Yahoo Finance PCB Bancorp (PCB) Q1 2024 Earnings: Misses Analyst Forecasts Amid Economic Challenges
Net Income: Reported $4.7 million for Q1 2024, down 54.5% from $10.3 million in Q1 2023, falling short of estimates of $6.47 million.
Earnings Per Share (EPS): Recorded $0.33 per diluted share, a decrease from $0.70 in the year-ago quarter and below the estimated $0.45.
Revenue: Net interest income totaled $21.0 million, a decrease from $22.4 million in Q1 2023, and below the estimated revenue of $25.30 million.
Total Assets: Increased to $2.85 billion, up 14.1% from $2.50 billion at the end of Q1 2023.
Loans Held-for-Investment: Grew to $2.40 billion, marking a 14.6% increase from $2.09 billion in Q1 2023.
Deposits: Rose to $2.40 billion, a 12.2% increase from $2.14 billion in the previous year's quarter.
Provision for Credit Losses: Reported $1.1 million, compared to a reversal of $(2.8) million in Q1 2023.
On April 25, 2024, PCB Bancorp (NASDAQ:PCB) disclosed its financial results for the first quarter of 2024 through its 8-K filing. The bank holding company, which offers a variety of banking services primarily in Southern California, reported a net income of $4.7 million, or $0.33 per diluted common share, a noticeable decline from the $10.3 million, or $0.70 per share, recorded in the same period last year. This performance fell short of analyst expectations, which had estimated earnings of $0.45 per share and a net income of $6.47 million.
Financial Highlights and Operational Review
PCB Bancorp's net interest income for Q1 2024 stood at $21.0 million, down from $22.4 million year-over-year, with a net interest margin of 3.10%, reflecting a decrease from the previous year's 3.79%. The bank also reported a provision for credit losses of $1.1 million, a shift from a reversal of $2.8 million in the prior year, indicating a more cautious approach to potential credit losses.
Total assets increased by 14.1% to $2.85 billion, driven by growth in loans held-for-investment, which saw a 14.6% increase to $2.40 billion. Similarly, total deposits grew by 12.2% to $2.40 billion. The bank's allowance for Credit Losses (ACL) to loans held-for-investment ratio remained stable at 1.18%.
Challenges and Strategic Measures
Despite the growth in assets and deposits, PCB Bancorp faced challenges including a higher interest rate environment leading to increased funding costs and compressed net interest margins. According to President and CEO Henry Kim, the bank has reached a peak in funding costs and expects stabilization in the coming quarters. Kim also highlighted the bank's ongoing strategic initiatives, including a core system conversion aimed at enhancing operational efficiency and customer experience.
Balance Sheet and Income Statement Analysis
The balance sheet expansion was primarily due to increases in loans held-for-investment. On the income statement, a decline in net interest income and a higher provision for credit losses were notable. Noninterest income saw a modest increase to $2.9 million, up from $2.5 million in the previous quarter, helped by gains on the sale of loans and other banking activities.
Outlook and Forward-Looking Statements
Looking ahead, PCB Bancorp remains optimistic about its ability to deliver solid financial results, maintain sound asset quality, and achieve strong balance sheet growth. The bank's capital levels are reported to be robust, positioning it well to navigate uncertain economic conditions.
In summary, while PCB Bancorp's Q1 2024 performance fell short of analyst expectations, the bank is taking strategic steps to address its challenges and capitalize on growth opportunities. Investors and stakeholders will likely watch closely how these strategies unfold in the upcoming quarters.
Explore the complete 8-K earnings release (here) from PCB Bancorp for further details.
This article first appeared on GuruFocus.
