PCB Bancorp(PCB) - 2024 Q3 - Quarterly Report

Financial Performance - For the three months ended September 30, 2024, net income was $7.814 million, an increase from $7.023 million for the same period in 2023, representing a year-over-year growth of approximately 11.3%[130] - The annualized return on average shareholders' equity for the third quarter of 2024 was 8.70%, up from 8.12% in the same quarter of 2023[130] - The company’s net income available to common shareholders for the three months ended September 30, 2024, was $7.468 million, compared to $7.023 million in the same period of 2023, reflecting a year-over-year increase of approximately 6.4%[130] - Net income for the three months ended September 30, 2024, was $7,814, compared to $7,023 for the same period last year, reflecting an increase of 11.3%[132] - Earnings per common share (diluted) increased to $0.52 from $0.49, representing a growth of 6.1%[132] Asset Growth - Total assets as of September 30, 2024, were $2.889 billion, an increase from $2.568 billion as of September 30, 2023, reflecting a growth of approximately 12.5%[130] - Total assets increased to $2,889,833, up from $2,567,974, representing a growth of 12.5% year-over-year[132] - Total assets increased to $2.89 billion at September 30, 2024, up $100.3 million, or 3.6%, from $2.79 billion at December 31, 2023[136] - Total assets reached $2,843,389 thousand, up from $2,518,624 thousand year-over-year[140] Equity and Capital - The tangible common equity per common share increased to $20.55 as of September 30, 2024, compared to $19.05 as of September 30, 2023, indicating a growth of approximately 7.8%[130] - The company’s total shareholders' equity increased to $362.300 million as of September 30, 2024, from $341.852 million as of September 30, 2023, representing a growth of approximately 6%[130] - Shareholders' equity increased to $362.3 million, reflecting a rise of $13.4 million or 3.8% from $348.9 million[176] - Common tier 1 capital ratio to risk-weighted assets was 11.92% as of September 30, 2024, exceeding the minimum regulatory requirement of 4.5%[178] Deposits - Total deposits rose to $2,459,682, up from $2,192,129, reflecting an increase of 12.2% year-over-year[132] - As of September 30, 2024, total deposits increased to $2,459,682 thousand, up by $108,070 thousand or 4.6% from $2,351,612 thousand on December 31, 2023[173] - Total interest-bearing deposits rose to $1,919,614 thousand, an increase of $162,675 thousand or 9.3% from $1,756,939 thousand[173] - Retail money market accounts saw an increase of $72,816 thousand or 18.3%, growing from $397,531 thousand to $470,347 thousand[173] Credit Losses and Nonperforming Loans - The allowance for credit losses (ACL) is projected to increase by approximately $8.4 million under a more adverse downside scenario as of September 30, 2024[126] - Nonperforming loans increased to $6,614, compared to $3,730, indicating a rise of 77.5%[134] - The provision for credit losses was $50, a significant decrease from $751 in the previous year[132] - The total nonperforming loans rose to $6,614 thousand as of September 30, 2024, a 68.9% increase from $3,916 thousand at the end of 2023[171] - The provision for credit losses on loans was $193 thousand for the three months ended September 30, 2024, compared to $822 thousand in the same period last year[166] Interest Income and Expenses - Interest income rose to $45,998, up from $38,852, marking a 18.5% increase year-over-year[132] - Total interest income for the three months ended September 30, 2024, was $45,998 thousand, an increase of 18.4% compared to $38,852 thousand in 2023[143] - Interest expense on deposits rose by 40.6% to $23,057 thousand due to a 21.2% increase in average balance of interest-bearing deposits and a 68 basis point increase in average cost[145] - Net interest income was $22.7 million for Q3 2024, compared to $22.4 million in Q3 2023, with a net interest margin of 3.25% in Q3 2024, down from 3.57% in Q3 2023[136] Noninterest Income and Expenses - Total noninterest income increased by $118 thousand, or 4.7%, to $2,620 thousand in 2024 compared to $2,502 thousand in 2023[151] - Total noninterest expense increased by $395 thousand, or 2.8%, to $14,602 thousand in 2024 compared to $14,207 thousand in 2023[154] - Salaries and employee benefits increased by $229 thousand, or 2.7%, to $8,801 thousand in 2024 compared to $8,572 thousand in 2023[154] Economic Outlook - The projected national unemployment rate for year-end 2024 and 2025 increased to 4.4% from previous estimates of 4.0% and 4.2%, respectively, leading to higher probability of default rates[166] - The projected year-over-year change in real GDP for 2024 decreased to 2.0% from 2.1% in the previous forecast[166] Interest Rate Risk Management - Net interest income sensitivity shows an asset sensitive profile, with a projected increase of 5.7% under a +200 basis point rate change scenario[195] - Economic Value of Equity (EVE) sensitivity indicates a slight liability sensitive profile, reflecting a shift from non-maturity deposits to time deposits[195] - The Company has established broad policy limits regarding interest rate risk, monitored by the Board Asset Liability Committee (ALCO)[192] - Management utilizes a simulation model to measure interest rate risk exposure, reporting results to the Board ALCO at least quarterly[193]