PCB Bancorp (the "Company") (NASDAQ:PCB), the holding company of PCB Bank (the "Bank"), today reported net income of $7.0 million, or $0.46 per diluted common share, for the third quarter of 2022, compared with $9.1 million, or $0.60 per diluted common share, for the previous quarter and $11.0 million, or $0.73 per diluted common share, for the year-ago quarter.

Q3 2022 Highlights

Net income totaled $7.0 million, or $0.46 per diluted common share, for the current quarter;
- The Company recorded a provision (reversal) for loan losses of $3.8 million for the current quarter compared with $(109) thousand for the previous quarter and $(1.1) million for the year-ago quarter.
- Allowance for loan losses ("Allowance") to loans held-for-investment⁽¹⁾ ratio was 1.21% at September 30, 2022 compared with 1.15% at June 30, 2022, 1.29% at December 31, 2021 and 1.39% at September 30, 2021. Adjusted Allowance to loans held-for-investment ratio⁽²⁾ was 1.21% at September 30, 2022 compared with 1.15% at June 30, 2022, 1.34% at December 31, 2021 and 1.48% at September 30, 2021.
- Net interest income was $24.0 million for the current quarter compared with $21.4 million for the previous quarter and $20.2 million for the year-ago quarter. Net interest margin was 4.25% for the current quarter compared with 4.01% for the previous quarter and 3.93% for the year-ago quarter.
- Gain on sale of loans was $1.4 million for the current quarter compared with $2.0 million for the previous quarter and $4.3 million for the year-ago quarter.

Total assets were $2.33 billion at September 30, 2022, a decrease of $17.5 million, or 0.7%, from $2.34 billion at June 30, 2022, but an increase of $177.3 million, or 8.2%, from $2.15 billion at December 31, 2021 and an increase of $222.4 million, or 10.6%, from $2.10 billion at September 30, 2021;
Loans held-for-investment were $1.96 billion at September 30, 2022, an increase of $126.2 million, or 6.9%, from $1.83 billion at June 30, 2022, an increase of $227.0 million, or 13.1%, from $1.73 billion at December 31, 2021, and an increase of $251.4 million, or 14.7%, from $1.71 billion at September 30, 2021;
Total deposits were $1.98 billion at September 30, 2022, a decrease of $19.5 million, or 1.0%, from $2.00 billion at June 30, 2022, but an increase of $111.0 million, or 5.9%, from $1.87 billion at December 31, 2021 and an increase of $145.4 million, or 7.9%, from $1.83 billion at September 30, 2021;
The Company announced a repurchase program on July 28, 2022 for the repurchase up to 5% of outstanding common stock. As of September 30, 2022, the Company repurchased and retired 119,941 shares of common stock for an aggregate cost of $2.2 million; and
The Bank changed its name from Pacific City Bank to PCB Bank and opened 2 new full-service branches in Dallas, Texas and Palisades Park, New Jersey.

"We are pleased to announce our continued solid financial performance for the third quarter of 2022," stated Henry Kim, President and Chief Executive Officer. "We funded $172 million in loans held-for-investment during the third quarter, resulting in a loan balance increase of 6.9% quarter-over-quarter or 13.1% year-to-date. Compared with the second quarter of 2022, our net interest margin expanded 24 basis points to 4.25% and our net interest income increased 12.5% to $24.0 million for the third quarter. In keeping with our expansion strategic initiative to increase the value of our franchise, we successfully opened two new full-service branches in Dallas, Texas, and Palisades Park, New Jersey during the third quarter of 2022."

"As we look ahead into the fourth quarter of this year, we will continue to remain opportunistic with our strong capital position and invest in our long-term franchise value by strategically expanding our footprint. We are on schedule to open one more full-service branch in Carrollton, Texas during the fourth quarter of this year," concluded Kim.

-------------------------------------------------------------------------------------

(1)		Loans held-for-investment are presented net of deferred fees and costs in this press release.
(2)		Adjusted Allowance to loans held-for-investment ratio is a non-GAAP measure, which excludes U.S. Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans from loans held-for-investment. See "Non-GAAP Measures" for reconciliation of this measure to its most comparable GAAP measure.

Financial Highlights (Unaudited)

($ in thousands, except per share data)	Three Months Ended													Nine Months Ended
($ in thousands, except per share data)	9/30/2022			6/30/2022			% Change		9/30/2021			% Change		9/30/2022			9/30/2021			% Change
Net income	$	6,953		$	9,092		(23.5	)%	$	11,023		(36.9	)%	$	26,285		$	29,427		(10.7	)%
Diluted earnings per common share	$	0.46		$	0.60		(23.3	)%	$	0.73		(37.0	)%	$	1.73		$	1.92		(9.9	)%

Net interest income	$	24,023		$	21,351		12.5	%	$	20,227		18.8	%	$	65,367		$	57,042		14.6	%
Provision (reversal) for loan losses		3,753			(109	)	NM			(1,053	)	NM			2,453			(3,134	)	NM
Noninterest income		3,176			3,648		(12.9	)%		5,588		(43.2	)%		12,110			13,596		(10.9	)%
Noninterest expense		13,695			12,245		11.8	%		11,232		21.9	%		38,011			32,040		18.6	%

Return on average assets ⁽¹⁾		1.19	%		1.65	%				2.11	%				1.58	%		1.94	%
Return on average shareholders' equity ⁽¹⁾		8.16	%		12.48	%				17.98	%				11.84	%		16.40	%
Return on average tangible common equity ("TCE") ⁽²⁾		10.25	%		13.85	%				17.98	%				13.31	%		16.40	%
Net interest margin ⁽¹⁾		4.25	%		4.01	%				3.93	%				4.05	%		3.82	%
Efficiency ratio ⁽³⁾		50.35	%		48.98	%				43.51	%				49.06	%		45.36	%

($ in thousands, except per share data)	9/30/2022			6/30/2022			% Change		12/31/2021			% Change		9/30/2021			% Change
Total assets	$	2,327,051		$	2,344,560		(0.7	)%	$	2,149,735		8.2	%	$	2,104,699		10.6	%
Net loans held-for-investment		1,935,476			1,811,939		6.8	%		1,709,824		13.2	%		1,684,071		14.9	%
Total deposits		1,978,098			1,997,607		(1.0	)%		1,867,134		5.9	%		1,832,666		7.9	%
Book value per common share ⁽⁴⁾	$	22.40		$	22.36				$	17.24				$	16.68
TCE per common share⁽²⁾	$	17.75		$	17.73				$	17.24				$	16.68
Tier 1 leverage ratio (consolidated)		14.74	%		15.37	%				12.11	%				11.91	%
Total shareholders' equity to total assets		14.30	%		14.26	%				11.92	%				11.76	%
TCE to total assets ^{(2), (5)}		11.33	%		11.31	%				11.92	%				11.76	%

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

Result of Operations (Unaudited)

Net Interest Income and Net Interest Margin

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

	Three Months Ended													Nine Months Ended
($ in thousands)	9/30/2022			6/30/2022			% Change		9/30/2021			% Change		9/30/2022			9/30/2021			% Change
Interest income/expense on
Loans	$	24,835		$	21,243		16.9	%	$	20,537		20.9	%	$	66,268		$	58,792		12.7	%
Investment securities		806			668		20.7	%		437		84.4	%		1,950			1,172		66.4	%
Other interest-earning assets		1,194			535		123.2	%		194		515.5	%		1,957			513		281.5	%
Total interest-earning assets		26,835			22,446		19.6	%		21,168		26.8	%		70,175			60,477		16.0	%
Interest-bearing deposits		2,798			1,041		168.8	%		885		216.2	%		4,689			3,196		46.7	%
Borrowings		14			54		(74.1	)%		56		(75.0	)%		119			239		(50.2	)%
Total interest-bearing liabilities		2,812			1,095		156.8	%		941		198.8	%		4,808			3,435		40.0	%
Net interest income	$	24,023		$	21,351		12.5	%	$	20,227		18.8	%	$	65,367		$	57,042		14.6	%
Average balance of
Loans	$	1,905,366		$	1,804,368		5.6	%	$	1,715,106		11.1	%	$	1,828,187		$	1,683,084		8.6	%
Investment securities		137,363			135,324		1.5	%		136,874		0.4	%		132,023			131,039		0.8	%
Other interest-earning assets		200,367			195,633		2.4	%		188,137		6.5	%		198,311			180,663		9.8	%
Total interest-earning assets	$	2,243,096		$	2,135,325		5.0	%	$	2,040,117		9.9	%	$	2,158,521		$	1,994,786		8.2	%
Interest-bearing deposits	$	1,137,739		$	1,001,424		13.6	%	$	1,000,332		13.7	%	$	1,058,105		$	1,026,842		3.0	%
Borrowings		2,033			11,132		(81.7	)%		18,152		(88.8	)%		7,824			37,363		(79.1	)%
Total interest-bearing liabilities	$	1,139,772		$	1,012,556		12.6	%	$	1,018,484		11.9	%	$	1,065,929		$	1,064,205		0.2	%
Total funding ⁽¹⁾	$	1,965,134		$	1,902,247		3.3	%	$	1,812,649		8.4	%	$	1,917,766		$	1,772,005		8.2	%
Annualized average yield/cost of
Loans		5.17	%		4.72	%				4.75	%				4.85	%		4.67	%

PCB Bancorp Reports Earnings of $7.0 million for Q3 2022