UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38621 PCB BANCORP (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or or ...

[Part I - Financial Information](index=4&type=section&id=Part%20I%20-%20Financial%20Information) [Item 1. Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements for PCB Bancorp and its subsidiary, including balance sheets, income statements, cash flows, and accompanying notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2021, total assets grew to **$2.06 billion** from **$1.92 billion** at year-end 2020, driven by an increase in net loans, while total liabilities increased due to a significant rise in noninterest-bearing demand deposits to **$795.7 million** from **$538.0 million**, and total shareholders' equity saw a modest increase to **$238.9 million** Consolidated Balance Sheet Highlights (Unaudited) | ($ in thousands) | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$2,060,003** | **$1,922,853** | | Total cash and cash equivalents | $174,621 | $194,098 | | Net loans held-for-investment | $1,694,767 | $1,557,068 | | **Total Liabilities** | **$1,821,062** | **$1,689,065** | | Total deposits | $1,797,648 | $1,594,851 | | Noninterest-bearing demand deposits | $795,741 | $538,009 | | Federal Home Loan Bank advances | $10,000 | $80,000 | | **Total Shareholders' Equity** | **$238,941** | **$233,788** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) For Q2 2021, net income surged to **$9.8 million** from **$3.4 million** in Q2 2020, driven by higher net interest income, a significant reversal of provision for loan losses, and a large gain on the sale of loans, resulting in diluted EPS of **$0.64** compared to **$0.22** Key Income Statement Data (Unaudited) | ($ in thousands) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $18,996 | $15,363 | $36,815 | $31,929 | | Provision (reversal) for loan losses | $(934) | $3,855 | $(2,081) | $6,751 | | Noninterest income | $5,151 | $2,918 | $8,008 | $4,944 | | Noninterest expense | $11,139 | $9,696 | $20,808 | $20,263 | | **Net income** | **$9,844** | **$3,367** | **$18,404** | **$6,939** | | **Diluted EPS** | **$0.64** | **$0.22** | **$1.19** | **$0.45** | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2021, net cash used in investing activities was **$146.8 million**, primarily due to net loan growth, while net cash provided by financing activities was **$120.2 million**, driven by increased deposits, resulting in an overall decrease of **$19.5 million** in cash and cash equivalents Cash Flow Summary for Six Months Ended June 30 (Unaudited) | ($ in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $7,205 | $4,810 | | Net cash used in investing activities | $(146,834) | $(112,127) | | Net cash provided by financing activities | $120,152 | $268,692 | | **Net (decrease) increase in cash and cash equivalents** | **$(19,477)** | **$161,375** | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on accounting policies, financial instruments, COVID-19 related loan modifications, PPP loans, and regulatory capital - As of June 30, 2021, the Company had **$16.2 million** in loans under modified terms related to the COVID-19 pandemic, all of which were accounted for under the CARES Act and not considered Troubled Debt Restructurings (TDRs)[31](index=31&type=chunk) - The company held **$181.0 million** in SBA Paycheck Protection Program (PPP) loans as of June 30, 2021. During the first six months of 2021, it funded **$107.0 million** in new PPP loans and recognized **$65.6 million** in loan forgiveness[32](index=32&type=chunk)[33](index=33&type=chunk) - On April 8, 2021, the Board approved a new stock repurchase program for up to **775,000 shares**. As of June 30, 2021, **646,334 shares** were repurchased for **$10.3 million** at a weighted-average price of **$15.99 per share**[93](index=93&type=chunk) - Both the Company and its subsidiary bank, Pacific City Bank, met all capital adequacy requirements as of June 30, 2021, with capital conservation buffers of **8.43%** and **8.13%**, respectively, well above the **2.50%** requirement[110](index=110&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance and condition, highlighting increased net income, asset and deposit growth, improved asset quality, and robust liquidity and capital resources [Executive Summary and Financial Highlights](index=41&type=section&id=Executive%20Summary%20and%20Financial%20Highlights) The company reported strong Q2 2021 results with net income of **$9.8 million**, a **192.4%** increase from Q2 2020, driven by a **$(934) thousand** reversal of provision for loan losses and a **$4.0 million** gain on sale of loans, with total assets growing **7.1%** to **$2.06 billion** and deposits increasing **12.7%** to **$1.80 billion** Q2 2021 Financial Highlights vs. Q2 2020 | Metric | Q2 2021 | Q2 2020 | | :--- | :--- | :--- | | **Net Income** | **$9.8 million** | **$3.4 million** | | Provision (reversal) for loan losses | $(934) thousand | $3.9 million | | Net Interest Income | $19.0 million | $15.4 million | | Gain on sale of loans | $4.0 million | $1.5 million | Balance Sheet Highlights (June 30, 2021 vs. Dec 31, 2020) | Metric | June 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$2.06 billion** | **$1.92 billion** | | **Loans held-for-investment** | **$1.72 billion** | **$1.58 billion** | | **Total Deposits** | **$1.80 billion** | **$1.59 billion** | | **SBA PPP Loans** | **$181.0 million** | **$135.7 million** | | **Loans under COVID-19 modification** | **$16.2 million** | **$36.1 million** | [Results of Operations](index=41&type=section&id=Results%20of%20Operations) For Q2 2021, net interest income increased **23.6%** year-over-year to **$19.0 million**, driven by a **70.8%** drop in interest expense, while the company recorded a loan loss provision reversal of **$934 thousand**, and noninterest income grew **76.5%** to **$5.2 million** largely due to a **164.8%** increase in gain on sale of loans - Net interest income for Q2 2021 increased by **$3.6 million (23.6%)** compared to Q2 2020, primarily due to a **$2.6 million (70.8%)** decrease in total interest expense[138](index=138&type=chunk) - The company recorded a reversal for loan losses of **$934 thousand** in Q2 2021, a significant shift from the **$3.9 million** provision in Q2 2020, attributed to improving economic conditions[151](index=151&type=chunk) - Gain on sale of loans surged to **$4.0 million** in Q2 2021 from **$1.5 million** in Q2 2020, driven by higher premiums and increased sales volume of SBA loans[155](index=155&type=chunk) - Salaries and employee benefits expense increased by **$1.4 million (23.7%)** in Q2 2021, mainly because direct loan origination costs related to SBA PPP loans, which offset salary expenses, were much lower (**$62 thousand**) compared to the prior year (**$1.1 million**)[162](index=162&type=chunk) [Financial Condition](index=50&type=section&id=Financial%20Condition) As of June 30, 2021, the company's financial condition strengthened with total assets reaching **$2.06 billion**, a loan portfolio of **$1.72 billion**, significantly improved asset quality with nonperforming assets decreasing **68.3%** to **$1.5 million**, and total deposits growing by **$202.8 million**, while shareholders' equity increased to **$238.9 million** - Loans held-for-investment increased by **$136.1 million (8.6%)** to **$1.72 billion** in the first six months of 2021, with SBA PPP and commercial property loans being the primary drivers of growth[179](index=179&type=chunk) - Total nonperforming assets decreased significantly to **$1.5 million (0.07% of total assets)** at June 30, 2021, from **$4.6 million (0.24% of total assets)** at December 31, 2020[195](index=195&type=chunk) - Total deposits increased by **$202.8 million (12.7%)** since year-end 2020, largely due to a **47.9%** increase in noninterest-bearing demand deposits, which were boosted by funds from government programs like PPP[198](index=198&type=chunk) - Shareholders' equity increased by **$5.2 million** to **$238.9 million** in the first half of 2021. The growth from net income (**$18.4 million**) was partially offset by stock repurchases (**$10.3 million**) and dividends (**$3.1 million**)[203](index=203&type=chunk) [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained a strong liquidity position with **$174.6 million** in cash and cash equivalents as of June 30, 2021, supported by **$502.7 million** in additional FHLB borrowing capacity and **$65.0 million** in unsecured federal funds lines, with all regulatory capital ratios significantly exceeding 'well-capitalized' standards - The company has substantial available liquidity, including **$502.7 million** in additional borrowing capacity from the FHLB and **$65.0 million** in unused federal funds lines as of June 30, 2021[213](index=213&type=chunk) Regulatory Capital Ratios as of June 30, 2021 | Ratio | Pacific City Bank | Well Capitalized Requirement | | :--- | :--- | :--- | | Common tier 1 capital (to risk-weighted assets) | 14.88% | 6.5% | | Total capital (to risk-weighted assets) | 16.13% | 10.0% | | Tier 1 capital (to risk-weighted assets) | 14.88% | 8.0% | | Tier 1 capital (to average assets) | 11.53% | 5.0% | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company actively manages interest rate risk using NII at Risk and EVE models, with its balance sheet positioned as asset-sensitive, projecting a **10.8%** increase in NII and an **8.0%** increase in EVE from a hypothetical immediate 100 basis point rate rise Interest Rate Risk Sensitivity Analysis (as of June 30, 2021) | Simulated Rate Change | Net Interest Income Sensitivity | Economic Value of Equity Sensitivity | | :--- | :--- | :--- | | +300 bps | +32.3% | +18.6% | | +200 bps | +21.6% | +14.2% | | +100 bps | +10.8% | +8.0% | - The company's balance sheet is positioned to be **asset-sensitive**, indicating that net interest income is expected to rise if short-term interest rates increase[228](index=228&type=chunk) [Item 4. Controls and Procedures](index=62&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2021, with no material changes to internal control over financial reporting during Q2 2021 - The CEO and CFO concluded that as of June 30, 2021, the company's disclosure controls and procedures were **effective**[232](index=232&type=chunk) - No material changes were made to the internal control over financial reporting during the three months ended June 30, 2021[233](index=233&type=chunk) [Part II - Other Information](index=63&type=section&id=Part%20II%20-%20Other%20Information) [Item 1. Legal Proceedings](index=63&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal claims arising in the normal course of business, which management does not expect to have a material effect on the consolidated financial statements, with no accrued loss contingencies for legal claims at June 30, 2021 - The Company is involved in various legal claims in the normal course of business but does not expect them to have a **material financial impact**[235](index=235&type=chunk) [Item 1A. Risk Factors](index=63&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2020 - No material changes to the risk factors disclosed in the 2020 Annual Report on Form 10-K were reported[236](index=236&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=63&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities for the quarter, but repurchased **646,334 shares** of common stock at an average price of **$15.99 per share** under a program approved on April 8, 2021 Share Repurchase Activity (Q2 2021) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 2021 | 12,737 | $15.89 | | May 2021 | 619,904 | $15.99 | | June 2021 | 13,693 | $15.98 | | **Total** | **646,334** | **$15.99** | - A new stock repurchase program was approved on April 8, 2021, authorizing the repurchase of up to **775,000 shares** through September 7, 2021[238](index=238&type=chunk) [Item 6. Exhibits](index=64&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including certifications by the CEO and CFO pursuant to the Sarbanes-Oxley Act of 2002 and Inline XBRL documents - The report includes CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act, along with various corporate documents and XBRL data files[242](index=242&type=chunk)

(Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.) Cal ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark one) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38621 PCB Bancorp (Exact name of registrant as specified in its charter) California 20-8856755 (State or other jurisdiction of incorp ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38621 PCB BANCORP (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or or ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38621 (Exact name of registrant as specified in its charter) California 20-8856755 (State or other jurisdiction of incorporation ...

[Part I - Financial Information](index=4&type=section&id=Part%20I%20-%20Financial%20Information) [Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents PCB Bancorp's unaudited consolidated financial statements for Q1 2020, detailing financial position, performance, and cash flows with explanatory notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$1.80 billion** by March 31, 2020, driven by cash and loans, while liabilities rose due to FHLB advances, and equity slightly decreased Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2020 ($ thousands) | December 31, 2019 ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | | **Total Assets** | **1,799,937** | **1,746,328** | **3.1%** | | Total cash and cash equivalents | 188,919 | 146,228 | 29.2% | | Net loans held-for-investment | 1,434,364 | 1,436,451 | -0.1% | | **Total Liabilities** | **1,575,812** | **1,519,494** | **3.7%** | | Total deposits | 1,477,442 | 1,479,307 | -0.1% | | Federal Home Loan Bank advances | 80,000 | 20,000 | 300.0% | | **Total Shareholders' Equity** | **224,125** | **226,834** | **-1.2%** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Net income for Q1 2020 decreased **45.6%** to **$3.57 million**, primarily due to a **$2.9 million** loan loss provision and lower net interest income Consolidated Income Statement Summary (Unaudited) | Metric | Three Months Ended Mar 31, 2020 ($ thousands) | Three Months Ended Mar 31, 2019 ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Net Interest Income | 16,566 | 17,153 | -3.4% | | Provision for loan losses | 2,896 | (85) | N/A | | Noninterest Income | 2,026 | 2,409 | -15.9% | | Noninterest Expense | 10,567 | 10,289 | 2.7% | | **Net Income** | **3,572** | **6,564** | **-45.6%** | | **Diluted EPS** | **$0.23** | **$0.40** | **-42.5%** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by financing activities totaled **$50.7 million** in Q1 2020, driven by FHLB advances, leading to a **$42.7 million** net increase in cash Cash Flow Summary (Unaudited) | Activity | Three Months Ended Mar 31, 2020 ($ thousands) | Three Months Ended Mar 31, 2019 ($ thousands) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | (6,378) | 10,035 | | Net cash used in investing activities | (1,643) | (2,142) | | Net cash provided by financing activities | 50,712 | 3,421 | | **Net increase in cash and cash equivalents** | **42,691** | **11,314** | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail accounting policies, investment and loan composition, the increased allowance for loan losses due to COVID-19, nonperforming assets, capital adequacy, and the BSA/AML consent order - The company operates as a bank holding company with its subsidiary, Pacific City Bank, having 13 full-service branches and 10 loan production offices across several states[20](index=20&type=chunk) - The company plans to adopt ASU 2016-13 (CECL model) on the delayed effective date of January 1, 2023[28](index=28&type=chunk) - On April 30, 2019, the Bank entered into a consent order with the FDIC and CDBO related to Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance, requiring enhanced oversight, processes, and reporting[112](index=112&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2020 financial performance, highlighting a **45.6%** net income decrease due to a **$2.9 million** loan loss provision, and analyzes changes in income, expenses, credit quality, deposits, liquidity, and capital [Executive Summary](index=38&type=section&id=Executive%20Summary) Q1 2020 performance was significantly impacted by COVID-19, with net income falling to **$3.6 million** due to a **$2.9 million** loan loss provision, despite asset growth and a **$6.5 million** share repurchase - Net income for Q1 2020 was **$3.6 million**, a decrease of **45.6%** from Q1 2019, primarily due to a **$2.9 million** provision for loan losses related to COVID-19 economic uncertainty[130](index=130&type=chunk)[135](index=135&type=chunk) - The company completed a **$6.5 million** share repurchase program in March 2020, repurchasing **428,474** shares[135](index=135&type=chunk) - As of April 24, 2020, the company has extended **930** Paycheck Protection Program (PPP) loans totaling **$104 million** and provided payment deferrals on **461** loans with an aggregate balance of **$347 million**[135](index=135&type=chunk) [Results of Operations](index=38&type=section&id=Results%20of%20Operations) Net interest income decreased **3.4%** to **$16.6 million** in Q1 2020 due to margin compression, while a **$2.9 million** loan loss provision, lower noninterest income, and increased noninterest expense impacted results Net Interest Margin Analysis | Metric | Three Months Ended Mar 31, 2020 | Three Months Ended Mar 31, 2019 | | :--- | :--- | :--- | | Net Interest Income ($ thousands) | 16,566 | 17,153 | | Net Interest Spread | 3.26% | 3.59% | | Net Interest Margin | 3.85% | 4.22% | - The provision for loan losses was **$2.9 million** for Q1 2020, a significant increase from a reversal of **$85 thousand** in Q1 2019, primarily due to adjustments for economic uncertainty from the COVID-19 pandemic[148](index=148&type=chunk) - Gain on sale of loans decreased by **35.3%** to **$725 thousand**, primarily due to lower sales volume of SBA loans amid reduced premiums in the secondary market[149](index=149&type=chunk)[151](index=151&type=chunk) [Financial Condition](index=43&type=section&id=Financial%20Condition) As of March 31, 2020, total assets were **$1.80 billion**, with the allowance for loan losses increasing to **1.15%** due to COVID-19, nonperforming assets rising, and shareholders' equity slightly decreasing after a stock buyback - The allowance for loan losses increased to **$16.7 million** (**1.15%** of loans held-for-investment) at March 31, 2020, from **$14.4 million** (**0.99%**) at year-end 2019, mainly due to a **$2.7 million** qualitative adjustment for COVID-19 related economic uncertainty[172](index=172&type=chunk) - Total nonperforming assets increased by **57.9%** to **$4.5 million** at March 31, 2020, from **$2.8 million** at December 31, 2019[177](index=177&type=chunk) Loan Segmentation by Business Type Potentially Impacted by COVID-19 (as of March 31, 2020) | Business Type | Total Loan Balance ($ thousands) | | :--- | :--- | | Retail trade | 151,134 | | Accommodation | 66,961 | | Restaurants | 48,243 | | Nursing care | 7,131 | | Travel | 2,893 | | **Total** | **276,362** | [Liquidity and Capital Resources](index=51&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong liquidity and capital, with shareholders' equity at **$224.1 million** despite repurchases, and the bank remaining well-capitalized with a **15.28%** Common Equity Tier 1 ratio and enhanced FHLB borrowing capacity - Shareholders' equity decreased by **$2.7 million** to **$224.1 million** in Q1 2020, primarily due to a **$6.5 million** stock repurchase and **$1.5 million** in dividends, partially offset by **$3.6 million** in net income[190](index=190&type=chunk) Regulatory Capital Ratios (Pacific City Bank) | Ratio | March 31, 2020 | Well Capitalized Requirement | | :--- | :--- | :--- | | Common tier 1 capital | 15.28% | 6.5% | | Total capital | 16.47% | 10.0% | | Tier 1 capital | 15.28% | 8.0% | | Tier 1 leverage | 12.37% | 5.0% | - The company increased its FHLB advances to **$80.0 million** and had additional borrowing capacity of **$356.6 million** with the FHLB and **$39.4 million** from the Federal Reserve Discount Window as of March 31, 2020[200](index=200&type=chunk)[201](index=201&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages interest rate risk using NII at Risk and EVE models, demonstrating asset sensitivity where a **100 bps** rate increase is projected to raise NII by **11.9%** and EVE by **7.9%** Interest Rate Risk Sensitivity Analysis | Simulated Rate Change (bps) | Net Interest Income Sensitivity (%) | Economic Value of Equity Sensitivity (%) | | :--- | :--- | :--- | | +200 | 23.8 | 13.9 | | +100 | 11.9 | 7.9 | | -100 | (9.5) | (4.4) | [Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2020, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2020[218](index=218&type=chunk) - No material changes were made to the internal control over financial reporting during the first quarter of 2020[219](index=219&type=chunk) [Part II - Other Information](index=56&type=section&id=Part%20II%20-%20Other%20Information) [Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal claims in the ordinary course of business, with management not expecting a material impact on financial statements - The company is involved in various legal claims arising in the ordinary course of business, but management does not expect them to have a material impact on financial statements[220](index=220&type=chunk) [Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors) This section details new risk factors related to the COVID-19 pandemic, which has adversely affected and will likely continue to impact the company's business, financial condition, and operations - The ongoing COVID-19 pandemic is highlighted as a significant risk factor that has and will likely continue to adversely affect the company's business, financial condition, and results of operations[221](index=221&type=chunk)[222](index=222&type=chunk) - Specific pandemic-related risks include declining collateral values, reduced demand for services, net interest margin compression from lower rates, and potential disruptions to branch operations and service delivery[225](index=225&type=chunk)[226](index=226&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company completed its **$6.5 million** stock repurchase program in March 2020, repurchasing **428,474** shares at a weighted-average price of **$15.14** per share Share Repurchase Activity (Q1 2020) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | Jan 2020 | 105,890 | $15.54 | | Feb 2020 | 281,680 | $15.15 | | Mar 2020 | 40,904 | $14.07 | | **Total** | **428,474** | **$15.14** | [Other Information](index=58&type=section&id=Item%205.%20Other%20Information) This section updates on the BSA/AML consent order, noting implemented corrective actions and ongoing efforts to address regulator concerns regarding a "look back" review and staff turnover - The company provides an update on the April 2019 consent order related to BSA/AML compliance, noting that while many actions have been taken, regulators have recently raised concerns about a "look back" review and staff turnover, which management is addressing[231](index=231&type=chunk)[233](index=233&type=chunk) - Management does not expect the costs associated with the consent order to have a material impact on the company's results of operations or financial position[234](index=234&type=chunk)

Part I [Business](index=4&type=section&id=Item%201.%20Business) PCB Bancorp is a California-based bank holding company serving small to medium-sized businesses and individuals, primarily within the Korean-American community, operating 13 branches and 10 loan production offices, and is subject to a 2019 BSA/AML consent order - The company changed its name to **PCB Bancorp** on July 1, 2019, aligning with its stock trading symbol[16](index=16&type=chunk) - The company completed its IPO on August 14, 2018, raising **$45.0 million** in net proceeds[17](index=17&type=chunk) Loan Portfolio Composition (Held-for-Investment) | Loan Category | Dec 31, 2019 ($ in thousands) | % of Total | Dec 31, 2018 ($ in thousands) | % of Total | | :--- | :--- | :--- | :--- | :--- | | **Real estate loans:** | | | | | | Commercial property | $803,014 | 55.4% | $709,409 | 53.1% | | Residential property | $235,046 | 16.3% | $233,816 | 17.5% | | SBA property | $129,837 | 8.9% | $120,939 | 9.0% | | Construction | $19,164 | 1.3% | $27,323 | 2.0% | | **Commercial & industrial loans:** | | | | | | Commercial term | $103,380 | 7.1% | $102,133 | 7.6% | | Commercial lines of credit | $111,768 | 7.7% | $91,994 | 6.9% | | SBA commercial term | $25,332 | 1.7% | $27,147 | 2.0% | | **Other consumer loans** | $23,290 | 1.6% | $25,921 | 1.9% | | **Total Loans held-for-investment** | **$1,450,831** | **100.0%** | **$1,338,682** | **100.0%** | - The Bank is designated as an **SBA Preferred Lender nationwide**, streamlining its SBA loan process[44](index=44&type=chunk) - Core deposits, excluding time deposits over **$250,000** and brokered deposits, constituted **74.2% of total deposits** as of December 31, 2019, serving as the primary low-cost funding source[53](index=53&type=chunk) - The Bank is subject to an **April 2019 consent order** from the FDIC and CDBO, mandating BSA/AML compliance improvements, with non-compliance potentially restricting business operations including new branch openings[137](index=137&type=chunk) [Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from its business operations, loan portfolio, and regulatory environment, including credit risk, interest rate sensitivity, liquidity management, a high concentration in real estate loans (81.8%), and substantial regulatory oversight due to a BSA/AML consent order and Basel III capital requirements - Effective credit risk management is crucial, as inadequate underwriting could result in loan defaults, foreclosures, and higher allowance for loan losses[167](index=167&type=chunk)[168](index=168&type=chunk) - The Bank is under an **April 2019 consent order** from the FDIC and CDBO for enhanced BSA/AML processes, with non-compliance potentially restricting growth like new branch or LPO openings[181](index=181&type=chunk) - **81.8%** of the loan portfolio at December 31, 2019, comprised real estate loans, increasing vulnerability to real estate market downturns and liquidity issues[189](index=189&type=chunk) - Commercial Real Estate (CRE) loans constituted **243.6% of total risk-based capital** as of December 31, 2019, remaining below the 300% regulatory guidance but still a focus of oversight[199](index=199&type=chunk)[200](index=200&type=chunk) - The residential loan portfolio primarily consists of **non-qualified mortgage loans**, which are less liquid and potentially riskier than qualified mortgages[201](index=201&type=chunk)[202](index=202&type=chunk) - Gain on sale of SBA loans was a significant **49.8% of noninterest income** in 2019, making profitability vulnerable to changes in the SBA 7(a) loan program[208](index=208&type=chunk)[209](index=209&type=chunk) - Operations are geographically concentrated in Southern California and the New York/New Jersey region, and ethnically focused on the Korean-American community, increasing exposure to localized economic or political factors[282](index=282&type=chunk)[285](index=285&type=chunk) [Unresolved Staff Comments](index=47&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[318](index=318&type=chunk) [Properties](index=47&type=section&id=Item%202.%20Properties) The company's headquarters is located at 3701 Wilshire Boulevard, Los Angeles, California, with all 13 retail branch locations and 10 loan production offices being leased - The Bank leases all its properties, including its headquarters, **13 branch locations**, and **10 LPOs** across multiple states[319](index=319&type=chunk)[320](index=320&type=chunk) [Legal Proceedings](index=47&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal claims, with **$8 thousand** in accrued loss contingencies as of December 31, 2019, and management anticipates no material effect on consolidated financial statements - The Company accrued **$8 thousand** in loss contingencies for legal claims at December 31, 2019, with no material impact expected from these proceedings[321](index=321&type=chunk) [Mine Safety Disclosures](index=47&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[322](index=322&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=48&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the NASDAQ Global Select Market under "PCB", with a policy of paying quarterly dividends subject to Board discretion and regulatory limits, and completed a **$6.5 million** share repurchase program in 2019, approving a new one through November 2021 - The company's common stock is listed on the **NASDAQ Global Select Market** under the symbol **"PCB"**[324](index=324&type=chunk) - The company intends to continue paying quarterly dividends, subject to Board discretion, financial condition, and regulatory requirements[325](index=325&type=chunk)[326](index=326&type=chunk) - A **$6.5 million** share repurchase program was completed in October 2019, repurchasing **396,715 shares**, and a new **$6.5 million** program was approved through November 20, 2021[328](index=328&type=chunk)[329](index=329&type=chunk) [Selected Financial Data](index=49&type=section&id=Item%206.%20Selected%20Financial%20Data) This section summarizes the company's key financial data from 2017 to 2019, showing total assets grew from **$1.44 billion** to **$1.75 billion**, loans held-for-investment increased from **$1.19 billion** to **$1.45 billion**, and net income remained stable around **$24 million**, with strong asset quality Selected Financial Data (2017-2019) | ($ in thousands, except per share data) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | **Balance Sheet Data:** | | | | | Total assets | $1,746,328 | $1,697,028 | $1,441,999 | | Loans held-for-investment | $1,450,831 | $1,338,682 | $1,189,999 | | Total deposits | $1,479,307 | $1,443,753 | $1,251,290 | | Shareholders' equity | $226,834 | $210,296 | $142,184 | | **Income Statement Data:** | | | | | Net interest income | $69,034 | $65,748 | $55,170 | | Provision for loan losses | $4,237 | $1,231 | $1,827 | | Net income | $24,108 | $24,301 | $16,403 | | **Per Share Data:** | | | | | Earnings per common share, diluted | $1.49 | $1.65 | $1.21 | | Book value per common share | $14.44 | $13.16 | $10.60 | | **Performance Ratios:** | | | | | Return on average assets | 1.40% | 1.53% | 1.22% | | Return on average shareholders' equity | 10.88% | 14.26% | 12.00% | | Net interest margin | 4.11% | 4.23% | 4.22% | | **Asset Quality:** | | | | | Nonperforming assets to total assets | 0.16% | 0.06% | 0.23% | | Allowance for loan losses to loans held-for-investment | 0.99% | 0.98% | 1.03% | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=51&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2019, PCB Bancorp's net income slightly decreased to **$24.1 million** from **$24.3 million** in 2018, primarily due to higher loan loss provisions and increased noninterest expenses, despite growth in net interest income and total assets to **$1.75 billion**, while maintaining strong asset quality and a well-capitalized position [Critical Accounting Policies](index=51&type=section&id=Critical%20Accounting%20Policies) The company's critical accounting policies involve significant judgment and estimates, including the Allowance for Loan Losses, Investment Securities valuation and impairment, and Income Taxes - Key subjective accounting areas include **Allowance for Loan Losses**, **Investment Securities valuation and impairment**, and **Income Taxes**[337](index=337&type=chunk) - The Allowance for Loan Losses is a critical estimate based on past experience, portfolio nature, borrower situations, and economic conditions, comprising specific and general reserves[342](index=342&type=chunk)[343](index=343&type=chunk)[346](index=346&type=chunk) - Investment securities are evaluated quarterly for **other-than-temporary impairment (OTTI)**, with credit losses recognized in earnings and other portions in other comprehensive income[339](index=339&type=chunk)[340](index=340&type=chunk) [Results of Operations](index=53&type=section&id=Results%20of%20Operations) For 2019, net income decreased **0.8%** to **$24.1 million**, primarily due to a **$3.0 million** increase in loan loss provision and a **5.2%** rise in noninterest expense, partially offset by a **5.0%** increase in net interest income to **$69.0 million** and a **13.5%** increase in noninterest income, while net interest margin compressed to **4.11%** Results of Operations Summary | ($ in thousands) | 2019 | 2018 | % Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $69,034 | $65,748 | 5.0% | | Provision for Loan Losses | $4,237 | $1,231 | 244.2% | | Noninterest Income | $11,869 | $10,454 | 13.5% | | Noninterest Expense | $42,315 | $40,226 | 5.2% | | **Net Income** | **$24,108** | **$24,301** | **-0.8%** | - Net interest income increased by **$3.3 million (5.0%)** in 2019 due to a **7.9%** increase in average interest-earning assets, though net interest margin declined by **12 basis points** to **4.11%** due to higher deposit costs[360](index=360&type=chunk) - Provision for loan losses significantly increased to **$4.2 million** in 2019 from **$1.2 million** in 2018, primarily due to a **$2.5 million** charge-off on a commercial line of credit and organic loan growth[373](index=373&type=chunk)[374](index=374&type=chunk) - Noninterest income rose **13.5%** to **$11.9 million** in 2019, driven by a **$786 thousand** gain on securities sales and a **$436 thousand** increase in gain on loan sales[376](index=376&type=chunk) - Noninterest expense increased **5.2%** to **$42.3 million** in 2019, driven by higher salaries and professional fees for public company infrastructure and enhanced BSA/AML compliance[385](index=385&type=chunk) [Financial Condition](index=61&type=section&id=Financial%20Condition) As of December 31, 2019, total assets grew **2.9%** to **$1.75 billion**, driven by an **8.4%** increase in loans held-for-investment to **$1.45 billion**, funded by a **2.5%** increase in deposits to **$1.48 billion**, while maintaining strong asset quality and a well-capitalized position with **16.71%** total risk-based capital Balance Sheet Highlights | ($ in thousands) | Dec 31, 2019 | Dec 31, 2018 | % Change | | :--- | :--- | :--- | :--- | | Total Assets | $1,746,328 | $1,697,028 | 2.9% | | Net Loans Held-for-Investment | $1,436,451 | $1,325,515 | 8.4% | | Total Investment Securities | $117,720 | $168,751 | -30.2% | | Total Deposits | $1,479,307 | $1,443,753 | 2.5% | | Shareholders' Equity | $226,834 | $210,296 | 7.9% | - The investment securities portfolio decreased by **$51.0 million**, primarily due to a **$32.8 million** sale of available-for-sale securities and principal paydowns[400](index=400&type=chunk) - Nonperforming assets (NPAs) increased to **$2.8 million (0.16% of total assets)** at year-end 2019 from **$1.1 million (0.06% of total assets)** at year-end 2018, primarily due to one commercial line of credit placed on nonaccrual status[414](index=414&type=chunk) - The Bank's CRE loans were **243.6% of total risk-based capital** at year-end 2019, a decrease from **253.6%** in 2018, remaining below the **300%** regulatory guidance threshold[418](index=418&type=chunk) - The Bank exceeded all regulatory capital requirements to be considered "well-capitalized" as of December 31, 2019, with a **Common Equity Tier 1 ratio of 15.68%** and a **Total Capital ratio of 16.71%**[431](index=431&type=chunk)[432](index=432&type=chunk) [Liquidity and Capital Resources](index=72&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a solid liquidity position, supported by liquid assets and access to funding sources, with **$404.8 million** in FHLB and **$37.9 million** in Federal Reserve Discount Window borrowing capacity as of December 31, 2019, and the parent company relies on Bank dividends for its obligations - The company's primary liquidity sources are cash flow from operations, maturing loans and investments, and customer deposits[436](index=436&type=chunk) - As of December 31, 2019, the company had substantial unused borrowing capacity, including **$404.8 million** from the FHLB and **$37.9 million** from the Federal Reserve Discount Window[438](index=438&type=chunk) - PCB Bancorp, the parent company, relies on dividends from Pacific City Bank to meet its cash obligations, including shareholder dividends[439](index=439&type=chunk) [Off-Balance Sheet Activities and Contractual Obligations](index=73&type=section&id=Off-Balance%20Sheet%20Activities%20and%20Contractual%20Obligations) The company's off-balance sheet arrangements, primarily financial commitments, totaled **$175.2 million** as of December 31, 2019, a significant increase from **$130.9 million** in 2018, with contractual obligations, mainly time deposits, totaling **$788.0 million**, which management believes it has sufficient liquidity to meet Outstanding Financial Commitments | ($ in thousands) | Dec 31, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | Commitments to extend credit | $171,608 | $127,443 | | Standby letters of credit | $3,300 | $2,998 | | Commercial letters of credit | $292 | $477 | | **Total** | **$175,200** | **$130,918** | Contractual Obligations Summary (as of Dec 31, 2019) | ($ in thousands) | Within 1 Year | 1 to 3 Years | 3 to 5 Years | Over 5 Years | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Time deposits | $734,003 | $21,529 | $1,557 | $— | $757,089 | | FHLB advances | $10,000 | $10,000 | $— | $— | $20,000 | | Operating leases | $2,686 | $4,454 | $2,375 | $1,352 | $10,867 | | **Total** | **$746,689** | **$35,983** | **$3,932** | **$1,352** | **$787,956** | [Quantitative and Qualitative Disclosures About Market Risk](index=74&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company actively manages interest rate risk through its ALCO using NII at Risk and EVE models, and as of December 31, 2019, it was asset sensitive, projecting a **10.4%** increase in Net Interest Income and a **4.7%** increase in EVE with a hypothetical **100 basis point** rate increase - The company manages interest rate risk through its **Asset Liability Committee (ALCO)** using **Net Interest Income at Risk (NII at Risk)** and **Economic Value of Equity (EVE)** models[449](index=449&type=chunk)[453](index=453&type=chunk) Interest Rate Sensitivity Analysis (as of Dec 31, 2019) | Simulated Rate Change | Net Interest Income Sensitivity | Economic Value of Equity Sensitivity | | :--- | :--- | :--- | | +200 bps | 20.3% | 7.7% | | +100 bps | 10.4% | 4.7% | | -100 bps | (11.7)% | (6.1)% | - The company increased its proportion of fixed-rate loans during 2019 to better position the balance sheet for the interest rate environment[452](index=452&type=chunk) [Financial Statements and Supplementary Data](index=75&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for PCB Bancorp and its subsidiary for the years ended December 31, 2019, 2018, and 2017, including Balance Sheets, Income Statements, Comprehensive Income, Changes in Shareholders' Equity, and Cash Flows, along with notes [Consolidated Balance Sheets](index=77&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2019, total assets were **$1.75 billion**, up from **$1.70 billion** in 2018, driven by an increase in net loans held-for-investment to **$1.44 billion**, with total liabilities at **$1.52 billion**, total deposits at **$1.48 billion**, and shareholders' equity at **$226.8 million** Consolidated Balance Sheet Summary | ($ in thousands) | Dec 31, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | Total cash and cash equivalents | $146,228 | $162,273 | | Net loans held-for-investment | $1,436,451 | $1,325,515 | | **Total assets** | **$1,746,328** | **$1,697,028** | | Total deposits | $1,479,307 | $1,443,753 | | **Total liabilities** | **$1,519,494** | **$1,486,732** | | **Total shareholders' equity** | **$226,834** | **$210,296** | [Consolidated Statements of Income](index=78&type=section&id=Consolidated%20Statements%20of%20Income) For the year ended December 31, 2019, net income was **$24.1 million**, or **$1.49 per diluted share**, a slight decrease from **$24.3 million**, or **$1.65 per diluted share**, in 2018, primarily due to a higher provision for loan losses (**$4.2 million** vs. **$1.2 million**) Consolidated Income Statement Summary | ($ in thousands, except per share) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Net interest income | $69,034 | $65,748 | $55,170 | | Provision for loan losses | $4,237 | $1,231 | $1,827 | | Noninterest income | $11,869 | $10,454 | $13,894 | | Noninterest expense | $42,315 | $40,226 | $35,895 | | **Net income** | **$24,108** | **$24,301** | **$16,403** | | **Earnings per share, diluted** | **$1.49** | **$1.65** | **$1.21** | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=121&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[622](index=622&type=chunk) [Controls and Procedures](index=121&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2019, with no attestation report required as an Emerging Growth Company - The company's CEO and CFO concluded that disclosure controls and procedures were effective as of December 31, 2019[624](index=624&type=chunk) - Management assessed internal control over financial reporting and determined it was effective as of December 31, 2019, based on the COSO framework[627](index=627&type=chunk)[628](index=628&type=chunk) [Other Information](index=122&type=section&id=Item%209B.%20Other%20Information) This section reiterates the **April 30, 2019, consent order** with the FDIC and CDBO regarding the Bank's BSA/AML compliance program, requiring enhanced oversight and a "look back" review, with ongoing compliance efforts and no expected material financial impact - Reiterates the **April 30, 2019, consent order** with the FDIC and CDBO concerning the Bank's BSA/AML program[632](index=632&type=chunk) - The order requires numerous corrective actions, including increased Board oversight, enhanced monitoring, and a "look back" review of past transactions, with regulators recently raising concerns about review depth and staff turnover[633](index=633&type=chunk)[634](index=634&type=chunk) - The company does not expect the order to have a material impact on its financial results, though it will incur additional non-interest expenses for compliance[635](index=635&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=123&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information for this item is incorporated by reference from the company's definitive Proxy Statement for its 2020 Annual Meeting of Shareholders - Information is incorporated by reference from the **2020 Proxy Statement**[637](index=637&type=chunk) [Executive Compensation](index=123&type=section&id=Item%2011.%20Executive%20Compensation) Information for this item is incorporated by reference from the company's definitive Proxy Statement for its 2020 Annual Meeting of Shareholders - Information is incorporated by reference from the **2020 Proxy Statement**[639](index=639&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters](index=123&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholders%20Matters) Information for this item is incorporated by reference from the company's definitive Proxy Statement for its 2020 Annual Meeting of Shareholders - Information is incorporated by reference from the **2020 Proxy Statement**[640](index=640&type=chunk) [Certain Relationships and Related Transactions, and Directors Independence](index=123&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Directors%20Independence) Information for this item is incorporated by reference from the company's definitive Proxy Statement for its 2020 Annual Meeting of Shareholders - Information is incorporated by reference from the **2020 Proxy Statement**[641](index=641&type=chunk) [Principal Accounting Fees and Services](index=123&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information for this item is incorporated by reference from the company's definitive Proxy Statement for its 2020 Annual Meeting of Shareholders - Information is incorporated by reference from the **2020 Proxy Statement**[642](index=642&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=124&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Annual Report on Form 10-K, with all required financial statements included in Item 8 and schedules omitted as not required - This section provides a list of all exhibits filed with the Form 10-K, including articles of incorporation, bylaws, employment agreements, and various certifications[643](index=643&type=chunk)[645](index=645&type=chunk) [Form 10-K Summary](index=124&type=section&id=Item%2016.%20Form%2010-K%20Summary) No Form 10-K summary is provided - None[644](index=644&type=chunk)

[Part I - Financial Information](index=4&type=section&id=Part%20I%20-%20Financial%20Information) [Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) Presents PCB Bancorp's unaudited consolidated financial statements for Q3 and YTD 2019, covering key statements and accounting policies [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets reached $1.70 billion as of September 30, 2019, driven by loan growth, with shareholders' equity increasing to $224.6 million Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2019 (Unaudited) | Dec 31, 2018 | | :--- | :--- | :--- | | **Total Assets** | **$1,699,446** | **$1,697,028** | | Total cash and cash equivalents | $121,912 | $162,273 | | Net loans held-for-investment | $1,376,736 | $1,325,515 | | **Total Liabilities** | **$1,474,803** | **$1,486,732** | | Total deposits | $1,432,262 | $1,443,753 | | Federal Home Loan Bank advances | $20,000 | $30,000 | | **Total Shareholders' Equity** | **$224,643** | **$210,296** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Net income for Q3 2019 increased 3.7% to $6.8 million, and 13.6% to $20.0 million YTD, primarily driven by higher net interest income Income Statement Summary (in thousands, except per share data) | Metric | Q3 2019 | Q3 2018 | YTD 2019 | YTD 2018 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $17,529 | $16,716 | $52,374 | $47,892 | | Provision (reversal) for loan losses | $(102) | $417 | $207 | $937 | | Noninterest Income | $2,802 | $2,580 | $8,265 | $8,215 | | Noninterest Expense | $10,777 | $9,520 | $32,050 | $30,091 | | **Net Income** | **$6,785** | **$6,543** | **$19,950** | **$17,569** | | **Diluted EPS** | **$0.42** | **$0.44** | **$1.23** | **$1.25** | [Notes to Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) Detailed notes disclose accounting policies, fair value measurements, loan details, and regulatory matters, including a BSA/AML consent order - The company adopted ASU 2016-02, "Leases (Topic 842)," in the first quarter of 2019, recognizing **right-of-use lease assets of $9.6 million** and **liabilities of $10.6 million**, with a **cumulative effect adjustment of $53 thousand** to retained earnings[27](index=27&type=chunk) - On April 30, 2019, the FDIC and CDBO issued a consent order related to the Bank's Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance program, requiring corrective actions and increased oversight[113](index=113&type=chunk) - Subsequent to the quarter end, the company completed its **$6.5 million stock repurchase program** on October 24, 2019, and the Board declared a **quarterly cash dividend of $0.08 per share** on October 31, 2019[122](index=122&type=chunk)[123](index=123&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Q3 and YTD 2019 financial performance, focusing on net interest income, loan loss provision, noninterest expenses, and financial condition changes [Results of Operations](index=42&type=section&id=Results%20of%20Operations) Net income for Q3 2019 increased 3.7% to $6.8 million, and 13.6% YTD to $20.0 million, driven by net interest income growth despite higher noninterest expenses Net Interest Income Change Analysis (Q3 2019 vs Q3 2018, in thousands) | Component | Change Due to Volume | Change Due to Rate | Net Change | | :--- | :--- | :--- | :--- | | **Total Interest Income** | **$1,715** | **$476** | **$2,191** | | Total Loans | $1,786 | $391 | $2,177 | | **Total Interest Expense** | **$68** | **$1,310** | **$1,378** | | Deposits | $112 | $1,305 | $1,417 | | **Change in Net Interest Income** | **$1,647** | **$(834)** | **$813** | - A **loan loss provision reversal of $102 thousand** was recorded in Q3 2019, compared to a provision of **$417 thousand** in Q3 2018. The reversal was attributed to a decrease in loans held-for-investment from the previous quarter, lower historical loss rates, and changes in qualitative factors[163](index=163&type=chunk) - Noninterest expense in Q3 2019 increased by **13.2% YoY**, driven by higher salaries and a **211.7% surge in professional fees** related to public company costs and BSA/AML enhancements[174](index=174&type=chunk)[175](index=175&type=chunk) [Financial Condition](index=51&type=section&id=Financial%20Condition) Total assets were $1.70 billion, with loan growth to $1.39 billion, a strategic shift in deposits, increased nonperforming assets, and strong capital ratios - Loans held-for-investment increased by **$51.1 million, or 3.8%**, to **$1.39 billion** at September 30, 2019, from December 31, 2018, driven by new funding of **$252.9 million**[193](index=193&type=chunk) - Total deposits decreased by **0.8%** from year-end 2018, reflecting a strategic reduction in time deposits (**$64.0 million decrease**) offset by growth in noninterest-bearing demand accounts (**$24.2 million increase**) and savings/money market accounts (**$28.4 million increase**)[206](index=206&type=chunk) Nonperforming Assets (in thousands) | Category | Sep 30, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | Total nonaccrual loans | $1,843 | $1,061 | | **Total nonperforming assets** | **$1,843** | **$1,061** | | Nonperforming assets to total assets | 0.11% | 0.06% | - Shareholders' equity increased by **$14.3 million (6.8%)** to **$224.6 million** since year-end 2018, driven by **net income of $20.0 million**, partially offset by **$6.1 million in common stock repurchases** and **$2.7 million in dividends**[212](index=212&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=62&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages interest rate risk through ALCO, using NII and EVE models, with an asset-sensitive balance sheet projecting increases in a rising rate environment Interest Rate Risk Sensitivity Analysis (September 30, 2019) | Simulated Rate Change (bps) | Net Interest Income Sensitivity | Economic Value of Equity Sensitivity | | :--- | :--- | :--- | | +200 | 21.9% | 9.7% | | +100 | 11.3% | 5.8% | | -100 | (12.7)% | (7.2)% | | -200 | (25.0)% | (10.2)% | - The company's Asset Liability Committee (ALCO) establishes policies and operating guidelines to manage interest rate risk, meeting quarterly to monitor sensitivity and ensure compliance with approved limits[234](index=234&type=chunk) [Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2019, with no material changes to internal control over financial reporting during Q3 2019 - The Principal Executive Officer and Principal Financial Officer concluded that as of September 30, 2019, the company's disclosure controls and procedures were effective[240](index=240&type=chunk) - There were no changes in the company's internal control over financial reporting during the third quarter of 2019 that have materially affected, or are reasonably likely to materially affect, these controls[241](index=241&type=chunk) [Part II - Other Information](index=64&type=section&id=Part%20II%20-%20Other%20Information) [Legal Proceedings](index=64&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal claims, with $9 thousand in accrued loss contingencies, not expected to materially impact financial statements - The Company had accrued loss contingencies of **$9 thousand** for certain legal claims as of September 30, 2019, and does not expect the outcome of pending litigation to be material to its financial statements[243](index=243&type=chunk) [Risk Factors](index=64&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors from the 2018 Annual Report on Form 10-K are reported, advising investors to consider them - There are no material changes to the risk factors disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2018[244](index=244&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=64&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2019, the company repurchased 316,518 shares of common stock at an average price of $16.21 per share under its $6.5 million repurchase program Share Repurchase Activity (Q3 2019) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | July 2019 | 88,476 | $16.87 | | August 2019 | 205,194 | $15.88 | | September 2019 | 22,848 | $16.55 | | **Total Q3 2019** | **316,518** | **$16.21** | - The share repurchases were conducted under a program approved on March 28, 2019, authorizing up to **$6.5 million in common stock repurchases** through March 27, 2020[245](index=245&type=chunk) [Other Information](index=65&type=section&id=Item%205.%20Other%20Information) Provides further details on the April 2019 BSA/AML consent order, outlining required corrective actions and the Bank's progress, with no material financial impact expected - A consent order from the FDIC and CDBO was issued on April 30, 2019, concerning deficiencies in the Bank's BSA/AML compliance program[249](index=249&type=chunk) - Corrective actions required by the order include increased Board oversight, hiring a qualified BSA officer, enhancing risk assessments and customer due diligence, and conducting a "look back" review of certain 2018 transactions[250](index=250&type=chunk) - The Bank has completed the required staffing assessment and "look back" review, hired a new BSA officer, and submitted required progress reports to regulators. The associated costs are not expected to materially impact financial results[251](index=251&type=chunk)[252](index=252&type=chunk) [Exhibits](index=66&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with Form 10-Q, including corporate governance documents, employment agreements, compensation plans, and required CEO/CFO certifications

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38621 PCB Bancorp (Exact name of registrant as specified in its charter) California (State or other jurisdiction of incorporation ...