PCB Bancorp (PCB) 8-K PCB Bancorp Reports Earnings of $6.6 million for Q2 2019

Exhibit 99.1

PCB Bancorp Reports Earnings of $6.6 million for Q2 2019

Los Angeles, California - July 25, 2019 - PCB Bancorp (the “Company”) (NASDAQ: PCB), the holding company of Pacific City Bank (the “Bank”), today reported net income of $6.6 million, or $0.40 per diluted common share for the second quarter of 2019, compared with $6.6 million, or $0.40 per diluted common share, for the previous quarter and $4.8 million, or $0.35 per diluted common share, for the year-ago quarter.

On July 1, 2019, the Company changed its corporate name to “PCB Bancorp” from “Pacific City Financial Corporation” to reflect the Company's goal to align the corporate name with the trading symbol of its common stock and simplify corporate communications while maintaining the Company's core branding.

Q2 2019 Financial Highlights

• Net income totaled $6.6 million or $0.40 per diluted common share;

• Total assets were $1.73 billion at June 30, 2019, an increase of $8.7 million, or 0.5%, from $1.72 billion at March 31, 2019, an increase of $29.5 million, or 1.7%, from $1.70 billion at December 31, 2018, and an increase of $107.3 million, or 6.6%, from $1.62 billion at June 30, 2018;

• Loans held-for-investment, net of deferred costs (fees), were $1.40 billion at June 30, 2019, an increase of $52.4 million, or 3.9%, from $1.34 billion at March 31, 2019, an increase of $56.9 million, or 4.2%, from $1.34 billion at December 31, 2018, and an increase of $140.7 million, or 11.2%, from $1.25 billion at June 30, 2018;

• Total deposits were $1.45 billion at June 30, 2019, a decrease of $1.2 million, or 0.1%, from $1.45 billion at March 31, 2019, but an increase of $2.8 million, or 0.2%, from $1.44 billion at December 31, 2018 and an increase of $19.3 million, or 1.4%, from $1.43 billion at June 30, 2018;

◦ State and Brokered deposits were $117.5 million at June 30, 2019 compared to $157.5 million, $142.5 million and $152.5 million, respectively, at March 31, 2019, December 31, 2018 and June 30, 2018.

• The Company repurchased 57,551 shares of its common stock totaling $974 thousand under the publicly announced $6.5 million share repurchase program; and

• The Company declared an increased cash dividend of $0.06 per common share.

“We are pleased to report another strong quarterly financial performance highlighted by earnings of $6.6 million, or $0.40 per diluted common share,” stated Henry Kim, President and Chief Executive Officer. “In spite of the uncertain interest rate environment coupled with intense competition on deposits and credits, during the second quarter our held-for-investment loan balance increased $52.4 million, or 3.9%, and our retail deposit balance, excluding wholesale deposits, increased $38.8 million, or 3.0%. We maintained our net interest margin at 4.17% during the quarter and we are successfully carrying our initiative on reducing our asset sensitive balance sheet by increasing the percentage of fixed rate loans to 37.8% at June 30, 2019 compared with 34.6% at March 31, 2019.”

1

Financial Highlights (Unaudited)

	ThreeMonthsEnded													Six Months Ended
($ in thousands, except per share data)	6/30/2019			3/31/2019			% Change		6/30/2018			% Change		6/30/2019			6/30/2018			% Change
Net income	$	6,601		$	6,564		0.6	%	$	4,762		38.6	%	$	13,165		$	11,026		19.4	%
Diluted earnings per common share	$	0.40		$	0.40		—	%	$	0.35		14.3	%	$	0.81		$	0.81		—	%
Net interest income	$	17,692		$	17,153		3.1	%	$	15,882		11.4	%	$	34,845		$	31,176		11.8	%
Provision (reversal) for loan losses	394			(85		)	(563.5	)%	425			(7.3	)%	309			520			(40.6	)%
Noninterest income	3,054			2,409			26.8	%	2,273			34.4	%	5,463			5,635			(3.1	)%
Noninterest expense	10,984			10,289			6.8	%	10,940			0.4	%	21,273			20,571			3.4	%
Return on average assets (1)	1.52		%	1.57		%			1.20		%			1.55		%	1.45		%
Return on average shareholders’ equity (1), (2)	12.01		%	12.43		%			12.74		%			12.22		%	15.07		%
Net interest margin (1)	4.17		%	4.22		%			4.08		%			4.19		%	4.20		%
Efficiency ratio (3)	52.95		%	52.60		%			60.26		%			52.78		%	55.88		%

($ in thousands, except per share data)	6/30/2019			3/31/2019			% Change		12/31/2018			% Change		6/30/2018			% Change
Total assets	$	1,726,486		$	1,717,774		0.5	%	$	1,697,028		1.7	%	$	1,619,169		6.6	%
Net loans held-for-investment	1,382,229			1,330,035			3.9	%	1,325,515			4.3	%	1,242,235			11.3	%
Total deposits	1,446,526			1,447,758			(0.1	)%	1,443,753			0.2	%	1,427,245			1.4	%
Book value per common share (2), (4)	$	13.98		$	13.57		3.0	%	$	13.16		6.2	%	$	11.27		24.0	%
Tier 1 leverage ratio (consolidated)	12.74		%	12.83		%			12.60		%			9.58		%
Total shareholders’ equity to total assets (2)	12.94		%	12.64		%			12.39		%			9.35		%

(1) Ratios are presented on an annualized basis.

(2) The Company did not have any intangible equity components for the presented periods.

(3) The ratios are calculated by dividing noninterest expense by the sum of net interest income and noninterest income.

(4) The ratios are calculated by dividing total shareholders’ equity by the number of outstanding common shares.

Result of Operations (Unaudited)

Net Interest Income and Net Interest Margin

The following table presents the components of net interest income for the periods indicated:

	ThreeMonthsEnded										Six Months Ended
($ in thousands)	6/30/2019		3/31/2019		% Change		6/30/2018		% Change		6/30/2019		6/30/2018		% Change
Interest income:
Interest and fees on loans	$	21,969	$	20,934	4.9	%	$	18,610	18.0	%	$	42,903	$	36,050	19.0	%
Interest on investment securities	1,062		1,093		(2.8	)%	869		22.2	%	2,155		1,717		25.5	%
Interest and dividend on other interest-earning assets	999		925		8.0	%	865		15.5	%	1,924		1,205		59.7	%
Total interest income	24,030		22,952		4.7	%	20,344		18.1	%	46,982		38,972		20.6	%
Interest expense:
Interest on deposits	6,200		5,665		9.4	%	4,292		44.5	%	11,865		7,458		59.1	%
Interest on borrowings	138		134		3.0	%	170		(18.8	)%	272		338		(19.5	)%
Total interest expense	6,338		5,799		9.3	%	4,462		42.0	%	12,137		7,796		55.7	%
Net interest income	$	17,692	$	17,153	3.1	%	$	15,882	11.4	%	$	34,845	$	31,176	11.8	%

Overall, the increases in net interest income were primarily due to increases in average balance and average yield on loans, partially offset by increases in average balance and average cost of interest-bearing deposits.

2

The increases in interest and fees on loans were primarily due to increases in both average balance and average yield of loans. The increase in average yield on loans for the current quarter compared with the previous quarter was primarily due to an increase in discount accretion on retained portion of sold SBA loans due to a higher prepayment trend. The increases in average yield on loans for the three and six months ended June 30, 2019 compared with the same periods of 2018 were primarily due to new loan production with higher interest rates than the existing portfolio and Company’s high proportion of variable rate loans that had repriced along with the rising interest rate environment in 2018 and current higher market rate. The following table presents a composition of total loans by interest rate type accompanied with the weighted-average contractual rates as of the dates indicated:

	6/30/2019				3/31/2019				12/31/2018				6/30/2018
	% to Total Loans		Weighted-Average Contractual Rate		% to Total Loans		Weighted-Average Contractual Rate		% to Total Loans		Weighted-Average Contractual Rate		% to Total Loans		Weighted-Average Contractual Rate
Fixed rate loans	37.8	%	5.24	%	34.6	%	5.17	%	34.4	%	5.13	%	27.0	%	5.08	%
Variable rate loans	62.2	%	6.29	%	65.4	%	6.29	%	65.6	%	6.30	%	73.0	%	5.84	%

The Company strategically increased the proportion of fixed rate loans during the current quarter as the interest rate environment had become stabilized and in order to better-position its balance sheet to match potential rate changes in the future.

The decrease in interest on investment securities for the current quarter compared with the previous quarter was primarily due to an increase in premium amortization on mortgage-backed securities from a higher prepayment trend in the current quarter. The increases in the three and six months ended June 30, 2019 compared with the same periods of 2018 were primarily due to increases in both average balance and average yield of investment securities. The increase in average yield on investment securities was primarily due to additional purchases of investment securities along with the rising interest rate environment in 2018 and current higher market rate. The Company purchased investment securities of $4.3 million and $36.4 million, respectively, during the current quarter and last 12-month period.

The increase in interest and dividend on other interest-earning assets for the current quarter compared with the previous quarter was primarily due to an increase in average balance, partially offset by a decrease in average yield on interest-bearing deposits in other financial institutions, as the Federal Reserve lowered its interest rate on excess reserve balance from 2.40% to 2.35% in May. The increase in the current quarter compared with the year-ago quarter was primarily due to an increase in average yield on interest-bearing deposits in other financial institutions in the current higher market rates, partially offset by a decrease in average balance. The increase for the six months ended June 30, 2019 compared with the same period of 2018 was primarily due to increases in both average balance and average yield.

The increases in total interest expense were primarily due to increases in average balance and average cost of interest-bearing deposits. The increase in average cost on interest-bearing deposits was primarily due to the rising interest rate environment in 2018 and current higher market rates, and high competition in the Company’s deposit target markets.

Provision (Reversal) for Loan Losses

Provision (reversal) for loan losses was $394 thousand for the current quarter compared with $(85) thousand for the previous quarter and $425 thousand for the year-ago quarter. For the six months ended June 30, 2019 and 2018, the Company recognized provision for loan losses of $309 thousand and $520 thousand, respectively. The Company recorded net charge-offs of $203 thousand for the current quarter compared with net recoveries of $55 thousand for the previous quarter and net charge-offs of $175 thousand for the year-ago quarter. For the six months ended June 30, 2019 and 2018, the Company recorded net charge-offs of $148 thousand and $123 thousand, respectively.

Allowance for loan losses to total loans held-for-investment ratio was 0.96% at June 30, 2019, 0.98% at March 31, 2019, 0.98% at December 31, 2018, and 1.01% at June 30, 2018. The decrease in allowance for loan losses to total loans held-for-investment ratio was primarily due to a decrease in historical loss rates and changes in qualitative adjustment factors.

3

Noninterest Income

The following table presents the components of noninterest income for the periods indicated:

	ThreeMonthsEnded										Six Months Ended
($ in thousands)	6/30/2019		3/31/2019		% Change		6/30/2018		% Change		6/30/2019		6/30/2018		% Change
Gain on sale of SBA loans	$	1,884	$	1,104	70.7	%	$	863	118.3	%	$	2,988	$	2,912	2.6	%
Gain on sale of residential property loans	7		16		(56.3	)%	170		(95.9	)%	23		192		(88.0	)%
Gain on sale of other loans	—		—		—	%	—		—	%	—		45		(100.0	)%
Total gain on sale of loans	1,891		1,120		68.8	%	1,033		83.1	%	3,011		3,149		(4.4	)%
Service charges and fees on deposits	368		364		1.1	%	376		(2.1	)%	732		725		1.0	%
Loan servicing income	492		631		(22.0	)%	585		(15.9	)%	1,123		1,211		(7.3	)%
Other income	303		294		3.1	%	279		8.6	%	597		550		8.5	%
Total noninterest income	$	3,054	$	2,409	26.8	%	$	2,273	34.4	%	$	5,463	$	5,635	(3.1	)%

The increases in gain on sale of SBA loans for the three and six months ended June 30, 2019 compared with the same periods of 2018 were primarily due to an increase in sales volume, partially offset by a decrease in premium rates in the secondary market. The increase for the current quarter compared with the previous quarter was primarily due to increases in both sales volume and premium rates. The Company sold the guaranteed portion of SBA loans of $29.2 million, $21.2 million and $12.6 million, respectively, for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018, and $50.4 million and $42.5 million, respectively, for the six months ended June 30, 2019 and 2018. The Company also sold residential property loans of $375 thousand, $2.4 million and $7.5 million, respectively, for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018, and $2.8 million and $8.7 million, respectively, for the six months ended June 30, 2019 and 2018, as well as other real estate loans of $1.1 million for the six months ended June 30, 2018.

The decreases in loan servicing income for the three and six months ended June 30, 2019 compared with the same periods of 2018 were primarily due to a lower balance of underlying loans being serviced. Underlying loans being serviced totaled $502.1 million and $540.0 million, respectively, at June 30, 2019 and 2018. The decrease for the current quarter compared with the previous quarter was primarily due to an increase in servicing asset amortization from a higher prepayment trend.

Noninterest Expense

The following table presents the components of noninterest expense for the periods indicated:

	ThreeMonthsEnded										Six Months Ended
($ in thousands)	6/30/2019		3/31/2019		% Change		6/30/2018		% Change		6/30/2019		6/30/2018		% Change
Salaries and employee benefits	$	6,600	$	6,622	(0.3	)%	$	6,153	7.3	%	$	13,222	$	12,399	6.6	%
Occupancy and equipment	1,407		1,313		7.2	%	1,246		12.9	%	2,720		2,390		13.8	%
Professional fees	686		758		(9.5	)%	988		(30.6	)%	1,444		1,511		(4.4	)%
Marketing and business promotion	529		228		132.0	%	541		(2.2	)%	757		929		(18.5	)%
Data processing	338		318		6.3	%	295		14.6	%	656		597		9.9	%
Director fees and expenses	185		189		(2.1	)%	211		(12.3	)%	374		441		(15.2	)%
Regulatory assessments	309		116		166.4	%	145		113.1	%	425		277		53.4	%
Other expenses	930		745		24.8	%	1,361		(31.7	)%	1,675		2,027		(17.4	)%
Total noninterest expense	$	10,984	$	10,289	6.8	%	$	10,940	0.4	%	$	21,273	$	20,571	3.4	%

Overall, the increases in salaries and employee benefits were primarily due to an increase in number of employees for supporting the expansion of the Company's infrastructure for being a public company and an enhancement of the controls and processes on Bank Secrecy Act and Anti-Money Laundering (“BSA/AML”) compliance. Comparing the current quarter with the previous quarter, the decrease was primarily due to a decrease in vacation accrual and an increase of deferred loan origination cost, which reduces salaries and benefits at origination, for a higher loan production during the current quarter, partially offset by the increase in number of employees. Comparing the three and six months ended June 30, 2019 with same periods of 2018, the increases were partially offset by decreases in bonus and vacation accruals, as well as a retirement bonus paid to the former chief executive officer of $192 thousand in the three months ended March 31, 2018.

The increases in occupancy and equipment was primarily due to increases in depreciation, occupancy lease and equipment maintenance expense. The Company opened a loan production office in Artesia, California in December 2018.

4

The decrease in professional fees for the current quarter compared with the previous quarter was primarily due to increased professional fees for enhancement of the Bank's controls and processes on BSA/AML compliance programs during the previous quarter, partially offset by an increase in legal fees for the Annual Meeting of Shareholders and the corporate name change. The decreases for the three and six months ended June 30, 2019 compared with the same periods of 2018 were primarily due to expenses related to the initial public offering (“IPO”) in 2018, partially offset by increases in audit fees for being a public company and expenses related to BSA/AML enhancements.

The increase in market and business promotion for the current quarter compared with the previous quarter was primarily due to an increase in advertising expense.

The increases in regulatory assessments for the three and six months ended June 30, 2019 were due to an increase in assessment rate and an adjustment made for the assessment rate increase for the previous quarter. The increase in assessment rate was primarily due to the recent consent order relating to the Bank’s compliance with BSA/AML.

The increase in other expenses for the current quarter compared with the previous quarter was primarily due to increases in other loan related legal and office expenses. The decrease for the three and six months ended June 30, 2019 compared with the same periods of 2018 was primarily due to a reimbursement paid to the SBA of $577 thousand during the year-ago quarter, partially offset by increases in other loan related legal and office expenses.

Balance Sheet (Unaudited)

Loans

The following table presents a composition of total loans (includes both loans held-for-sale and loans held-for-investment, net of deferred costs (fees)) as of the dates indicated:

($ in thousands)	6/30/2019		3/31/2019		% Change		12/31/2018		% Change		6/30/2018		% Change
Real estate loans:
Commercial property	$	748,526	$	715,488	4.6	%	$	709,409	5.5	%	$	673,871	11.1	%
Residential property	240,630		237,115		1.5	%	233,816		2.9	%	197,229		22.0	%
SBA property	128,208		124,751		2.8	%	120,939		6.0	%	134,531		(4.7	)%
Construction	22,455		19,983		12.4	%	27,323		(17.8	)%	28,578		(21.4	)%
Commercial and industrial loans:
Commercial term	105,651		103,866		1.7	%	102,133		3.4	%	80,730		30.9	%
Commercial lines of credit	85,197		77,022		10.6	%	80,473		5.9	%	72,805		17.0	%
SBA commercial term	24,762		26,347		(6.0	)%	27,147		(8.8	)%	28,464		(13.0	)%
Trade finance	16,334		14,046		16.3	%	11,521		41.8	%	7,741		111.0	%
Other consumer loans	23,794		24,554		(3.1	)%	25,921		(8.2	)%	30,907		(23.0	)%
Loans held-for-investment	1,395,557		1,343,172		3.9	%	1,338,682		4.2	%	1,254,856		11.2	%
Loans held-for-sale	440		3,915		(88.8	)%	5,781		(92.4	)%	20,331		(97.8	)%
Total loans	$	1,395,997	$	1,347,087	3.6	%	$	1,344,463	3.8	%	$	1,275,187	9.5	%

The increase in loans held-for-investment for the current quarter was primarily due to new funding of $109.2 million and advances on lines of credit of $30.5 million, partially offset by pay-downs and pay-offs of $87.1 million. The increase for the six months ended June 30, 2019 was primarily due to new funds of $182.4 million and advances on lines of credit of $53.9 million, partially offset by pay-downs and pay-offs of $178.9 million.

The decrease in loans held-for-sale for the current quarter was primarily due to sales of $29.5 million, partially offset by new funding of $26.1 million. The decrease in loans held-for-sale for the six months ended June 30, 2019 was primarily due to sales of $53.1 million, partially offset by new funding of $47.5 million and a loan transferred from loans held-for-investment of $303 thousand.

5

Credit Quality

The following table presents compositions of non-performing loans and non-performing assets as of the dates indicated:

($ in thousands)	6/30/2019			3/31/2019			% Change		12/31/2018			% Change		6/30/2018			% Change
Nonaccrual loans:
Real estate loans:
Commercial property	$	—		$	—		—	%	$	—		—	%	$	240		(100.0	)%
Residential property	—			—			—	%	302			(100.0	)%	—			—	%
SBA property	1,372			1,011			35.7	%	540			154.1	%	1,203			14.0	%
Commercial and industrial loans:
Commercial lines of credit	—			—			—	%	—			—	%	39			(100.0	)%
SBA commercial term	16			186			(91.4	)%	203			(92.1	)%	519			(96.9	)%
Consumer loans	41			74			(44.6	)%	16			156.3	%	25			64.0	%
Total nonaccrual loans held-for-investment	1,429			1,271			12.4	%	1,061			34.7	%	2,026			(29.5	)%
Loans past due 90 days or more and still accruing	—			—			—	%	—			—	%	—			—	%
Non-performing loans (“NPLs”)	1,429			1,271			12.4	%	1,061			34.7	%	2,026			(29.5	)%
Other real estate owned (“OREO”)	395			395			—	%	—			—	%	—			—	%
Non-performing assets (“NPAs”)	$	1,824		$	1,666		9.5	%	$	1,061		71.9	%	$	2,026		(10.0	)%
Loans past due and still accruing:
Loans past due 30 to 59 days and still accruing	$	804		$	950		(15.4	)%	$	368		118.5	%	$	145		454.5	%
Loans past due 60 to 89 days and still accruing	5			12			(58.3	)%	9			(44.4	)%	185			(97.3	)%
Loans past due 90 days or more and still accruing	—			—			—	%	—			—	%	—			—	%
Total loans past due and still accruing	$	809		$	962		(15.9	)%	377			114.6	%	$	330		145.2	%
Troubled debt restructurings (“TDRs”):
Accruing TDRs	$	391		$	412		(5.1	)%	$	432		(9.5	)%	$	453		(13.7	)%
Nonaccrual TDRs	131			127			3.1	%	131			—	%	548			(76.1	)%
Total TDRs	$	522		$	539		(3.2	)%	$	563		(7.3	)%	$	1,001		(47.9	)%
NPLs to loans held-for-investment	0.10		%	0.09		%			0.08		%			0.16		%
NPAs to total assets	0.11		%	0.10		%			0.06		%			0.13		%

Classified Assets

Classified loans were $7.5 million at June 30, 2019, an increase of $435 thousand, or 6.2%, from $7.0 million at March 31, 2019, an increase of $1.2 million, or 20.0%, from $6.2 million at December 31, 2018, and an increase of $3.2 million, or 72.7%, from $4.3 million at June 30, 2018. Classified assets, which consist of classified loans and OREO, and the classified assets to total assets ratios were $7.9 million and 0.46%, respectively, at June 30, 2019, $7.4 million and 0.43%, respectively, at March 31, 2019, and $4.3 million and 0.27%, respectively, at June 30, 2018.

Investment Securities

Total investment securities were $165.2 million at June 30, 2019, a decrease of $2.4 million, or 1.5%, from $167.7 million at March 31, 2019, a decrease of $3.5 million, or 2.1%, from $168.8 million at December 31, 2018, but an increase of $12.7 million, or 8.3%, from $152.5 million at June 30, 2018. The decrease for the current quarter was primarily due to principal pay-downs and calls of $8.1 million and net premium amortization of $218 thousand, partially offset by purchases of $4.3 million and an increase in fair value of securities available-for-sale of $1.6 million. The decrease for the six months ended June 30, 2019 was primarily due to principal pay-downs and calls of $14.3 million and net premium amortization of $407 thousand, partially offset by purchases of $8.4 million and an increase in fair value of securities available-for-sale of $2.8 million.

6

Deposits

The following table presents deposit mix as of the dates indicated:

	6/30/2019				3/31/2019				12/31/2018				6/30/2018
($ in thousands)	Amount		% to Total		Amount		% to Total		Amount		% to Total		Amount		% to Total
Noninterest-bearing demand deposits	$	339,603	23.5	%	$	330,645	22.8	%	$	329,270	22.8	%	$	347,342	24.3	%
Interest-bearing deposits:
NOW	12,638		0.9	%	13,045		0.9	%	24,683		1.7	%	13,812		1.0	%
Money market accounts	311,865		21.6	%	272,085		18.8	%	280,733		19.4	%	259,098		18.2	%
Savings	6,844		0.5	%	9,510		0.7	%	8,194		0.6	%	9,886		0.7	%
Time deposits of $250,000 or less	453,286		31.2	%	455,270		31.4	%	477,134		33.0	%	492,053		34.4	%
Time deposits of more than $250,000	204,780		14.2	%	209,693		14.5	%	181,239		12.6	%	152,554		10.7	%
State and brokered deposits	117,510		8.1	%	157,510		10.9	%	142,500		9.9	%	152,500		10.7	%
Total interest-bearing deposits	1,106,923		76.5	%	1,117,113		77.2	%	1,114,483		77.2	%	1,079,903		75.7	%
Total deposits	$	1,446,526	100.0	%	$	1,447,758	100.0	%	$	1,443,753	100.0	%	$	1,427,245	100.0	%

The decrease for the current quarter was primarily due to closed accounts of $99.2 million and net balance decreases of $1.3 million on existing accounts, partially offset by new accounts of $96.6 million. The increase for the six months ended June 30, 2019 was primarily due to new accounts of $229.7 million, partially offset by closed accounts of $194.6 million and net balance decreases of $15.8 million on existing accounts. In order to reduce the reliance on wholesale deposits, the Company reduced state and brokered deposits by $40.0 million, or 34.0%, during the current quarter.

Operating Lease Assets and Liabilities

On January 1, 2019, the Company adopted Accounting Standard Update (“ASU”) 2016-02, “Leases (Topic 842),” and all subsequent ASUs that are related to Topic 842. The Company adopted this ASU using the optional transition method with a cumulative effect adjustment to retained earnings without restating prior financial statements for comparable amounts. As a result, the Company recognized right-of-use assets and liabilities of $9.6 million and $10.6 million, respectively, with a cumulative effect adjustment of $53 thousand to retained earnings at the date of adoption.

Shareholders’ Equity

Shareholders’ equity was $223.4 million at June 30, 2019, an increase of $6.2 million, or 2.8%, from $217.2 million at March 31, 2019, an increase of $13.1 million, or 6.2%, from $210.3 million at December 31, 2018, and an increase of $72.0 million, or 47.5%, from $151.4 million at June 30, 2018. The increases for the three and six months ended June 30, 2019 were primarily due to retention of earnings and increases in other comprehensive income, share-based compensation expense and stock options exercised, partially offset by repurchase of common stock and cash dividends paid on common stock. The year-over-year increase was primarily due to the IPO completed in August 2018 and retention of earnings, partially offset by repurchase of common stock and cash dividends paid on common stock.

On March 28, 2019, the Company’s Board of Directors approved the repurchase of up to $6.5 million of the Company’s common stock through March 27, 2020. During the current quarter, the Company repurchased 57,551 shares of its common stock totaling $974 thousand.

7

Capital Ratios

Based on changes to the Federal Reserve’s definition of a “Small Bank Holding Company” that increased the threshold to $3 billion in assets in August 2018, the Company is not currently subject to separate minimum capital measurements. At such time as the Company reaches the $3 billion asset level, it will again be subject to capital measurements independent of the Bank. For comparison purposes, the Company’s ratios are included in following discussion. The following table presents capital ratios for the Company and the Bank as of dates indicated:

	6/30/2019		3/31/2019		12/31/2018		6/30/2018
PCB Bancorp
Common tier 1 capital (to risk-weighted assets)	16.20	%	16.52	%	16.28	%	12.43	%
Total capital (to risk-weighted assets)	17.18	%	17.53	%	17.31	%	13.46	%
Tier 1 capital (to risk-weighted assets)	16.20	%	16.52	%	16.28	%	12.43	%
Tier 1 capital (to average assets)	12.74	%	12.83	%	12.60	%	9.58	%
Pacific City Bank
Common tier 1 capital (to risk-weighted assets)	16.07	%	16.41	%	16.19	%	12.37	%
Total capital (to risk-weighted assets)	17.05	%	17.42	%	17.21	%	13.40	%
Tier 1 capital (to risk-weighted assets)	16.07	%	16.41	%	16.19	%	12.37	%
Tier 1 capital (to average assets)	12.64	%	12.74	%	12.53	%	9.53	%

About PCB Bancorp

PCB Bancorp, formerly known as Pacific City Financial Corporation, is the bank holding company for Pacific City Bank, a California state chartered bank, offering a full suite of commercial banking services to small to medium-sized businesses, individuals and professionals, primarily in Southern California, and predominantly in Korean-American and other minority communities.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as ‘‘may,’’ “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan,” or words or phases of similar meaning. We caution that the forward-looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control. These and other important factors are detailed in various securities law filings made periodically by the Company, copies of which are available from the Company without charge. Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements. Any forward-looking statements presented herein are made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise, except as required by law.

Contact:

Timothy Chang

Executive Vice President & Chief Financial Officer

213-210-2000

8

PCB Bancorp and Subsidiary

Consolidated Balance Sheets (Unaudited)

($ in thousands, except share and per share data)

	6/30/2019			3/31/2019			% Change		12/31/2018			% Change		6/30/2018			% Change
Assets
Cash and due from banks	$	19,080		$	22,106		(13.7	)%	$	24,121		(20.9	)%	$	33,800		(43.6	)%
Interest-bearing deposits in financial institutions	114,205			151,481			(24.6	)%	138,152			(17.3	)%	134,846			(15.3	)%
Total cash and cash equivalents	133,285			173,587			(23.2	)%	162,273			(17.9	)%	168,646			(21.0	)%
Securities available-for-sale, at fair value	142,539			144,353			(1.3	)%	146,991			(3.0	)%	132,106			7.9	%
Securities held-to-maturity	22,685			23,311			(2.7	)%	21,760			4.3	%	20,390			11.3	%
Total investment securities	165,224			167,664			(1.5	)%	168,751			(2.1	)%	152,496			8.3	%
Loans held-for-sale	440			3,915			(88.8	)%	5,781			(92.4	)%	20,331			(97.8	)%
Loans held-for-investment, net of deferred loan costs (fees)	1,395,557			1,343,172			3.9	%	1,338,682			4.2	%	1,254,856			11.2	%
Allowance for loan losses	(13,328		)	(13,137		)	1.5	%	(13,167		)	1.2	%	(12,621		)	5.6	%
Net loans held-for-investment	1,382,229			1,330,035			3.9	%	1,325,515			4.3	%	1,242,235			11.3	%
Premises and equipment, net	4,334			4,259			1.8	%	4,588			(5.5	)%	4,892			(11.4	)%
Federal Home Loan Bank and other bank stock	8,345			7,433			12.3	%	7,433			12.3	%	7,433			12.3	%
Other real estate owned, net	395			395			—	%	—			—	%	—			—	%
Deferred tax assets, net	3,241			3,251			(0.3	)%	3,377			(4.0	)%	4,360			(25.7	)%
Servicing assets	7,230			7,485			(3.4	)%	7,666			(5.7	)%	8,390			(13.8	)%
Operating lease assets	10,105			9,132			10.7	%	—			—	%	—			—	%
Accrued interest receivable and other assets	11,658			10,618			9.8	%	11,644			0.1	%	10,386			12.2	%
Total assets	$	1,726,486		$	1,717,774		0.5	%	$	1,697,028		1.7	%	$	1,619,169		6.6	%
Liabilities
Deposits:
Noninterest-bearing demand	$	339,603		$	330,645		2.7	%	$	329,270		3.1	%	$	347,342		(2.2	)%
Savings, NOW and money market accounts	331,357			294,650			12.5	%	313,610			5.7	%	282,796			17.2	%
Time deposits of $250,000 or less	480,786			492,770			(2.4	)%	519,634			(7.5	)%	544,553			(11.7	)%
Time deposits of more than $250,000	294,780			329,693			(10.6	)%	281,239			4.8	%	252,554			16.7	%
Total deposits	1,446,526			1,447,758			(0.1	)%	1,443,753			0.2	%	1,427,245			1.4	%
Federal Home Loan Bank advances	35,000			30,000			16.7	%	30,000			16.7	%	30,000			16.7	%
Operating lease liabilities	11,131			10,133			9.8	%	—			—	%	—			—	%
Accrued interest payable and other liabilities	10,429			12,672			(17.7	)%	12,979			(19.6	)%	10,493			(0.6	)%
Total liabilities	1,503,086			1,500,563			0.2	%	1,486,732			1.1	%	1,467,738			2.4	%
Commitments and contingent liabilities
Shareholders’ equity
Common stock	170,769			171,407			(0.4	)%	171,067			(0.2	)%	125,579			36.0	%
Additional paid-in capital	3,366			3,336			0.9	%	3,299			2.0	%	3,206			5.0	%
Retained earnings	48,927			43,288			13.0	%	37,577			30.2	%	25,258			93.7	%
Accumulated other comprehensive loss, net	338			(820		)	(141.2	)%	(1,647		)	(120.5	)%	(2,612		)	(112.9	)%
Total shareholders’ equity	223,400			217,211			2.8	%	210,296			6.2	%	151,431			47.5	%
Total liabilities and shareholders’ equity	$	1,726,486		$	1,717,774		0.5	%	$	1,697,028		1.7	%	$	1,619,169		6.6	%
Outstanding common shares	15,980,655			16,011,151					15,977,754					13,435,214
Book value per common share (1)	$	13.98		$	13.57				$	13.16				$	11.27
Total loan to total deposit ratio	96.51		%	93.05		%			93.12		%			89.35		%
Noninterest-bearing deposits to total deposits	23.48		%	22.84		%			22.81		%			24.34		%

(1) The ratios are calculated by dividing total shareholders’ equity by the number of outstanding common shares. The Company did not have any intangible equity components for the presented periods.

9

PCB Bancorp and Subsidiary

Consolidated Statements of Income (Unaudited)

($ in thousands, except share and per share data)

	ThreeMonthsEnded													Six Months Ended
	6/30/2019			3/31/2019			% Change		6/30/2018			% Change		6/30/2019			6/30/2018			% Change
Interest income:
Interest and fees on loans	$	21,969		$	20,934		4.9	%	$	18,610		18.0	%	$	42,903		$	36,050		19.0	%
Interest on investment securities	1,062			1,093			(2.8	)%	869			22.2	%	2,155			1,717			25.5	%
Interest and dividend on other interest-earning assets	999			925			8.0	%	865			15.5	%	1,924			1,205			59.7	%
Total interest income	24,030			22,952			4.7	%	20,344			18.1	%	46,982			38,972			20.6	%
Interest expense:
Interest on deposits	6,200			5,665			9.4	%	4,292			44.5	%	11,865			7,458			59.1	%
Interest on other borrowings	138			134			3.0	%	170			(18.8	)%	272			338			(19.5	)%
Total interest expense	6,338			5,799			9.3	%	4,462			42.0	%	12,137			7,796			55.7	%
Net interest income	17,692			17,153			3.1	%	15,882			11.4	%	34,845			31,176			11.8	%
Provision (reversal) for loan losses	394			(85		)	(563.5	)%	425			(7.3	)%	309			520			(40.6	)%
Net interest income after provision for loan losses	17,298			17,238			0.3	%	15,457			11.9	%	34,536			30,656			12.7	%
Noninterest income:
Gain on sale of SBA loans	1,884			1,104			70.7	%	863			118.3	%	2,988			2,912			2.6	%
Gain on sale of residential property loans	7			16			(56.3	)%	170			(95.9	)%	23			192			(88.0	)%
Gain on sale of other loans	—			—			—	%	—			—	%	—			45			(100.0	)%
Service charges and fees on deposits	368			364			1.1	%	376			(2.1	)%	732			725			1.0	%
Servicing income	492			631			(22.0	)%	585			(15.9	)%	1,123			1,211			(7.3	)%
Other income	303			294			3.1	%	279			8.6	%	597			550			8.5	%
Total noninterest income	3,054			2,409			26.8	%	2,273			34.4	%	5,463			5,635			(3.1	)%
Noninterest expense:
Salaries and employee benefits	6,600			6,622			(0.3	)%	6,153			7.3	%	13,222			12,399			6.6	%
Occupancy and equipment	1,407			1,313			7.2	%	1,246			12.9	%	2,720			2,390			13.8	%
Professional fees	686			758			(9.5	)%	988			(30.6	)%	1,444			1,511			(4.4	)%
Marketing and business promotion	529			228			132.0	%	541			(2.2	)%	757			929			(18.5	)%
Data processing	338			318			6.3	%	295			14.6	%	656			597			9.9	%
Director fees and expenses	185			189			(2.1	)%	211			(12.3	)%	374			441			(15.2	)%
Regulatory assessments	309			116			166.4	%	145			113.1	%	425			277			53.4	%
Other expenses	930			745			24.8	%	1,361			(31.7	)%	1,675			2,027			(17.4	)%
Total noninterest expense	10,984			10,289			6.8	%	10,940			0.4	%	21,273			20,571			3.4	%
Income before income taxes	9,368			9,358			0.1	%	6,790			38.0	%	18,726			15,720			19.1	%
Income tax expense	2,767			2,794			(1.0	)%	2,028			36.4	%	5,561			4,694			18.5	%
Net income	$	6,601		$	6,564		0.6	%	$	4,762		38.6	%	$	13,165		$	11,026		19.4	%
Earnings per common share
Basic	$	0.41		$	0.41				$	0.35				$	0.82		$	0.82
Diluted	$	0.40		$	0.40				$	0.35				$	0.81		$	0.81
Average common shares outstanding
Basic	16,017,089			15,999,464					13,432,775					16,008,325			13,425,557
Diluted	16,330,039			16,271,269					13,628,677					16,303,274			13,607,834
Dividend paid per common share	$	0.06		$	0.05				$	0.03				$	0.11		$	0.06
Return on average assets (1)	1.52		%	1.57		%			1.20		%			1.55		%	1.45		%
Return on average shareholders’ equity (1), (2)	12.01		%	12.43		%			12.74		%			12.22		%	15.07		%
Efficiency ratio (3)	52.95		%	52.60		%			60.26		%			52.78		%	55.88		%

(1) Ratios are presented on an annualized basis.

(2) The Company did not have any intangible equity components for the presented periods.

(3) The ratios are calculated by dividing noninterest expense by the sum of net interest income and noninterest income.

10

PCB Bancorp and Subsidiary

Average Balance, Average Yield, and Average Rate (Unaudited)

($ in thousands)

	Three Months Ended
	6/30/19							3/31/19							6/30/18
	Average Balance			Interest Income/ Expense		Avg. Yield/Rate		Average Balance			Interest Income/ Expense		Avg. Yield/Rate		Average Balance			Interest Income/ Expense		Avg. Yield/Rate
Assets
Interest-earning assets:
Total loans (1)	$	1,378,910		$	21,969	6.39	%	$	1,342,168		$	20,934	6.33	%	$	1,236,075		$	18,610	6.04	%
Mortgage-backed securities	53,027			325		2.46	%	54,908			358		2.64	%	65,708			378		2.31	%
Collateralized mortgage obligation	21,297			140		2.64	%	22,142			147		2.69	%	52,455			309		2.36	%
SBA loan pool securities	87,787			559		2.55	%	84,523			549		2.63	%	23,212			141		2.44	%
Municipal bonds (2)	5,880			38		2.59	%	5,888			39		2.69	%	6,552			41		2.51	%
Other interest-earning assets	154,661			999		2.59	%	140,464			925		2.67	%	175,615			865		1.98	%
Total interest-earning assets	1,701,562			24,030		5.66	%	1,650,093			22,952		5.64	%	1,559,617			20,344		5.23	%
Noninterest-earning assets:
Cash and cash equivalents	18,342							18,678							18,530
Allowance for loan losses	(13,163		)					(13,118		)					(12,446		)
Other assets	35,843							34,696							27,460
Total noninterest-earning assets	41,022							40,256							33,544
Total assets	$	1,742,584						$	1,690,349						$	1,593,161
Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Deposits:
NOW and money market accounts	$	323,285		1,339		1.66	%	$	293,245		1,132		1.57	%	$	279,515		773		1.11	%
Savings	9,146			14		0.61	%	8,469			8		0.38	%	8,739			6		0.28	%
Time deposits	811,247			4,847		2.40	%	813,934			4,525		2.25	%	790,430			3,513		1.78	%
Total interest-bearing deposits	1,143,678			6,200		2.17	%	1,115,648			5,665		2.06	%	1,078,684			4,292		1.60	%
Federal Home Loan Bank advances	30,166			138		1.83	%	30,074			134		1.81	%	39,782			170		1.71	%
Total interest-bearing liabilities	1,173,844			6,338		2.17	%	1,145,722			5,799		2.05	%	1,118,466			4,462		1.60	%
Noninterest-bearing liabilities
Noninterest-bearing demand	326,813							308,071							315,232
Other liabilities	21,441							22,322							9,533
Total noninterest-bearing liabilities	348,254							330,393							324,765
Total liabilities	1,522,098							1,476,115							1,443,231
Total shareholders’ equity	220,486							214,234							149,930
Total liabilities and shareholders’ equity	$	1,742,584						$	1,690,349						$	1,593,161
Net interest income				$	17,692						$	17,153						$	15,882
Net interest spread (3)						3.49	%						3.59	%						3.63	%
Net interest margin (4)						4.17	%						4.22	%						4.08	%
Total deposits	$	1,470,491		$	6,200	1.69	%	$	1,423,719		$	5,665	1.61	%	$	1,393,916		$	4,292	1.24	%
Total funding (5)	$	1,500,657		$	6,338	1.69	%	$	1,453,793		$	5,799	1.62	%	$	1,433,698		$	4,462	1.25	%

(1) Total loans include both loans held-for-sale and loans held-for-investment, net of deferred loan costs (fees).

(2) The yield on municipal bonds has not been computed on a tax-equivalent basis.

(3) Net interest spread is calculated by subtracting average rate on interest-bearing liabilities from average yield on interest-earning assets.

(4) Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets.

(5) Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.

11

PCB Bancorp and Subsidiary

Average Balance, Average Yield, and Average Rate (Unaudited)

($ in thousands)

	Six Months Ended
	6/30/19							6/30/18
	Average Balance			Interest Income/ Expense		Avg. Yield/Rate		Average Balance			Interest Income/ Expense		Avg. Yield/Rate
Assets
Interest-earning assets:
Total loans (1)	$	1,360,641		$	42,903	6.36	%	$	1,228,015		$	36,050	5.92	%
Mortgage-backed securities	86,164			1,108		2.59	%	66,591			769		2.33	%
Collateralized mortgage obligation	53,962			683		2.55	%	51,719			589		2.30	%
SBA loan pool securities	21,717			287		2.66	%	23,778			278		2.36	%
Municipal bonds (2)	5,884			77		2.64	%	6,567			81		2.49	%
Other interest-earning assets	147,601			1,924		2.63	%	120,107			1,205		2.02	%
Total interest-earning assets	1,675,969			46,982		5.65	%	1,496,777			38,972		5.25	%
Noninterest-earning assets:
Cash and cash equivalents	18,509							19,425
Allowance for loan losses	(13,141		)					(12,406		)
Other assets	35,215							27,105
Total noninterest-earning assets	40,583							34,124
Total assets	$	1,716,552						$	1,530,901
Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Deposits:
NOW and money market accounts	$	308,348		2,471		2.54	%	$	288,680		1,533		1.07	%
Savings	8,810			22		2.59	%	8,686			12		0.28	%
Time deposits	812,583			9,372		5.66	%	722,654			5,913		1.65	%
Total interest-bearing deposits	1,129,741			11,865		2.12	%	1,020,020			7,458		1.47	%
Federal Home Loan Bank advances	30,120			272		1.82	%	39,890			338		1.71	%
Total interest-bearing liabilities	1,159,861			12,137		2.11	%	1,059,910			7,796		1.48	%
Noninterest-bearing liabilities
Noninterest-bearing demand	317,493							314,450
Other liabilities	21,880							8,962
Total noninterest-bearing liabilities	339,373							323,412
Total liabilities	1,499,234							1,383,322
Total shareholders’ equity	217,318							147,579
Total liabilities and shareholders’ equity	$	1,716,552						$	1,530,901
Net interest income				$	34,845						$	31,176
Net interest spread (3)						3.54	%						3.77	%
Net interest margin (4)						4.19	%						4.20	%
Total deposits	$	1,447,234		$	11,865	1.65	%	$	1,334,470		$	7,458	1.13	%
Total funding (5)	$	1,477,354		$	12,137	1.66	%	$	1,374,360		$	7,796	1.14	%

(1) Total loans include both loans held-for-sale and loans held-for-investment, net of deferred loan costs (fees).

(2) The yield on municipal bonds has not been computed on a tax-equivalent basis.

(3) Net interest spread is calculated by subtracting average rate on interest-bearing liabilities from average yield on interest-earning assets.

(4) Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets.

(5) Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.

12