PCB Bancorp Reports Record Earnings of $9.8 Million for Q2 2021
07/22/2021 - 04:15 PM
PCB Bancorp (the “Company”) (NASDAQ: PCB), the holding company of Pacific City Bank (the “Bank”), today reported net income of $9.8 million , or $0.64 per diluted common share for the second quarter of 2021, compared with $8.6 million , or $0.55 per diluted common share, for the previous quarter and $3.4 million , or $0.22 per diluted common share, for the year-ago quarter.
Q2 2021 Highlights
Net income totaled $9.8 million or $0.64 per diluted common share;
The Company recorded a provision (reversal) for loan losses of $(934) thousand for the current quarter compared with $(1.1) million for the previous quarter and $3.9 million for the year-ago quarter.
Allowance for loan losses to total loans held-for-investment ratio was 1.45% at June 30, 2021 compared with 1.51% at March 31, 2021 and 1.30% at June 30, 2020. Excluding U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans, allowance for loan losses to total loans held-for-investment ratio was 1.62% and 1.74% at June 30, 2021 and March 31, 2021, respectively.
Net interest income was $19.0 million for the current quarter compared with $17.8 million for the previous quarter and $15.4 million for the year-ago quarter. Net interest margin was 3.83% for the second quarter of 2021 compared with 3.70% for the previous quarter and 3.22% for the year-ago quarter.
Gain on sale of loans was $4.0 million for the current quarter compared with $1.3 million for the previous quarter and $1.5 million for the year-ago quarter.
Total assets were $2.06 billion at June 30, 2021, an increase of $9.3 million , or 0.5% , from $2.05 billion at March 31, 2021 and an increase of $39.2 million , or 1.9% , from $2.02 billion at June 30, 2020;
Loans held-for-investment, net of deferred costs (fees), were $1.72 billion at June 30, 2021, an increase of $33.7 million , or 2.0% , from $1.69 billion at March 31, 2021 and an increase of $166.1 million , or 10.7% , from $1.55 billion at June 30, 2020;
SBA PPP loans totaled $181.0 million and $218.7 million at June 30, 2021 and March 31, 2021, respectively.
Loans under modified terms related to COVID-19 totaled $16.2 million and $19.8 million at June 30, 2021 and March 31, 2021, respectively.
Total deposits were $1.80 billion at June 30, 2021, an increase of $43.9 million from $1.75 billion at March 31, 2021 and an increase of $150.7 million , or 9.2% , from $1.65 billion at June 30, 2020;
Announced a repurchase program on April 8, 2021 for the repurchase up to 5% of outstanding common stock, which represented 775,000 shares, through September 7, 2021. As of June 30, 2021, the Company repurchased and retired 646,334 shares of common stock; and
Declared an increased cash dividend of $0.12 per share on July 22, 2021. This represents the 26th consecutive quarterly dividend paid by PCB Bancorp.
Henry Kim, President and Chief Executive Officer, commented, "We are pleased to announce another record quarter with net income of $9.8 million for the second quarter of 2021, an increase from $8.6 million in the first quarter of 2021. On a year-to-date basis, net income totaled $18.4 million for the first six months of 2021, up from $6.9 million in the first six months of 2020, a 165% increase. We continue to experience positive credit trends and improving economic conditions that resulted in additional release of loan loss reserves in the quarter. Our total loan portfolio excluding SBA PPP loans increased to $1.55 billion at June 30, 2021, an increase of $79.1 million , compared to March 31, 2021 and an increase of $125.9 million compared to June 30, 2020. During the second quarter of 2021, we prudently took advantage of our market opportunities to deploy excess liquidity into organic loans.”
Mr. Kim continued, "Net interest margin improved by thirteen basis points in the second quarter of 2021 as compared to the first quarter of 2021 primarily due to an expansion in loan interest income and a twelve basis point decline on average cost on total interest bearing liabilities. Although there are persistent uncertainties related to the evolving pandemic, our loan pipeline continues to be solid coupled with ample liquidity to expand our net interest income, and we remain positive in our outlook in delivering strong financial performance for the remainder of the year.
Financial Highlights (Unaudited)
($ in thousands, except per share data)
Three Months Ended
Six Months Ended
6/30/2021
3/31/2021
% Change
6/30/2020
% Change
6/30/2021
6/30/2020
% Change
Net income
$
9,844
$
8,560
15.0
%
$
3,367
192.4
%
$
18,404
$
6,939
165.2
%
Diluted earnings per common share
$
0.64
$
0.55
16.4
%
$
0.22
190.9
%
$
1.19
$
0.45
164.4
%
Net interest income
$
18,996
$
17,819
6.6
%
$
15,363
23.6
%
$
36,815
$
31,929
15.3
%
Provision (reversal) for loan losses
(934
)
(1,147
)
(18.6
)%
3,855
(124.2
)%
(2,081
)
6,751
(130.8
)%
Noninterest income
5,151
2,857
80.3
%
2,918
76.5
%
8,008
4,944
62.0
%
Noninterest expense
11,139
9,669
15.2
%
9,696
14.9
%
20,808
20,263
2.7
%
Return on average assets (1)
1.96
%
1.75
%
0.69
%
1.85
%
0.75
%
Return on average shareholders’ equity (1), (2)
16.49
%
14.66
%
5.98
%
15.59
%
6.17
%
Net interest margin (1)
3.83
%
3.70
%
3.22
%
3.77
%
3.52
%
Efficiency ratio (3)
46.13
%
46.76
%
53.04
%
46.42
%
54.95
%
($ in thousands, except per share data)
6/30/2021
3/31/2021
% Change
12/31/2020
% Change
6/30/2020
% Change
Total assets
$
2,060,003
$
2,050,672
0.5
%
$
1,922,853
7.1
%
$
2,020,777
1.9
%
Net loans held-for-investment
1,694,767
1,660,402
2.1
%
1,557,068
8.8
%
1,533,341
10.5
%
Total deposits
1,797,648
1,753,771
2.5
%
1,594,851
12.7
%
1,646,930
9.2
%
Book value per common share (2), (4)
$
16.09
$
15.53
3.6
%
$
15.19
5.9
%
$
14.78
8.9
%
Tier 1 leverage ratio (consolidated)
11.76
%
12.03
%
11.94
%
11.49
%
Total shareholders’ equity to total assets (2)
11.60
%
11.72
%
12.16
%
11.24
%
(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. While California’s and New York’s shelter-at-home limits were largely lifted in June 2021, the local economies in the Company’s primary markets have not yet fully recovered.
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 $181.0 million (1,746 loans) and loans under modified terms related to the COVID-19 pandemic totaled $16.2 million (6 loan customers) as of June 30, 2021. The Company recognized $65.6 million in forgiveness for 1,061 SBA PPP loans as of June 30, 2021. On January 13, 2021, SBA began accepting applications for second draw PPP loans and the Company had funded $107.3 million (1,160 loans), net of origination fees and costs, as of June 30, 2021.
In addition, the Company has been monitoring its liquidity and capital closely. As of June 30, 2021, the Company maintained $174.6 million , or 8.5% of total assets, of cash and cash equivalents and $601.9 million , or 29.2% of total assets, of available borrowing capacity. All regulatory capital ratios were also well above the regulatory well capitalized requirements as of June 30, 2021.
At this time, the Company cannot estimate the long term impact of the COVID-19 pandemic, but these conditions are expected to impact its business, results of operations, and financial condition negatively.
Result of Operations (Unaudited)
Net Interest Income and Net Interest Margin
The following table presents the components of net interest income for the periods indicated:
Three Months Ended
Six Months Ended
($ in thousands)
6/30/2021
3/31/2021
% Change
6/30/2020
% Change
6/30/2021
6/30/2020
% Change
Interest income/expense on
Loans
$
19,511
$
18,744
4.1
%
$
18,273
6.8
%
$
38,255
$
38,679
(1.1
)%
Investment securities
375
360
4.2
%
539
(30.4
)%
735
1,183
(37.9
)%
Other interest-earning assets
165
154
7.1
%
161
2.5
%
319
771
(58.6
)%
Total interest-earning assets
20,051
19,258
4.1
%
18,973
5.7
%
39,309
40,633
(3.3
)%
Interest-bearing deposits
1,000
1,311
(23.7
)%
3,409
(70.7
)%
2,311
8,401
(72.5
)%
Borrowings
55
128
(57.0
)%
201
(72.6
)%
183
303
(39.6
)%
Total interest-bearing liabilities
1,055
1,439
(26.7
)%
3,610
(70.8
)%
2,494
8,704
(71.3
)%
Net interest income
$
18,996
$
17,819
6.6
%
$
15,363
23.6
%
$
36,815
$
31,929
15.3
%
Average balance of
Loans
$
1,691,704
$
1,641,634
3.1
%
$
1,554,011
8.9
%
$
1,666,808
$
1,504,369
10.8
%
Investment securities
132,249
123,851
6.8
%
120,336
9.9
%
128,073
119,419
7.2
%
Other interest-earning assets
164,710
189,153
(12.9
)%
245,447
(32.9
)%
176,864
202,120
(12.5
)%
Total interest-earning assets
$
1,988,663
$
1,954,638
1.7
%
$
1,919,794
3.6
%
$
1,971,745
$
1,825,908
8.0
%
Interest-bearing deposits
$
1,026,937
$
1,053,845
(2.6
)%
$
1,109,307
(7.4
)%
$
1,040,316
$
1,119,503
(7.1
)%
Borrowings
19,012
75,556
(74.8
)%
130,330
(85.4
)%
47,128
77,723
(39.4
)%
Total interest-bearing liabilities
$
1,045,949
$
1,129,401
(7.4
)%
$
1,239,637
(15.6
)%
$
1,087,444
$
1,197,226
(9.2
)%
Total funding (1)
$
1,766,054
$
1,736,477
1.7
%
$
1,713,812
3.0
%
$
1,751,346
$
1,619,073
8.2
%
Annualized average yield/cost of
Loans
4.63
%
4.63
%
4.73
%
4.63
%
5.17
%
Investment securities
1.14
%
1.18
%
1.80
%
1.16
%
1.99
%
Other interest-earning assets
0.40
%
0.33
%
0.26
%
0.36
%
0.77
%
Total interest-earning assets
4.04
%
4.00
%
3.97
%
4.02
%
4.48
%
Interest-bearing deposits
0.39
%
0.50
%
1.24
%
0.45
%
1.51
%
Borrowings
1.16
%
0.69
%
0.62
%
0.78
%
0.78
%
Total interest-bearing liabilities
0.40
%
0.52
%
1.17
%
0.46
%
1.46
%
Net interest margin
3.83
%
3.70
%
3.22
%
3.77
%
3.52
%
Cost of total funding (1)
0.24
%
0.34
%
0.85
%
0.29
%
1.08
%
Supplementary information
Net accretion of discount on loans
$
1,012
$
745
35.8
%
$
530
90.9
%
$
1,757
$
1,558
12.8
%
Net amortization of deferred loan fees (costs)
$
1,459
$
1,220
19.6
%
$
649
124.8
%
$
2,679
$
770
247.9
%
(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. 4.63% as increases in net accretion of discount on loans from an increase in loan payoffs and net amortization of deferred loan fees were mostly offset by an increase in SBA PPP loans and lower interest rates on newly originated loans. Excluding SBA PPP loans, weighted-average interest rates on total loans and new loans funded during the current quarter were 4.31% and 3.77% , respectively, at June 30, 2021. The decreases in average yield for the current quarter and year-to-date period compared with the same periods of 2020 were primarily due to an increase in SBA PPP loans and a decrease in overall interest rates on loans from lower market rates, partially offset by increases in net accretion of discount 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:
6/30/2021
3/31/2021
12/31/2020
6/30/2020
% 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
33.9
%
3.56
%
36.3
%
3.44
%
31.7
%
3.86
%
38.4
%
4.18
%
Hybrid rate loans
22.5
%
4.52
%
19.3
%
4.77
%
20.8
%
4.82
%
13.3
%
4.99
%
Variable rate loans
43.6
%
3.99
%
44.4
%
4.04
%
47.5
%
4.06
%
48.3
%
4.11
%
Investment Securities. $19.3 million and $54.5 million , respectively.
Other Interest-Earning Assets.
Interest-Bearing Deposits.
Borrowings. $30.0 million and $40.0 million , respectively, with a weighted-average rate of 0.32% and 0.47% , respectively, for the current quarter and year-to-date period. At June 30, 2021, the Company had a term FHLB advance of $10.0 million with an interest rate of 2.07% that matures on June 29, 2022.
Provision (reversal) for Loan Losses
Provision (reversal) for loan losses was $(934) thousand for the current quarter compared with $(1.1) million for the previous quarter and $3.9 million for the year-ago quarter. For the current and previous year-to-date periods, provision (reversal) for loan losses was $(2.1) million and $6.8 million , respectively. The reversals for the current and previous quarters were primarily due to a decrease in historical loss and qualitative adjustment factor allocations as a result of improving economic conditions. The Company recorded net charge-offs (recoveries) of $(309) thousand for the current quarter compared with $(151) thousand for the previous quarter and $281 thousand for the year-ago quarter. For the current and previous year-to-date periods, net charge-offs (recoveries) were $(460) thousand and $883 thousand , respectively.
The following table presents allowance for loan losses to total loans held-for-investment ratio for the dates indicated:
($ in thousands)
6/30/2021
3/31/2021
12/31/2020
6/30/2020
Total loans held-for-investment
$
1,719,656
$
1,685,916
$
1,583,578
$
1,553,589
Less: SBA PPP loans
181,019
218,709
135,654
133,675
Total loans held-for-investment, excluding SBA PPP loans
$
1,538,637
$
1,467,207
$
1,447,924
$
1,419,914
Allowance for loan losses
$
24,889
$
25,514
$
26,510
$
20,248
Allowance for loan losses to total loans held-for-investment
1.45
%
1.51
%
1.67
%
1.30
%
Allowance for loan losses to total loans held-for-investment, excluding SBA PPP loans
1.62
%
1.74
%
1.83
%
1.43
%
Noninterest Income
The following table presents the components of noninterest income for the periods indicated:
Three Months Ended
Six Months Ended
($ in thousands)
6/30/2021
3/31/2021
% Change
6/30/2020
% Change
6/30/2021
6/30/2020
% Change
Gain on sale of loans
$
3,967
$
1,322
200.1
%
$
1,498
164.8
%
$
5,289
$
2,223
137.9
%
Service charges and fees on deposits
302
293
3.1
%
275
9.8
%
595
665
(10.5
)%
Loan servicing income
545
882
(38.2
)%
902
(39.6
)%
1,427
1,456
(2.0
)%
Other income
337
360
(6.4
)%
243
38.7
%
697
600
16.2
%
Total noninterest income
$
5,151
$
2,857
80.3
%
$
2,918
76.5
%
$
8,008
$
4,944
62.0
%
Gain on Sale of Loans.
Three Months Ended
Six Months Ended
($ in thousands)
6/30/2021
3/31/2021
% Change
6/30/2020
% Change
6/30/2021
6/30/2020
% Change
Gain on sale of SBA loans
Sold loan balance
$
34,107
$
10,919
212.4
%
$
27,066
26.0
%
$
45,026
$
38,781
16.1
%
Premium received
4,172
1,309
218.7
%
2,042
104.3
%
5,481
3,098
76.9
%
Gain recognized
3,954
1,195
230.9
%
1,448
173.1
%
5,149
2,152
139.3
%
Gain on sale of residential property loans
Sold loan balance
$
1,615
$
7,907
(79.6
)%
$
6,118
(73.6
)%
$
9,522
$
8,197
16.2
%
Gain recognized
13
127
(89.8
)%
50
(74.0
)%
140
71
97.2
%
The increases in gain on sale of SBA loans for the current quarter and year-to-date period were primarily due to increased origination and sales of SBA loans and higher premiums from the secondary market. The Company sold certain commercial property loans of $1.7 million at par during the current quarter.
Loan Servicing Income.
Three Months Ended
Six Months Ended
($ in thousands)
6/30/2021
3/31/2021
% Change
6/30/2020
% Change
6/30/2021
6/30/2020
% Change
Loan servicing income
Servicing income received
$
1,124
$
1,273
(11.7
)%
$
1,294
(13.1
)%
$
2,397
$
2,452
(2.2
)%
Servicing assets amortization
(579
)
(391
)
48.1
%
(392
)
47.7
%
(970
)
(996
)
(2.6
)%
Loan servicing income
$
545
$
882
(38.2
)%
$
902
(39.6
)%
$
1,427
$
1,456
(2.0
)%
Underlying loans at end of period
$
492,130
$
492,981
(0.2
)%
$
494,000
(0.4
)%
$
492,130
$
494,000
(0.4
)%
The Company services SBA loans and certain residential property loans that are sold to the secondary market. The decreases for the current quarter and year-to-date period were primarily due to a decrease in servicing income received and an increase in servicing asset amortization from an increase in loan payoffs.
Noninterest Expense
The following table presents the components of noninterest expense for the periods indicated:
Three Months Ended
Six Months Ended
($ in thousands)
6/30/2021
3/31/2021
% Change
6/30/2020
% Change
6/30/2021
6/30/2020
% Change
Salaries and employee benefits
$
7,125
$
6,182
15.3
%
$
5,761
23.7
%
$
13,307
$
12,312
8.1
%
Occupancy and equipment
1,388
1,371
1.2
%
1,400
(0.9
)%
2,759
2,780
(0.8
)%
Professional fees
658
494
33.2
%
509
29.3
%
1,152
1,306
(11.8
)%
Marketing and business promotion
516
138
273.9
%
548
(5.8
)%
654
727
(10.0
)%
Data processing
396
377
5.0
%
366
8.2
%
773
724
6.8
%
Director fees and expenses
151
138
9.4
%
107
41.1
%
289
328
(11.9
)%
Regulatory assessments
179
208
(13.9
)%
242
(26.0
)%
387
461
(16.1
)%
Other expenses
726
761
(4.6
)%
763
(4.8
)%
1,487
1,625
(8.5
)%
Total noninterest expense
$
11,139
$
9,669
15.2
%
$
9,696
14.9
%
$
20,808
$
20,263
2.7
%
Salaries and Employee Benefits. $62 thousand , $750 thousand , and $1.1 million for the current, previous, and year-ago quarters, respectively, and $812 thousand and $1.1 million for the current and previous year-to-date periods, respectively.
Professional Fees.
Marketing and business promotion.
Director fees and expense.
Regulatory Assessments.
Balance Sheet (Unaudited)
Total assets were $2.06 billion at June 30, 2021, an increase of $9.3 million , or 0.5% , from $2.05 billion at March 31, 2021 and an increase of $39.2 million , or 1.9% , from $2.02 billion at June 30, 2020. The increases for the current quarter and year-to-date period were primarily due to increases in loans held-for-investment and investment securities, partially offset by a decrease in cash and cash equivalents.
The following table presents a composition of total loans (includes both loans held-for-sale and loans held-for-investment, net of deferred costs (fees)) as of the dates indicated:
($ in thousands)
6/30/2021
3/31/2021
% Change
12/31/2020
% Change
6/30/2020
% Change
Real estate loans
Commercial property
$
997,918
$
922,536
8.2
%
$
880,736
13.3
%
$
813,409
22.7
%
Residential property
196,983
190,990
3.1
%
198,431
(0.7
)%
223,923
(12.0
)%
SBA property
124,251
125,989
(1.4
)%
126,570
(1.8
)%
122,675
1.3
%
Construction
13,475
13,151
2.5
%
15,199
(11.3
)%
20,432
(34.0
)%
Commercial and industrial loans
Commercial term
74,503
80,361
(7.3
)%
87,250
(14.6
)%
98,936
(24.7
)%
Commercial lines of credit
90,286
91,970
(1.8
)%
96,087
(6.0
)%
96,339
(6.3
)%
SBA commercial term
19,614
21,078
(6.9
)%
21,878
(10.3
)%
22,650
(13.4
)%
SBA PPP
181,019
218,709
(17.2
)%
135,654
33.4
%
133,675
35.4
%
Other consumer loans
21,607
21,132
2.2
%
21,773
(0.8
)%
21,550
0.3
%
Loans held-for-investment
1,719,656
1,685,916
2.0
%
1,583,578
8.6
%
1,553,589
10.7
%
Loans held-for-sale
11,255
3,569
215.4
%
1,979
468.7
%
4,102
174.4
%
Total loans
$
1,730,911
$
1,689,485
2.5
%
$
1,585,557
9.2
%
$
1,557,691
11.1
%
The increase in loans held-for-investment for the current quarter was primarily due to new funding of $171.1 million and advances on lines of credit of $28.6 million , partially offset by pay-downs and pay-offs of $164.1 million . The increase in loans held-for-investment for the current year-to-date period was primarily due to new funding of $361.5 million and advances on lines of credit of $56.4 million , partially offset by pay-downs and pay-offs of $279.9 million . SBA PPP loan and commercial property loan production contributed significantly to the Company’s loan growth for the current year-to-date period.
The increase in loans held-for-sale for the current quarter was primarily due to new funding of $43.2 million , partially offset by sales of $37.4 million . The increase in loans held-for-sale for the current year-to-date period was primarily due to new funding of $63.6 million , partially offset by sales of $56.3 million .
The following table presents a composition of commitments to extend credit as of the dates indicated:
($ in thousands)
6/30/2021
3/31/2021
% Change
12/31/2020
% Change
6/30/2020
% Change
Real estate loans
Commercial property
$
15,277
$
20,003
(23.6
)%
$
21,016
(27.3
)%
$
16,962
(9.9
)%
SBA property
6,191
3,677
68.4
%
540
1,046.5
%
220
2,714.1
%
Construction
6,233
13,588
(54.1
)%
13,986
(55.4
)%
16,451
(62.1
)%
Commercial and industrial loans
Commercial term
2,950
1,000
195.0
%
1,000
195.0
%
1,000
195.0
%
Commercial lines of credit
164,648
168,381
(2.2
)%
156,870
5.0
%
159,753
3.1
%
SBA commercial term
—
—
—
%
—
—
%
—
—
%
Other consumer loans
118
96
22.9
%
84
40.5
%
45
162.2
%
Total commitments to extend credit
$
195,417
$
206,745
(5.5
)%
$
193,496
1.0
%
$
194,431
0.5
%
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)
6/30/2021
3/31/2021
% Change
12/31/2020
% Change
6/30/2020
% Change
Nonaccrual loans
Real estate loans
Commercial property
$
—
$
—
—
%
$
524
(100.0
)%
$
—
—
%
Residential property
—
—
—
%
189
(100.0
)%
—
—
%
SBA property
781
841
(7.1
)%
885
(11.8
)%
1,351
(42.2
)%
Commercial and industrial loans
Commercial lines of credit
—
—
—
%
904
(100.0
)%
1,968
(100.0
)%
SBA commercial term
600
568
5.6
%
595
0.8
%
381
57.5
%
Other consumer loans
65
52
25.0
%
66
(1.5
)%
70
(7.1
)%
Total nonaccrual loans held-for-investment
1,446
1,461
(1.0
)%
3,163
(54.3
)%
3,770
(61.6
)%
Loans past due 90 days or more and still accruing
—
—
—
%
—
—
%
696
(100.0
)%
Non-performing loans (“NPLs”)
1,446
1,461
(1.0
)%
3,163
(54.3
)%
4,466
(67.6
)%
Other real estate owned (“OREO”)
—
2,336
(100.0
)%
1,401
(100.0
)%
376
(100.0
)%
Non-performing assets (“NPAs”)
$
1,446
$
3,797
(61.9
)%
$
4,564
(68.3
)%
$
4,842
(70.1
)%
Loans past due and still accruing
Past due 30 to 59 days
$
227
$
56
305.4
%
$
302
(24.8
)%
$
311
(27.0
)%
Past due 60 to 89 days
—
52
(100.0
)%
36
(100.0
)%
113
(100.0
)%
Past due 90 days or more
—
—
—
%
—
—
%
696
(100.0
)%
Total loans past due and still accruing
$
227
$
108
110.2
%
338
(32.8
)%
$
1,120
(79.7
)%
Troubled debt restructurings (“TDRs”)
Accruing TDRs
$
605
$
620
(2.4
)%
$
634
(4.6
)%
$
669
(9.6
)%
Nonaccrual TDRs
30
33
(9.1
)%
5
500.0
%
40
(25.0
)%
Total TDRs
$
635
$
653
(2.8
)%
$
639
(0.6
)%
$
709
(10.4
)%
Special mention loans
$
18,238
$
17,997
1.3
%
$
16,461
10.8
%
$
71
25,587.3
%
Classified assets
Classified loans
$
9,666
$
7,090
36.3
%
$
10,130
(4.6
)%
$
5,809
66.4
%
OREO
—
2,336
(100.0
)%
1,401
(100.0
)%
376
(100.0
)%
Classified assets
$
9,666
$
9,426
2.5
%
$
11,531
(16.2
)%
$
6,185
56.3
%
NPLs to loans held-for-investment
0.08
%
0.09
%
0.20
%
0.29
%
NPAs to total assets
0.07
%
0.19
%
0.24
%
0.24
%
Classified assets to total assets
0.47
%
0.46
%
0.60
%
0.31
%
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.
Special mention loans included $14.7 million , $16.4 million and $14.9 million of loans under modified terms related to the COVID-19 pandemic at June 30, 2021, March 31, 2021 and December 31, 2020, respectively. The special mention loans under modified terms related to the COVID-19 pandemic included commercial property loans of $11.8 million and commercial term loans of $2.9 million at June 30, 2021.
Classified loans included $1.2 million , $1.2 million and $1.9 million of loans under modified terms related to the COVID-19 pandemic at June 30, 2021, March 31, 2021 and December 31, 2020, respectively.
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 $16.2 million at June 30, 2021, a decrease of $19.9 million , or 55.1% , from $36.1 million at December 31, 2020 and a decrease of $467.8 million , or 96.7% , from $484.0 million at June 30, 2020.
The following table presents a summary of loans under modified terms related to the COVID-19 pandemic by portfolio segment as of June 30, 2021:
Modification Type
Weighted-Average Contractual Rate
Accrued Interest Receivable
($ in thousands)
Payment Deferment
Interest Only Payment
Total
Real estate loans
Commercial property
$
—
$
11,831
$
11,831
3.59
%
$
74
Residential property
328
—
328
4.75
%
8
Commercial and industrial loans
Commercial term
—
4,042
4,042
3.77
%
84
Total
$
328
$
15,873
$
16,201
3.65
%
$
166
Investment Securities
Total investment securities were $135.5 million at June 30, 2021, an increase of $8.4 million , or 6.6% , from $127.1 million at March 31, 2021 and an increase of $7.4 million , or 5.8% , from $128.0 million at June 30, 2020. The increase in investment securities for the current quarter was primarily due to purchases of $19.3 million , partially offset by principal pay-downs and calls of $11.1 million and net premium amortization of $280 thousand . The increase in investment securities for the current year-to-date period was primarily due to purchases of $39.5 million , partially offset by principal pay-downs and calls of $22.8 million and net premium amortization of $590 thousand .
Deposits
The following table presents the Company’s deposit mix as of the dates indicated:
6/30/2021
3/31/2021
12/31/2020
6/30/2020
($ in thousands)
Amount
% to Total
Amount
% to Total
Amount
% to Total
Amount
% to Total
Noninterest-bearing demand deposits
$
795,741
44.3
%
$
715,719
40.8
%
$
538,009
33.7
%
$
551,415
33.5
%
Interest-bearing deposits
Savings
11,671
0.6
%
11,271
0.6
%
10,481
0.7
%
8,258
0.5
%
NOW
21,725
1.2
%
19,380
1.1
%
21,604
1.4
%
21,173
1.3
%
Retail money market accounts
358,575
19.9
%
381,704
21.7
%
351,739
22.0
%
339,444
20.6
%
Brokered money market accounts
4
0.1
%
4
0.1
%
25,002
1.6
%
10
0.1
%
Retail time deposits of
$250,000 or less
271,531
15.1
%
276,232
15.8
%
299,431
18.7
%
347,382
21.0
%
More than $250,000
173,401
9.6
%
166,845
9.5
%
168,683
10.6
%
170,180
10.3
%
Time deposits from internet rate service providers
—
—
%
17,616
1.0
%
24,902
1.6
%
37,068
2.3
%
State and brokered time deposits
165,000
9.2
%
165,000
9.4
%
155,000
9.7
%
172,000
10.4
%
Total interest-bearing deposits
1,001,907
55.7
%
1,038,052
59.2
%
1,056,842
66.3
%
1,095,515
66.5
%
Total deposits
$
1,797,648
100.0
%
$
1,753,771
100.0
%
$
1,594,851
100.0
%
$
1,646,930
100.0
%
The increase in noninterest-bearing demand deposits for the current year-to-date period was primarily due to the overall liquid deposit market. During the current year-to-date period, a total of $93.9 million of SBA PPP loans were funded through the Bank’s noninterest-bearing demand deposits and deposit customers also received $93.6 million of SBA Economic Injury Disaster Loans and SBA Revitalization Funds.
The increase in retail time deposits for the current quarter was primarily due to new accounts of $27.6 million , renewals of the matured accounts of $96.6 million , and balance increases of $4.0 million , partially offset by matured and closed accounts of $126.3 million . The decrease in retail time deposits for the current year-to-date period was primarily due to matured and closed accounts of $321.9 million , partially offset by new accounts of $59.3 million , renewals of the matured accounts of $232.7 million , and balance increases of $6.7 million .
Liquidity
The following table presents a summary of the Company’s liquidity position as of June 30, 2021:
($ in thousands)
6/30/2021
Cash and cash equivalents
$
174,621
Cash and cash equivalents to total assets
8.5
%
Available borrowing capacity
FHLB advances
$
502,653
Federal Reserve Discount Window
34,224
Overnight federal funds lines
65,000
Total
$
601,877
Total available borrowing capacity to total assets
29.2
%
Shareholders’ Equity
Shareholders’ equity was $238.9 million at June 30, 2021, a decrease of $1.3 million , or 0.6% , from $240.3 million at March 31, 2021 and an increase of $11.7 million , or 5.2% , from $227.2 million at June 30, 2020. The decrease for the current quarter was primarily due to repurchases of common stock of $10.3 million and cash dividends declared on common stock of $1.5 million , partially offset by net income and an increase in accumulated other comprehensive income. The increase for the current year-to-date period was primarily due to net income, partially offset by repurchases of common stock of $10.3 million , cash dividends declared on common stock of $3.1 million and a decrease in accumulated other comprehensive income.
On April 8, 2021, the Company’s Board of Directors approved a repurchase program authorizing the repurchase of up to 5% of the Company’s outstanding common stock as of the date of the board meeting, which represented 775,000 shares, through September 7, 2021. As of June 30, 2021, the Company repurchased and retired 646,334 shares of common stock totaling $10.3 million at a weighted-average price of $15.99 per share.
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:
6/30/2021
3/31/2021
12/31/2020
6/30/2020
Well Capitalized Requirements
PCB Bancorp
Common tier 1 capital (to risk-weighted assets)
15.17
%
15.92
%
15.97
%
15.83
%
N/A
Total capital (to risk-weighted assets)
16.43
%
17.17
%
17.22
%
17.09
%
N/A
Tier 1 capital (to risk-weighted assets)
15.17
%
15.92
%
15.97
%
15.83
%
N/A
Tier 1 capital (to average assets)
11.76
%
12.03
%
11.94
%
11.49
%
N/A
Pacific City Bank
Common tier 1 capital (to risk-weighted assets)
14.88
%
15.62
%
15.70
%
15.58
%
6.5
%
Total capital (to risk-weighted assets)
16.13
%
16.88
%
16.95
%
16.83
%
10.0
%
Tier 1 capital (to risk-weighted assets)
14.88
%
15.62
%
15.70
%
15.58
%
8.0
%
Tier 1 capital (to average assets)
11.53
%
11.81
%
11.74
%
11.30
%
5.0
%
About PCB Bancorp
PCB Bancorp, formerly known as Pacific City Financial Corporation, is the bank holding company for Pacific City Bank, a California state chartered bank, offering a full suite of commercial banking services to small to medium-sized businesses, individuals and professionals, primarily in Southern California, and predominantly in Korean-American and other minority communities.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan,” or words or phases of similar meaning. We caution that the forward-looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control, including but not limited to our borrowers’ actual payment performance as loan deferrals related to the COVID-19 pandemic expire, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to the COVID-19 pandemic, including the potential adverse impact of loan modifications and payment deferrals implemented consistent with recent regulatory guidance, and the general economic uncertainty caused by the COVID-19 pandemic, and government and societal responses thereto. These and other important factors are detailed in various securities law filings made periodically by the Company, copies of which are available from the Company without charge. Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements. Any forward-looking statements presented herein are made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise, except as required by law.
PCB Bancorp and Subsidiary
Consolidated Balance Sheets (Unaudited)
($ in thousands, except share and per share data)
6/30/2021
3/31/2021
% Change
12/31/2020
% Change
6/30/2020
% Change
Assets
Cash and due from banks
$
18,417
$
16,764
9.9
%
$
19,605
(6.1
)%
$
18,255
0.9
%
Interest-bearing deposits in other financial institutions
156,204
195,016
(19.9
)%
174,493
(10.5
)%
289,348
(46.0
)%
Total cash and cash equivalents
174,621
211,780
(17.5
)%
194,098
(10.0
)%
307,603
(43.2
)%
Securities available-for-sale, at fair value
135,479
127,114
6.6
%
120,527
12.4
%
128,049
5.8
%
Loans held-for-sale
11,255
3,569
215.4
%
1,979
468.7
%
4,102
174.4
%
Loans held-for-investment, net of deferred loan costs (fees)
1,719,656
1,685,916
2.0
%
1,583,578
8.6
%
1,553,589
10.7
%
Allowance for loan losses
(24,889
)
(25,514
)
(2.4
)%
(26,510
)
(6.1
)%
(20,248
)
22.9
%
Net loans held-for-investment
1,694,767
1,660,402
2.1
%
1,557,068
8.8
%
1,533,341
10.5
%
Premises and equipment, net
3,576
3,774
(5.2
)%
4,048
(11.7
)%
4,542
(21.3
)%
Federal Home Loan Bank and other bank stock
8,577
8,447
1.5
%
8,447
1.5
%
8,447
1.5
%
Other real estate owned, net
—
2,336
(100.0
)%
1,401
(100.0
)%
376
(100.0
)%
Deferred tax assets, net
7,892
8,170
(3.4
)%
8,120
(2.8
)%
6,347
24.3
%
Servicing assets
6,482
6,253
3.7
%
6,400
1.3
%
6,399
1.3
%
Operating lease assets
6,595
7,145
(7.7
)%
7,616
(13.4
)%
7,843
(15.9
)%
Accrued interest receivable
6,741
7,523
(10.4
)%
9,334
(27.8
)%
9,498
(29.0
)%
Other assets
4,018
4,159
(3.4
)%
3,815
5.3
%
4,230
(5.0
)%
Total assets
$
2,060,003
$
2,050,672
0.5
%
$
1,922,853
7.1
%
$
2,020,777
1.9
%
Liabilities
Deposits
Noninterest-bearing demand
$
795,741
$
715,719
11.2
%
$
538,009
47.9
%
$
551,415
44.3
%
Savings, NOW and money market accounts
391,975
412,359
(4.9
)%
408,826
(4.1
)%
368,885
6.3
%
Time deposits of $250,000 or less
336,531
358,848
(6.2
)%
379,333
(11.3
)%
466,450
(27.9
)%
Time deposits of more than $250,000
273,401
266,845
2.5
%
268,683
1.8
%
260,180
5.1
%
Total deposits
1,797,648
1,753,771
2.5
%
1,594,851
12.7
%
1,646,930
9.2
%
Federal Home Loan Bank advances
10,000
40,000
(75.0
)%
80,000
(87.5
)%
130,000
(92.3
)%
Operating lease liabilities
7,338
7,935
(7.5
)%
8,455
(13.2
)%
8,758
(16.2
)%
Accrued interest payable and other liabilities
6,076
8,703
(30.2
)%
5,759
5.5
%
7,856
(22.7
)%
Total liabilities
1,821,062
1,810,409
0.6
%
1,689,065
7.8
%
1,793,544
1.5
%
Commitments and contingent liabilities
Shareholders’ equity
Common stock, no par value
154,796
164,698
(6.0
)%
164,140
(5.7
)%
163,759
(5.5
)%
Retained earnings
83,002
74,707
11.1
%
67,692
22.6
%
61,531
34.9
%
Accumulated other comprehensive income, net
1,143
858
33.2
%
1,956
(41.6
)%
1,942
(41.1
)%
Total shareholders’ equity
238,941
240,263
(0.6
)%
233,788
2.2
%
227,233
5.2
%
Total liabilities and shareholders’ equity
$
2,060,003
$
2,050,672
0.5
%
$
1,922,853
7.1
%
$
2,020,777
1.9
%
Outstanding common shares
14,854,315
15,468,242
15,385,878
15,377,935
Book value per common share (1)
$
16.09
$
15.53
$
15.19
$
14.78
Total loan to total deposit ratio
96.29
%
96.33
%
99.42
%
94.58
%
Noninterest-bearing deposits to total deposits
44.27
%
40.81
%
33.73
%
33.48
%
(1)
The ratios are calculated by dividing total shareholders ’ equity by the number of outstanding common shares. The Company did not have any intangible equity components for the presented periods.
PCB Bancorp and Subsidiary
Consolidated Statements of Income (Unaudited)
($ in thousands, except share and per share data)
Three Months Ended
Six Months Ended
6/30/2021
3/31/2021
% Change
6/30/2020
% Change
6/30/2021
6/30/2020
% Change
Interest and dividend income
Loans, including fees
$
19,511
$
18,744
4.1
%
$
18,273
6.8
%
$
38,255
$
38,679
(1.1
)%
Investment securities
375
360
4.2
%
539
(30.4
)%
735
1,183
(37.9
)%
Other interest-earning assets
165
154
7.1
%
161
2.5
%
319
771
(58.6
)%
Total interest income
20,051
19,258
4.1
%
18,973
5.7
%
39,309
40,633
(3.3
)%
Interest expense
Deposits
1,000
1,311
(23.7
)%
3,409
(70.7
)%
2,311
8,401
(72.5
)%
Other borrowings
55
128
(57.0
)%
201
(72.6
)%
183
303
(39.6
)%
Total interest expense
1,055
1,439
(26.7
)%
3,610
(70.8
)%
2,494
8,704
(71.3
)%
Net interest income
18,996
17,819
6.6
%
15,363
23.6
%
36,815
31,929
15.3
%
Provision (reversal) for loan losses
(934
)
(1,147
)
(18.6
)%
3,855
(124.2
)%
(2,081
)
6,751
(130.8
)%
Net interest income after provision (reversal) for loan losses
19,930
18,966
5.1
%
11,508
73.2
%
38,896
25,178
54.5
%
Noninterest income
Gain on sale of loans
3,967
1,322
200.1
%
1,498
164.8
%
5,289
2,223
137.9
%
Service charges and fees on deposits
302
293
3.1
%
275
9.8
%
595
665
(10.5
)%
Loan servicing income
545
882
(38.2
)%
902
(39.6
)%
1,427
1,456
(2.0
)%
Other income
337
360
(6.4
)%
243
38.7
%
697
600
16.2
%
Total noninterest income
5,151
2,857
80.3
%
2,918
76.5
%
8,008
4,944
62.0
%
Noninterest expense
Salaries and employee benefits
7,125
6,182
15.3
%
5,761
23.7
%
13,307
12,312
8.1
%
Occupancy and equipment
1,388
1,371
1.2
%
1,400
(0.9
)%
2,759
2,780
(0.8
)%
Professional fees
658
494
33.2
%
509
29.3
%
1,152
1,306
(11.8
)%
Marketing and business promotion
516
138
273.9
%
548
(5.8
)%
654
727
(10.0
)%
Data processing
396
377
5.0
%
366
8.2
%
773
724
6.8
%
Director fees and expenses
151
138
9.4
%
107
41.1
%
289
328
(11.9
)%
Regulatory assessments
179
208
(13.9
)%
242
(26.0
)%
387
461
(16.1
)%
Other expenses
726
761
(4.6
)%
763
(4.8
)%
1,487
1,625
(8.5
)%
Total noninterest expense
11,139
9,669
15.2
%
9,696
14.9
%
20,808
20,263
2.7
%
Income before income taxes
13,942
12,154
14.7
%
4,730
194.8
%
26,096
9,859
164.7
%
Income tax expense
4,098
3,594
14.0
%
1,363
200.7
%
7,692
2,920
163.4
%
Net income
$
9,844
$
8,560
15.0
%
$
3,367
192.4
%
$
18,404
$
6,939
165.2
%
Earnings per common share
Basic
$
0.65
$
0.55
$
0.22
$
1.20
$
0.45
Diluted
$
0.64
$
0.55
$
0.22
$
1.19
$
0.45
Average common shares
Basic
15,115,561
15,384,343
15,337,405
15,249,210
15,421,552
Diluted
15,309,873
15,533,608
15,373,655
15,425,308
15,522,626
Dividend paid per common share
$
0.10
$
0.10
$
0.10
$
0.20
$
0.20
Return on average assets (1)
1.96
%
1.75
%
0.69
%
1.85
%
0.75
%
Return on average shareholders’ equity (1), (2)
16.49
%
14.66
%
5.98
%
15.59
%
6.17
%
Efficiency ratio (3)
46.13
%
46.76
%
53.04
%
46.42
%
54.95
%
(1)
Ratios are presented on an annualized basis.
(2)
The Company did not have any intangible equity components for the presented periods.
(3)
The ratios are calculated by dividing noninterest expense by the sum of net interest income and noninterest income.
PCB Bancorp and Subsidiary
Average Balance, Average Yield, and Average Rate (Unaudited)
($ in thousands)
Three Months Ended
6/30/2021
3/31/2021
6/30/2020
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)
$
1,691,704
$
19,511
4.63
%
$
1,641,634
$
18,744
4.63
%
$
1,554,011
$
18,273
4.73
%
Mortgage-backed securities
92,732
233
1.01
%
81,486
215
1.07
%
63,692
317
2.00
%
Collateralized mortgage obligation
22,929
54
0.94
%
24,888
57
0.93
%
37,745
122
1.30
%
SBA loan pool securities
10,828
51
1.89
%
11,673
52
1.81
%
13,189
62
1.89
%
Municipal bonds (2)
5,760
37
2.58
%
5,804
36
2.52
%
5,710
38
2.68
%
Other interest-earning assets
164,710
165
0.40
%
189,153
154
0.33
%
245,447
161
0.26
%
Total interest-earning assets
1,988,663
20,051
4.04
%
1,954,638
19,258
4.00
%
1,919,794
18,973
3.97
%
Noninterest-earning assets
Cash and cash equivalents
19,080
19,072
16,031
Allowance for loan losses
(25,559
)
(26,870
)
(17,320
)
Other assets
36,605
40,377
37,959
Total noninterest-earning assets
30,126
32,579
36,670
Total assets
$
2,018,789
$
1,987,217
$
1,956,464
Liabilities and Shareholders’ Equity
Interest-bearing liabilities
Deposits
NOW and money market accounts
$
400,314
317
0.32
%
$
407,623
333
0.33
%
$
371,992
548
0.59
%
Savings
11,588
1
0.03
%
10,609
1
0.04
%
6,966
3
0.17
%
Time deposits
615,035
682
0.44
%
635,613
977
0.62
%
730,349
2,858
1.57
%
Total interest-bearing deposits
1,026,937
1,000
0.39
%
1,053,845
1,311
0.50
%
1,109,307
3,409
1.24
%
Federal Home Loan Bank advances
19,012
55
1.16
%
75,556
128
0.69
%
130,330
201
0.62
%
Total interest-bearing liabilities
1,045,949
1,055
0.40
%
1,129,401
1,439
0.52
%
1,239,637
3,610
1.17
%
Noninterest-bearing liabilities
Noninterest-bearing demand
720,105
607,076
474,175
Other liabilities
13,287
13,950
16,198
Total noninterest-bearing liabilities
733,392
621,026
490,373
Total liabilities
1,779,341
1,750,427
1,730,010
Total shareholders’ equity
239,448
236,790
226,454
Total liabilities and shareholders’ equity
$
2,018,789
$
1,987,217
$
1,956,464
Net interest income
$
18,996
$
17,819
$
15,363
Net interest spread (3)
3.64
%
3.48
%
2.80
%
Net interest margin (4)
3.83
%
3.70
%
3.22
%
Total deposits
$
1,747,042
$
1,000
0.23
%
$
1,660,921
$
1,311
0.32
%
$
1,583,482
$
3,409
0.87
%
Total funding (5)
$
1,766,054
$
1,055
0.24
%
$
1,736,477
$
1,439
0.34
%
$
1,713,812
$
3,610
0.85
%
(1)
Total loans include both loans held-for-sale and loans held-for-investment, net of deferred loan costs (fees).
(2)
The yield on municipal bonds has not been computed on a tax-equivalent basis.
(3)
Net interest spread is calculated by subtracting average rate on interest-bearing liabilities from average yield on interest-earning assets.
(4)
Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets.
(5)
Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.
PCB Bancorp and Subsidiary
Average Balance, Average Yield, and Average Rate (Unaudited)
($ in thousands)
Six Months Ended
6/30/2021
6/30/2020
Average Balance
Interest Income/ Expense
Avg. Yield/Rate
Average Balance
Interest Income/ Expense
Avg. Yield/Rate
Assets
Interest-earning assets
Total loans (1)
$
1,666,808
$
38,255
4.63
%
$
1,504,369
$
38,679
5.17
%
Mortgage-backed securities
87,140
448
1.04
%
60,597
646
2.14
%
Collateralized mortgage obligation
23,903
111
0.94
%
39,577
320
1.63
%
SBA loan pool securities
11,248
103
1.85
%
13,531
141
2.10
%
Municipal bonds (2)
5,782
73
2.55
%
5,714
76
2.67
%
Other interest-earning assets
176,864
319
0.36
%
202,120
771
0.77
%
Total interest-earning assets
1,971,745
39,309
4.02
%
1,825,908
40,633
4.48
%
Noninterest-earning assets
Cash and cash equivalents
19,076
17,441
Allowance for loan losses
(26,211
)
(15,860
)
Other assets
38,481
36,136
Total noninterest-earning assets
31,346
37,717
Total assets
$
2,003,091
$
1,863,625
Liabilities and Shareholders’ Equity
Interest-bearing liabilities
Deposits
NOW and money market accounts
$
403,948
650
0.32
%
$
368,298
1,667
0.91
%
Savings
11,101
2
0.04
%
6,790
6
0.18
%
Time deposits
625,267
1,659
0.54
%
744,415
6,728
1.82
%
Total interest-bearing deposits
1,040,316
2,311
0.45
%
1,119,503
8,401
1.51
%
Federal Home Loan Bank advances
47,128
183
0.78
%
77,723
303
0.78
%
Total interest-bearing liabilities
1,087,444
2,494
0.46
%
1,197,226
8,704
1.46
%
Noninterest-bearing liabilities
Noninterest-bearing demand
663,902
421,847
Other liabilities
13,618
18,281
Total noninterest-bearing liabilities
677,520
440,128
Total liabilities
1,764,964
1,637,354
Total shareholders’ equity
238,127
226,271
Total liabilities and shareholders’ equity
$
2,003,091
$
1,863,625
Net interest income
$
36,815
$
31,929
Net interest spread (3)
3.56
%
3.02
%
Net interest margin (4)
3.77
%
3.52
%
Total deposits
$
1,704,218
$
2,311
0.27
%
$
1,541,350
$
8,401
1.10
%
Total funding (5)
$
1,751,346
$
2,494
0.29
%
$
1,619,073
$
8,704
1.08
%
(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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