PCB Bancorp Reports Earnings of $8.7 million for Q4 2022 and $35.0 million for 2022
LOS ANGELES, January 26, 2023--(BUSINESS WIRE)--PCB Bancorp (the "Company") (NASDAQ: PCB), the holding company of PCB Bank (the "Bank"), today reported net income of $8.7 million, or $0.58 per diluted common share, for the fourth quarter of 2022, compared with $7.0 million, or $0.46 per diluted common share, for the previous quarter and $10.7 million, or $0.70 per diluted common share, for the year-ago quarter. For 2022, net income was $35.0 million, or $2.31 per diluted common share, compared with $40.1 million, or $2.62 per diluted common share, for the previous year.
Q4 2022 and Full Year Highlights
Net income totaled $8.7 million, or $0.58 per diluted common share, for the current quarter and $35.0 million, or $2.31 per diluted common share, for the current year;
The Company recorded a provision (reversal) for loan losses of $1.1 million for the current quarter compared with $3.8 million for the previous quarter and $(1.5) million for the year-ago quarter. For the current year, provision (reversal) for loan losses was $3.6 million compared with $(4.6) million for the previous year.
Allowance for loan losses ("Allowance") to loans held-for-investment(1) ratio was 1.22% at December 31, 2022 compared with 1.21% at September 30, 2022 and 1.29% at December 31, 2021. Adjusted Allowance to loans held-for-investment ratio(2) was 1.22% at December 31, 2022 compared with 1.21% at September 30, 2022 and 1.34% at December 31, 2021.
Net interest income was $24.3 million for the current quarter compared with $24.0 million for the previous quarter and $20.1 million for the year-ago quarter. Net interest margin was 4.15% for the current quarter compared with 4.25% for the previous quarter and 3.87% for the year-ago quarter. For the current year, net interest income and net interest margin were $89.6 million and 4.08%, respectively, compared with $77.1 million and 3.83%, respectively, for the previous year.
Gain on sale of loans was $759 thousand for the current quarter compared with $1.4 million for the previous quarter and $3.4 million for the year-ago quarter. For the current year, gain on sale of loans was $8.0 million compared with $12.9 million for the previous year.
Total assets were $2.42 billion at December 31, 2022, an increase of $93.0 million, or 4.0%, from $2.33 billion at September 30, 2022 and an increase of $270.3 million, or 12.6%, from $2.15 billion at December 31, 2021.
Loans held-for-investment were $2.05 billion at December 31, 2022, an increase of $86.8 million, or 4.4%, from $1.96 billion at September 30, 2022 and an increase of $313.9 million, or 18.1%, from $1.73 billion at December 31, 2021;
Total deposits were $2.05 billion at December 31, 2022, an increase of $67.9 million, or 3.4%, from $1.98 billion at September 30, 2022 and an increase of $178.8 million, or 9.6%, from $1.87 billion at December 31, 2021;
The Company opened 1 new full-service branch in Carrollton, Texas; and
As of December 31, 2022, the Company repurchased and retired 362,557 shares of common stock for an aggregate cost of $6.7 million under the repurchase program announced on July 28, 2022. On January 26, 2023, the Company announced the amendment to the repurchase program, which extended the program expiration from February 1, 2023 to February 1, 2024.
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(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. |
"We are pleased to announce another solid financial performance for the fourth quarter of 2022 to close out the year," stated Henry Kim, President and Chief Executive Officer. "For the fourth quarter, we achieve a well-balance loan held-for-investment portfolio growth of $86.8 million, or 17.6% annualized, that contributed to further diversification, sound deposit balance growth of $67.9 million, or 13.6% annualized, in spite of the ongoing challenges in the deposit market due to competition and rising market interest rate environment, and a record net interest income of $24.3 million."
"During the 2022 fourth quarter, we successfully executed several key strategic plans of expanding our branch network in Texas by opening a full service branch in Carrollton to complement our Dallas branch that opened in September 2022, maintaining our exceptional credit quality by being proactive with our borrowers, and actively continuing our stock repurchase program."
"As we look ahead of 2023 and beyond, our strong balance sheet combined with our exceptionally robust capital position will provide us with the capacity to maneuver through potential uncertain economic environment ahead. We remain entirely committed to helping for the success of our customers and increase the shareholder value through disciplined growth."
Financial Highlights (Unaudited)
($ in thousands, except per share data) | Three Months Ended | Year Ended | |||||||||||||||||||||||||||
12/31/2022 | 9/30/2022 | % Change | 12/31/2021 | % Change | 12/31/2022 | 12/31/2021 | % Change | ||||||||||||||||||||||
Net income | $ | 8,702 | $ | 6,953 | 25.2 | % | $ | 10,676 | (18.5 | ) % | $ | 34,987 | $ | 40,103 | (12.8 | ) % | |||||||||||||
Diluted earnings per common share | $ | 0.58 | $ | 0.46 | 26.1 | % | $ | 0.70 | (17.1 | ) % | $ | 2.31 | $ | 2.62 | (11.8 | ) % | |||||||||||||
Net interest income | $ | 24,265 | $ | 24,023 | 1.0 | % | $ | 20,095 | 20.8 | % | $ | 89,632 | $ | 77,137 | 16.2 | % | |||||||||||||
Provision (reversal) for loan losses | 1,149 | 3,753 | (69.4 | ) % | (1,462 | ) | NM | 3,602 | (4,596 | ) | NM | ||||||||||||||||||
Noninterest income | 2,389 | 3,176 | (24.8 | ) % | 4,838 | (50.6 | ) % | 14,499 | 18,434 | (21.3 | ) % | ||||||||||||||||||
Noninterest expense | 13,115 | 13,695 | (4.2 | ) % | 11,168 | 17.4 | % | 51,126 | 43,208 | 18.3 | % | ||||||||||||||||||
Return on average assets (1) | 1.44 | % | 1.19 | % | 2.01 | % | 1.54 | % | 1.96 | % | |||||||||||||||||||
Return on average shareholders’ equity (1) | 10.31 | % | 8.16 | % | 16.84 | % | 11.42 | % | 16.52 | % | |||||||||||||||||||
Return on average tangible common equity ("TCE") (2) | 12.99 | % | 10.25 | % | 16.84 | % | 13.23 | % | 16.52 | % | |||||||||||||||||||
Net interest margin (1) | 4.15 | % | 4.25 | % | 3.87 | % | 4.08 | % | 3.83 | % | |||||||||||||||||||
Efficiency ratio (3) | 49.20 | % | 50.35 | % | 44.79 | % | 49.10 | % | 45.21 | % | |||||||||||||||||||
($ in thousands, except per share data) | 12/31/2022 | 9/30/2022 | % Change | 12/31/2021 | % Change | |||||||||||||
Total assets | $ | 2,420,036 | $ | 2,327,051 | 4.0 | % | $ | 2,149,735 | 12.6 | % | ||||||||
Net loans held-for-investment | 2,021,121 | 1,935,476 | 4.4 | % | 1,709,824 | 18.2 | % | |||||||||||
Total deposits | 2,045,983 | 1,978,098 | 3.4 | % | 1,867,134 | 9.6 | % | |||||||||||
Book value per common share (4) | $ | 22.94 | $ | 22.40 | $ | 17.24 | ||||||||||||
TCE per common share (2) | $ | 18.21 | $ | 17.75 | $ | 17.24 | ||||||||||||
Tier 1 leverage ratio (consolidated) | 14.33 | % | 14.74 | % | 12.11 | % | ||||||||||||
Total shareholders’ equity to total assets | 13.86 | % | 14.30 | % | 11.92 | % | ||||||||||||
TCE to total assets (2), (5) | 11.00 | % | 11.33 | % | 11.92 | % | ||||||||||||
(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 | Year Ended | ||||||||||||||||||||||||||||
($ in thousands) | 12/31/2022 | 9/30/2022 | % Change | 12/31/2021 | % Change | 12/31/2022 | 12/31/2021 | % Change | |||||||||||||||||||||
Interest income/expense on | |||||||||||||||||||||||||||||
Loans | $ | 28,786 | $ | 24,835 | 15.9 | % | $ | 20,363 | 41.4 | % | $ | 95,054 | $ | 79,155 | 20.1 | % | |||||||||||||
Investment securities | 957 | 806 | 18.7 | % | 441 | 117.0 | % | 2,907 | 1,613 | 80.2 | % | ||||||||||||||||||
Other interest-earning assets | 1,833 | 1,194 | 53.5 | % | 191 | 859.7 | % | 3,790 | 704 | 438.4 | % | ||||||||||||||||||
Total interest-earning assets | 31,576 | 26,835 | 17.7 | % | 20,995 | 50.4 | % | 101,751 | 81,472 | 24.9 | % | ||||||||||||||||||
Interest-bearing deposits | 7,295 | 2,798 | 160.7 | % | 847 | 761.3 | % | 11,984 | 4,043 | 196.4 | % | ||||||||||||||||||
Borrowings | 16 | 14 | 14.3 | % | 53 | (69.8 | ) % | 135 | 292 | (53.8 | ) % | ||||||||||||||||||
Total interest-bearing liabilities | 7,311 | 2,812 | 160.0 | % | 900 | 712.3 | % | 12,119 | 4,335 | 179.6 | % | ||||||||||||||||||
Net interest income | $ | 24,265 | $ | 24,023 | 1.0 | % | $ | 20,095 | 20.8 | % | $ | 89,632 | $ | 77,137 | 16.2 | % | |||||||||||||
Average balance of | |||||||||||||||||||||||||||||
Loans | $ | 2,004,220 | $ | 1,905,366 | 5.2 | % | $ | 1,758,421 | 14.0 | % | $ | 1,872,557 | $ | 1,702,073 | 10.0 | % | |||||||||||||
Investment securities | 134,066 | 137,363 | (2.4 | ) % | 128,650 | 4.2 | % | 132,538 | 130,437 | 1.6 | % | ||||||||||||||||||
Other interest-earning assets | 182,018 | 200,367 | (9.2 | ) % | 175,468 | 3.7 | % | 194,205 | 179,353 | 8.3 | % | ||||||||||||||||||
Total interest-earning assets | $ | 2,320,304 | $ | 2,243,096 | 3.4 | % | $ | 2,062,539 | 12.5 | % | $ | 2,199,300 | $ | 2,011,863 | 9.3 | ... | |||||||||||||