PCB Bancorp(PCB) - 2020 Q2 - Quarterly Report

Financial Performance - Net income for the three months ended June 30, 2020, was $3.4 million, a decrease of 49.1% from $6.6 million in the same period of 2019[126]. - Net income for the three months ended June 30, 2020, was $3.4 million, a decrease of $3.2 million, or 49.0%, from $6.6 million for the same period in 2019[136]. - Net interest income for the three months ended June 30, 2020, was $15.363 million, down from $17.692 million for the same period in 2019[137]. - Total interest income for the six months ended June 30, 2020, was $40,633 thousand, down $6,349 thousand, or 13.5%, from $46,982 thousand in 2019[151]. - Total noninterest income for the three months ended June 30, 2020, was $2,918 thousand, a decrease of $136 thousand, or 4.5%, compared to $3,054 thousand in 2019[159]. - Total noninterest income for the six months ended June 30, 2020, was $4,944 thousand, a decrease of $519 thousand or 9.5% compared to $5,463 thousand in 2019[163]. - Net interest margin decreased to 3.22% for the three months ended June 30, 2020, down from 4.17% for the same period in 2019[136]. - The efficiency ratio for the six months ended June 30, 2020, was 54.95%, compared to 52.78% in the same period of 2019[127]. Assets and Liabilities - As of June 30, 2020, the Company reported total assets of $2,020.8 million, an increase of 17.0% compared to $1,726.5 million as of June 30, 2019[126]. - Cash and cash equivalents stood at $307.6 million, representing 15.2% of total assets as of June 30, 2020[133]. - The Company maintained total deposits amounting to $1,646.9 million, up from $1,446.5 million in the previous year, reflecting a growth of 13.9%[126]. - Total deposits reached $1.65 billion at June 30, 2020, an increase of $167.6 million, or 11.3%, from $1.48 billion at December 31, 2019[136]. - The Company had $130.0 million in outstanding FHLB advances as of June 30, 2020, compared to $20.0 million as of December 31, 2019, indicating increased reliance on external funding[215]. - The Company's total contractual obligations amounted to $866.1 million as of June 30, 2020, compared to $788.0 million as of December 31, 2019, showing an increase in financial commitments[224]. Loan Performance - The allowance for loan losses increased to $20.2 million, compared to $13.3 million in the prior year, indicating a rise of 51.5%[126]. - The provision for loan losses was $3.9 million, primarily due to increased economic uncertainty from the COVID-19 pandemic[136]. - The allowance for loan losses to total loans held-for-investment ratio increased to 1.30% at June 30, 2020, compared to 0.99% at December 31, 2019[136]. - The Company recorded an additional provision for loan losses of $4.2 million and $6.8 million for the three and six months ended June 30, 2020, respectively, due to economic risks from the COVID-19 pandemic[194]. - Total nonperforming assets rose to $4,842 thousand as of June 30, 2020, a 71.5% increase from $2,824 thousand at December 31, 2019, driven by a 58.1% increase in total nonperforming loans[199]. - Nonaccrual loans increased to $3,770 thousand, up 48.6% from $2,537 thousand, with real estate loans showing a 205.7% increase to $1,351 thousand[199]. - The ratio of nonperforming loans to loans held-for-investment increased to 0.29% as of June 30, 2020, compared to 0.19% at December 31, 2019[199]. COVID-19 Impact - The Company extended 1,551 PPP loans totaling $133.7 million as of June 30, 2020, to support customers affected by the COVID-19 pandemic[132]. - The Company provided loan modifications to 467 customers, with an aggregated carrying value of $484.0 million, to assist those adversely affected by the pandemic[132]. - The Company provided modifications to loans affected by COVID-19, totaling $484.0 million, with an average interest rate of 4.66% as of June 30, 2020[186]. - The Company had 938 SBA loans with an aggregated carrying value of $140.9 million that qualified for relief under the CARES Act as of June 30, 2020[132]. Capital and Equity - Shareholders' equity was $227.2 million at June 30, 2020, reflecting a slight increase of 0.2% from $226.8 million at December 31, 2019, supported by net income of $6.9 million[205]. - As of June 30, 2020, PCB Bancorp's common tier 1 capital ratio was 15.83%, exceeding the regulatory minimum of 4.5% and the well-capitalized requirement of 6.5%[209]. - The total capital ratio for PCB Bancorp was 17.09% as of June 30, 2020, surpassing the regulatory minimum of 8.0% and the well-capitalized requirement of 10.0%[209]. - The capital conservation buffer for PCB Bancorp was 9.09% as of June 30, 2020, compared to 8.90% as of December 31, 2019, indicating a stable capital position[209]. Interest Rates and Sensitivity - The projected net interest income sensitivity for a +200 basis point change in interest rates was 26.4% as of June 30, 2020, indicating a strong position to benefit from rising rates[232]. - The economic value of equity sensitivity for a +200 basis point change in interest rates was 21.4% as of June 30, 2020, reflecting the potential impact on the Company's asset values[232]. Employee and Operational Metrics - The number of full-time equivalent employees was 251 at June 30, 2020, compared to 248 at June 30, 2019[171]. - Salaries and employee benefits decreased by $910 thousand or 6.9% to $12,312 thousand for the six months ended June 30, 2020, compared to $13,222 thousand in 2019[171].