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PCB BANCORP (PCB)·Q2 2025 Earnings Summary

Executive Summary

  • EPS beat but revenue slightly below SPGI consensus: Q2 2025 diluted EPS $0.62 vs $0.56 consensus; SPGI “Revenue” $27.5M vs $28.7M consensus (3 ests). Beat driven by margin expansion and higher gain-on-sale; “Revenue” shortfall reflects SPGI’s definition for banks rather than NII+noninterest income mix.* *
  • Net interest margin expanded to 3.33% (from 3.28% in Q1 and 3.16% a year ago) as funding costs eased; net interest income rose 7% q/q to $26.0M.
  • Balance sheet momentum: loans HFI +2.5% q/q to $2.80B; deposits +4.0% q/q to $2.82B; core deposit push continued with 59.6% of total per deck.
  • Asset quality mixed: NPLs up to $8.9M (0.32% of loans) with a jump in residential mortgage nonaccruals; classified assets also rose.
  • Capital return catalysts maintained: $0.20 quarterly dividend declared; repurchase authorization extended to July 31, 2026 with 428,473 shares remaining.

What Went Well and What Went Wrong

What Went Well

  • Margin and spread improved as cost of interest-bearing liabilities declined, lifting NIM to 3.33% (+5 bps q/q, +17 bps y/y); cost of total funding fell to 3.35% q/q.
  • Strong balance sheet growth: loans HFI +$67.7M q/q to $2.80B; deposits +$108.5M q/q to $2.82B; total assets +$121.8M q/q to $3.31B.
  • Noninterest income acceleration from SBA: gain on sale of loans $1.465M (up 65% q/q; up 92% y/y) on $26.9M sold balances and higher premiums.

Management quote: “We are pleased with our second quarter results highlighted by strong net income growth, continued healthy increases in loan and deposit balances, [and] expansion in net interest margin.” — Henry Kim, President & CEO.

What Went Wrong

  • Credit mix deterioration: NPLs rose 43% q/q to $8.9M (0.32% of loans) driven by residential mortgage nonaccruals ($5.5M vs $3.2M in Q1); classified assets nearly doubled q/q to $16.4M.
  • Provision for credit losses increased q/q to $1.787M (vs $1.598M in Q1) and far above $259K a year ago, reflecting loan growth.
  • Funding mix still deposit-price sensitive: time deposits remain elevated; uninsured deposits at $1.165B (41.3% of total), limiting cost-of-funds relief speed amid competitive markets.

Financial Results

P&L and Margin (oldest → newest)

MetricQ2 2024Q1 2025Q2 2025
Diluted EPS ($)0.43 0.53 0.62
Net Interest Income ($M)21.735 24.283 25.990
Noninterest Income ($M)2.485 2.580 3.297
Net Interest Margin (%)3.16 3.28 3.33
Efficiency Ratio (%)62.65 53.88 50.63

Balance Sheet & Credit KPIs (oldest → newest)

KPIQ2 2024Q1 2025Q2 2025
Loans HFI ($M)2,449.1 2,727.6 2,795.3
Deposits ($M)2,406.3 2,714.4 2,822.9
ACL / Loans HFI (%)1.17 1.17 1.20
NPLs / Loans HFI (%)0.31 0.23 0.32
Gain on Sale of Loans ($M)0.763 0.887 1.465

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Formal financial guidance2025None providedNone providedN/A
Quarterly dividend per common shareQ3 2025 payout (Aug 15)$0.20 (Q1 2025) $0.20 (declared Jul 23, 2025) Maintained
Stock repurchase programThrough Jul 31, 2026Expires Aug 1, 2025 Extended 1 year; 428,473 shares remaining Raised duration

Earnings Call Themes & Trends

Note: We did not locate a Q2 2025 earnings call transcript; themes derive from the press release and investor presentation. -

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Macro: inflation, tariffs, trade restrictionsCautioned on rate cuts and macro uncertainty; operating discipline emphasized Persisting inflation and tariff/trade uncertainty acknowledged; focus on relationship banking and steady execution Stable caution
Net interest margin / funding costsNIM 3.18% in Q4; decline in earning-asset yields partially offset by lower funding costs NIM 3.33%; improvement driven by reduced cost of interest-bearing liabilities despite modest yield pressure Improving
Deposit strategy / uninsured depositsCore deposits ~59% (Q1 deck); uninsured deposits ~$1.04B at YE’24 (39.6%) Core deposits 59.6% (deck); uninsured $1.165B (41.3%) Mixed (core steady, uninsured elevated)
SBA gain-on-saleQ4/Q1 steady; premiums supportive Gain-on-sale $1.465M; sold balances $26.9M; higher premiums q/q and y/y Improving
Credit qualityNPAs 0.15% at YE’24; NPLs 0.23% in Q1 NPLs up to 0.32%; residential mortgage nonaccruals increased; classified assets higher Worsening
Geographic/branch expansionHQ/branch optimization in 2024 Opened first full-service branch in Georgia (Suwanee) Expanding footprint

Management Commentary

  • “We are pleased with our second quarter results highlighted by strong net income growth, continued healthy increases in loan and deposit balances, expansion in net interest margin, and the establishment of our first full-service branch in the state of Georgia.” — Henry Kim, President & CEO.
  • “Heading into the second half of 2025, we are encouraged by the positive momentum in our balance sheet growth, disciplined expense management, and results of our continued emphasis on relationship banking.” — Henry Kim.
  • Prior quarter context: “Our strong first quarter results were highlighted by continued robust growth in loan and deposit balances, expansion in net interest margin, and outstanding credit metrics,” while noting tariff/trade uncertainty. — Henry Kim.

Q&A Highlights

  • We did not find an earnings call transcript for Q2 2025 in the document set; no Q&A highlights available. (Search returned no “earnings-call-transcript” documents.)

Estimates Context

Consensus (S&P Global) vs actuals (oldest → newest):

MetricQ2 2024Q1 2025Q2 2025
Primary EPS Consensus Mean0.4070.4870.563
Primary EPS Actual0.43 0.53 0.62
Revenue Consensus Mean ($M)24.9726.4028.70
Revenue Actual ($M)23.9625.2727.50
  • Outcome: Q2 2025 EPS beat by ~$0.06; “Revenue” (SPGI definition) missed by ~$1.2M; three estimates in each period for both EPS and revenue. Adjustments to models likely include slightly higher NIM trajectory and stronger gain-on-sale, partially offset by higher credit provision and elevated uninsured/time deposits.*
  • Estimates counts: EPS (3); Revenue (3) each period.*

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Margin inflection intact: NIM expanded to 3.33% as deposit costs eased; further upside if funding costs continue to normalize and loan yields hold.
  • Healthy operating leverage: Net interest income +7% q/q and efficiency ratio improved to 50.6%, reflecting expense discipline and fee tailwinds.
  • SBA engine ramping: Higher SBA premiums and sold balances lifted gain-on-sale; continued execution can support noninterest income stability.
  • Credit watch items: Rising NPLs (notably in residential mortgages) and higher classified assets warrant closer monitoring; provision likely to track loan growth and any asset quality drift.
  • Balance sheet growth supported by deposits: Solid q/q deposit growth, but uninsured/time deposits remain elevated—pace of cost relief may be gradual.
  • Capital returns sustained: $0.20 quarterly dividend maintained and buyback authorization extended through mid-2026, providing downside support.
  • Near-term trading: Positive setup on EPS beat and NIM expansion; watch any headlines on asset quality and macro (tariffs/inflation) for volatility.