||||||||||||
Gain on sale of loans | $ | 3,483 | $ | 821 | 324.2 | % | $ | 1,445 | 141.0 | % | $ | 6,527 | $ | 5,996 | 8.9 | % | ||||||||||||||||||||||||||||||||||
Gain on sale of securities available-for-sale | — | — | — | % | 786 | (100.0) | % | — | 786 | (100.0) | % | |||||||||||||||||||||||||||||||||||||||
Service charges and fees on deposits | 311 | 280 | 11.1 | % | 407 | (23.6) | % | 1,256 | 1,544 | (18.7) | % | |||||||||||||||||||||||||||||||||||||||
Loan servicing income | 398 | 856 | (53.5) | % | 652 | (39.0) | % | 2,710 | 2,309 | 17.4 | % | |||||||||||||||||||||||||||||||||||||||
Other income | 332 | 315 | 5.4 | % | 314 | 5.7 | % | 1,247 | 1,234 | 1.1 | % | |||||||||||||||||||||||||||||||||||||||
Total noninterest income | $ | 4,524 | $ | 2,272 | 99.1 | % | $ | 3,604 | 25.5 | % | $ | 11,740 | $ | 11,869 | (1.1) | % | ||||||||||||||||||||||||||||||||||
Gain on Sale of Loans. The following table presents information on gain on sale of loans for the periods indicated:
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 12/31/2020 | 9/30/2020 | % Change | 12/31/2019 | % Change | 12/31/2020 | 12/31/2019 | % Change | ||||||||||||||||||||||||||||||||||||||||||
Gain on sale of SBA loans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Sold loan balance | $ | 42,413 | $ | 8,582 | 394.2 | % | $ | 27,072 | 56.7 | % | $ | 89,776 | $ | 99,609 | (9.9) | % | ||||||||||||||||||||||||||||||||||
Premium received | 4,441 | 917 | 384.3 | % | 2,067 | 114.9 | % | 8,456 | 8,355 | 1.2 | % | |||||||||||||||||||||||||||||||||||||||
Gain recognized | 3,197 | 689 | 364.0 | % | 1,428 | 123.9 | % | 6,038 | 5,915 | 2.1 | % | |||||||||||||||||||||||||||||||||||||||
Gain on sale of residential property loans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Sold loan balance | $ | 27,139 | $ | 16,585 | 63.6 | % | $ | 2,636 | 929.6 | % | $ | 51,921 | $ | 10,068 | 415.7 | % | ||||||||||||||||||||||||||||||||||
Gain recognized | 286 | 132 | 116.7 | % | 17 | 1,582.4 | % | 489 | 81 | 503.7 | % | |||||||||||||||||||||||||||||||||||||||
The increase in sale of SBA loans was primarily due to SBA loans held-for-sale of $26.8 million at September 30, 2020, which were sold during the current quarter. The increase in sale of residential property loans was primarily due to residential property loans held-for-sale of $4.0 million at September 30, 2020, which were sold during the current quarter, and an increased demand for refinancing from the lower market rates.
Gain on Sale of Securities Available-For-Sale. The Company sold securities available-for-sale of $32.8 million during the year-ago quarter. The Company did not sell any investment securities during the current year.
Loan Servicing Income. The following table presents information on loan servicing income for the periods indicated:
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 12/31/2020 | 9/30/2020 | % Change | 12/31/2019 | % Change | 12/31/2020 | 12/31/2019 | % Change | ||||||||||||||||||||||||||||||||||||||||||
Loan servicing income: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Servicing income received | $ | 961 | $ | 1,244 | (22.7) | % | $ | 1,159 | (17.1) | % | $ | 4,657 | $ | 4,691 | (0.7) | % | ||||||||||||||||||||||||||||||||||
Servicing assets amortization | (563) | (388) | 45.1 | % | (507) | 11.0 | % | (1,947) | (2,382) | (18.3) | % | |||||||||||||||||||||||||||||||||||||||
Loan servicing income | $ | 398 | $ | 856 | (53.5) | % | $ | 652 | (39.0) | % | $ | 2,710 | $ | 2,309 | 17.4 | % | ||||||||||||||||||||||||||||||||||
Underlying loans at end of period | $ | 498,795 | $ | 484,651 | 2.9 | % | $ | 498,616 | — | % | $ | 498,795 | $ | 498,616 | — | % | ||||||||||||||||||||||||||||||||||
The Company services SBA loans and certain residential property loans that are sold to the secondary market. The decrease for the current quarter compared with the previous quarter was primarily due to a decrease in servicing income received and an increase in servicing asset amortization from an increase in loan payoffs. The increase for the current year compared with the previous year was primarily due to a decrease in servicing asset amortization from a decrease in loan payoffs.
5
Noninterest Expense
The following table presents the components of noninterest expense for the periods indicated:
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 12/31/2020 | 9/30/2020 | % Change | 12/31/2019 | % Change | 12/31/2020 | 12/31/2019 | % Change | ||||||||||||||||||||||||||||||||||||||||||
Salaries and employee benefits | $ | 7,397 | $ | 6,438 | 14.9 | % | $ | 6,016 | 23.0 | % | $ | 26,147 | $ | 26,139 | — | % | ||||||||||||||||||||||||||||||||||
Occupancy and equipment | 1,424 | 1,416 | 0.6 | % | 1,417 | 0.5 | % | 5,620 | 5,545 | 1.4 | % | |||||||||||||||||||||||||||||||||||||||
Professional fees | 625 | 325 | 92.3 | % | 622 | 0.5 | % | 2,256 | 2,730 | (17.4) | % | |||||||||||||||||||||||||||||||||||||||
Marketing and business promotion | 440 | 193 | 128.0 | % | 501 | (12.2) | % | 1,360 | 1,550 | (12.3) | % | |||||||||||||||||||||||||||||||||||||||
Data processing | 375 | 373 | 0.5 | % | 361 | 3.9 | % | 1,472 | 1,365 | 7.8 | % | |||||||||||||||||||||||||||||||||||||||
Director fees and expenses | 146 | 125 | 16.8 | % | 189 | (22.8) | % | 599 | 751 | (20.2) | % | |||||||||||||||||||||||||||||||||||||||
Regulatory assessments | 250 | 267 | (6.4) | % | 126 | 98.4 | % | 978 | 551 | 77.5 | % | |||||||||||||||||||||||||||||||||||||||
Other expenses | 893 | 749 | 19.2 | % | 1,033 | (13.6) | % | 3,267 | 3,684 | (11.3) | % | |||||||||||||||||||||||||||||||||||||||
Total noninterest expense | $ | 11,550 | $ | 9,886 | 16.8 | % | $ | 10,265 | 12.5 | % | $ | 41,699 | $ | 42,315 | (1.5) | % | ||||||||||||||||||||||||||||||||||
Salaries and Employee Benefits. The increases for the current quarter compared with the previous and year-ago quarters were primarily due to increases in bonus accrual and other employee benefits. The increase for the current year compared with the previous year was primarily due to increases in wages, other employee benefits and vacation accrual, partially offset by direct loan origination costs of $1.1 million related to SBA PPP loan production and a decrease in bonus accrual.
Professional Fees. The increase for the current quarter compared with the previous quarter was primarily due to an increased other professional fees as a part of the year-end processes. The decrease for the current year compared with the previous year was primarily due to a decrease in expenses related to the Bank’s Bank Secrecy Act and Anti-Money Laundering (“BSA/AML”) compliance enhancements. The consent order with the Federal Deposit Insurance Corporation (“FDIC”) and California Department of Financial Protection and Innovation (“CDFPI”) related to the BSA/AML compliance was terminated during the previous quarter.
Marketing and business promotion. The increase for the current quarter compared with the previous quarter was primarily due to the year-end promotion and an increase in advertisement. The decreases for the current quarter and year compared with the same periods of 2019 were primarily due to fewer marketing activities related to the COVID-19 pandemic.
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 and previous year, as well as an increase in balance sheet. The Company would have recognized regulatory assessments expense of $242 thousand and $895 thousand without the small bank credit for the year-ago quarter and previous year, respectively.
6
Balance Sheet (Unaudited)
Total assets were $1.92 billion at December 31, 2020, a decrease of $98.3 million, or 4.9%, from $2.02 billion at September 30, 2020, but an increase of $176.5 million, or 10.1%, from $1.75 billion at December 31, 2019. The decrease for the current quarter was primarily due to decreases in cash and cash equivalents, loans held-for-sale and investment securities. The decrease in cash and cash equivalents for the current quarter was primarily due to decreases in deposits and other borrowings, partially offset by cash proceeds from sales of loans held-for-sale and paydowns from investment securities. The increase for the current year was primarily due to increases in loans held-for-investment and cash and cash equivalents. The increase in cash and cash equivalents for the current year was primarily due to increases in deposits and other borrowings, partially offset by cash utilized to support the loan growth.
Loans
The following table presents a composition of total loans (includes both loans held-for-sale and loans held-for-investment, net of deferred costs (fees)) as of the dates indicated:
| ($ in thousands) | 12/31/2020 | 9/30/2020 | % Change | 12/31/2019 | % Change | |||||||||||||||||||||||||||
Real estate loans: | ||||||||||||||||||||||||||||||||
Commercial property | $ | 880,736 | $ | 853,708 | 3.2 | % | $ | 803,014 | 9.7 | % | ||||||||||||||||||||||
Residential property | 198,431 | 212,804 | (6.8) | % | 235,046 | (15.6) | % | |||||||||||||||||||||||||
SBA property | 126,570 | 128,038 | (1.1) | % | 129,837 | (2.5) | % | |||||||||||||||||||||||||
Construction | 15,199 | 19,803 | (23.2) | % | 19,164 | (20.7) | % | |||||||||||||||||||||||||
Commercial and industrial loans: | ||||||||||||||||||||||||||||||||
Commercial term | 87,250 | 90,867 | (4.0) | % | 103,380 | (15.6) | % | |||||||||||||||||||||||||
Commercial lines of credit | 96,087 | 92,222 | 4.2 | % | 111,768 | (14.0) | % | |||||||||||||||||||||||||
SBA commercial term | 21,878 | 23,011 | (4.9) | % | 25,332 | (13.6) | % | |||||||||||||||||||||||||
SBA PPP | 135,654 | 136,418 | (0.6) | % | — | — | % | |||||||||||||||||||||||||
Other consumer loans | 21,773 | 21,933 | (0.7) | % | 23,290 | (6.5) | % | |||||||||||||||||||||||||
Loans held-for-investment | 1,583,578 | 1,578,804 | 0.3 | % | 1,450,831 | 9.1 | % | |||||||||||||||||||||||||
Loans held-for-sale | 1,979 | 30,878 | (93.6) | % | 1,975 | 0.2 | % | |||||||||||||||||||||||||
Total loans | $ | 1,585,557 | $ | 1,609,682 | (1.5) | % | $ | 1,452,806 | 9.1 | % | ||||||||||||||||||||||
The increase in loans held-for-investment for the current quarter was primarily due to new funding of $50.7 million and advances on lines of credit of $23.5 million, partially offset by pay-downs and pay-offs of $69.2 million. The increase for the current year was primarily due to new funding of $345.9 million and advances on lines of credit of $100.5 million, partially offset by pay-downs and pay-offs of $311.5 million.
The decrease in loans held-for-sale for the current quarter was primarily due to sales of $69.6 million, partially offset by new funding of $40.7 million. The increase for the current year was primarily due to new funding of $141.2 million and transfers of loans from loans held-for-investment of $1.4 million, partially offset by sales of $141.7 million and a transfer to loans held-for-investment of $697 thousand.
The following table presents a composition of commitments to extend credit as of the dates indicated:
| ($ in thousands) | 12/31/2020 | 9/30/2020 | % Change | 12/31/2019 | % Change | |||||||||||||||||||||||||||
Real estate loans: | ||||||||||||||||||||||||||||||||
Commercial property | $ | 21,016 | $ | 17,621 | 19.3 | % | $ | 15,836 | 32.7 | % | ||||||||||||||||||||||
SBA property | 540 | — | — | % | 1,405 | (61.6) | % | |||||||||||||||||||||||||
Construction | 13,986 | 15,366 | (9.0) | % | 11,557 | 21.0 | % | |||||||||||||||||||||||||
Commercial and industrial loans: | ||||||||||||||||||||||||||||||||
Commercial term | 1,000 | 1,000 | — | % | 1,243 | (19.5) | % | |||||||||||||||||||||||||
Commercial lines of credit | 156,870 | 173,080 | (9.4) | % | 140,690 | 11.5 | % | |||||||||||||||||||||||||
SBA commercial term | — | — | — | % | 762 | (100.0) | % | |||||||||||||||||||||||||
Other consumer loans | 84 | 75 | 12.0 | % | 115 | (27.0) | % | |||||||||||||||||||||||||
Total commitments to extend credit | $ | 193,496 | $ | 207,142 | (6.6) | % | $ | 171,608 | 12.8 | % | ||||||||||||||||||||||
7
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) | 12/31/2020 | 9/30/2020 | % Change | 12/31/2019 | % Change | |||||||||||||||||||||||||||
Nonaccrual loans: | ||||||||||||||||||||||||||||||||
Real estate loans: | ||||||||||||||||||||||||||||||||
Commercial property | $ | 524 | $ | — | — | % | $ | — | — | % | ||||||||||||||||||||||
Residential property | 189 | — | — | % | — | — | % | |||||||||||||||||||||||||
SBA property | 885 | 923 | (4.1) | % | 442 | 100.2 | % | |||||||||||||||||||||||||
Commercial and industrial loans: | ||||||||||||||||||||||||||||||||
Commercial lines of credit | 904 | 1,525 | (40.7) | % | 1,888 | (52.1) | % | |||||||||||||||||||||||||
SBA commercial term | 595 | 378 | 57.4 | % | 159 | 274.2 | % | |||||||||||||||||||||||||
Other consumer loans | 66 | 67 | (1.5) | % | 48 | 37.5 | % | |||||||||||||||||||||||||
Total nonaccrual loans held-for-investment | 3,163 | 2,893 | 9.3 | % | 2,537 | 24.7 | % | |||||||||||||||||||||||||
Loans past due 90 days or more and still accruing | — | 699 | (100.0) | % | 287 | (100.0) | % | |||||||||||||||||||||||||
Non-performing loans (“NPLs”) | 3,163 | 3,592 | (11.9) | % | 2,824 | 12.0 | % | |||||||||||||||||||||||||
Other real estate owned (“OREO”) | 1,401 | 376 | 272.6 | % | — | — | % | |||||||||||||||||||||||||
Non-performing assets (“NPAs”) | $ | 4,564 | $ | 3,968 | 15.0 | % | $ | 2,824 | 61.6 | % | ||||||||||||||||||||||
Loans past due and still accruing: | ||||||||||||||||||||||||||||||||
Past due 30 to 59 days | $ | 302 | $ | 298 | 1.3 | % | $ | 893 | (66.2) | % | ||||||||||||||||||||||
Past due 60 to 89 days | 36 | 3 | 1,100.0 | % | 925 | (96.1) | % | |||||||||||||||||||||||||
Past due 90 days or more | — | 699 | (100.0) | % | 287 | (100.0) | % | |||||||||||||||||||||||||
Total loans past due and still accruing | $ | 338 | $ | 1,000 | (66.2) | % | 2,105 | (83.9) | % | |||||||||||||||||||||||
Troubled debt restructurings (“TDRs”): | ||||||||||||||||||||||||||||||||
Accruing TDRs | $ | 634 | $ | 649 | (2.3) | % | $ | 700 | (9.4) | % | ||||||||||||||||||||||
Nonaccrual TDRs | 5 | 38 | (86.8) | % | 121 | (95.9) | % | |||||||||||||||||||||||||
Total TDRs | $ | 639 | $ | 687 | (7.0) | % | $ | 821 | (22.2) | % | ||||||||||||||||||||||
| Special mention loans | $ | 16,461 | $ | 4,746 | 246.8 | % | $ | 1,783 | 823.2 | % | ||||||||||||||||||||||
Classified assets | ||||||||||||||||||||||||||||||||
Classified loans | $ | 10,130 | $ | 4,860 | 108.4 | % | $ | 8,862 | 14.3 | % | ||||||||||||||||||||||
OREO | 1,401 | 376 | 272.6 | % | — | — | % | |||||||||||||||||||||||||
Classified assets | $ | 11,531 | $ | 5,236 | 120.2 | % | $ | 8,862 | 30.1 | % | ||||||||||||||||||||||
NPLs to loans held-for-investment | 0.20 | % | 0.23 | % | 0.19 | % | ||||||||||||||||||||||||||
NPAs to total assets | 0.24 | % | 0.20 | % | 0.16 | % | ||||||||||||||||||||||||||
Classified assets to total assets | 0.60 | % | 0.26 | % | 0.51 | % | ||||||||||||||||||||||||||
The increases in special mention and classified loans were primarily due to downgrades of loans under modified terms related to the COVID-19 pandemic. Loans that are granted modifications related to the COVID-19 pandemic in excess of 6 months, on a cumulative basis, are classified as special mention or classified. As of December 31, 2020, special mention and classified loans included $14.9 million and $1.9 million of loans under modified terms related to the COVID-19 pandemic, respectively. The special mention loans under modified terms related to the COVID-19 pandemic included 2 commercial property loans totaling $10.3 million, 4 commercial term loans totaling $4.4 million, and a SBA property loan of $251 thousand. The classified loans under modified terms related to the COVID-19 pandemic included 2 commercial term loans totaling $1.2 million, a commercial property loan of $706 thousand, and a SBA commercial term loan of $72 thousand.
8
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”). Therefore, the modified loans were not considered TDRs. Total loans under modified terms related to the COVID-19 pandemic were $36.1 million at December 31, 2020, a decrease of $135.5 million, or 79.0%, from $171.6 million at September 30, 2020 and a decrease of $447.9 million, or 92.5%, from $484.0 million at June 30, 2020.
The following table presents a summary of loans under modified terms related to the COVID-19 pandemic by portfolio segment as of December 31, 2020:
| Modification Type | Weighted-Average Contractual Rate | Accrued Interest Receivable | ||||||||||||||||||||||||||||||
| ($ in thousands) | Payment Deferment | Interest Only Payment | Total | |||||||||||||||||||||||||||||
Real estate loans: | ||||||||||||||||||||||||||||||||
| Commercial property | $ | 9,688 | $ | 14,444 | $ | 24,132 | 4.10 | % | $ | 151 | ||||||||||||||||||||||
| Residential property | 425 | — | 425 | 4.75 | % | 12 | ||||||||||||||||||||||||||
| SBA property | — | 4,192 | 4,192 | 4.79 | % | 26 | ||||||||||||||||||||||||||
| Commercial and industrial loans: | ||||||||||||||||||||||||||||||||
| Commercial term | 2,462 | 3,065 | 5,527 | 3.88 | % | 98 | ||||||||||||||||||||||||||
| SBA commercial term | — | 1,841 | 1,841 | 5.41 | % | 7 | ||||||||||||||||||||||||||
| Total | $ | 12,575 | $ | 23,542 | $ | 36,117 | 4.22 | % | $ | 294 | ||||||||||||||||||||||
Investment Securities
On June 30, 2020, 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 $120.5 million at December 31, 2020, a decrease of $8.5 million, or 6.6%, from $129.0 million at September 30, 2020, but an increase of $2.8 million, or 2.4%, from $117.7 million at December 31, 2019.
The decrease for the current quarter was primarily due to principal pay-downs and calls of $10.9 million and net premium amortization of $282 thousand, partially offset by purchases of $2.7 million. The increase for the current year was primarily due to purchases of $39.4 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 $38.5 million and net premium amortization of $938 thousand.
Deposits
The following table presents the Company’s deposit mix as of the dates indicated:
| 12/31/2020 | 9/30/2020 | 12/31/2019 | ||||||||||||||||||||||||||||||||||||
| ($ in thousands) | Amount | % to Total | Amount | % to Total | Amount | % to Total | ||||||||||||||||||||||||||||||||
Noninterest-bearing demand deposits | $ | 538,009 | 33.7 | % | $ | 576,086 | 35.0 | % | $ | 360,039 | 24.3 | % | ||||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||||||||||||||||
Savings | 10,481 | 0.7 | % | 11,124 | 0.7 | % | 6,492 | 0.4 | % | |||||||||||||||||||||||||||||
NOW | 21,604 | 1.4 | % | 21,726 | 1.3 | % | 17,673 | 1.2 | % | |||||||||||||||||||||||||||||
Retail money market accounts | 351,739 | 22.0 | % | 344,939 | 20.9 | % | 307,980 | 20.8 | % | |||||||||||||||||||||||||||||
Brokered money market accounts | 25,002 | 1.6 | % | 30,001 | 1.9 | % | 30,034 | 2.0 | % | |||||||||||||||||||||||||||||
Retail time deposits of: | ||||||||||||||||||||||||||||||||||||||
$250,000 or less | 299,431 | 18.7 | % | 312,171 | 18.9 | % | 405,004 | 27.5 | % | |||||||||||||||||||||||||||||
More than $250,000 | 168,683 | 10.6 | % | 167,208 | 10.2 | % | 199,726 | 13.5 | % | |||||||||||||||||||||||||||||
Time deposits from internet rate service providers | 24,902 | 1.6 | % | 31,852 | 1.9 | % | — | — | % | |||||||||||||||||||||||||||||
State and brokered time deposits | 155,000 | 9.7 | % | 152,000 | 9.2 | % | 152,359 | 10.3 | % | |||||||||||||||||||||||||||||
Total interest-bearing deposits | 1,056,842 | 66.3 | % | 1,071,021 | 65.0 | % | 1,119,268 | 75.7 | % | |||||||||||||||||||||||||||||
Total deposits | $ | 1,594,851 | 100.0 | % | $ | 1,647,107 | 100.0 | % | $ | 1,479,307 | 100.0 | % | ||||||||||||||||||||||||||
9
The increase in noninterest-bearing demand deposits for the current year was primarily due to the overall liquid deposit market. A total of $117.9 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 9-month period; however, the Company believes that most of these funds have been utilized by the customers as of December 31, 2020.
The decrease in retail time deposits for the current quarter was primarily due to matured and closed accounts of $124.0 million, partially offset by new accounts of $23.2 million and renewals of the matured accounts of $86.6 million. The decrease in retail time deposits for the current year was primarily due to matured and closed accounts of $639.5 million, partially offset by new accounts of $97.0 million and renewals of the matured accounts of $391.7 million.
Liquidity
The following table presents a summary of the Company’s liquidity position as of December 31, 2020:
| ($ in thousands) | 12/31/2020 | |||||||
Cash and cash equivalents | $ | 194,098 | ||||||
Cash and cash equivalents to total assets | 10.1 | % | ||||||
Available borrowing capacity: | ||||||||
FHLB advances | $ | 425,280 | ||||||
Federal Reserve Discount Window | 35,799 | |||||||
Overnight federal funds lines | 65,000 | |||||||
Total | $ | 526,079 | ||||||
Total available borrowing capacity to total assets | 27.4 | % | ||||||
Shareholders’ Equity
Shareholders’ equity was $233.8 million at December 31, 2020, an increase of $4.4 million, or 1.9%, from $229.3 million at September 30, 2020 and an increase of $7.0 million, or 3.1%, from $226.8 million at December 31, 2019. The increase for the current quarter was primarily due to net income, partially offset by a 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 dividends declared on common stock of $6.2 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:
| 12/31/2020 | 9/30/2020 | 12/31/2019 | Well Capitalized Requirements | |||||||||||||||||||||||
PCB Bancorp | ||||||||||||||||||||||||||
Common tier 1 capital (to risk-weighted assets) | 15.97 | % | 15.60 | % | 15.87 | % | N/A | |||||||||||||||||||
Total capital (to risk-weighted assets) | 17.22 | % | 16.86 | % | 16.90 | % | N/A | |||||||||||||||||||
Tier 1 capital (to risk-weighted assets) | 15.97 | % | 15.60 | % | 15.87 | % | N/A | |||||||||||||||||||
Tier 1 capital (to average assets) | 11.94 | % | 11.40 | % | 13.23 | % | N/A | |||||||||||||||||||
Pacific City Bank | ||||||||||||||||||||||||||
Common tier 1 capital (to risk-weighted assets) | 15.70 | % | 15.34 | % | 15.68 | % | 6.5 | % | ||||||||||||||||||
Total capital (to risk-weighted assets) | 16.95 | % | 16.60 | % | 16.71 | % | 10.0 | % | ||||||||||||||||||
Tier 1 capital (to risk-weighted assets) | 15.70 | % | 15.34 | % | 15.68 | % | 8.0 | % | ||||||||||||||||||
Tier 1 capital (to average assets) | 11.74 | % | 11.21 | % | 13.06 | % | 5.0 | % | ||||||||||||||||||
10
Declaration of Quarterly Cash Dividend
On January 28, 2021, the Company’s Board of Directors declared a quarterly cash dividend of $0.10 per common share. The dividend will be paid on or about February 19, 2021, to shareholders of record as of the close of business on February 10, 2021.
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.
Contact:
Timothy Chang
Executive Vice President & Chief Financial Officer
213-210-2000
11
PCB Bancorp and Subsidiary
Consolidated Balance Sheets (Unaudited)
($ in thousands, except share and per share data)
| 12/31/2020 | 9/30/2020 | % Change | 12/31/2019 | % Change | ||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Cash and due from banks | $ | 19,605 | $ | 13,572 | 44.5 | % | $ | 17,808 | 10.1 | % | ||||||||||||||||||||||
Interest-bearing deposits in financial institutions | 174,493 | 243,810 | (28.4) | % | 128,420 | 35.9 | % | |||||||||||||||||||||||||
Total cash and cash equivalents | 194,098 | 257,382 | (24.6) | % | 146,228 | 32.7 | % | |||||||||||||||||||||||||
Securities available-for-sale, at fair value | 120,527 | 128,982 | (6.6) | % | 97,566 | 23.5 | % | |||||||||||||||||||||||||
Securities held-to-maturity | — | — | — | % | 20,154 | (100.0) | % | |||||||||||||||||||||||||
Total investment securities | 120,527 | 128,982 | (6.6) | % | 117,720 | 2.4 | % | |||||||||||||||||||||||||
Loans held-for-sale | 1,979 | 30,878 | (93.6) | % | 1,975 | 0.2 | % | |||||||||||||||||||||||||
Loans held-for-investment, net of deferred loan costs (fees) | 1,583,578 | 1,578,804 | 0.3 | % | 1,450,831 | 9.1 | % | |||||||||||||||||||||||||
Allowance for loan losses | (26,510) | (24,546) | 8.0 | % | (14,380) | 84.4 | % | |||||||||||||||||||||||||
Net loans held-for-investment | 1,557,068 | 1,554,258 | 0.2 | % | 1,436,451 | 8.4 | % | |||||||||||||||||||||||||
Premises and equipment, net | 4,048 | 4,355 | (7.0) | % | 3,760 | 7.7 | % | |||||||||||||||||||||||||
Federal Home Loan Bank and other bank stock | 8,447 | 8,447 | — | % | 8,345 | 1.2 | % | |||||||||||||||||||||||||
Other real estate owned, net | 1,401 | 376 | 272.6 | % | — | — | % | |||||||||||||||||||||||||
Deferred tax assets, net | 8,120 | 7,454 | 8.9 | % | 5,288 | 53.6 | % | |||||||||||||||||||||||||
Servicing assets | 6,400 | 6,166 | 3.8 | % | 6,798 | (5.9) | % | |||||||||||||||||||||||||
Operating lease assets | 7,616 | 7,329 | 3.9 | % | 8,991 | (15.3) | % | |||||||||||||||||||||||||
Accrued interest receivable | 9,334 | 11,246 | (17.0) | % | 5,136 | 81.7 | % | |||||||||||||||||||||||||
Other assets | 3,815 | 4,314 | (11.6) | % | 5,636 | (32.3) | % | |||||||||||||||||||||||||
Total assets | $ | 1,922,853 | $ | 2,021,187 | (4.9) | % | $ | 1,746,328 | 10.1 | % | ||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||||||||
Noninterest-bearing demand | $ | 538,009 | $ | 576,086 | (6.6) | % | $ | 360,039 | 49.4 | % | ||||||||||||||||||||||
Savings, NOW and money market accounts | 408,826 | 407,790 | 0.3 | % | 362,179 | 12.9 | % | |||||||||||||||||||||||||
Time deposits of $250,000 or less | 379,333 | 406,023 | (6.6) | % | 467,363 | (18.8) | % | |||||||||||||||||||||||||
Time deposits of more than $250,000 | 268,683 | 257,208 | 4.5 | % | 289,726 | (7.3) | % | |||||||||||||||||||||||||
Total deposits | 1,594,851 | 1,647,107 | (3.2) | % | 1,479,307 | 7.8 | % | |||||||||||||||||||||||||
Federal Home Loan Bank advances | 80,000 | 130,000 | (38.5) | % | 20,000 | 300.0 | % | |||||||||||||||||||||||||
Operating lease liabilities | 8,455 | 8,204 | 3.1 | % | 9,990 | (15.4) | % | |||||||||||||||||||||||||
Accrued interest payable and other liabilities | 5,759 | 6,537 | (11.9) | % | 10,197 | (43.5) | % | |||||||||||||||||||||||||
Total liabilities | 1,689,065 | 1,791,848 | (5.7) | % | 1,519,494 | 11.2 | % | |||||||||||||||||||||||||
Commitments and contingent liabilities | ||||||||||||||||||||||||||||||||
Shareholders’ equity | ||||||||||||||||||||||||||||||||
Common stock, no par value | 164,140 | 163,960 | 0.1 | % | 169,221 | (3.0) | % | |||||||||||||||||||||||||
Retained earnings | 67,692 | 63,443 | 6.7 | % | 57,670 | 17.4 | % | |||||||||||||||||||||||||
Accumulated other comprehensive income (loss), net | 1,956 | 1,936 | 1.0 | % | (57) | NM | ||||||||||||||||||||||||||
Total shareholders’ equity | 233,788 | 229,339 | 1.9 | % | 226,834 | 3.1 | % | |||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 1,922,853 | $ | 2,021,187 | (4.9) | % | $ | 1,746,328 | 10.1 | % | ||||||||||||||||||||||
Outstanding common shares | 15,385,878 | 15,379,538 | 15,707,016 | |||||||||||||||||||||||||||||
Book value per common share (1) | $ | 15.19 | $ | 14.91 | $ | 14.44 | ||||||||||||||||||||||||||
Total loan to total deposit ratio | 99.42 | % | 97.73 | % | 98.21 | % | ||||||||||||||||||||||||||
Noninterest-bearing deposits to total deposits | 33.73 | % | 34.98 | % | 24.34 | % | ||||||||||||||||||||||||||
(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.
12
PCB Bancorp and Subsidiary
Consolidated Statements of Income (Unaudited)
($ in thousands, except share and per share data)
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
| 12/31/2020 | 9/30/2020 | % Change | 12/31/2019 | % Change | 12/31/2020 | 12/31/2019 | % Change | |||||||||||||||||||||||||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Interest and fees on loans | $ | 18,929 | $ | 18,938 | — | % | $ | 20,888 | (9.4) | % | $ | 76,546 | $ | 85,667 | (10.6) | % | ||||||||||||||||||||||||||||||||||
Interest on investment securities | 429 | 515 | (16.7) | % | 823 | (47.9) | % | 2,127 | 3,956 | (46.2) | % | |||||||||||||||||||||||||||||||||||||||
Interest and dividend on other interest-earning assets | 150 | 167 | (10.2) | % | 565 | (73.5) | % | 1,088 | 3,322 | (67.2) | % | |||||||||||||||||||||||||||||||||||||||
Total interest income | 19,508 | 19,620 | (0.6) | % | 22,276 | (12.4) | % | 79,761 | 92,945 | (14.2) | % | |||||||||||||||||||||||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Interest on deposits | 1,958 | 2,599 | (24.7) | % | 5,514 | (64.5) | % | 12,958 | 23,439 | (44.7) | % | |||||||||||||||||||||||||||||||||||||||
Interest on other borrowings | 143 | 168 | (14.9) | % | 102 | 40.2 | % | 614 | 472 | 30.1 | % | |||||||||||||||||||||||||||||||||||||||
Total interest expense | 2,101 | 2,767 | (24.1) | % | 5,616 | (62.6) | % | 13,572 | 23,911 | (43.2) | % | |||||||||||||||||||||||||||||||||||||||
Net interest income | 17,407 | 16,853 | 3.3 | % | 16,660 | 4.5 | % | 66,189 | 69,034 | (4.1) | % | |||||||||||||||||||||||||||||||||||||||
| Provision for loan losses | 2,142 | 4,326 | (50.5) | % | 4,030 | (46.8) | % | 13,219 | 4,237 | 212.0 | % | |||||||||||||||||||||||||||||||||||||||
| Net interest income after provision for loan losses | 15,265 | 12,527 | 21.9 | % | 12,630 | 20.9 | % | 52,970 | 64,797 | (18.3) | % | |||||||||||||||||||||||||||||||||||||||
Noninterest income: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Gain on sale of loans | 3,483 | 821 | 324.2 | % | 1,445 | 141.0 | % | 6,527 | 5,996 | 8.9 | % | |||||||||||||||||||||||||||||||||||||||
Gain on sale of securities available-for-sale | — | — | — | % | 786 | (100.0) | % | — | 786 | (100.0) | % | |||||||||||||||||||||||||||||||||||||||
Service charges and fees on deposits | 311 | 280 | 11.1 | % | 407 | (23.6) | % | 1,256 | 1,544 | (18.7) | % | |||||||||||||||||||||||||||||||||||||||
Loan servicing income | 398 | 856 | (53.5) | % | 652 | (39.0) | % | 2,710 | 2,309 | 17.4 | % | |||||||||||||||||||||||||||||||||||||||
Other income | 332 | 315 | 5.4 | % | 314 | 5.7 | % | 1,247 | 1,234 | 1.1 | % | |||||||||||||||||||||||||||||||||||||||
Total noninterest income | 4,524 | 2,272 | 99.1 | % | 3,604 | 25.5 | % | 11,740 | 11,869 | (1.1) | % | |||||||||||||||||||||||||||||||||||||||
Noninterest expense: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Salaries and employee benefits | 7,397 | 6,438 | 14.9 | % | 6,016 | 23.0 | % | 26,147 | 26,139 | — | % | |||||||||||||||||||||||||||||||||||||||
Occupancy and equipment | 1,424 | 1,416 | 0.6 | % | 1,417 | 0.5 | % | 5,620 | 5,545 | 1.4 | % | |||||||||||||||||||||||||||||||||||||||
Professional fees | 625 | 325 | 92.3 | % | 622 | 0.5 | % | 2,256 | 2,730 | (17.4) | % | |||||||||||||||||||||||||||||||||||||||
Marketing and business promotion | 440 | 193 | 128.0 | % | 501 | (12.2) | % | 1,360 | 1,550 | (12.3) | % | |||||||||||||||||||||||||||||||||||||||
Data processing | 375 | 373 | 0.5 | % | 361 | 3.9 | % | 1,472 | 1,365 | 7.8 | % | |||||||||||||||||||||||||||||||||||||||
Director fees and expenses | 146 | 125 | 16.8 | % | 189 | (22.8) | % | 599 | 751 | (20.2) | % | |||||||||||||||||||||||||||||||||||||||
Regulatory assessments | 250 | 267 | (6.4) | % | 126 | 98.4 | % | 978 | 551 | 77.5 | % | |||||||||||||||||||||||||||||||||||||||
Other expenses | 893 | 749 | 19.2 | % | 1,033 | (13.6) | % | 3,267 | 3,684 | (11.3) | % | |||||||||||||||||||||||||||||||||||||||
Total noninterest expense | 11,550 | 9,886 | 16.8 | % | 10,265 | 12.5 | % | 41,699 | 42,315 | (1.5) | % | |||||||||||||||||||||||||||||||||||||||
Income before income taxes | 8,239 | 4,913 | 67.7 | % | 5,969 | 38.0 | % | 23,011 | 34,351 | (33.0) | % | |||||||||||||||||||||||||||||||||||||||
Income tax expense | 2,452 | 1,464 | 67.5 | % | 1,811 | 35.4 | % | 6,836 | 10,243 | (33.3) | % | |||||||||||||||||||||||||||||||||||||||
Net income | $ | 5,787 | $ | 3,449 | 67.8 | % | $ | 4,158 | 39.2 | % | $ | 16,175 | $ | 24,108 | (32.9) | % | ||||||||||||||||||||||||||||||||||
Earnings per common share | ||||||||||||||||||||||||||||||||||||||||||||||||||
Basic | $ | 0.38 | $ | 0.22 | $ | 0.26 | $ | 1.05 | $ | 1.52 | ||||||||||||||||||||||||||||||||||||||||
Diluted | $ | 0.38 | $ | 0.22 | $ | 0.26 | $ | 1.04 | $ | 1.49 | ||||||||||||||||||||||||||||||||||||||||
Average shares | ||||||||||||||||||||||||||||||||||||||||||||||||||
Basic | 15,350,742 | 15,343,888 | 15,665,010 | 15,384,231 | 15,873,383 | |||||||||||||||||||||||||||||||||||||||||||||
Diluted | 15,392,355 | 15,377,531 | 15,948,793 | 15,448,892 | 16,172,282 | |||||||||||||||||||||||||||||||||||||||||||||
Dividend paid per common share | $ | 0.10 | $ | 0.10 | $ | 0.08 | $ | 0.40 | $ | 0.25 | ||||||||||||||||||||||||||||||||||||||||
Return on average assets (1) | 1.19 | % | 0.69 | % | 0.96 | % | 0.84 | % | 1.40 | % | ||||||||||||||||||||||||||||||||||||||||
Return on average shareholders’ equity (1), (2) | 9.92 | % | 5.98 | % | 7.25 | % | 7.08 | % | 10.88 | % | ||||||||||||||||||||||||||||||||||||||||
Efficiency ratio (3) | 52.67 | % | 51.69 | % | 50.66 | % | 53.51 | % | 52.30 | % | ||||||||||||||||||||||||||||||||||||||||
(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.
13
PCB Bancorp and Subsidiary
Average Balance, Average Yield, and Average Rate (Unaudited)
($ in thousands)
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 12/31/2020 | 9/30/2020 | 12/31/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average Balance | Interest Income/ Expense | Avg. Yield/Rate | Average Balance | Interest Income/ Expense | Avg. Yield/Rate | Average Balance | Interest Income/ Expense | Avg. Yield/Rate | ||||||||||||||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total loans (1) | $ | 1,592,705 | $ | 18,929 | 4.73 | % | $ | 1,564,704 | $ | 18,938 | 4.81 | % | $ | 1,415,781 | $ | 20,888 | 5.85 | % | ||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities | 76,787 | 275 | 1.42 | % | 75,832 | 339 | 1.78 | % | 75,121 | 452 | 2.39 | % | ||||||||||||||||||||||||||||||||||||||||||||
Collateralized mortgage obligation | 28,743 | 60 | 0.83 | % | 33,393 | 82 | 0.98 | % | 47,032 | 216 | 1.82 | % | ||||||||||||||||||||||||||||||||||||||||||||
SBA loan pool securities | 12,432 | 57 | 1.82 | % | 12,996 | 57 | 1.74 | % | 18,572 | 116 | 2.48 | % | ||||||||||||||||||||||||||||||||||||||||||||
Municipal bonds (2) | 5,823 | 37 | 2.53 | % | 5,991 | 37 | 2.46 | % | 5,729 | 39 | 2.70 | % | ||||||||||||||||||||||||||||||||||||||||||||
Other interest-earning assets | 187,592 | 150 | 0.32 | % | 260,426 | 167 | 0.26 | % | 108,919 | 565 | 2.06 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total interest-earning assets | 1,904,082 | 19,508 | 4.08 | % | 1,953,342 | 19,620 | 4.00 | % | 1,671,154 | 22,276 | 5.29 | % | ||||||||||||||||||||||||||||||||||||||||||||
Noninterest-earning assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | 18,188 | 17,094 | 18,507 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses | (25,699) | (21,268) | (13,232) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Other assets | 42,755 | 42,446 | 33,941 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total noninterest-earning assets | 35,244 | 38,272 | 39,216 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 1,939,326 | $ | 1,991,614 | $ | 1,710,370 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOW and money market accounts | $ | 383,507 | 327 | 0.34 | % | $ | 365,093 | 391 | 0.43 | % | $ | 349,282 | 1,259 | 1.43 | % | |||||||||||||||||||||||||||||||||||||||||
Savings | 11,037 | 1 | 0.04 | % | 9,517 | 2 | 0.08 | % | 7,227 | 4 | 0.22 | % | ||||||||||||||||||||||||||||||||||||||||||||
Time deposits | 655,825 | 1,630 | 0.99 | % | 689,352 | 2,206 | 1.27 | % | 741,448 | 4,251 | 2.27 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total interest-bearing deposits | 1,050,369 | 1,958 | 0.74 | % | 1,063,962 | 2,599 | 0.97 | % | 1,097,957 | 5,514 | 1.99 | % | ||||||||||||||||||||||||||||||||||||||||||||
Federal Home Loan Bank advances | 91,467 | 143 | 0.62 | % | 130,000 | 168 | 0.51 | % | 21,141 | 102 | 1.91 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 1,141,836 | 2,101 | 0.73 | % | 1,193,962 | 2,767 | 0.92 | % | 1,119,098 | 5,616 | 1.99 | % | ||||||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing demand | 549,922 | 552,255 | 341,683 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Other liabilities | 15,412 | 15,934 | 22,117 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total noninterest-bearing liabilities | 565,334 | 568,189 | 363,800 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities | 1,707,170 | 1,762,151 | 1,482,898 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total shareholders’ equity | 232,156 | 229,463 | 227,472 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 1,939,326 | $ | 1,991,614 | $ | 1,710,370 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 17,407 | $ | 16,853 | $ | 16,660 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest spread (3) | 3.35 | % | 3.08 | % | 3.30 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest margin (4) | 3.64 | % | 3.43 | % | 3.96 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total deposits | $ | 1,600,291 | $ | 1,958 | 0.49 | % | $ | 1,616,217 | $ | 2,599 | 0.64 | % | $ | 1,439,640 | $ | 5,514 | 1.52 | % | ||||||||||||||||||||||||||||||||||||||
Total funding (5) | $ | 1,691,758 | $ | 2,101 | 0.49 | % | $ | 1,746,217 | $ | 2,767 | 0.63 | % | $ | 1,460,781 | $ | 5,616 | 1.53 | % | ||||||||||||||||||||||||||||||||||||||
(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.
14
PCB Bancorp and Subsidiary
Average Balance, Average Yield, and Average Rate, Continued (Unaudited)
($ in thousands)
| Year Ended | ||||||||||||||||||||||||||||||||||||||
| 12/31/2020 | 12/31/2019 | |||||||||||||||||||||||||||||||||||||
| Average Balance | Interest Income/ Expense | Avg. Yield/Rate | Average Balance | Interest Income/ Expense | Avg. Yield/Rate | |||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||||||||||||
Total loans (1) | $ | 1,541,740 | $ | 76,546 | 4.96 | % | $ | 1,383,562 | $ | 85,667 | 6.19 | % | ||||||||||||||||||||||||||
Mortgage-backed securities | 68,496 | 1,260 | 1.84 | % | 82,848 | 2,081 | 2.51 | % | ||||||||||||||||||||||||||||||
Collateralized mortgage obligation | 35,299 | 462 | 1.31 | % | 51,441 | 1,185 | 2.30 | % | ||||||||||||||||||||||||||||||
SBA loan pool securities | 13,120 | 255 | 1.94 | % | 20,681 | 536 | 2.59 | % | ||||||||||||||||||||||||||||||
Municipal bonds (2) | 5,811 | 150 | 2.58 | % | 5,833 | 154 | 2.64 | % | ||||||||||||||||||||||||||||||
Other interest-earning assets | 213,124 | 1,088 | 0.51 | % | 134,870 | 3,322 | 2.46 | % | ||||||||||||||||||||||||||||||
Total interest-earning assets | 1,877,590 | 79,761 | 4.25 | % | 1,679,235 | 92,945 | 5.53 | % | ||||||||||||||||||||||||||||||
Noninterest-earning assets: | ||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | 17,542 | 18,614 | ||||||||||||||||||||||||||||||||||||
Allowance for loan losses | (19,693) | (13,197) | ||||||||||||||||||||||||||||||||||||
Other assets | 39,385 | 35,010 | ||||||||||||||||||||||||||||||||||||
Total noninterest-earning assets | 37,234 | 40,427 | ||||||||||||||||||||||||||||||||||||
Total assets | $ | 1,914,824 | $ | 1,719,662 | ||||||||||||||||||||||||||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||||||||||||||
NOW and money market accounts | $ | 371,315 | 2,385 | 0.64 | % | $ | 329,562 | 5,162 | 1.57 | % | ||||||||||||||||||||||||||||
Savings | 8,543 | 9 | 0.11 | % | 7,965 | 32 | 0.40 | % | ||||||||||||||||||||||||||||||
Time deposits | 708,306 | 10,564 | 1.49 | % | 783,353 | 18,245 | 2.33 | % | ||||||||||||||||||||||||||||||
Total interest-bearing deposits | 1,088,164 | 12,958 | 1.19 | % | 1,120,880 | 23,439 | 2.09 | % | ||||||||||||||||||||||||||||||
Federal Home Loan Bank advances | 94,319 | 614 | 0.65 | % | 25,388 | 472 | 1.86 | % | ||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 1,182,483 | 13,572 | 1.15 | % | 1,146,268 | 23,911 | 2.09 | % | ||||||||||||||||||||||||||||||
Noninterest-bearing liabilities | ||||||||||||||||||||||||||||||||||||||
Noninterest-bearing demand | 486,820 | 329,731 | ||||||||||||||||||||||||||||||||||||
Other liabilities | 16,968 | 22,087 | ||||||||||||||||||||||||||||||||||||
Total noninterest-bearing liabilities | 503,788 | 351,818 | ||||||||||||||||||||||||||||||||||||
Total liabilities | 1,686,271 | 1,498,086 | ||||||||||||||||||||||||||||||||||||
Total shareholders’ equity | 228,553 | 221,576 | ||||||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 1,914,824 | $ | 1,719,662 | ||||||||||||||||||||||||||||||||||
Net interest income | $ | 66,189 | $ | 69,034 | ||||||||||||||||||||||||||||||||||
Net interest spread (3) | 3.10 | % | 3.44 | % | ||||||||||||||||||||||||||||||||||
Net interest margin (4) | 3.53 | % | 4.11 | % | ||||||||||||||||||||||||||||||||||
Total deposits | $ | 1,574,984 | $ | 12,958 | 0.82 | % | $ | 1,450,611 | $ | 23,439 | 1.62 | % | ||||||||||||||||||||||||||
Total funding (5) | $ | 1,669,303 | $ | 13,572 | 0.81 | % | $ | 1,475,999 | $ | 23,911 | 1.62 | % | ||||||||||||||||||||||||||
(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.
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