PCB Bancorp (the "Company") (NASDAQ:PCB), the holding company of PCB Bank (the "Bank"), today reported net income of $5.9 million, or $0.41 per diluted common share, for the fourth quarter of 2023, compared with $7.0 million, or $0.49 per diluted common share, for the previous quarter and $8.7 million, or $0.58 per diluted common share, for the year-ago quarter. For 2023, net income was $30.7 million, or $2.12 per diluted common share, compared with $35.0 million and $2.31 per diluted common share, for the previous year.

Q4 2023 and Full Year Highlights

Net income totaled $5.9 million, or $0.41 per diluted common share, for the current quarter and $30.7 million, or $2.12 per diluted common share for the current year;
Recorded a provision for credit losses^(1),(2) of $1.7 million for the current quarter compared with $751 thousand for the previous quarter and $1.1 million for the year-ago quarter. For the current year, provision (reversal) for the credit losses was $(132) thousand compared with $3.6 million for the previous year;
Allowance for Credit Losses ("ACL")⁽¹⁾ on loans to loans held-for-investment ratio was 1.19% at December 31, 2023 compared with 1.18% at September 30, 2023 and 1.22% at December 31, 2022;
Net interest income was $21.9 million for the current quarter compared with $22.4 million for the previous quarter and $24.3 million for the year-ago quarter. Net interest margin was 3.40% for the current quarter compared with 3.57% for the previous quarter and 4.15% for the year-ago quarter. For the current year, net interest income and net interest margin were $88.5 million and 3.57%, respectively, compared with $89.6 million and 4.08%, respectively, for the previous year;
Gain on sale of loans was $803 thousand for the current quarter compared with $689 thousand for the previous quarter and $759 thousand for the year-ago quarter. For the current year, gain on sale of loans was $3.6 million compared with $8.0 million for the previous year;
Total assets were $2.79 billion at December 31, 2023, an increase of $221.5 million, or 8.6%, from $2.57 billion at September 30, 2023, and an increase of $369.5 million, or 15.3%, from $2.42 billion at December 31, 2022;
Loans held-for-investment were $2.32 billion at December 31, 2023, an increase of $155.8 million, or 7.2%, from $2.17 billion at September 30, 2023, and an increase of $277.4 million, or 13.6%, from $2.05 billion at December 31, 2022;
Total deposits were $2.35 billion at December 31, 2023, an increase of $159.5 million, or 7.3%, from $2.19 billion at September 30, 2023, and an increase of $305.6 million, or 14.9%, from $2.05 billion at December 31, 2022; and
The Company repurchased and retired 60,074 shares of common stock during the current quarter. For the current year, the Company repurchased and retired 512,657 shares of common stock.

"We are pleased with our fourth quarter and full-year performance. Our results reflect our solid business strategy of strong relationship banking, which continues to provide strong loan funding opportunities and stable operating performance that has positioned us well to overcome the continued economic uncertainties," said Henry Kim, President and Chief Executive Officer. "PCB's performance for the fourth quarter of 2023 benefited from strong loan growth and higher yields on interest-earning assets. However, the continued higher interest rate environment and its effect on our funding costs resulted in moderate compression in net interest margin during the quarter. During the quarter loan balance increased 7.1% to $2.3 billion, deposit balance increased 7.3% to $2.4 billion, and we continue to maintain very strong credit metrics with ACL to loans ratio of 1.19%, and non-performing assets and classified assets to total assets ratios of 0.23% and 0.34%, respectively."

Mr. Kim added, "As we look ahead in 2024, PCB is well positioned to continue delivering solid results with emphasis on strong balance sheet and sound asset quality with robust capital levels that are above our peers to operate in all economic cycles and changing market conditions."

----------------------------------------
(1)		Provision (reversal) for credit losses and ACL for reporting periods beginning with January 1, 2023 are presented under ASC 326, while prior period comparisons continue to be presented under legacy ASC 450 and ASC 310 in this release.
(2)		Provision for credit losses on off-balance sheet credit exposures of $57 thousand and $85 thousand, respectively, for the year-ago quarter and previous year were recorded in Other Expense on Consolidated Statements of Income (Unaudited).

Financial Highlights (Unaudited)

($ in thousands, except per share data)	Three Months Ended													Year Ended
($ in thousands, except per share data)	12/31/2023			9/30/2023			% Change		12/31/2022			% Change		12/31/2023			12/31/2022			% Change
Net income	$	5,908		$	7,023		(15.9	)%	$	8,702		(32.1	)%	$	30,705		$	34,987		(12.2	)%
Diluted earnings per common share	$	0.41		$	0.49		(16.3	)%	$	0.58		(29.3	)%	$	2.12		$	2.31		(8.2	)%

Net interest income	$	21,924		$	22,449		(2.3	)%	$	24,265		(9.6	)%	$	88,504		$	89,632		(1.3	)%
Provision (reversal) for credit losses ⁽¹⁾		1,698			751		126.1	%		1,149		47.8	%		(132	)		3,602		NM
Noninterest income		2,503			2,502		—	%		2,389		4.8	%		10,683			14,499		(26.3	)%
Noninterest expense		14,469			14,207		1.8	%		13,115		10.3	%		56,057			51,126		9.6	%

Return on average assets ⁽²⁾		0.89	%		1.09	%				1.44	%				1.20	%		1.54	%
Return on average shareholders' equity ⁽²⁾		6.82	%		8.12	%				10.31	%				9.02	%		11.42	%
Return on average tangible common equity ("TCE") ^(2),(3)		8.54	%		10.17	%				12.99	%				11.31	%		13.23	%
Net interest margin ⁽²⁾		3.40	%		3.57	%				4.15	%				3.57	%		4.08	%
Efficiency ratio ⁽⁴⁾		59.23	%		56.94	%				49.20	%				56.52	%		49.10	%

($ in thousands, except per share data)	12/31/2023			9/30/2023			% Change		12/31/2022			% Change
Total assets	$	2,789,506		$	2,567,974		8.6	%	$	2,420,036		15.3	%
Net loans held-for-investment		2,295,919			2,142,006		7.2	%		2,021,121		13.6	%
Total deposits		2,351,612			2,192,129		7.3	%		2,045,983		14.9	%
Book value per common share ⁽⁵⁾	$	24.46		$	23.87				$	22.94
TCE per common share⁽³⁾	$	19.62		$	19.05				$	18.21
Tier 1 leverage ratio (consolidated)		13.43	%		13.76	%				14.33	%
Total shareholders' equity to total assets		12.51	%		13.31	%				13.86	%
TCE to total assets ^{(3), (6)}		10.03	%		10.62	%

PCB Bancorp Reports Earnings of $5.9 million for Q4 2023 and $30.7 million for 2023