EX-99.1 2 pcbpr20240725earnings.htm EX-99.1

Exhibit 99.1

PCB Bancorp Reports Earnings of $6.3 million for Q2 2024

Los Angeles, California - July 25, 2024 - PCB Bancorp (the “Company”) (NASDAQ: PCB), the holding company of PCB Bank (the “Bank”), today reported net income of $6.3 million, or $0.43 per diluted common share, for the second quarter of 2024, compared with $4.7 million, or $0.33 per diluted common share, for the previous quarter and $7.5 million, or $0.52 per diluted common share, for the year-ago quarter.

Q2 2024 Highlights

•Net income totaled $6.3 million, or $0.43 per diluted common share;

•Recorded a provision for credit losses of $259 thousand for the current quarter compared with $1.1 million for the previous quarter and $197 thousand for the year-ago quarter;

•Allowance for Credit Losses (“ACL”) on loans to loans held-for-investment ratio was 1.17% at June 30, 2024 compared with 1.18% at March 31, 2024, 1.19% at December 31, 2023 and 1.17% at June 30, 2023;

•Net interest income was $21.7 million for the current quarter compared with $21.0 million for the previous quarter and $21.7 million for the year-ago quarter. Net interest margin was 3.16% for the current quarter compared with 3.10% for the previous quarter and 3.55% for the year-ago quarter;

•Gain on sale of loans was $763 thousand for the current quarter compared with $1.1 million for the previous quarter and $769 thousand for the year-ago quarter;

•Total assets were $2.85 billion at June 30, 2024, a decrease of $1.3 million, or 0.1%, from $2.85 billion at March 31, 2024, but an increase of $63.5 million, or 2.3%, from $2.79 billion at December 31, 2023 and an increase of $296.6 million, or 11.6%, from $2.56 billion at June 30, 2023;

•Loans held-for-investment were $2.45 billion at June 30, 2024, an increase of $51.1 million, or 2.1%, from $2.40 billion at March 31, 2024, an increase of $125.6 million, or 5.4% from $2.32 billion at December 31, 2023, and an increase of $326.6 million, or 15.4%, from $2.12 billion at June 30, 2023;

•Total deposits were $2.41 billion at June 30, 2024, an increase of $3.4 million, or 0.1%, from $2.40 billion at March 31, 2024, an increase of $54.6 million, or 2.3%, from $2.35 billion at December 31, 2023, and an increase of $218.0 million, or 10.0%, from $2.19 billion at June 30, 2023; and

•The Company paid the initial quarterly preferred stock dividend at an annualized dividend rate of 2% during the current quarter. Preferred stock dividend for the current quarter was $142 thousand.

“We are pleased to share our strong second quarter results led by solid loan growth and stabilization of core deposit balance which gave rise to an improvement in our net interest margin,” said Henry Kim, President and Chief Executive Officer. Our commitment to focus on relationship banking and strategic expansions, while maintaining our conservative credit culture, has resulted in continued positive results.”

“During the second quarter our loan balance increased 2.1% to $2.5 billion, deposits increased 0.1% to $2.4 billion, and we slightly reduced the brokered deposits. We continued to maintain solid ACL to loan ratio of 1.17%, and non-performing assets and classified assets to total assets ratios of 0.26% and 0.34%, respectively. Even with the challenging high interest rate environment and its effect on our funding costs, our net interest margin expanded during the quarter. We believe our funding costs are currently near the peak and our net interest margin is showing positive sign of coming out from the bottom.”

Mr. Kim added, “As we look ahead into the second half of the year, our expanding bi-coastal branch network is well positioned to deliver continued strong balance sheet growth with solid financial results and sound asset quality that is further strengthened by our robust capital levels.”

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Financial Highlights (Unaudited)

($ in thousands, except per share data)						Three Months Ended																														Six Months Ended
						6/30/2024						3/31/2024						% Change						6/30/2023						% Change						6/30/2024						6/30/2023						% Change
Net income						$	6,281					$	4,685					34.1		%				$	7,477					(16.0)		%				$	10,966					$	17,774					(38.3)		%
Net income available to common shareholders						$	6,139					$	4,685					31.0		%				$	7,477					(17.9)		%				$	10,824					$	17,774					(39.1)		%
Diluted earnings per common share						$	0.43					$	0.33					30.3		%				$	0.52					(17.3)		%				$	0.75					$	1.22					(38.5)		%
Net interest income						$	21,735					$	20,999					3.5		%				$	21,717					0.1		%				$	42,734					$	44,131					(3.2)		%
Provision (reversal) for credit losses						259						1,090						(76.2)		%				197						31.5		%				1,349						(2,581)						NM
Noninterest income						2,485						2,945						(15.6)		%				2,657						(6.5)		%				5,430						5,678						(4.4)		%
Noninterest expense						15,175						16,352						(7.2)		%				13,627						11.4		%				31,527						27,381						15.1		%
Return on average assets (1)						0.89		%				0.67		%										1.19		%										0.78		%				1.44		%
Return on average shareholders’ equity (1)						7.19		%				5.39		%										8.82		%										6.29		%				10.62		%
Return on average tangible common equity (“TCE”) (1),(2)						8.96		%				6.72		%										11.08		%										7.84		%				13.35		%
Net interest margin (1)						3.16		%				3.10		%										3.55		%										3.13		%				3.67		%
Efficiency ratio (3)						62.65		%				68.29		%										55.91		%										65.46		%				54.97		%

($ in thousands, except per share data)						6/30/2024						3/31/2024						% Change						12/31/2023						% Change						6/30/2023						% Change
Total assets						$	2,852,964					$	2,854,292					(0.1)		%				$	2,789,506					2.3		%				$	2,556,345					11.6		%
Net loans held-for-investment						2,420,327						2,369,632						2.1		%				2,295,919						5.4		%				2,097,560						15.4		%
Total deposits						2,406,254						2,402,840						0.1		%				2,351,612						2.3		%				2,188,232						10.0		%
Book value per common share (4)						$	24.80					$	24.54											$	24.46											$	23.77
TCE per common share (2)						$	19.95					$	19.69											$	19.62											$	18.94
Tier 1 leverage ratio (consolidated)						12.66		%				12.73		%										13.43		%										13.84		%
Total shareholders’ equity to total assets						12.39		%				12.26		%										12.51		%										13.32		%
TCE to total assets (2), (5)						9.97		%				9.84		%										10.03		%										10.61		%

(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.

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Result of Operations (Unaudited)

Net Interest Income and Net Interest Margin

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

						Three Months Ended																														Six Months Ended
($ in thousands)						6/30/2024						3/31/2024						% Change						6/30/2023						% Change						6/30/2024						6/30/2023						% Change
Interest income/expense on
Loans						$	40,626					$	39,251					3.5		%				$	32,960					23.3		%				$	79,877					$	64,189					24.4		%
Investment securities						1,310						1,246						5.1		%				1,136						15.3		%				2,556						2,238						14.2		%
Other interest-earning assets						3,009						3,058						(1.6)		%				2,742						9.7		%				6,067						4,947						22.6		%
Total interest-earning assets						44,945						43,555						3.2		%				36,838						22.0		%				88,500						71,374						24.0		%
Interest-bearing deposits						22,536						21,967						2.6		%				15,121						49.0		%				44,503						27,034						64.6		%
Borrowings						674						589						14.4		%				—						—		%				1,263						209						504.3		%
Total interest-bearing liabilities						23,210						22,556						2.9		%				15,121						53.5		%				45,766						27,243						68.0		%
Net interest income						$	21,735					$	20,999					3.5		%				$	21,717					0.1		%				$	42,734					$	44,131					(3.2)		%
Average balance of
Loans						$	2,414,824					$	2,370,027					1.9		%				$	2,097,489					15.1		%				$	2,392,426					$	2,085,021					14.7		%
Investment securities						141,816						140,459						1.0		%				142,136						(0.2)		%				141,137						142,107						(0.7)		%
Other interest-earning assets						213,428						217,002						(1.6)		%				213,883						(0.2)		%				215,215						200,420						7.4		%
Total interest-earning assets						$	2,770,068					$	2,727,488					1.6		%				$	2,453,508					12.9		%				$	2,748,778					$	2,427,548					13.2		%
Interest-bearing deposits						$	1,863,623					$	1,827,209					2.0		%				$	1,527,522					22.0		%				$	1,845,417					$	1,469,490					25.6		%
Borrowings						48,462						42,187						14.9		%				—						—		%				45,324						7,862						476.5		%
Total interest-bearing liabilities						$	1,912,085					$	1,869,396					2.3		%				$	1,527,522					25.2		%				$	1,890,741					$	1,477,352					28.0		%
Total funding (1)						$	2,447,593					$	2,412,207					1.5		%				$	2,155,649					13.5		%				$	2,429,900					$	2,135,039					13.8		%
Annualized average yield/cost of
Loans						6.77		%				6.66		%										6.30		%										6.71		%				6.21		%
Investment securities						3.72		%				3.57		%										3.21		%										3.64		%				3.18		%
Other interest-earning assets						5.67		%				5.67		%										5.14		%										5.67		%				4.98		%
Total interest-earning assets						6.53		%				6.42		%										6.02		%										6.47		%				5.93		%
Interest-bearing deposits						4.86		%				4.84		%										3.97		%										4.85		%				3.71		%
Borrowings						5.59		%				5.62		%										—		%										5.60		%				5.36		%
Total interest-bearing liabilities						4.88		%				4.85		%										3.97		%										4.87		%				3.72		%
Net interest margin						3.16		%				3.10		%										3.55		%										3.13		%				3.67		%
Cost of total funding (1)						3.81		%				3.76		%										2.81		%										3.79		%				2.57		%
Supplementary information
Net accretion of discount on loans						$	791					$	573					38.0		%				$	751					5.3		%				$	1,364					$	1,422					(4.1)		%
Net amortization of deferred loan fees						$	339					$	334					1.5		%				$	247					37.2		%				$	673					$	422					59.5		%

(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.

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Loans. The increase in average yield for the current quarter was primarily due to increases in overall interest rates on loans, accretion of discount on loans and prepayment fees. The increase for the current year-to-date period was primarily due to increases in overall interest rates on loans and net amortization of deferred loan fees.

The following table presents a composition of total loans by interest rate type accompanied with the weighted-average contractual rates as of the dates indicated:

						6/30/2024												3/31/2024												12/31/2023												6/30/2023
						% to Total Loans						Weighted-Average Contractual Rate						% to Total Loans						Weighted-Average Contractual Rate						% to Total Loans						Weighted-Average Contractual Rate						% to Total Loans						Weighted-Average Contractual Rate
Fixed rate loans						18.8		%				5.04		%				20.0		%				4.92		%				21.2		%				4.86		%				22.6		%				4.64		%
Hybrid rate loans						37.2		%				5.04		%				38.6		%				5.01		%				39.0		%				4.93		%				39.2		%				4.62		%
Variable rate loans						44.0		%				8.45		%				41.4		%				8.46		%				39.8		%				8.51		%				38.2		%				8.39		%

Investment Securities. The increases in average yield for the current quarter and year-to-date periods were primarily due to higher yield on newly purchased investment securities.

Other Interest-Earning Assets. The increase in average yield for the current quarter and year-to-date period compared with the same periods of 2023 were primarily due to increases in interest rate on cash held at the Federal Reserve Bank and dividends received on Federal Home Loan Bank stock.

Interest-Bearing Deposits. The increase in average cost for the current quarter and year-to-date period were primarily due to an increase in market rates.

Provision (Reversal) for Credit Losses

The following table presents a composition of provision (reversal) for credit losses for the periods indicated:

						Three Months Ended																														Six Months Ended
($ in thousands)						6/30/2024						3/31/2024						% Change						6/30/2023						% Change						6/30/2024						6/30/2023						% Change
Provision (reversal) for credit losses on loans						$	329					$	922					(64.3)		%				$	157					109.6		%				$	1,251					$	(2,260)					NM
Provision (reversal) for credit losses on off-balance sheet credit exposure						(70)						168						NM						40						NM						98						(321)						NM
Total provision (reversal) for credit losses						$	259					$	1,090					(76.2)		%				$	197					31.5		%				$	1,349					$	(2,581)					NM

The provision for credit losses on loans for the current quarter was primarily due to an increase in loans held-for-investment.

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Noninterest Income

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

						Three Months Ended																														Six Months Ended
($ in thousands)						6/30/2024						3/31/2024						% Change						6/30/2023						% Change						6/30/2024						6/30/2023						% Change
Gain on sale of loans						$	763					$	1,078					(29.2)		%				$	769					(0.8)		%				$	1,841					$	2,078					(11.4)		%
Service charges and fees on deposits						364						378						(3.7)		%				369						(1.4)		%				742						713						4.1		%
Loan servicing income						799						919						(13.1)		%				868						(7.9)		%				1,718						1,728						(0.6)		%
Bank-owned life insurance income						236						228						3.5		%				184						28.3		%				464						364						27.5		%
Other income						323						342						(5.6)		%				467						(30.8)		%				665						795						(16.4)		%
Total noninterest income						$	2,485					$	2,945					(15.6)		%				$	2,657					(6.5)		%				$	5,430					$	5,678					(4.4)		%

Gain on Sale of Loans. The following table presents information on gain on sale of loans for the periods indicated:

						Three Months Ended																														Six Months Ended
($ in thousands)						6/30/2024						3/31/2024						% Change						6/30/2023						% Change						6/30/2024						6/30/2023						% Change
Gain on sale of SBA loans
Sold loan balance						$	13,619					$	19,414					(29.8)		%				$	16,762					(18.8)		%				$	33,033					$	43,895					(24.7)		%
Premium received						1,056						1,596						(33.8)		%				1,209						(12.7)		%				2,652						3,250						(18.4)		%
Gain recognized						763						1,078						(29.2)		%				769						(0.8)		%				1,841						2,078						(11.4)		%

Loan Servicing Income. The following table presents information on loan servicing income for the periods indicated:

						Three Months Ended																														Six Months Ended
($ in thousands)						6/30/2024						3/31/2024						% Change						6/30/2023						% Change						6/30/2024						6/30/2023						% Change
Loan servicing income
Servicing income received						$	1,318					$	1,293					1.9		%				$	1,317					0.1		%				$	2,611					$	2,601					0.4		%
Servicing assets amortization						(519)						(374)						38.8		%				(449)						15.6		%				(893)						(873)						2.3		%
Loan servicing income						$	799					$	919					(13.1)		%				$	868					(7.9)		%				$	1,718					$	1,728					(0.6)		%
Underlying loans at end of period						$	527,458					$	540,039					(2.3)		%				$	539,160					(2.2)		%				$	527,458					$	539,160					(2.2)		%

The Company services SBA loans and certain residential property loans sold to the secondary market.

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Noninterest Expense

The following table presents the components of noninterest expense for the periods indicated:

						Three Months Ended																														Six Months Ended
($ in thousands)						6/30/2024						3/31/2024						% Change						6/30/2023						% Change						6/30/2024						6/30/2023						% Change
Salaries and employee benefits						$	9,225					$	9,218					0.1		%				$	8,675					6.3		%				$	18,443					$	17,603					4.8		%
Occupancy and equipment						2,300						2,358						(2.5)		%				1,919						19.9		%				4,658						3,815						22.1		%
Professional fees						973						1,084						(10.2)		%				772						26.0		%				2,057						1,504						36.8		%
Marketing and business promotion						318						319						(0.3)		%				203						56.7		%				637						575						10.8		%
Data processing						495						402						23.1		%				380						30.3		%				897						792						13.3		%
Director fees and expenses						221						232						(4.7)		%				217						1.8		%				453						397						14.1		%
Regulatory assessments						327						298						9.7		%				382						(14.4)		%				625						537						16.4		%
Other expense						1,316						2,441						(46.1)		%				1,079						22.0		%				3,757						2,158						74.1		%
Total noninterest expense						$	15,175					$	16,352					(7.2)		%				$	13,627					11.4		%				$	31,527					$	27,381					15.1		%

Salaries and Employee Benefits. The increase for the current quarter compared with the year-ago quarter was primarily due to increases in salaries, and bonus and vacation accruals. The increase for the current year-to-date period was primarily due to increases in salaries and incentives tied to sales of SBA loans originated at loan production offices, partially offset by decreases in bonus and vacation accruals. The number of full-time equivalent employees was 265, 272 and 272 as of June 30, 2024, March 31, 2024 and June 30, 2023, respectively.

Occupancy and Equipment. The increases for the current quarter and year-to-date period were primarily due to an expansion of headquarters location in the second half of 2023 and a relocation of a regional office and two branches into one location in Orange County, California.

Professional Fees. The decrease for the current quarter compared with the previous quarter was primarily due to a decrease in professional fees related to a core system conversion completed in April 2024. The increase for the current year-to-date period was primarily due to the aforementioned.

Other Expense. The decrease for the current quarter compared with the previous quarter was primarily due to a termination charge for the legacy core system of $508 thousand and an expense of $815 thousand for a reimbursement for an SBA loan guarantee previously paid by the SBA on a loan originated in 2014 that subsequently defaulted and was ultimately determined to be ineligible for the SBA guaranty during the previous quarter. The Company has retained a law firm specializing in SBA recovery demands to seek that SBA reconsider the evidence and allow the Company to recoup all or part of the reimbursement. The increase for the current year-to-date period was primarily due to the two aforementioned matters.

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Balance Sheet (Unaudited)

Total assets were $2.85 billion at June 30, 2024, a decrease of $1.3 million, or 0.1%, from $2.85 billion at March 31, 2024, an increase of $63.5 million, or 2.3%, from $2.79 billion at December 31, 2023, and an increase of $296.6 million, or 11.6%, from $2.56 billion at June 30, 2023. The increases for the current quarter and year-to-date period were primarily due to increases in loans held-for-investment and securities available-for-sale, partially offset by a decrease in cash and cash equivalents.

Loans

The following table presents a composition of total loans (includes both loans held-for-sale and loans held-for-investment) as of the dates indicated:

($ in thousands)						6/30/2024						3/31/2024						% Change						12/31/2023						% Change						6/30/2023						% Change
Commercial real estate:
Commercial property						$	852,677					$	874,300					(2.5)		%				$	855,270					(0.3)		%				$	793,946					7.4		%
Business property						572,643						578,903						(1.1)		%				558,772						2.5		%				533,592						7.3		%
Multifamily						177,657						131,742						34.9		%				132,500						34.1		%				124,029						43.2		%
Construction						28,316						29,212						(3.1)		%				24,843						14.0		%				16,942						67.1		%
Total commercial real estate						1,631,293						1,614,157						1.1		%				1,571,385						3.8		%				1,468,509						11.1		%
Commercial and industrial						417,333						371,934						12.2		%				342,002						22.0		%				272,278						53.3		%
Consumer:
Residential mortgage						384,905						389,888						(1.3)		%				389,420						(1.2)		%				359,655						7.0		%
Other consumer						15,543						21,985						(29.3)		%				20,645						(24.7)		%				21,985						(29.3)		%
Total consumer						400,448						411,873						(2.8)		%				410,065						(2.3)		%				381,640						4.9		%
Loans held-for-investment						2,449,074						2,397,964						2.1		%				2,323,452						5.4		%				2,122,427						15.4		%
Loans held-for-sale						2,959						3,256						(9.1)		%				5,155						(42.6)		%				13,065						(77.4)		%
Total loans						$	2,452,033					$	2,401,220					2.1		%				$	2,328,607					5.3		%				$	2,135,492					14.8		%
SBA loans included in:
Loans held-for-investment						$	144,440					$	148,316					(2.6)		%				$	145,603					(0.8)		%				$	147,357					(2.0)		%
Loans held-for-sale						$	2,959					$	3,256					(9.1)		%				$	5,155					(42.6)		%				$	13,065					(77.4)		%

The increase in loans held-for-investment for the current quarter was primarily due to new funding and advances on lines of credit of $597.8 million, partially offset by pay-downs and pay-offs of $546.7 million. The increase for the current year-to-date period was primarily due to new funding and advances on lines of credit of $1.07 billion, partially offset by pay-downs and pay-offs of $940.6 million.

The decrease in loans held-for-sale for the current quarter was primarily due to sales of $13.6 million, and pay-downs and pay-offs of $40 thousand, partially offset by new funding of $13.4 million. The decrease for the current year-to-date period was primarily due to sales of $33.0 million, and pay-downs and pay-offs of $1.6 million, partially offset by new funding of $32.4 million

The following table presents a composition of off-balance sheet credit exposure as of the dates indicated:

($ in thousands)						6/30/2024						3/31/2024						% Change						12/31/2023						% Change						6/30/2023						% Change
Commercial property						$	6,309					$	8,687					(27.4)		%				$	11,634					(45.8)		%				$	11,118					(43.3)		%
Business property						11,607						10,196						13.8		%				9,899						17.3		%				9,487						22.3		%
Multifamily						1,800						1,800						—		%				1,800						—		%				4,500						(60.0)		%
Construction						22,030						22,895						(3.8)		%				23,739						(7.2)		%				30,865						(28.6)		%
Commercial and industrial						336,121						384,034						(12.5)		%				351,025						(4.2)		%				279,584						20.2		%
Other consumer						5,192						992						423.4		%				3,421						51.8		%				445						1,066.7		%
Total commitments to extend credit						383,059						428,604						(10.6)		%				401,518						(4.6)		%				335,999						14.0		%
Letters of credit						6,808						6,558						3.8		%				6,583						3.4		%				6,027						13.0		%
Total off-balance sheet credit exposure						$	389,867					$	435,162					(10.4)		%				$	408,101					(4.5)		%				$	342,026					14.0		%

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Credit Quality

The following table presents a summary of non-performing loans and assets, and classified assets as of the dates indicated:

($ in thousands)						6/30/2024						3/31/2024						% Change						12/31/2023						% Change						6/30/2023						% Change
Nonaccrual loans
Commercial real estate:
Commercial property						$	1,804					$	932					93.6		%				$	958					88.3		%				$	699					158.1		%
Business property						2,440						3,455						(29.4)		%				2,865						(14.8)		%				3,007						(18.9)		%
Multifamily						2,038						—						NM						—						NM						—						NM
Total commercial real estate						6,282						4,387						43.2		%				3,823						64.3		%				3,706						69.5		%
Commercial and industrial						112						111						0.9		%				68						64.7		%				88						27.3		%
Consumer:
Residential mortgage						1,100						436						152.3		%				—						NM						—						NM
Other consumer						6						6						—		%				25						(76.0)		%				51						(88.2)		%
Total consumer						1,106						442						150.2		%				25						4,324.0		%				51						2,068.6		%
Total nonaccrual loans held-for-investment						7,500						4,940						51.8		%				3,916						91.5		%				3,845						95.1		%
Loans past due 90 days or more and still accruing						—						—						—		%				—						—		%				—						—		%
Non-performing loans (“NPLs”)						7,500						4,940						51.8		%				3,916						91.5		%				3,845						95.1		%
Other real estate owned (“OREO”)						—						—						—		%				2,558						(100.0)		%				—						—		%
Non-performing assets (“NPAs”)						$	7,500					$	4,940					51.8		%				$	6,474					15.8		%				$	3,845					95.1		%
Loans past due and still accruing
Past due 30 to 59 days						$	2,245					$	3,412					(34.2)		%				$	1,394					61.0		%				$	428					424.5		%
Past due 60 to 89 days						41						1,103						(96.3)		%				34						20.6		%				—						NM
Past due 90 days or more						—						—						—		%				—						—		%				—						—		%
Total loans past due and still accruing						$	2,286					$	4,515					(49.4)		%				1,428						60.1		%				$	428					434.1		%
Special mention loans						$	5,080					$	1,101					361.4		%				$	5,156					(1.5)		%				$	5,406					(6.0)		%
Classified assets
Classified loans held-for-investment						$	9,752					$	7,771					25.5		%				$	7,000					39.3		%				$	6,901					41.3		%
OREO						—						—						—		%				2,558						(100.0)		%				—						—		%
Classified assets						$	9,752					$	7,771					25.5		%				$	9,558					2.0		%				$	6,901					41.3		%
NPLs to loans held-for-investment						0.31		%				0.21		%										0.17		%										0.18		%
NPAs to total assets						0.26		%				0.17		%										0.23		%										0.15		%
Classified assets to total assets						0.34		%				0.27		%										0.34		%										0.27		%

During the fourth quarter of 2023, the Company recognized an OREO of $2.6 million by transferring a SBA 7(a) loan, of which the guaranteed portion was previously sold. The Company’s exposure was 25% of the OREO and the SBA was entitled to 75% of the sale price upon the sale of property. The Company sold the property and recognized a gain of $13 thousand during the first quarter of 2024.

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Allowance for Credit Losses

The following table presents activities in ACL for the periods indicated:

						Three Months Ended																														Six Months Ended
($ in thousands)						6/30/2024						3/31/2024						% Change						6/30/2023						% Change						6/30/2024						6/30/2023						% Change
ACL on loans
Balance at beginning of period						$	28,332					$	27,533					2.9		%				$	24,694					14.7		%				$	27,533					$	24,942					10.4		%
Impact of ASC 326 adoption						—						—						NM						—						NM						—						1,067						NM
Charge-offs						—						(185)						(100.0)		%				(7)						(100.0)		%				(185)						(7)						2,542.9		%
Recoveries						86						62						38.7		%				23						273.9		%				148						1,125						(86.8)		%
Provision (reversal) for credit losses on loans						329						922						(64.3)		%				157						109.6		%				1,251						(2,260)						(155.4)		%
Balance at end of period						$	28,747					$	28,332					1.5		%				$	24,867					15.6		%				$	28,747					$	24,867					15.6		%
Percentage to loans held-for-investment at end of period						1.17		%				1.18		%										1.17		%										1.17		%				1.17		%
ACL on off-balance sheet credit exposure
Balance at beginning of period						$	1,445					$	1,277					13.2		%				$	1,545					(6.5)		%				$	1,277					$	299					327.1		%
Impact of ASC 326 adoption						—						—						NM						—						NM						—						1,607						NM
Provision (reversal) for credit losses on off-balance sheet credit exposure						(70)						168						NM						40						NM						98						(321)						NM
Balance at end of period						$	1,375					$	1,445					(4.8)		%				$	1,585					(13.2)		%				$	1,375					$	1,585					(13.2)		%

On January 1, 2023, the Company adopted the provisions of ASC 326 through the application of the modified retrospective transition approach. The initial adjustment to the ACL reflected the expected lifetime credit losses associated with the composition of financial assets within the scope of ASC 326 as of January 1, 2023, as well as management’s current expectation of future economic conditions. The Company recorded a net decrease of $1.9 million to the beginning balance of retained earnings as of January 1, 2023 for the cumulative effect adjustment, reflecting an initial adjustment to the ACL on loans of $1.1 million and the ACL on off-balance sheet credit exposures of $1.6 million, net of related deferred tax assets arising from temporary differences of $788 thousand.

Investment Securities

Total investment securities were $148.0 million at June 30, 2024, an increase of $9.8 million, or 7.1%, from $138.2 million at March 31, 2024, an increase of $4.7 million, 3.3%, from $143.3 million at December 31, 2023, and an increase of $9.3 million, or 6.7%, from $138.7 million at June 30, 2023. The increase for the current quarter was primarily due to purchases of $14.8 million, partially offset by principal pay-downs of $4.8 million, a fair value decrease of $103 thousand, and net premium amortization of $41 thousand. The increase for the current year-to-date period was primarily due to purchases of $14.8 million, partially offset by principal pay-downs of $8.3 million, a fair value decrease of $1.7 million, and net premium amortization of $82 thousand.

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Deposits

The following table presents the Company’s deposit mix as of the dates indicated:

						6/30/2024												3/31/2024												12/31/2023												6/30/2023
($ in thousands)						Amount						% to Total						Amount						% to Total						Amount						% to Total						Amount						% to Total
Noninterest-bearing demand deposits						$	543,538					22.6		%				$	538,380					22.4		%				$	594,673					25.3		%				$	635,329					29.0		%
Interest-bearing deposits
Savings						7,821						0.3		%				6,153						0.3		%				6,846						0.3		%				7,504						0.3		%
NOW						18,346						0.8		%				16,232						0.7		%				16,825						0.7		%				16,993						0.8		%
Retail money market accounts						457,760						18.9		%				461,221						19.0		%				397,531						16.8		%				464,655						21.1		%
Brokered money market accounts						1						0.1		%				1						0.1		%				1						0.1		%				1						0.1		%
Retail time deposits of
$250,000 or less						475,923						19.8		%				471,528						19.6		%				456,293						19.4		%				392,012						17.9		%
More than $250,000						559,832						23.2		%				549,550						22.9		%				515,702						21.9		%				451,590						20.7		%
State and brokered time deposits						343,033						14.3		%				359,775						15.0		%				363,741						15.5		%				220,148						10.1		%
Total interest-bearing deposits						1,862,716						77.4		%				1,864,460						77.6		%				1,756,939						74.7		%				1,552,903						71.0		%
Total deposits						$	2,406,254					100.0		%				$	2,402,840					100.0		%				$	2,351,612					100.0		%				$	2,188,232					100.0		%
Estimated total deposits not covered by deposit insurance						$	1,020,963					42.4		%				$	1,017,696					42.4		%				$	947,294					40.3		%				$	1,034,148					47.3		%

Total retail deposits were $2.06 billion at June 30, 2024, an increase of $20.2 million, or 1.0%, from $2.04 billion at March 31, 2024, an increase of $75.4 million, or 3.8%, from $1.99 billion at December 31, 2023, and an increase of $95.1 million, or 4.8%, from $1.97 billion at June 30, 2023.

The increase in retail time deposits for the current quarter was primarily due to new accounts of $72.9 million, renewals of the matured accounts of $183.4 million and balance increases of $10.2 million, partially offset by matured and closed accounts of $251.8 million. The increase for the current year-to-date period was primarily due to new accounts of $196.1 million, renewals of the matured accounts of $442.5 million and balance increases of $18.8 million, partially offset by matured and closed accounts of $593.7 million.

Liquidity

The following table presents a summary of the Company’s liquidity position as of June 30, 2024:

($ in thousands)						6/30/2024						12/31/2023						% Change
Cash and cash equivalents						$	177,630					$	242,342					(26.7)		%
Cash and cash equivalents to total assets						6.2		%				8.7		%
Available borrowing capacity
FHLB advances						$	697,571					$	602,976					15.7		%
Federal Reserve Discount Window						574,245						528,893						8.6		%
Overnight federal funds lines						61,000						65,000						(6.2)		%
Total						$	1,332,816					$	1,196,869					11.4		%
Total available borrowing capacity to total assets						46.7		%				42.9		%

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Shareholders’ Equity

Shareholders’ equity was $353.5 million at June 30, 2024, an increase of $3.5 million, or 1.0%, from $350.0 million at March 31, 2024, an increase of $4.6 million, or 1.3%, from $348.9 million at December 31, 2023, and an increase of $13.1 million, or 3.8%, from $340.4 million at June 30, 2023. The increase for the current quarter was primarily due to net income, partially offset by cash dividends declared on common stock of $2.6 million, preferred stock dividends of $142 thousand, and repurchase of common stock of $222 thousand. The increase for the current year-to-date period was primarily due to net income, partially offset by cash dividends declared on common stock of $5.1 million, preferred stock dividends of $142 thousand, repurchase of common stock of $222 thousand, and an increase in accumulated other comprehensive loss of $1.2 million.

Stock Repurchases

In 2023, the Company repurchased and retired 512,657 shares of common stock at a weighted-average price of $17.22, totaling $8.8 million. During the current year-to-date period, the Company repurchased and retired 14,947 shares of common stock at a weighted-average price of $14.88, totaling $222 thousand. As of June 30, 2024, the Company is authorized to purchase 577,777 additional shares under the its current stock repurchase program, which expires on August 2, 2024.

Preferred Stock Under the Emergency Capital Investment Program

On May 24, 2022, the Company issued 69,141 shares of Senior Non-Cumulative Perpetual Preferred Stock, Series C, liquidation preference of $1,000 per share (“Series C Preferred Stock”) for the capital investment of $69.1 million from the U.S. Treasury under the Emergency Capital Investment Program (“ECIP”). The ECIP investment is treated as tier 1 capital for regulatory capital purposes.

The Series C Preferred Stock bore no dividend for the first 24 months following the investment date. Thereafter, the dividend rate will be measured quarterly based on the lending growth criteria listed in the terms of the ECIP investment with an annual dividend rate of up to 2%. After the tenth anniversary of the investment date, the dividend rate will be fixed based on the average annual amount of lending in years 2 through 10.

The Company paid the initial quarterly dividend at an annualized dividend rate of 2% beginning in the second quarter of 2024.

Capital Ratios

Based on the Federal Reserve’s Small Bank Holding Company policy, the Company is not currently subject to consolidated minimum capital measurements. At such time as the Company reaches the $3 billion asset level, it will be subject to consolidated capital requirements independent of the Bank. For comparison purposes, the Company’s capital ratios are included in following table, which presents capital ratios for the Company and the Bank as of the dates indicated:

						6/30/2024						3/31/2024						12/31/2023						6/30/2023						Well Capitalized Minimum Requirements
PCB Bancorp
Common tier 1 capital (to risk-weighted assets)						11.91		%				11.88		%				12.23		%				13.12		%				N/A
Total capital (to risk-weighted assets)						15.94		%				15.93		%				16.39		%				17.57		%				N/A
Tier 1 capital (to risk-weighted assets)						14.71		%				14.71		%				15.16		%				16.34		%				N/A
Tier 1 capital (to average assets)						12.66		%				12.73		%				13.43		%				13.84		%				N/A
PCB Bank
Common tier 1 capital (to risk-weighted assets)						14.38		%				14.37		%				14.85		%				16.00		%				6.5		%
Total capital (to risk-weighted assets)						15.60		%				15.59		%				16.07		%				17.23		%				10.0		%
Tier 1 capital (to risk-weighted assets)						14.38		%				14.37		%				14.85		%				16.00		%				8.0		%
Tier 1 capital (to average assets)						12.37		%				12.44		%				13.16		%				13.55		%				5.0		%

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About PCB Bancorp

PCB Bancorp is the bank holding company for PCB Bank, a California state chartered bank, offering a full suite of commercial banking services to small to medium-sized businesses, individuals and professionals, primarily in Southern California, and predominantly in Korean-American and other minority communities.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan,” or words or phases of similar meaning. We caution that the forward-looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control, including but not limited to the health of the national and local economies including the impact to the Company and its customers resulting from changes to, and the level of, inflation and interest rates; the Company’s ability to maintain and grow its deposit base; loan demand and continued portfolio performance; the impact of adverse developments at other banks, including bank failures, that impact general sentiment regarding the stability and liquidity of banks that could affect the Company’s liquidity, financial performance and stock price; changes to valuations of the Company’s assets and liabilities including the allowance for credit losses, earning assets, and intangible assets; changes to the availability of liquidity sources including borrowing lines and the ability to pledge or sell certain assets; the Company's ability to attract and retain skilled employees; customers' service expectations; cyber security risks; the Company's ability to successfully deploy new technology; acquisitions and branch and loan production office expansions; operational risks including the ability to detect and prevent errors and fraud; the effectiveness of the Company’s enterprise risk management framework; costs related to litigation; changes in laws, rules, regulations, or interpretations to which the Company is subject; the effects of severe weather events, pandemics, other public health crises, acts of war or terrorism, and other external events on our business. These and other important factors are detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and other filings the Company makes with the SEC, which are available at the SEC’s Internet site (http://www.sec.gov) or from the Company without charge. Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise, except as required by law.

Contact:

Timothy Chang

Executive Vice President & Chief Financial Officer

213-210-2000

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PCB Bancorp and Subsidiary

Consolidated Balance Sheets (Unaudited)

($ in thousands, except share and per share data)

						6/30/2024						3/31/2024						% Change						12/31/2023						% Change						6/30/2023						% Change
Assets
Cash and due from banks						$	23,247					$	29,432					(21.0)		%				$	26,518					(12.3)		%				$	22,159					4.9		%
Interest-bearing deposits in other financial institutions						154,383						210,359						(26.6)		%				215,824						(28.5)		%				199,987						(22.8)		%
Total cash and cash equivalents						177,630						239,791						(25.9)		%				242,342						(26.7)		%				222,146						(20.0)		%
Securities available-for-sale, at fair value						148,009						138,170						7.1		%				143,323						3.3		%				138,673						6.7		%
Loans held-for-sale						2,959						3,256						(9.1)		%				5,155						(42.6)		%				13,065						(77.4)		%
Loans held-for-investment						2,449,074						2,397,964						2.1		%				2,323,452						5.4		%				2,122,427						15.4		%
Allowance for credit losses on loans						(28,747)						(28,332)						1.5		%				(27,533)						4.4		%				(24,867)						15.6		%
Net loans held-for-investment						2,420,327						2,369,632						2.1		%				2,295,919						5.4		%				2,097,560						15.4		%
Premises and equipment, net						8,923						8,892						0.3		%				5,999						48.7		%				6,394						39.6		%
Federal Home Loan Bank and other bank stock						14,042						12,716						10.4		%				12,716						10.4		%				12,716						10.4		%
Other real estate owned, net						—						—						—		%				2,558						(100.0)		%				—						—		%
Bank-owned life insurance						31,281						31,045						0.8		%				30,817						1.5		%				30,428						2.8		%
Deferred tax assets, net						—						—						—		%				—						—		%				4,348						(100.0)		%
Servicing assets						6,205						6,544						(5.2)		%				6,666						(6.9)		%				7,142						(13.1)		%
Operating lease assets						17,609						18,255						(3.5)		%				18,913						(6.9)		%				5,182						239.8		%
Accrued interest receivable						10,464						10,394						0.7		%				9,468						10.5		%				8,040						30.1		%
Other assets						15,515						15,597						(0.5)		%				15,630						(0.7)		%				10,651						45.7		%
Total assets						$	2,852,964					$	2,854,292					(0.1)		%				$	2,789,506					2.3		%				$	2,556,345					11.6		%
Liabilities
Deposits
Noninterest-bearing demand						$	543,538					$	538,380					1.0		%				$	594,673					(8.6)		%				$	635,329					(14.4)		%
Savings, NOW and money market accounts						483,928						483,607						0.1		%				421,203						14.9		%				489,153						(1.1)		%
Time deposits of $250,000 or less						758,956						771,303						(1.6)		%				760,034						(0.1)		%				552,160						37.5		%
Time deposits of more than $250,000						619,832						609,550						1.7		%				575,702						7.7		%				511,590						21.2		%
Total deposits						2,406,254						2,402,840						0.1		%				2,351,612						2.3		%				2,188,232						10.0		%
Other short-term borrowings						4,000						—						NM						—						NM						—						NM
Federal Home Loan Bank advances						32,000						50,000						(36.0)		%				39,000						(17.9)		%				—						NM
Deferred tax liabilities, net						577						266						116.9		%				876						(34.1)		%				—						NM
Operating lease liabilities						18,939						19,555						(3.2)		%				20,137						(5.9)		%				5,495						244.7		%
Accrued interest payable and other liabilities						37,725						31,626						19.3		%				29,009						30.0		%				22,207						69.9		%
Total liabilities						2,499,495						2,504,287						(0.2)		%				2,440,634						2.4		%				2,215,934						12.8		%
Commitments and contingent liabilities
Shareholders’ equity
Preferred stock						69,141						69,141						—		%				69,141						—		%				69,141						—		%
Common stock						142,698						142,734						(0.1)		%				142,563						0.1		%				143,686						(0.7)		%
Retained earnings						151,781						148,209						2.4		%				146,092						3.9		%				138,315						9.7		%
Accumulated other comprehensive loss, net						(10,151)						(10,079)						0.7		%				(8,924)						13.7		%				(10,731)						(5.4)		%
Total shareholders’ equity						353,469						350,005						1.0		%				348,872						1.3		%				340,411						3.8		%
Total liabilities and shareholders’ equity						$	2,852,964					$	2,854,292					(0.1)		%				$	2,789,506					2.3		%				$	2,556,345					11.6		%
Outstanding common shares						14,254,024						14,263,791												14,260,440												14,318,890
Book value per common share (1)						$	24.80					$	24.54											$	24.46											$	23.77
TCE per common share (2)						$	19.95					$	19.69											$	19.62											$	18.94
Total loan to total deposit ratio						101.90		%				99.93		%										99.02		%										97.59		%
Noninterest-bearing deposits to total deposits						22.59		%				22.41		%										25.29		%										29.03		%

(1)The ratios are calculated by dividing total shareholders’ equity by the number of outstanding common shares. The Company did not have any intangible equity components for the presented periods.

(2)Non-GAAP. See “Non-GAAP Measures” for reconciliation of this measure to its most comparable GAAP measure.

13

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PCB Bancorp and Subsidiary

Consolidated Statements of Income (Unaudited)

($ in thousands, except share and per share data)

						Three Months Ended																														Six Months Ended
						6/30/2024						3/31/2024						% Change						6/30/2023						% Change						6/30/2024						6/30/2023						% Change
Interest and dividend income
Loans, including fees						$	40,626					$	39,251					3.5		%				$	32,960					23.3		%				$	79,877					$	64,189					24.4		%
Investment securities						1,310						1,246						5.1		%				1,136						15.3		%				2,556						2,238						14.2		%
Other interest-earning assets						3,009						3,058						(1.6)		%				2,742						9.7		%				6,067						4,947						22.6		%
Total interest income						44,945						43,555						3.2		%				36,838						22.0		%				88,500						71,374						24.0		%
Interest expense
Deposits						22,536						21,967						2.6		%				15,121						49.0		%				44,503						27,034						64.6		%
Other borrowings						674						589						14.4		%				—						—		%				1,263						209						504.3		%
Total interest expense						23,210						22,556						2.9		%				15,121						53.5		%				45,766						27,243						68.0		%
Net interest income						21,735						20,999						3.5		%				21,717						0.1		%				42,734						44,131						(3.2)		%
Provision (reversal) for credit losses						259						1,090						(76.2)		%				197						31.5		%				1,349						(2,581)						NM
Net interest income after provision (reversal) for credit losses						21,476						19,909						7.9		%				21,520						(0.2)		%				41,385						46,712						(11.4)		%
Noninterest income
Gain on sale of loans						763						1,078						(29.2)		%				769						(0.8)		%				1,841						2,078						(11.4)		%
Service charges and fees on deposits						364						378						(3.7)		%				369						(1.4)		%				742						713						4.1		%
Loan servicing income						799						919						(13.1)		%				868						(7.9)		%				1,718						1,728						(0.6)		%
Bank-owned life insurance income						236						228						3.5		%				184						28.3		%				464						364						27.5		%
Other income						323						342						(5.6)		%				467						(30.8)		%				665						795						(16.4)		%
Total noninterest income						2,485						2,945						(15.6)		%				2,657						(6.5)		%				5,430						5,678						(4.4)		%
Noninterest expense
Salaries and employee benefits						9,225						9,218						0.1		%				8,675						6.3		%				18,443						17,603						4.8		%
Occupancy and equipment						2,300						2,358						(2.5)		%				1,919						19.9		%				4,658						3,815						22.1		%
Professional fees						973						1,084						(10.2)		%				772						26.0		%				2,057						1,504						36.8		%
Marketing and business promotion						318						319						(0.3)		%				203						56.7		%				637						575						10.8		%
Data processing						495						402						23.1		%				380						30.3		%				897						792						13.3		%
Director fees and expenses						221						232						(4.7)		%				217						1.8		%				453						397						14.1		%
Regulatory assessments						327						298						9.7		%				382						(14.4)		%				625						537						16.4		%
Other expense						1,316						2,441						(46.1)		%				1,079						22.0		%				3,757						2,158						74.1		%
Total noninterest expense						15,175						16,352						(7.2)		%				13,627						11.4		%				31,527						27,381						15.1		%
Income before income taxes						8,786						6,502						35.1		%				10,550						(16.7)		%				15,288						25,009						(38.9)		%
Income tax expense						2,505						1,817						37.9		%				3,073						(18.5)		%				4,322						7,235						(40.3)		%
Net income						6,281						4,685						34.1		%				7,477						(16.0)		%				10,966						17,774						(38.3)		%
Preferred stock dividends						142						—						NM						—						NM						142						—						NM
Net income available to common shareholders						$	6,139					$	4,685					31.0		%				$	7,477					(17.9)		%				$	10,824					$	17,774					(39.1)		%
Earnings per common share
Basic						$	0.43					$	0.33											$	0.52											$	0.76					$	1.24
Diluted						$	0.43					$	0.33											$	0.52											$	0.75					$	1.22
Average common shares
Basic						14,237,083						14,235,419												14,271,200												14,236,251						14,344,769
Diluted						14,312,949						14,330,204												14,356,776												14,323,171						14,468,981
Dividend paid per common share						$	0.18					$	0.18											$	0.18											$	0.36					$	0.33
Return on average assets (1)						0.89		%				0.67		%										1.19		%										0.78		%				1.44		%
Return on average shareholders’ equity (1)						7.19		%				5.39		%										8.82		%										6.29		%				10.62		%
Return on average TCE (1), (2)						8.96		%				6.72		%										11.08		%										7.84		%				13.35		%
Efficiency ratio (3)						62.65		%				68.29		%										55.91		%										65.46		%				54.97		%

(1)Ratios are presented on an annualized basis.

(2)Non-GAAP. See “Non-GAAP Measures” for reconciliation of this measure to its most comparable GAAP measure.

(3)The ratios are calculated by dividing noninterest expense by the sum of net interest income and noninterest income.

14

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PCB Bancorp and Subsidiary

Average Balance, Average Yield, and Average Rate (Unaudited)

($ in thousands)

						Three Months Ended
						6/30/2024																		3/31/2024																		6/30/2023
						Average Balance						Interest Income/ Expense						Avg. Yield/Rate(6)						Average Balance						Interest Income/ Expense						Avg. Yield/Rate(6)						Average Balance						Interest Income/ Expense						Avg. Yield/Rate(6)
Assets
Interest-earning assets
Total loans (1)						$	2,414,824					$	40,626					6.77		%				$	2,370,027					$	39,251					6.66		%				$	2,097,489					$	32,960					6.30		%
Mortgage-backed securities						104,538						911						3.50		%				101,852						839						3.31		%				98,971						713						2.89		%
Collateralized mortgage obligation						22,992						249						4.36		%				23,763						254						4.30		%				26,228						262						4.01		%
SBA loan pool securities						6,891						74						4.32		%				7,317						78						4.29		%				8,364						81						3.88		%
Municipal bonds (2)						3,238						29						3.60		%				3,300						28						3.41		%				4,234						33						3.13		%
Corporate bonds						4,157						47						4.55		%				4,227						47						4.47		%				4,339						47						4.34		%
Other interest-earning assets						213,428						3,009						5.67		%				217,002						3,058						5.67		%				213,883						2,742						5.14		%
Total interest-earning assets						2,770,068						44,945						6.53		%				2,727,488						43,555						6.42		%				2,453,508						36,838						6.02		%
Noninterest-earning assets
Cash and due from banks						23,057																		21,365																		20,754
ACL on loans						(28,372)																		(27,577)																		(24,710)
Other assets						88,399																		88,532																		71,200
Total noninterest-earning assets						83,084																		82,320																		67,244
Total assets						$	2,853,152																	$	2,809,808																	$	2,520,752
Liabilities and Shareholders’ Equity
Interest-bearing liabilities
Deposits
NOW and money market accounts						$	473,557					4,876						4.14		%				$	453,801					4,665						4.13		%				$	465,564					3,929						3.38		%
Savings						6,899						4						0.23		%				6,196						4						0.26		%				7,767						5						0.26		%
Time deposits						1,383,167						17,656						5.13		%				1,367,212						17,298						5.09		%				1,054,191						11,187						4.26		%
Total interest-bearing deposits						1,863,623						22,536						4.86		%				1,827,209						21,967						4.84		%				1,527,522						15,121						3.97		%
Other borrowings						48,462						674						5.59		%				42,187						589						5.62		%				—						—						—		%
Total interest-bearing liabilities						1,912,085						23,210						4.88		%				1,869,396						22,556						4.85		%				1,527,522						15,121						3.97		%
Noninterest-bearing liabilities
Noninterest-bearing demand						535,508																		542,811																		628,127
Other liabilities						54,338																		47,957																		25,234
Total noninterest-bearing liabilities						589,846																		590,768																		653,361
Total liabilities						2,501,931																		2,460,164																		2,180,883
Total shareholders’ equity						351,221																		349,644																		339,869
Total liabilities and shareholders’ equity						$	2,853,152																	$	2,809,808																	$	2,520,752
Net interest income												$	21,735																	$	20,999																	$	21,717
Net interest spread (3)																		1.65		%																1.57		%																2.05		%
Net interest margin (4)																		3.16		%																3.10		%																3.55		%
Total deposits						$	2,399,131					$	22,536					3.78		%				$	2,370,020					$	21,967					3.73		%				$	2,155,649					$	15,121					2.81		%
Total funding (5)						$	2,447,593					$	23,210					3.81		%				$	2,412,207					$	22,556					3.76		%				$	2,155,649					$	15,121					2.81		%

(1)Total loans include both loans held-for-sale and loans held-for-investment.

(2)The yield on municipal bonds has not been computed on a tax-equivalent basis.

(3)Net interest spread is calculated by subtracting average rate on interest-bearing liabilities from average yield on interest-earning assets.

(4)Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets.

(5)Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.

(6)Annualized.

15

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PCB Bancorp and Subsidiary

Average Balance, Average Yield, and Average Rate (Unaudited)

($ in thousands)

						Six Months Ended
						6/30/2024																		6/30/2023
						Average Balance						Interest Income/ Expense						Avg. Yield/Rate(6)						Average Balance						Interest Income/ Expense						Avg. Yield/Rate(6)
Assets
Interest-earning assets
Total loans (1)						$	2,392,426					$	79,877					6.71		%				$	2,085,021					$	64,189					6.21		%
Mortgage-backed securities						103,195						1,750						3.41		%				98,278						1,396						2.86		%
Collateralized mortgage obligation						23,377						503						4.33		%				26,484						518						3.94		%
SBA loan pool securities						7,104						152						4.30		%				8,693						163						3.78		%
Municipal bonds (2)						3,269						57						3.51		%				4,228						67						3.20		%
Corporate bonds						4,192						94						4.51		%				4,424						94						4.28		%
Other interest-earning assets						215,215						6,067						5.67		%				200,420						4,947						4.98		%
Total interest-earning assets						2,748,778						88,500						6.47		%				2,427,548						71,374						5.93		%
Noninterest-earning assets
Cash and due from banks						22,211																		20,953
ACL on loans						(27,975)																		(25,727)
Other assets						88,592																		73,177
Total noninterest-earning assets						82,828																		68,403
Total assets						$	2,831,606																	$	2,495,951
Liabilities and Shareholders’ Equity
Interest-bearing liabilities
Deposits
NOW and money market accounts						$	463,679					9,541						4.14		%				$	475,707					7,374						3.13		%
Savings						6,548						8						0.25		%				7,932						10						0.25		%
Time deposits						1,375,190						34,954						5.11		%				985,851						19,650						4.02		%
Total interest-bearing deposits						1,845,417						44,503						4.85		%				1,469,490						27,034						3.71		%
Other borrowings						45,324						1,263						5.60		%				7,862						209						5.36		%
Total interest-bearing liabilities						1,890,741						45,766						4.87		%				1,477,352						27,243						3.72		%
Noninterest-bearing liabilities
Noninterest-bearing demand						539,159																		657,687
Other liabilities						51,123																		23,382
Total noninterest-bearing liabilities						590,282																		681,069
Total liabilities						2,481,023																		2,158,421
Total shareholders’ equity						350,583																		337,530
Total liabilities and shareholders’ equity						$	2,831,606																	$	2,495,951
Net interest income												$	42,734																	$	44,131
Net interest spread (3)																		1.60		%																2.21		%
Net interest margin (4)																		3.13		%																3.67		%
Total deposits						$	2,384,576					$	44,503					3.75		%				$	2,127,177					$	27,034					2.56		%
Total funding (5)						$	2,429,900					$	45,766					3.79		%				$	2,135,039					$	27,243					2.57		%

(1)Total loans include both loans held-for-sale and loans held-for-investment.

(2)The yield on municipal bonds has not been computed on a tax-equivalent basis.

(3)Net interest spread is calculated by subtracting average rate on interest-bearing liabilities from average yield on interest-earning assets.

(4)Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets.

(5)Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.

(6)Annualized.

16

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PCB Bancorp and Subsidiary

Non-GAAP Measures

($ in thousands)

Return on average tangible common equity, tangible common equity per common share and tangible common equity to total assets ratios

The Company's TCE is calculated by subtracting preferred stock from shareholders’ equity. The Company does not have any intangible assets for the presented periods. Return on average TCE, TCE per common share, and TCE to total assets constitute supplemental financial information determined by methods other than in accordance with GAAP. These non-GAAP measures are used by management in its analysis of the Company's performance. These non-GAAP measures should not be viewed as substitutes for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP measures that may be presented by other companies. The following tables provide reconciliations of the non-GAAP measures with financial measures defined by GAAP.

($ in thousands)									Three Months Ended																		Six Months Ended
									6/30/2024						3/31/2024						6/30/2023						6/30/2024						6/30/2023
Average total shareholders' equity			(a)						$	351,221					$	349,644					$	339,869					$	350,583					$	337,530
Less: average preferred stock			(b)						69,141						69,141						69,141						69,141						69,141
Average TCE			(c)=(a)-(b)						$	282,080					$	280,503					$	270,728					$	281,442					$	268,389
Net income			(d)						$	6,281					$	4,685					$	7,477					$	10,966					$	17,774
Return on average shareholder's equity (1)			(d)/(a)						7.19		%				5.39		%				8.82		%				6.29		%				10.62		%
Return on average TCE (1)			(d)/(c)						8.96		%				6.72		%				11.08		%				7.84		%				13.35		%

(1) Annualized.

($ in thousands, except per share data)									6/30/2024						3/31/2024						12/31/2023						6/30/2023
Total shareholders' equity			(a)						$	353,469					$	350,005					$	348,872					$	340,411
Less: preferred stock			(b)						69,141						69,141						69,141						69,141
TCE			(c)=(a)-(b)						$	284,328					$	280,864					$	279,731					$	271,270
Outstanding common shares			(d)						14,254,024						14,263,791						14,260,440						14,318,890
Book value per common share			(a)/(d)						$	24.80					$	24.54					$	24.46					$	23.77
TCE per common share			(c)/(d)						$	19.95					$	19.69					$	19.62					$	18.94
Total assets			(e)						$	2,852,964					$	2,854,292					$	2,789,506					$	2,556,345
Total shareholders' equity to total assets			(a)/(e)						12.39		%				12.26		%				12.51		%				13.32		%
TCE to total assets			(c)/(e)						9.97		%				9.84		%				10.03		%				10.61		%

17