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PB

PCB BANCORP (PCB)·Q3 2025 Earnings Summary

Executive Summary

  • Record quarterly net income available to common shareholders of $11.3M ($0.78 diluted EPS) on stronger net interest income, higher SBA loan sale gains, and a reversal of credit losses; ROAA 1.35%, efficiency ratio 48.9% .
  • EPS materially beat Wall Street consensus ($0.78 actual vs $0.603 consensus; +29%); revenue was modestly above consensus ($30.8M vs $30.45M) with the company’s “net interest income + noninterest income” totaling $30.4M; note S&P Global uses primary EPS and a revenue definition different from company presentation *.
  • Net interest margin slipped 5 bps q/q to 3.28% despite higher loan yields, as balance mix and deposit costs offset; loans HFI decreased 1.5% q/q while total deposits rose 3.2% q/q, improving loan-to-deposit ratio to 94.8% .
  • Quarterly dividend of $0.20 per share was declared, sustaining capital return; capital ratios remained comfortably above well-capitalized thresholds (CET1 11.52% at HoldCo; Bank CET1 13.61%) .
  • Potential stock reaction catalyst: sizable EPS beat vs consensus and operating leverage improvement (efficiency ratio down ~171 bps q/q), partially tempered by NIM compression and higher uninsured deposit mix *.

What Went Well and What Went Wrong

What Went Well

  • Record earnings driven by higher net interest income ($26.98M, +3.8% q/q) and SBA gain on sale ($1.62M, +10.4% q/q), alongside a reversal of the credit loss provision (-$0.38M) .
  • Strong deposit growth: total deposits +$90.6M q/q to $2.91B; retail deposits +$140.6M q/q, reducing wholesale time deposits by $50M q/q .
  • Operating efficiency improved: efficiency ratio 48.92% vs 50.63% in Q2; ROAA 1.35% vs 1.13% q/q; management emphasized “record earnings…solid credit quality and strong deposit growth” and disciplined expenses .
  • SBA secondary market momentum: sold balance $29.0M with $1.85M premium; YTD SBA gains rose 53% y/y .
  • Credit metrics solid: NPLs/loans at 0.30% and NPAs/assets at 0.24%; past-due accruing loans fell to $1.55M from $2.55M q/q .

What Went Wrong

  • NIM down 5 bps to 3.28% despite loan yield uptick; pressure from deposit costs and balance changes persisted .
  • Loans HFI declined 1.5% q/q on paydowns/payoffs of term loans ($103.4M) and net decrease of lines of credit ($36.1M); quarterly loan production slowed q/q .
  • Uninsured deposits rose to 43.8% of total vs 41.3% in Q2, modestly increasing funding sensitivity .
  • Salaries and benefits rose 5.1% q/q; impairment charges on operating lease assets persisted (though lower vs Q2) .
  • Residential mortgage nonaccruals remain elevated vs year-end (5.37M vs 0.40M at 12/31/24), though down slightly q/q .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Net Interest Income ($USD Millions)$22.72 $25.99 $26.98
Noninterest Income ($USD Millions)$2.62 $3.30 $3.41
Total Revenue (NII + Noninterest) ($USD Millions)$25.34 $29.29 $30.39
Diluted EPS ($USD)$0.52 $0.62 $0.78
Net Interest Margin (%)3.25% 3.33% 3.28%
ROAA (%)1.08% 1.13% 1.35%
Efficiency Ratio (%)57.63% 50.63% 48.92%

Revenue vs estimates (S&P Global):

MetricQ3 2025 EstimateQ3 2025 Actual
Revenue ($USD Millions)$30.45*$30.77*
Primary EPS ($USD)$0.603*$0.79*

Values retrieved from S&P Global.

Segment/Portfolio composition (Loans HFI):

CategoryQ2 2025 ($USD Millions)Q3 2025 ($USD Millions)q/q Change
CRE – Commercial Property$1,010.78 $1,039.97 +2.9%
CRE – Business Property$635.65 $639.60 +0.6%
CRE – Multifamily$212.74 $172.10 -19.1%
CRE – Construction$27.29 $25.91 -5.1%
Commercial & Industrial$492.86 $465.42 -5.6%
Consumer – Residential Mortgage$406.68 $401.65 -1.2%
Other Consumer$9.31 $7.87 -15.5%
Total Loans HFI$2,795.31 $2,752.51 -1.5%

KPIs and balance sheet:

KPIQ2 2025Q3 2025
Total Deposits ($USD Billions)$2.823 $2.914
Core Deposits ($USD Billions)$1.683 $1.801
Uninsured Deposits (% of Total)41.3% 43.8%
Loan-to-Deposit Ratio (%)99.31% 94.81%
NPLs / Loans HFI (%)0.32% 0.30%
NPAs / Total Assets (%)0.27% 0.24%
ACL / Loans HFI (%)1.20% 1.20%
Available Borrowing Capacity ($USD Billions)$1.591 $1.700

Note: Company “Total Revenue” is presented as net interest income + noninterest income; S&P’s revenue measure differs, hence the S&P-reported “actual” varies from company construct *.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per shareQ4 2025 (pay date ~11/14/25)$0.20 $0.20 Maintained
Revenue, margins, OpEx, tax rateQ4 2025 / FYNot provided Not provided N/A

No explicit quantitative forward guidance was provided in the press release or 8-K investor materials .

Earnings Call Themes & Trends

No Q3 2025 earnings call transcript was found in the document catalog; themes are drawn from press releases and the investor presentation.

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Macro backdrop: tariffs/trade, inflationManagement cited “persistent inflation and ongoing uncertainty surrounding tariffs and trade restrictions” while remaining focused on relationship banking .Cautious optimism amid U.S. government shutdown and budget dispute; focus on adaptability and consistent returns .Continued caution; macro uncertainty persists.
Credit quality“Strong credit metrics” and “solid reserve for loan losses”; ACL at 1.17% (Q1), 1.20% (Q2) .NPLs/loans at 0.30%; ACL 1.20%; past-due accruing down q/q .Stable to improving sequentially.
Deposit growth/mixStrong deposit growth and core deposit emphasis; retail time deposits growth .Total deposits +3.2% q/q; retail +6% q/q; uninsured deposits rose to 43.8% .Growth continues; mix sensitivity slightly up.
SBA loan salesGains increased q/q and y/y; sold balances $16.6M in Q1 and $26.9M in Q2 .Sold balances $29.0M with higher premium; YTD SBA gains +53% y/y .Positive momentum sustained.
Expansion/operationsNew Georgia branch opened in Q2; disciplined expense management .Efficiency improved; FTEs modestly higher; continued capital return .Operating leverage improving.
Regulatory/legalPrior mentions of core system conversion impacts and legal accruals; data processing and professional fees adjusted .Lower professional fees q/q; residual impairment charges; contingent accruals discussed YTD .Normalizing post-conversion.

Management Commentary

  • “We are pleased to report another great quarter with record earnings…primarily from increases in our net interest income and gain on sale of SBA loans combined with well-controlled noninterest expenses and a reversal for credit losses.” — Henry Kim, President & CEO .
  • “Heading into the fourth quarter and into 2026, with the U.S. government currently shutdown and unable to resolve the ongoing budget dispute, we are cautiously optimistic in our ability to adapt…” — Henry Kim .

Q&A Highlights

  • Not available: No Q3 2025 earnings call transcript was found in the document catalog for PCB’s quarter. Analysis is based on the press release and investor presentation .

Estimates Context

  • EPS beat: $0.78 diluted EPS vs $0.603 consensus (Primary EPS); +0.177, ~+29% relative; S&P’s “actual” shows $0.79, consistent with basic EPS in the company table (basic $0.79 vs diluted $0.78), explaining the slight discrepancy *.
  • Revenue modest beat: $30.77M actual vs $30.45M consensus; the company’s reported NII + noninterest income totals $30.39M due to presentation differences *.
  • Expect upward estimate revisions for near-term EPS on operating leverage and credit provisioning tailwinds; caution around NIM trajectory given deposit mix.

Values retrieved from S&P Global.

Key Takeaways for Investors

  • EPS materially beat consensus on higher NII, stronger SBA sale gains, and provision reversal; operating leverage improved (efficiency ratio down to 48.9%) *.
  • NIM compression (3.28%, -5 bps q/q) remains the key watch item, despite rising loan yields (6.58% vs 6.56% q/q) .
  • Balance sheet resilience: deposits +3.2% q/q, core deposits +$118M q/q, liquidity capacity ~$1.70B (50.5% of assets), loan-to-deposit ratio improved to 94.8% .
  • Credit quality steady: NPLs/loans 0.30%, NPAs/assets 0.24%; ACL/loans 1.20% with sequential decline in past-due accruals .
  • Dividend maintained at $0.20 per share; capital ratios comfortably above well-capitalized levels (HoldCo CET1 11.52%; Bank CET1 13.61%) .
  • Near-term: positive setup from the beat and stronger efficiency, tempered by NIM/ funding mix; monitor uninsured deposit share and deposit pricing .
  • Medium-term: SBA platform momentum and relationship banking strategy underpin noninterest income and deposit growth; watch multifamily and C&I loan trends after Q3 declines .

Footnote: Values retrieved from S&P Global for consensus and S&P “actuals”. The company’s revenue construct (Net Interest Income + Noninterest Income) differs from S&P’s revenue definition *.