PCB BANCORP (PCB)

CIK: 0001423869. SIC: 6022 State Commercial Banks. Latest 10-K as of: 2026-03-16.

SIC breadcrumb: Finance, Insurance, And Real Estate > Depository Institutions > SIC 6022 State Commercial Banks

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1423869. Latest filing source: 0001423869-26-000006.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-16. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001423869.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001423869.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001423869-26-000018.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-07. Report date: 2026-03-31.

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is management’s discussion and analysis of the major factors that influenced the Company’s results of operations and financial condition as of and for the three months ended March 31, 2026. This analysis should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 and with the unaudited consolidated financial statements and notes (unaudited) thereto set forth in this Quarterly Report on Form 10-Q.

Critical Accounting Estimates

The Company’s consolidated financial statements are prepared in accordance with GAAP and general practices within the banking industry. Within these financial statements, certain financial information contains approximate measurements of financial effects of transactions and impacts at the consolidated statements of financial condition dates and the Company’s results of operations for the reporting periods. As certain accounting policies require significant estimates and assumptions that have a material impact on the carrying value of assets and liabilities, the Company has established critical accounting policies to facilitate making the judgment necessary to prepare financial statements. The Company’s critical accounting policies are described in Note 1 to Consolidated Financial Statements and in the “Critical Accounting Estimates” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in its Annual Report on Form 10-K for the year ended December 31, 2025 and in Note 1 to Consolidated Financial Statements (unaudited) included in Part I of this Quarterly Report on Form 10-Q.

Allowance for Credit Losses

The Company accounts for credit losses on loans, off-balance sheet credit exposures and securities available-for-sale in accordance with ASC 326, “Financial Instruments - Credit Losses (Topic 326).” Measuring credit losses under the current expected credit losses (“CECL”) framework requires a significant amount of judgment, including the incorporation of reasonable and supportable forecasts about future conditions that may ultimately impact the level of credit losses the Company may recognize. Under the CECL framework, current expected credit losses are recorded on financial assets within the scope of ASC 326 at the time of their origination or acquisition.

Estimating expected credit losses requires management to use relevant forward-looking information, including the use of reasonable and supportable forecasts. The measurement of the ACL is performed by collectively evaluating loans with similar risk characteristics. The Company’s discounted cash flow methodology incorporates a probability of default and loss given default model, as well as expectations of future economic conditions, using reasonable and supportable forecasts.

The use of reasonable and supportable forecasts requires significant judgment, such as selecting forecast scenarios, as well as determining the appropriate length of the forecast horizon. Management leverages economic projections from a reputable and independent third party to inform and provide its reasonable and supportable economic forecasts. Although no one economic variable can fully demonstrate the sensitivity of the ACL estimate to changes in economic variables used in the ACL model, the Company utilized changes in U.S. unemployment rate and year-over-year change in real gross domestic product (“GDP”) growth rate as its key economic variables. Other internal and external indicators of economic forecasts may also be considered by management when developing the forecast metrics. The Company’s ACL model reverts to long-term average loss rates for purposes of estimating expected cash flows beyond a period deemed reasonable and supportable. The Company forecasts economic conditions and expected credit losses over a one-year time horizon. Beyond the one-year forecast time horizon, the Company’s ACL model reverts to historical long-term average loss rates over a one-year period.

Within the various economic scenarios considered as of March 31, 2026, the quantitative estimate of the ACL would increase by approximately $20.7 million under sole consideration of a more adverse downside scenario. The quoted sensitivity calculation reflects the sensitivity of the modeled ACL estimate to macroeconomic forecast data, but is absent of qualitative overlays and other qualitative adjustments that are part of the quarterly reserving process and does not necessarily reflect the nature and extent of future changes in the ACL for reasons including increases or decreases in qualitative adjustments, changes in the risk profile and size of the portfolio, changes in the severity of the macroeconomic scenario and the range of scenarios under management consideration.

40

A portion of the collectively evaluated ACL on loans also includes qualitative adjustments for risk factors not reflected or captured by the quantitative modeled ACL but are relevant in estimating future expected credit losses. Qualitative adjustments may be related to and include, but are not limited to factors such as: (i) management’s assessment of economic forecasts used in the model and how those forecasts align with management’s overall evaluation of current and expected economic conditions, (ii) organization-specific risks such as credit concentrations, collateral specific risks, regulatory risks, and external factors that may ultimately impact credit quality, (iii) potential model limitations such as limitations identified through back-testing, and other limitations associated with factors such as underwriting changes, acquisition of new portfolios and changes in portfolio segmentation, and (iv) management’s overall assessment of the adequacy of the ACL, including an assessment of ACL model data inputs.

Although management uses the best information reasonably available to derive estimates and assumptions necessary to measure an appropriate level of the ACL, these estimates and assumptions are subject to change in future periods, which may have a material impact on the level of the ACL and the Company’s results of operations.

Non-GAAP Measures

The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of such financial performance. Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated, and presented in accordance with GAAP. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures and may not be comparable to non-GAAP financial measures that may be presented by other companies.

The following tables present reconciliation of return on average tangible common equity, tangible common equity per common share and tangible common equity to tangible assets ratios to their most comparable GAAP measures as of the dates or for the periods indicated. These non-GAAP measures, which are presented in this Quarterly Report on Form 10-Q, are used by management in its analysis of the Company’s performance.

Three Months Ended March 31,

($ in thousands)

2026

2025

Average total shareholders’ equity

$

394,574 

$

367,718 

Less: average preferred stock

69,141 

69,141 

Average tangible common equity

$

325,433 

$

298,577 

Net income

$

10,653 

$

7,735 

Annualized return on average shareholders’ equity

10.95 

%

8.53 

%

Net income available to common shareholders

$

10,567 

$

7,695 

Annualized return on average tangible common equity

13.17 

%

10.45 

%

($ in thousands, except per share data)

March 31, 2026

December 31, 2025

March 31, 2025

Total shareholders’ equity

$

396,718 

$

390,026 

$

370,864 

Less: preferred stock

69,141 

69,141 

69,141 

Tangible common equity

$

327,577 

$

320,885 

$

301,723 

Outstanding common shares

14,231,423 

14,230,428 

14,387,176 

Book value per common share

$

27.88 

$

27.41 

$

25.78 

Tangible common equity per common share

$

23.02 

$

22.55 

$

20.97 

Total assets

$

3,396,193 

$

3,281,771 

$

3,183,758 

Total shareholders’ equity to total assets

11.68 

%

11.88 

%

11.65 

%

Tangible common equity to total assets

9.65 

%

9.78 

%

9.48 

%

41

Selected Financial Data

The following table presents certain selected financial data as of the dates or for the periods indicated:

As of or For the Three Months Ended March 31,

($ in thousands, except per share data)

2026

2025

Selected balance sheet data:

Cash and cash equivalents

$

267,405 

$

214,348 

Securities available-for-sale

170,477 

148,190 

Loans held-for-sale

3,604 

12,101 

Loans held-for-investment

2,873,551 

2,727,610 

ACL on loans

(33,943)

(31,942)

Total assets

3,396,193 

3,183,758 

Total deposits

2,887,980 

2,714,399 

Shareholders’ equity

396,718 

370,864 

Selected income statement data:

Interest income

$

48,831 

$

46,892 

Interest expense

22,021 

22,609 

Net interest income

26,810 

24,283 

Provision for credit losses

467 

1,598 

Noninterest income

3,374 

2,580 

Noninterest expense

14,814 

14,474 

Income before income taxes

14,903 

10,791 

Income tax expense

4,250 

3,056 

Net income

10,653 

7,735 

Preferred stock dividends

86 

40 

Net income available to common shareholders

10,567 

7,695 

Per share data:

Earnings per common share, basic

$

0.74 

$

0.53 

Earnings per common share, diluted

0.74 

0.53 

Book value per common share (1)

27.88 

25.78 

Tangible common equity per common share (9)

23.02 

20.97 

Cash dividends declared per common share

0.22 

0.20 

Outstanding share data:

Number of common shares outstanding

14,231,423 

14,387,176 

Weighted-average common shares outstanding, basic

14,142,092 

14,272,267 

Weighted-average common shares outstanding, diluted

14,238,226 

14,403,769 

Selected performance ratios:

Return on average assets (2)

1.30 

%

1.01 

%

Return on average shareholders’ equity (2)

10.95 

%

8.53 

%

Dividend payout ratio (3)

29.73 

%

37.74 

%

Efficiency ratio (4)

49.08 

%

53.88 

%

Yield on average interest-earning assets (2)

6.12 

%

6.33 

%

Cost of average interest-bearing liabilities (2)

3.82 

%

4.28 

%

Net interest spread (2)

2.30 

%

2.05 

%

Net interest margin (2), (5)

3.36 

%

3.28 

%

Total loans to total deposits ratio (6)

99.63 

%

100.93 

%

42

As of or For the Three Months Ended March 31,

($ in thousands, except per share data)

2026

2025

Asset quality:

Loans 30 to 89 days past due and still accruing

$

1,371 

$

5,337 

Nonaccrual loans held-for-investment

8,185 

6,248 

Nonperforming loans held-for-investment (7)

8,185 

6,248 

Nonperforming loans held-for-sale

1,091 

— 

Nonperforming assets (8)

9,276 

6,248 

Net charge-offs

56 

277 

Loans 30 to 89 days past due and still accruing to loans held-for-investment

0.05 

%

0.20 

%

Nonperforming loans held-for-investment to loans held-for-investment

0.28 

%

0.23 

%

Nonperforming loans held-for-investment to ACL on loans

24.11 

%

19.56 

%

Nonperforming assets to total assets

0.27 

%

0.20 

%

ACL on loans to loans held-for-investment

1.18 

%

1.17 

%

ACL on loans to nonaccrual loans held-for-investment

414.70 

%

511.24 

%

ACL on loans to nonperforming loans held-for-investment

414.70 

%

511.24 

%

Net charge-offs (recoveries) to average loans held-for-investment (2)

0.01 

%

0.04 

%

Capital ratios:

Shareholders’ equity to total assets

11.68 

%

11.65 

%

Tangible common equity to total assets (9)

9.65 

%

9.48 

%

Average shareholders’ equity to average tota

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-03-16. Report date: 2025-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of financial condition and results of operations together with the Consolidated Financial Statements and accompanying notes included in Item 8 of this Annual Report on Form 10-K. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under Item 1A “Risk Factors” and “Forward Looking Statements” immediately preceding Part I of this Annual Report on Form 10-K.

Critical Accounting Estimates

The Company follows accounting and reporting policies and procedures that conform, in all material respects, to GAAP and to practices generally applicable to the financial services industry, the most significant of which are described in Note 1 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make judgments and accounting estimates that affect the amounts reported for assets, liabilities, revenues and expenses on the Consolidated Financial Statements and accompanying notes, and amounts disclosed as contingent assets and liabilities. While the Company bases estimates on historical experience, current information and other factors deemed to be relevant, actual results could differ from those estimates. Accounting estimates are necessary in the application of certain accounting policies and procedures that are particularly susceptible to significant change. Critical accounting policies are defined as those that require the most complex or subjective judgment and are reflective of significant uncertainties, and could potentially result in materially different results under different assumptions and conditions.

The following is a summary of the more subjective and complex accounting estimates and principles affecting the financial condition and results reported in financial statements. In each area, the Company has identified the variables that management believes to be the most important in the estimation process. The Company uses the best information available to make the estimations necessary to value the related assets and liabilities in each of these areas.

Allowance for Credit Losses

On January 1, 2023, the Company adopted the provisions of Accounting Standards Codification (“ASC”) 326, “Financial Instruments - Credit Losses (Topic 326).” The adoption of ASC 326 changes the way the Company estimates the ACL on certain financial assets. The adoption of ASC 326 requires the Company to measure and record current expected credit losses for financial assets within the scope of ASC 326, which for the Company currently consist substantially of loans, off-balance sheet credit exposures and securities available-for-sale. Measuring credit losses under the current expected credit losses (“CECL”) framework requires a significant amount of judgment, including the incorporation of reasonable and supportable forecasts about future conditions that may ultimately impact the level of credit losses the Company may recognize. Under the CECL framework, current expected credit losses are recorded on financial assets within the scope of ASC 326 at the time of their origination or acquisition.

The following table summarizes the initial adjustment to the ACL as of January 1, 2023:

($ in thousands)

Pre-ASC 326 Adoption

Impact of ASC 326 Adoption

As Reported Under ASC 326

Assets

ACL on loans

Commercial real estate

$

15,536 

$

(610)

$

14,926 

Commercial and industrial

5,502 

4,344 

9,846 

Consumer

3,904 

(2,667)

1,237 

Total ACL on loans

24,942 

1,067 

26,009 

Deferred tax assets

3,115 

788 

3,903 

Liabilities

ACL on off-balance sheet credit exposures

$

299 

$

1,607 

1,906 

Shareholders’ equity

Retained earnings

$

127,181 

$

(1,886)

125,295 

In conjunction with the adoption of ASC 326, the Company made an accounting policy election not to measure an ACL on accrued interest receivables for the loans collectively evaluated. For the loans individually evaluated, the Company considers accrued interest receivables as a part of the amortized cost and measures an ACL.

39

When accrued interest receivable is deemed to be uncollectable, the Company promptly reverses such balances through current period interest income in the period they are deemed uncollectable. Additionally, the Company has also elected not to include the balance of accrued interest receivable in the amortized cost basis of financial assets within the scope of ASC 326. Accrued interest receivable will continue to be presented separately in the Consolidated Balance Sheets.

Estimating expected credit losses requires management to use relevant forward-looking information, including the use of reasonable and supportable forecasts. The measurement of the ACL is performed by collectively evaluating loans with similar risk characteristics. The Company’s discounted cash flow methodology incorporates a probability of default (“PD”) and loss given default (“LGD”) model, as well as expectations of future economic conditions, using reasonable and supportable forecasts.

The use of reasonable and supportable forecasts requires significant judgment, such as selecting forecast scenarios, as well as determining the appropriate length of the forecast horizon. Management leverages economic projections from a reputable and independent third party to inform and provide its reasonable and supportable economic forecasts. Although no one economic variable can fully demonstrate the sensitivity of the ACL estimate to changes in economic variables used in the ACL model, the Company utilized changes in U.S. unemployment rate and year-over-year change in real gross domestic product (“GDP”) growth rate as its key economic variables. Other internal and external indicators of economic forecasts may also be considered by management when developing the forecast metrics. The Company’s ACL model reverts to long-term average loss rates for purposes of estimating expected cash flows beyond a period deemed reasonable and supportable. The Company forecasts economic conditions and expected credit losses over a one-year time horizon. Beyond the one-year forecast time horizon, the Company’s ACL model reverts to historical long-term average loss rates over a one-year period.

Within the various economic scenarios considered as of December 31, 2025, the quantitative estimate of the ACL would increase by approximately $21.0 million under sole consideration of the more adverse downside scenario. The quoted sensitivity calculation reflects the sensitivity of the modeled ACL estimate to macroeconomic forecast data, but is absent of qualitative overlays and other qualitative adjustments that are part of the quarterly reserving process and does not necessarily reflect the nature and extent of future changes in the ACL for reasons including increases or decreases in qualitative adjustments, changes in the risk profile and size of the portfolio, changes in the severity of the macroeconomic scenario and the range of scenarios under management consideration.

A portion of the collectively evaluated ACL on loans also includes qualitative adjustments for risk factors not reflected or captured by the quantitative modeled ACL but are relevant in estimating future expected credit losses. Qualitative adjustments may be related to and include, but not limited to factors such as: (i) management’s assessment of economic forecasts used in the model and how those forecasts align with management’s overall evaluation of current and expected economic conditions, (ii) organization-specific risks such as credit concentrations, collateral specific risks, regulatory risks, and external factors that may ultimately impact credit quality, (iii) potential model limitations such as limitations identified through back-testing, and other limitations associated with factors such as underwriting changes, acquisition of new portfolios and changes in portfolio segmentation, and (iv) management’s overall assessment of the adequacy of the ACL, including an assessment of ACL model data inputs.

Although management uses the best information reasonably available to derive estimates and assumptions necessary to measure an appropriate level of the ACL, these estimates and assumptions are subject to change in future periods, which may have a material impact on the level of the ACL and the Company’s results of operations.

40

Loan portfolio segments identified by the Company include: commercial real estate (commercial property, business property, multifamily and construction), commercial and industrial, and consumer loans (residential mortgage and other consumer).

Each loan segment bears varying degrees of risk based on, among other things, the type of loan and collateral, and the sensitivity of the borrower or industry to changes in external factors such as economic conditions and interest rate changes. The loan segments are as follows:

Commercial Real Estate Loans:

•Commercial property loans – Commercial property loans include loans for which the Company holds real property as collateral, but where the borrower does not occupy the underlying property. The primary risks associated with investor property loans include the borrower’s inability to pay, material decreases in the value of the real estate that is being held as collateral, significant increases in interest rates, changes in market rents, and vacancy and conditions of the underlying property, any of which may make the real estate property unprofitable to the borrower. Real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy.

•Business property loans – Business property loans include loans for which the Company holds real property as collateral and where the underlying property is occupied by the borrower, such as with a place of business. These loans are primarily underwritten based on the cash flows of the business and secondarily on the real estate. The primary risks associated with business property loans include the borrower’s inability to pay, material decreases in the value of the real estate that is being held as collateral, and significant increases in interest rates, which reduce the cash flows of the underlying business. Real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy.

•Multifamily loans: Multifamily loans are secured by multi-tenant (5 or more units) residential real properties. Payments on multifamily loans are dependent on the successful operation or management of the properties, and repayment of these loans may be subject to adverse conditions in the real estate market or the economy.

•Construction loans: Construction loans are considered to have higher risks due to construction completion and timing risk, and the ultimate repayment being sensitive to interest rate changes, government regulation of real property, and the availability of long-term financing. Additionally, economic conditions may impact the Company’s ability to recover its investment in construction loans, as adverse economic conditions may negatively impact the real estate market, which could affect the borrower’s ability to complete and sell the project. The fair value of the underlying collateral may fluctuate as market conditions change. The primary risks include the borrower’s inability to pay and the inability of the Company to recover its investment due to a decline in the fair value of the underlying collateral.

Commercial and Industrial Loans:

•Commercial and industrial loans – The C&I loan category includes commercial term loans and commercial lines of credit. Commercial term loans are typically extended to finance business acquisitions, permanent working capital needs, and/or equipment purchases. Commercial lines of credit are generally provided to finance short-term working capital needs and warehouse lending credit facilities. Warehouse lending is a line of credit given to a loan originator, the funds from which are used to finance a residential mortgage or CRE loans that a borrower uses to purchase property or refinance an existing loan. The primary risk associated with C&I loans is the difference between expected and actual cash flows of the borrowers. In addition, the recoverability of the Company’s investment in these loans is also dependent on other factors primarily dictated by the type of collateral securing these loans, and occasionally upon other borrower assets and guarantor assets.

Consumer Loans:

•Residential mortgage loans – The primary risks of residential mortgage loans include the borrower’s inability to pay, material decreases in the value of the real estate that is being held as collateral, and significant increases in interest rates, which may reduce the borrower’s capacity to pay.

•Other consumer loans – Other consumer loans primarily include automobile loans, as well as unsecured lines of credit and term loans to high net worth individuals. Automobile loans have relatively higher LTV ratios on average and carry higher interest rates to offset for the inherently higher default risks. Unsecured lines of credit and term consumer loans are underwritten primarily based on the individual borrower’s income, current debt level, and past credit history. Repayment of these loans is dependent on the borrower’s ability to pay, and the fair value of the underlying collateral for automobile loans.

41

Non-GAAP Financial Measures

The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of such financial performance. Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position or cash flows that exclude (or include) amounts that are included in (or excluded from) the most directly comparable measure calculated, and presented in accordance with GAAP. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures and may not be comparable to non-GAAP financial measures that may be presented by other companies.

The following tables present reconciliation of return on average tangible common equity, tangible common equity per common share and tangible common equity to tangible assets ratios to their most comparable GAAP measures as of the dates or for the periods indicated. These non-GAAP measures are used by management in its analysis of the Company's performance.

Year Ended December 31,

($ in thousands)

2025

2024

2023

2022

2021

Average total shareholders' equity

$

376,990 

$

355,620 

$

340,509 

$

306,440 

$

242,766 

Less: average preferred stock

69,141 

69,141 

69,141 

42,053 

— 

Average tangible common equity

$

307,849 

$

286,479 

$

271,368 

$

264,387 

$

242,766 

Net income

$

37,453 

$

25,810 

$

30,705 

$

34,987 

$

40,103 

Return on average shareholders' equity

9.93 

%

7.26 

%

9.02 

%

11.42 

%

16.52 

%

Net income available to common shareholders

$

37,153 

$

24,976 

$

30,705 

$

34,987 

$

40,103 

Return on average tangible common equity

12.07 

%

8.72 

%

11.31 

%

13.23 

%

16.52 

%

December 31,

($ in thousands, except per share data)

2025

2024

2023

2022

2021

Total shareholders' equity

$

390,026 

$

363,814 

$

348,872 

$

335,442 

$

256,286 

Less: preferred stock

69,141 

69,141 

69,141 

69,141 

— 

Tangible common equity

$

320,885 

$

294,673 

$

279,731 

$

266,301 

$

256,286 

Outstanding common shares

14,230,428 

14,380,651 

14,260,440 

14,625,474 

14,865,825 

Book value per common share

$

27.41 

$

25.30 

$

24.46 

$

22.94 

$

17.24 

Tangible common equity per common share

$

22.55 

$

20.49 

$

19.62 

$

18.21 

$

17.24 

Total assets

$

3,281,771 

$

3,063,971 

$

2,789,506 

$

2,420,036 

$

2,149,735 

Total shareholders' equity to total assets

11.88 

%

11.87 

%

12.51 

%

13.86 

%

11.92 

%

Tangible common equity to total assets

9.78 

%

9.62 

%

10.03 

%

11.00 

%

11.92 

%

42

Five-Year Summary of Selected Financial Data

The following table presents certain selected financial data as of the dates or for the periods indicated:

As of or For the Year Ended December 31,

($ in thousands, except per share data)

2025

2024

2023

2022

2021

Selected balance sheet data:

Cash and cash equivalents

$

207,142 

$

198,792 

$

242,342 

$

147,031 

$

203,285 

Securities available-for-sale

160,009 

146,349 

143,323 

141,863 

123,198 

Loans held-for-sale

12,077 

6,292 

5,155 

22,811 

37,026 

Loans held-for-investment

2,820,400 

2,629,387 

2,323,452 

2,046,063 

1,732,205 

ACL on loans (1)

(33,381)

(30,628)

(27,533)

(24,942)

(22,381)

Total assets

3,281,771 

3,063,971 

2,789,506 

2,420,036 

2,149,735 

Total deposits

2,795,412 

2,615,791 

2,351,612 

2,045,983 

1,867,134 

Shareholders’ equity

390,026 

363,814 

348,872 

335,442 

256,286 

Selected income statement data:

Interest income

$

197,536 

$

180,817 

$

151,177 

$

101,751 

$

81,472 

Interest expense

93,658 

92,200 

62,673 

12,119 

4,335 

Net interest income

103,878 

88,617 

88,504 

89,632 

77,137 

Provision (reversal) for credit losses (1)

4,028 

3,401 

(132)

3,602 

(4,596)

Noninterest income

11,836 

11,093 

10,683 

14,499 

18,434 

Noninterest expense

59,198 

60,023 

56,057 

51,126 

43,208 

Income before income taxes

52,488 

36,286 

43,262 

49,403 

56,959 

Income tax expense

15,035 

10,476 

12,557 

14,416 

16,856 

Net income

37,453 

25,810 

30,705 

34,987 

40,103 

Preferred stock dividends

300 

834 

— 

— 

— 

Net income available to common shareholders

37,153 

24,976 

30,705 

34,987 

40,103 

Per share data:

Earnings per common share, basic

$

2.59 

$

1.75 

$

2.14 

$

2.35 

$

2.66 

Earnings per common share, diluted

2.58 

1.74 

2.12 

2.31 

2.62 

Book value per common share (2)

27.41 

25.30 

24.46 

22.94 

17.24 

Tangible common equity per common share (8)

22.55 

20.49 

19.62 

18.21 

17.24 

Cash dividends declared per common share

0.80 

0.72 

0.69 

0.60 

0.44 

Outstanding share data:

Number of common shares outstanding

14,230,428 

14,380,651 

14,260,440 

14,625,474 

14,865,825 

Weighted-average common shares outstanding, basic

14,204,468 

14,242,057 

14,301,691 

14,822,018 

15,017,637 

Weighted-average common shares outstanding, diluted

14,279,130 

14,342,361 

14,417,938 

15,065,175 

15,253,820 

Selected performance ratios:

Return on average assets

1.15 

%

0.90 

%

1.20 

%

1.54 

%

1.96 

%

Return on average shareholders’ equity

9.93 

%

7.26 

%

9.02 

%

11.42 

%

16.52 

%

Return on average tangible common equity (8)

12.07 

%

8.72 

%

11.31 

%

13.23 

%

16.52 

%

Dividend payout ratio (3)

30.89 

%

41.14 

%

32.24 

%

25.53 

%

16.54 

%

Efficiency ratio (4)

51.16 

%

60.20 

%

56.52 

%

49.10 

%

45.21 

%

Yield on average interest-earning assets

6.26 

%

6.47 

%

6.10 

%

4.63 

%

4.05 

%

Cost of average interest-bearing liabilities

4.12 

%

4.79 

%

4.05 

%

1.08 

%

0.41 

%

Net interest spread

2.14 

%

1.68 

%

2.05 

%

3.55 

%

3.64 

%

Net interest margin (5)

3.29 

%

3.17 

%

3.57 

%

4.08 

%

3.83 

%

Total loans to total deposits ratio (6)

101.33 

%

100.76 

%

99.02 

%

101.12 

%

94.76 

%

43

As of or For the Year Ended December 31,

($ in thousands, except per share data)

2025

2024

2023

2022

2021

Asset quality:

Loans 30 to 89 days past due and still accruing

$

955 

$

4,902 

0

$

1,428 

$

134 

$

554 

Loans past due 90 days or more and still accruing

— 

— 

— 

— 

— 

Nonaccrual loans held-for-investment

7,910 

4,693 

3,916 

3,360 

994 

NPLs held-for-investment

7,910 

4,693 

3,916 

3,360 

994 

NPLs held-for-sale

— 

— 

— 

4,000 

— 

Total NPLs

7,910 

4,693 

3,916 

7,360 

994 

NPAs (7)

7,910 

4,693 

3,916 

7,360 

994 

Net charge-offs (recoveries)

922 

393 

(1,027)

1,041 

(467)

Loans 30 to 89 days past due and still accruing to loans held-for-investment

0.03 

%

0.19 

%

0.06 

%

0.01 

%

0.03 

%

Nonaccrual loans held-for-investment to loans held-for-investment

0.28 

%

0.18 

%

0.17 

%

0.16 

%

0.06 

%

Nonaccrual loans held-for-investment to ACL on loans (1)

23.70 

%

15.32 

%

14.22 

%

13.47 

%

4.44 

%

NPLs held-for-investment to loans held-for-investment

0.28 

%

0.18 

%

0.17 

%

0.16 

%

0.06 

%

NPLs held-for-investment to ACL on loans (1)

23.70 

%

15.32 

%

14.22 

%

13.47 

%

4.44 

%

NPAs to total assets

0.24 

%

0.15 

%

0.23 

%

0.30 

%

0.05 

%

ACL on loans (1) to loans held-for-investment

1.18 

%

1.16 

%

1.19 

%

1.22 

%

1.29 

%

ACL on loans (1) to nonaccrual loans held-for-investment

422.01 

%

652.63 

%

703.09 

%

742.32 

%

2,251.61 

%

ACL on loans (1) to NPLs held-for-investment

422.01 

%

652.63 

%

703.09 

%

742.32 

%

2,251.61 

%

Net charge-offs (recoveries) to average loans held-for-investment

0.03 

%

0.02 

%

(0.05)

%

0.06 

%

(0.03)

%

Capital ratios:

Shareholders’ equity to total assets

11.88 

%

11.87 

%

12.51 

%

13.86 

%

11.92 

%

Tangible common equity to total assets (8)

9.78 

%

9.62 

%

10.03 

%

11.00 

%

11.92 

%

Average equity to average assets

11.61 

%

12.36 

%

13.35 

%

13.49 

%

11.86 

%

PCB Bancorp

Common tier 1 capital (to risk-weighted assets)

11.46 

%

11.44 

%

12.23 

%

13.29 

%

14.79 

%

Total capital (to risk-weighted assets)

15.13 

%

15.24 

%

16.39 

%

17.83 

%

16.04 

%

Tier 1 capital (to risk-weighted assets)

13.89 

%

14.04 

%

15.16 

%

16.62 

%

14.79 

%

Tier 1 capital (to average assets)

11.89 

%

12.45 

%

13.43 

%

14.33 

%

12.11 

%

PCB Bank

Common tier 1 capital (to risk-weighted assets)

13.49 

%

13.72 

%

14.85 

%

16.30 

%

14.48 

%

Total capital (to risk-weighted assets)

14.72 

%

14.92 

%

16.07 

%

17.52 

%

15.73 

%

Tier 1 capital (to risk-weighted assets)

13.49 

%

13.72 

%

14.85 

%

16.30 

%

14.48 

%

Tier 1 capital (to average assets)

11.55 

%

12.16 

%

13.16 

%

14.05 

%

11.85 

%

(1)    ACL and provision (reversal) for credit losses for the years ended December 31, 2025, 2024 and 2023 are presented under ASC 326, while prior period comparisons continue to be presented under legacy ASC 450 and ASC 310. Provision (reversal) for credit losses on off-balance sheet credit exposures of $85 thousand and $(24) thousand, respectively, for the years ended December 31, 2022 and 2021 is recorded in Other Expense on the Consolidated Income Statement.

(2)    Shareholders' equity divided by common shares outstanding.

(3)    Dividends declared per common share divided by basic earnings per common share.

(4)    Noninterest expenses divided by the sum of net interest income and noninterest income.

(5)    Net interest income divided by average total interest-earning assets.

(6)    Total loans include both loans held-for-sale and loans held-for-investment.

(7)    NPAs include total NPLs (nonaccrual loans plus loans past due 90 days or more and still accruing) and OREO.

(8)    Non-GAAP measure. See "Non-GAAP Measures" for a reconciliation to its most comparable GAAP measure.

44

Executive Summary

Financial Highlights

•Net income available for common shareholders was $37.2 million for the year ended December 31, 2025, an increase of $12.2 million, or 48.8%, from $25.0 million for the year ended December 31, 2024 and an increase of $6.4 million, or 21.0%, from $30.7 million for the year ended December 31, 2023;

◦Provision (reversal) for credit losses was $4.0 million, $3.4 million and $(132) thousand for the years ended December 31, 2025, 2024 and 2023, respectively.

◦Diluted earnings per common share was $2.58, $1.74 and $2.12 for the years ended December 31, 2025, 2024 and 2023, respectively.

◦Net interest margin was 3.29%, 3.17% and 3.57% for the years ended December 31, 2025, 2024 and 2023, respectively.

•Total assets were $3.28 billion at December 31, 2025, an increase of $217.8 million, or 7.1%, from $3.06 billion at December 31, 2024;

•Loans held-for-investment were $2.82 billion at December 31, 2025, an increase of $191.0 million, or 7.3%, from $2.63 billion at December 31, 2024;

•Total deposits were $2.80 billion at December 31, 2025, an increase of $179.6 million, or 6.9%, from $2.62 billion at December 31, 2024;

•The Company declared and paid cash dividends of $0.80, $0.72 and $0.69 per common share for the years ended December 31, 2025, 2024 and 2023, respectively; and

•The Company purchased and retired 358,251, 14,947 and 512,657 shares of common stock for the years ended December 31, 2025, 2024 and 2023, respectively.

The increase in net income for the year ended December 31, 2025 compared with the year ended December 31, 2024 was primarily due to an increase in net interest income and noninterest income and a decrease in noninterest expense, partially offset by an increase in provision for credit losses of $4.0 million for the year ended December 31, 2025 compared with $3.4 million for the year ended December 31, 2024.

The decrease in net income for the year ended December 31, 2024 compared with the year ended December 31, 2023 was primarily due to an increase in noninterest expense, partially offset by increases in noninterest income and net interest income, and provision for credit losses of $3.4 million for the year ended December 31, 2024 compared with reversal for credit losses of $132 thousand for the year ended December 31, 2023.

The increase in total assets for the year ended December 31, 2025 was primarily due to increases in loans held-for-investment and securities available-for-sale.

The Company is committed to making corporate decisions that directly benefit its shareholders, and during the year ended December 31, 2025, increased its dividend per common share by $0.08, or 11.1%, to $0.80 from $0.72 for the year ended December 31, 2024. During the year ended December 31, 2025, the Company also repurchased 358,251 shares of common stock, totaling $7.1 million. Overall, the Company returned 49.6% of its earnings to common shareholders through dividends and common share repurchases during the year ended December 31, 2025.

Result of Operations

Net Interest Income

A principal component of the Company’s earnings is net interest income, which is the difference between the interest and fees earned on loans and investments and the interest paid on deposits and borrowed funds. Net interest income expressed as a percentage of average interest-earning assets is referred to as the net interest margin. The net interest spread is the yield on average interest-earning assets less the cost of average interest-bearing liabilities. Net interest income is affected by changes in the balances of interest-earning assets and interest-bearing liabilities and changes in the yields earned on interest-earning assets and the rates paid on interest-bearing liabilities.

45

The following table presents interest income, average interest-earning assets, interest expense, average interest-bearing liabilities, and their correspondent yields and costs expressed both in dollars and rates for the periods indicated:

Year Ended December 31,

2025

2024

2023

($ in thousands)

Average Balance

Interest

Yield/Cost

Average Balance

Interest

Yield/Cost

Average Balance

Interest

Yield/Cost

Interest-earning assets:

Total loans (1)

$

2,757,090 

$

180,345 

6.54 

%

$

2,445,080 

$

164,301 

6.72 

%

$

2,137,851 

$

136,029 

6.36 

%

Mortgage-backed securities

119,335 

4,614 

3.87 

%

107,768 

3,780 

3.51 

%

98,903 

3,001 

3.03 

%

Collateralized mortgage obligation

20,160 

794 

3.94 

%

22,806 

975 

4.28 

%

25,466 

1,039 

4.08 

%

SBA loan pool securities

5,074 

177 

3.49 

%

6,756 

283 

4.19 

%

8,166 

325 

3.98 

%

Municipal securities - tax exempt (2)

2,424 

87 

3.59 

%

2,917 

102 

3.50 

%

3,788 

126 

3.33 

%

Corporate bonds

4,660 

188 

4.03 

%

4,208 

188 

4.47 

%

4,273 

188 

4.40 

%

Interest-bearing deposits in other financial institutions

232,652 

10,076 

4.33 

%

189,628 

10,031 

5.29 

%

186,850 

9,621 

5.15 

%

FHLB and other bank stock

14,706 

1,255 

8.53 

%

13,651 

1,157 

8.48 

%

11,959 

848 

7.09 

%

Total interest-earning assets

3,156,101 

197,536 

6.26 

%

2,792,814 

180,817 

6.47 

%

2,477,256 

151,177 

6.10 

%

Noninterest-earning assets:

Cash and due from banks

23,999 

23,044 

21,565 

ACL on loans

(32,267)

(28,397)

(25,495)

Other assets

99,631 

90,425 

76,444 

Total noninterest-earning assets

91,363 

85,072 

72,514 

Total assets

$

3,247,464 

$

2,877,886 

$

2,549,770 

Interest-bearing liabilities:

Deposits:

NOW and money market accounts

$

578,796 

20,840 

3.60 

%

$

475,754 

19,149 

4.02 

%

$

470,750 

16,190 

3.44 

%

Savings

5,448 

13 

0.24 

%

6,312 

16 

0.25 

%

7,499 

18 

0.24 

%

Time deposits

1,657,709 

71,408 

4.31 

%

1,410,878 

71,322 

5.06 

%

1,059,985 

45,957 

4.34 

%

Other borrowings

30,619 

1,397 

4.56 

%

31,033 

1,713 

5.52 

%

9,192 

508 

5.53 

%

Total interest-bearing liabilities

2,272,572 

93,658 

4.12 

%

1,923,977 

92,200 

4.79 

%

1,547,426 

62,673 

4.05 

%

Noninterest-bearing liabilities:

Demand deposits

532,426 

539,263 

629,774 

Other liabilities

65,476 

59,026 

32,061 

Total noninterest-bearing liabilities

597,902 

598,289 

661,835 

Total liabilities

2,870,474 

2,522,266 

2,209,261 

Shareholders’ equity

376,990 

355,620 

340,509 

Total liabilities and shareholders’ equity

$

3,247,464 

$

2,877,886 

$

2,549,770 

Net interest income

$

103,878 

$

88,617 

$

88,504 

Net interest spread (3)

2.14 

%

1.68 

%

2.05 

%

Net interest margin (4)

3.29 

%

3.17 

%

3.57 

%

Cost of deposits

3.33 

%

3.72 

%

2.87 

%

Cost of funds (5)

3.34 

%

3.74 

%

2.88 

%

(1)    Average balance includes both loans held-for-sale and loans held-for-investment, as well as nonaccrual loans. Net amortization of deferred loan fees (cost) of $1.4 million, $1.2 million and $1.1 million, respectively, and net accretion of discount on loans of $2.8 million, $2.8 million and $2.2 million, respectively, are included in the interest income for the years ended December 31, 2025, 2024 and 2023, respectively.

(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 net interest income by average interest-earning assets.

(5)    Cost of funds is calculated by dividing total interest expense by the sum of total interest-bearing liabilities and noninterest-bearing demand deposits.

46

The following table presents the changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. Information is provided on changes attributable to: (i) changes in volume multiplied by the prior rate; and (ii) changes in rate multiplied by the prior volume. Changes attributable to both rate and volume which cannot be segregated have been allocated proportionately to the change due to volume and the change due to rate.

Year Ended December 31, 2025 vs. 2024

Year Ended December 31, 2024 vs. 2023

Increase (Decrease) Due to

Net Increase (Decrease)

Increase (Decrease) Due to

Net Increase (Decrease)

($ in thousands)

Volume

Rate

Volume

Rate

Interest earned on:

Total loans

$

20,966 

$

(4,922)

$

16,044 

$

19,549 

$

8,723 

$

28,272 

Investment securities

265 

267 

532 

128 

521 

649 

Other interest-earning assets

2,426 

(2,283)

143 

235 

484 

719 

Total interest income

23,657 

(6,938)

16,719 

19,912 

9,728 

29,640 

Interest paid on:

Savings, NOW, and money market deposits

4,062 

(2,374)

1,688 

129 

2,828 

2,957 

Time deposits

12,478 

(12,392)

86 

15,213 

10,152 

25,365 

Other borrowings

(23)

(293)

(316)

1,207 

(2)

1,205 

Total interest expense

16,517 

(15,059)

1,458 

16,549 

12,978 

29,527 

Change in net interest income

$

7,140 

$

8,121 

$

15,261 

$

3,363 

$

(3,250)

$

113 

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

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

Year Ended December 31,

Amount Change

Percentage Change

($ in thousands)

2025

2024

Interest income:

Interest and fees on loans

$

180,345 

$

164,301 

$

16,044 

9.8 

%

Interest on investment securities

5,860 

5,328 

532 

10.0 

%

Interest and dividends on other interest-earning assets

11,331 

11,188 

143 

1.3 

%

Total interest income

197,536 

180,817 

16,719 

9.2 

%

Interest expense:

Interest on deposits

92,261 

90,487 

1,774 

2.0 

%

Interest on other borrowings

1,397 

1,713 

(316)

(18.4)

%

Total interest expense

93,658 

92,200 

1,458 

1.6 

%

Net interest income

$

103,878 

$

88,617 

$

15,261 

17.2 

%

Net interest income increased primarily due to a 13.0% increase in average balance of interest-earning assets and a 67 basis point decrease in average cost of interest-bearing liabilities, partially offset by an 18.1% increase in average balance of interest-bearing liabilities and a 21 basis point decrease in average yield on interest-earning assets. The increase in average balance of interest-earning assets was primarily due to growth in loans and investment securities as well as other interest-earning assets, supported by deposit growth. The decreases in average yield on interest-earning assets and average cost of interest-bearing liabilities were primarily due to re-pricing at evaluated rates and originations at lower market rates during the year ended December 31, 2025.

Interest and fees on loans increased primarily due to a 12.8% increase in average balance, partially offset by an 18 basis point decrease in average yield. The increase in average balance was primarily due to an increase in commercial real estate, commercial and industrial, and residential mortgage loans, partially offset by a decrease in other consumer loans. The decrease in average yield was primarily due to the lower market rates.

Interest on investment securities increased primarily due to a 5.0% increase in average balance and a 17 basis point increase in average yield. The Company purchased $31.7 million and $23.5 million, respectively, of investment securities during the years ended December 31, 2025 and 2024. The increase in average yield was primarily due to new investment securities purchased at higher rates and a decrease in net amortization of premium on investment securities. For the years ended December 31, 2025 and 2024, average yield on total investment securities was 3.86% and 3.69%, respectively.

47

Interest income on other interest-earning assets increased primarily due to a 21.7% increase in average balance, partially offset by a 92 basis point decrease in average yield. The decrease in average yield was primarily due to the lower market rates, partially offset by an increase in dividend on FHLB stock. The increase in average balance was primarily due to an increase in average balance of deposits, partially offset by an increase in loans. For the years ended December 31, 2025 and 2024, yield on total other interest-earning assets was 4.58% and 5.50%, respectively.

Interest expense on deposits increased primarily due to an 18.4% increase in average balance of interest-bearing deposits, partially offset by a 66 basis point decrease in average cost of interest-bearing deposits. The increase in average balance was primarily due to an increase in time deposits, and NOW and money market accounts, partially offset by decreases in savings. The decrease in average cost was primarily due to the lower market rates. For the years ended December 31, 2025 and 2024, average cost on total interest-bearing deposits was 4.12% and 4.78%, respectively.

Interest expense on other borrowings decreased primarily due to a 1.3% decrease in average balance and a 96 basis point decrease in average cost.

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

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

Year Ended December 31,

Amount Change

Percentage Change

($ in thousands)

2024

2023

Interest income:

Interest and fees on loans

$

164,301 

$

136,029 

$

28,272 

20.8 

%

Interest on investment securities

5,328 

4,679 

649 

13.9 

%

Interest and dividends on other interest-earning assets

11,188 

10,469 

719 

6.9 

%

Total interest income

180,817 

151,177 

29,640 

19.6 

%

Interest expense:

Interest on deposits

90,487 

62,165 

28,322 

45.6 

%

Interest on borrowings

1,713 

508 

1,205 

237.2 

%

Total interest expense

92,200 

62,673 

29,527 

47.1 

%

Net interest income

$

88,617 

$

88,504 

$

113 

0.1 

%

Net interest income increased primarily due to a 12.7% increase in average balance of interest-earning assets and a 37 basis point increase in average yield on interest-earning assets, partially offset by a 24.3% increase in average balance of interest-bearing liabilities and a 74 basis point increase in average cost of interest-bearing liabilities. The increase in average balance of interest-earning assets was primarily due to growth in loans and investment securities, supported by deposit growth. The increases in average yield on interest-earning assets and average cost of interest-bearing liabilities were primarily due to re-pricing at evaluated rates and originations at higher market rates during the year ended December 31, 2024.

Interest and fees on loans increased primarily due to a 14.4% increase in average balance and a 36 basis point increase in average yield. The increase in average balance was primarily due to an increase in commercial real estate, commercial and industrial, and residential mortgage loans, partially offset by a decrease in other consumer loans. The increase in average yield was primarily due to the higher market rates, partially offset by a decrease in net accretion of discount on loans.

Interest on investment securities increased primarily due to a 36 basis point increase in average yield and a 2.7% increase in average balance. The increase in average yield was primarily due to new investment securities purchased at higher market rates and a decrease in net amortization. The Company purchased $23.5 million and $17.3 million, respectively, of investment securities during the years ended December 31, 2024 and 2023. For the years ended December 31, 2024 and 2023, average yield on total investment securities was 3.69% and 3.33%, respectively.

Interest income on other interest-earning assets increased primarily due to a 23 basis point increase in average yield and a 2.2% increase in average balance. The increase in average yield was primarily due to the higher market rates and an increase in dividend on FHLB stock. The increase in average balance was primarily due to an increase in average balance of deposits, partially offset by an increase in loans. For the years ended December 31, 2024 and 2023, yield on total other interest-earning assets was 5.50% and 5.27%, respectively.

48

Interest expense on deposits increased primarily due to a 23.1% increase in average balance of interest-bearing deposits and a 74 basis point increase in average cost of interest-bearing deposits. The increase in average balance was primarily due to an increase in time deposits, and NOW and money market accounts, partially offset by decreases in savings. The increase in average cost was primarily due to the higher market rates. For the years ended December 31, 2024 and 2023, average cost on total interest-bearing deposits was 4.78% and 4.04%, respectively.

Interest expense on other borrowings increased primarily due to a 237.6% increase in average balance. The Company utilized additional borrowings to support its balance sheet growth.

Provision (reversal) for Credit Losses

The following table presents a composition of provision (reversal) for credit losses for the periods indicated:

Year Ended December 31,

($ in thousands)

2025

2024

2023

Provision (reversal) for credit losses on loans

$

3,675 

$

3,488 

$

497 

Provision (reversal) for credit losses on off-balance sheet credit exposure

353 

(87)

(629)

Total provision (reversal) for credit losses

$

4,028 

$

3,401 

$

(132)

Provision for credit losses on loans for the year ended December 31, 2025 was primarily due to increases in loans held-for-investment, quantitatively measured loss reserves and reserves on individually evaluated loans, partially offset by a decrease in overall reserve related to qualitative adjustment factors. See further discussion in “Allowance for Credit Losses.”

49

Noninterest Income

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

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

Year Ended December 31,

Amount Change

Percentage Change

($ in thousands)

2025

2024

Service charges and fees on deposits

$

1,540 

$

1,545 

$

(5)

(0.3)

%

Loan servicing income

2,945 

3,365 

(420)

(12.5)

%

Bank-owned life insurance income

1,030 

949 

81 

8.5 

%

Gain on sale of loans

4,617 

3,752 

865 

23.1 

%

Other income

1,704 

1,482 

222 

15.0 

%

Total noninterest income

$

11,836 

$

11,093 

$

743 

6.7 

%

Service charges and fees on deposits decreased primarily due to a decrease in fee-based transactions.

Loan servicing income represents fees received on loans that the Company services, net of amortization of servicing assets. The decrease was primarily due to an increase in amortization of servicing assets from higher prepayments of loans being serviced.

Bank-owned life insurance income represents the increase in cash surrender value of the insurance policy.

Gain on sale of loans increased primarily due to increases in gain margin and sales volume. The Company sold SBA loans of $85.8 million with a gain of $4.6 million during the year ended December 31, 2025. During the year ended December 31, 2024, the Company sold SBA loans of $71.1 million with a gain of $3.8 million and a residential mortgage loan of $676 thousand with no gain.

Other income included wire and remittance fees of $699 thousand and $626 thousand, respectively, and debit card interchange fees of $396 thousand and $340 thousand, respectively, for the years ended December 31, 2025 and 2024.

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

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

Year Ended December 31,

Amount Change

Percentage Change

($ in thousands)

2024

2023

Service charges and fees on deposits

$

1,545 

$

1,475 

$

70 

4.7 

%

Loan servicing income

3,365 

3,330 

35 

1.1 

%

Bank-owned life insurance income

949 

753 

196 

26.0 

%

Gain on sale of loans

3,752 

3,570 

182 

5.1 

%

Other income

1,482 

1,555 

(73)

(4.7)

%

Total noninterest income

$

11,093 

$

10,683 

$

410 

3.8 

%

Service charges and fees on deposits increased primarily due to an increase in fee-based transactions.

Loan servicing income represents fees received on loans that the Company services, net of amortization of servicing assets. The increase was primarily due to a decrease in amortization of servicing assets from lower prepayments of loans being serviced.

Bank-owned life insurance income represents the increase in cash surrender value of the insurance policy.

Gain on sale of loans increased primarily due to an increase in gain margin, partially offset by a decrease in sales volume. The Company sold SBA loans of $71.1 million with a gain of $3.8 million and a residential mortgage loan of $676 thousand with no gain during the year ended December 31, 2024. During the year ended December 31, 2023, the Company sold SBA loans of $82.3 million with a gain of $3.6 million.

Other income included wire and remittance fees of $626 thousand and $625 thousand, respectively, and debit card interchange fees of $340 thousand and $339 thousand, respectively, for the years ended December 31, 2024 and 2023.

50

Noninterest Expense

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

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

Year Ended December 31,

Amount Change

Percentage Change

($ in thousands)

2025

2024

Salaries and employee benefits

$

36,551 

$

35,661 

$

890 

2.5 

%

Occupancy and equipment

9,242 

9,117 

125 

1.4 

%

Professional fees

2,808 

3,408 

(600)

(17.6)

%

Marketing and business promotion

2,116 

1,886 

230 

12.2 

%

Data processing

1,334 

1,499 

(165)

(11.0)

%

Director fees and expenses

898 

906 

(8)

(0.9)

%

Regulatory assessments

1,464 

1,256 

208 

16.6 

%

Other expenses

4,785 

6,290 

(1,505)

(23.9)

%

Total noninterest expense

$

59,198 

$

60,023 

$

(825)

(1.4)

%

Salaries and employee benefits increased primarily due to increases in bonus accrual, group insurance and stock compensation expenses, partially offset by an increase in direct loan origination cost, which offsets and defers the recognition of salaries and benefits expense. The number of full-time equivalent employees averaged 264.3 for the year ended December 31, 2025 compared to 265.8 for the year ended December 31, 2024.

Occupancy and equipment expense increased primarily due to increases in rent expenses and additional fixture, furniture and equipment purchases.

Professional fees decreased primarily due to additional professional fees related to a core system conversion completed in April 2024 for the year ended December 31, 2024, partially offset by professional fees related to evaluating the accounting for a preferred stock purchase option for the year ended December 31, 2025.

Marketing and business promotion expense increased primarily due to a higher volume of advertisements.

Data processing expense decreased primarily due to a decrease in overall service charges after the core system conversion, partially offset by one-time new relationship credit recognized during the year-ago quarter from the core system conversion completed during the year ended December 31, 2024.

Regulatory assessment expense increased primarily due to an increase in balance sheet.

Other expense included other loan related legal expenses of $505 thousand and $432 thousand, respectively, armed guard expense of $760 thousand and $867 thousand, respectively, office expenses of $2.0 million and $2.2 million, respectively, for the years ended December 31, 2025 and 2024. During the year ended December 31, 2025, the Company recognized the impairment on operating lease assets of $238 thousand and contingent accrual for legal settlements of $217 thousand. During the year ended December 31, 2024, the Company recognized a termination charge for the legacy core system of $508 thousand and an expense of $815 thousand for a reimbursement for an SBA loan guarantee previously paid by the SBA on a loan originated in 2014 that subsequently defaulted and was ultimately determined to be ineligible for the SBA guarantee during the second quarter of 2024.

51

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

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

Year Ended December 31,

Amount Change

Percentage Change

($ in thousands)

2024

2023

Salaries and employee benefits

$

35,661 

$

34,572 

$

1,089 

3.1 

%

Occupancy and equipment

9,117 

7,924 

1,193 

15.1 

%

Professional fees

3,408 

3,087 

321 

10.4 

%

Marketing and business promotion

1,886 

2,327 

(441)

(19.0)

%

Data processing

1,499 

1,552 

(53)

(3.4)

%

Director fees and expenses

906 

756 

150 

19.8 

%

Regulatory assessments

1,256 

1,103 

153 

13.9 

%

Other expenses

6,290 

4,736 

1,554 

32.8 

%

Total noninterest expense

$

60,023 

$

56,057 

$

3,966 

7.1 

%

Salaries and employee benefits increased primarily due to increases in salaries, bonus accrual, and incentives tied to SBA loan sales, partially offset by a decrease in vacation accruals. The number of full-time equivalent employees averaged 265.8 for the year ended December 31, 2024 compared to 272.5 for the year ended December 31, 2023.

Occupancy and equipment expense increased primarily due to an expansion of headquarters location in the second half of 2023 and a relocation of a regional office and the consolidation of two branches into one location in Orange County, California in 2024.

Professional fees increased primarily due to additional professional fees related to a core system conversion, which was completed in April 2024.

Marketing and business promotion expense decreased primarily due to a higher, nonrecurring volume of advertisements in 2023 related to the Company’s 20th anniversary celebration.

Data processing expense decreased primarily due to one-time new relationship credit from the aforementioned core system conversion.

Director fees and expenses increased primarily due to an increase in stock-based compensation expense from stock options granted during the three months ended December 31, 2023.

Regulatory assessment expense increased primarily due to an increase in balance sheet.

Other expense included other loan related legal expenses of $432 thousand and $534 thousand, respectively, armed guard expense of $867 thousand and $798 thousand, respectively, office expenses of $2.2 million and $2.2 million, respectively, for the years ended December 31, 2024 and 2023. In addition, during the year ended December 31, 2024, the Company recognized a termination charge for the legacy core system of $508 thousand and an expense of $815 thousand for a reimbursement for an SBA loan guarantee previously paid by the SBA on a loan originated in 2014 that subsequently defaulted and was determined by the SBA to be ineligible for the guarantee.

Income Tax Expense

Income tax expense was $15.0 million, $10.5 million and $12.6 million, respectively, and the effective tax rate was 28.6%, 28.9% and 29.0%, respectively, for the years ended December 31, 2025, 2024 and 2023.

52

Financial Condition

Investment Securities

The Company’s investment strategy aims to maximize earnings while maintaining liquidity in securities with minimal credit risk. The types and maturities of securities purchased are primarily based on current and projected liquidity and interest rate sensitivity positions.

The following table presents the amortized cost and fair value of the investment securities portfolio as of the dates indicated:

December 31,

2025

2024

($ in thousands)

Amortized Cost

Fair Value

Unrealized Gain (Loss)

Amortized Cost

Fair Value

Unrealized Gain (Loss)

Securities available-for-sale:

U.S. government agency and U.S. government sponsored enterprise securities:

Mortgage-backed securities

$

135,728 

$

129,822 

$

(5,906)

$

123,209 

$

112,439 

$

(10,770)

Collateralized mortgage obligations

19,499 

18,762 

(737)

22,753 

21,237 

(1,516)

SBA loan pool securities

4,363 

4,193 

(170)

6,328 

6,008 

(320)

Municipal bonds

2,463 

2,484 

21 

2,452 

2,420 

(32)

Corporate bonds

5,000 

4,748 

(252)

5,000 

4,245 

(755)

Total securities available-for-sale

$

167,053 

$

160,009 

$

(7,044)

$

159,742 

$

146,349 

$

(13,393)

Total carrying value of investment securities were $160.0 million at December 31, 2025, an increase of $13.7 million, or 9.3%, from $146.3 million at December 31, 2024. The increase was primarily due to purchases of $31.7 million and an increase in fair value of securities available-for-sale of $6.3 million, partially offset by principal paydowns and calls of $24.2 million and net premium amortization of $146 thousand.

As of December 31, 2025 and 2024, 95.5% and 95.3%, respectively, of the Company's securities available-for-sale at amortized cost basis were issued by U.S. government agency and U.S. GSEs. Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell these securities before their anticipated recovery, the Company determined that these securities with unrealized losses did not warrant an ACL as of December 31, 2025 and 2024.

Municipal and corporate bonds had an investment grade rating upon purchase. The issuers of these securities have not established any cause for default on these securities and various rating agencies have reaffirmed their long-term investment grade status as of December 31, 2025 and 2024. These securities have fluctuated in value since their purchase dates as market interest rates fluctuated. Additionally, the Company continues to receive contractual principal and interest payments in a timely manner. The Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell before the recovery of its amortized cost basis. The Company therefore determined that the investment securities with unrealized losses did not warrant an ACL as of December 31, 2025 and 2024.

As of December 31, 2025 and 2024, the Company recorded no ACL on securities available-for-sale.

53

The following table presents the contractual maturity schedule for securities, at amortized cost, and their weighted-average yields as of the date indicated. Weighted-average yields are based upon the amortized cost of securities and are calculated using the interest method which takes into consideration of premium amortization and discount accretion. Weighted-average yields on tax-exempt debt securities exclude the federal income tax benefit.

December 31, 2025

Within One Year

More than One Year through Five Years

More than Five Years through Ten Years

More than Ten Years

Total

($ in thousands)

Amortized Cost

Weighted-Average Yield

Amortized Cost

Weighted-Average Yield

Amortized Cost

Weighted-Average Yield

Amortized Cost

Weighted-Average Yield

Amortized Cost

Weighted-Average Yield

Securities available-for-sale:

U.S. government agency and U.S. government sponsored enterprise securities:

Mortgage-backed securities

$

12 

1.35 

%

$

1,491 

1.52 

%

$

12,103 

1.62 

%

$

122,122 

4.04 

%

$

135,728 

3.80 

%

Collateralized mortgage obligations

— 

— 

%

5,686 

4.20 

%

8 

2.43 

%

13,805 

3.24 

%

19,499 

3.52 

%

SBA loan pool securities

— 

— 

%

639 

4.05 

%

1,598 

2.54 

%

2,126 

3.26 

%

4,363 

3.11 

%

Municipal bonds

— 

— 

%

83 

3.00 

%

1,503 

3.50 

%

877 

3.68 

%

2,463 

3.55 

%

Corporate bonds

— 

— 

%

— 

— 

%

5,000 

3.75 

%

— 

— 

%

5,000 

3.75 

%

Total securities available-for-sale

$

12 

1.35 

%

$

7,899 

3.67 

%

$

20,212 

2.36 

%

$

138,930 

3.95 

%

$

167,053 

3.74 

%

54

Loans Held-For-Investment and Allowance for Credit Losses

On January 1, 2023, the Company adopted ASU 2016-13 using the modified retrospective method through a cumulative-effect adjustment to retained earnings. Balance sheet information and results for reporting periods beginning with January 1, 2023 are presented under ASC 326, while prior period comparisons continue to be presented under legacy ASC 450 and ASC 310. The following table presents the composition of the Company’s loans held-for-investment as of the dates indicated:

December 31,

2025

2024

2023

January 1, 2023

($ in thousands)

Amount

Percentage to Total

Amount

Percentage to Total

Amount

Percentage to Total

Amount

Percentage to Total

Commercial real estate:

Commercial property

$

1,071,396 

38.0 

%

$

940,931 

35.9 

%

$

855,270 

36.8 

%

$

772,020 

37.8 

%

Business property

638,063 

22.6 

%

595,547 

22.6 

%

558,772 

24.0 

%

526,513 

25.7 

%

Multifamily

175,579 

6.2 

%

194,220 

7.4 

%

132,500 

5.7 

%

124,751 

6.1 

%

Construction

18,561 

0.7 

%

21,854 

0.8 

%

24,843 

1.1 

%

17,054 

0.8 

%

Total commercial real estate

1,903,599 

67.5 

%

1,752,552 

66.7 

%

1,571,385 

67.6 

%

1,440,338 

70.4 

%

Commercial and industrial

508,662 

18.0 

%

472,763 

18.0 

%

342,002 

14.7 

%

249,250 

12.2 

%

Consumer:

Residential mortgage

401,337 

14.3 

%

392,456 

14.9 

%

389,420 

16.8 

%

333,726 

16.3 

%

Other consumer

6,802 

0.2 

%

11,616 

0.4 

%

20,645 

0.9 

%

22,749 

1.1 

%

Total consumer

408,139 

14.5 

%

404,072 

15.3 

%

410,065 

17.7 

%

356,475 

17.4 

%

Loans held-for-investment

$

2,820,400 

100.0 

%

$

2,629,387 

100.0 

%

$

2,323,452 

100.0 

%

$

2,046,063 

100.0 

%

ACL on loans

(33,381)

(30,628)

(27,533)

(26,009)

Net loans held-for-investment

$

2,787,019 

$

2,598,759 

$

2,295,919 

$

2,020,054 

The following table presents the composition of the Company’s loans held-for-investment by legacy loan segments as of the dates indicated:

December 31,

2022

2021

($ in thousands)

Amount

Percentage to Total

Amount

Percentage to Total

Real estate loans:

Commercial property

$

1,288,392 

63.0 

%

$

1,105,843 

63.9 

%

Residential property

333,726 

16.3 

%

209,485 

12.1 

%

SBA property

134,892 

6.6 

%

129,661 

7.5 

%

Construction

17,054 

0.8 

%

8,252 

0.5 

%

Total real estate loans

1,774,064 

86.7 

%

1,453,241 

84.0 

%

Commercial and industrial loans:

Commercial term

77,700 

3.8 

%

73,438 

4.2 

%

Commercial lines of credit

154,142 

7.5 

%

100,936 

5.8 

%

SBA commercial term

16,211 

0.8 

%

17,640 

1.0 

%

SBA PPP

1,197 

0.1 

%

65,329 

3.8 

%

Total commercial and industrial loans

249,250 

12.2 

%

257,343 

14.8 

%

Other consumer loans

22,749 

1.1 

%

21,621 

1.2 

%

Loans held-for-investment

2,046,063 

100.0 

%

1,732,205 

100.0 

%

Allowance for loan losses

(24,942)

(22,381)

Net loans held-for-investment

$

2,021,121 

$

1,709,824 

55

The following table presents activities in loans held-for-investment for the period indicated:

Year Ended December 31, 2025

($ in thousands)

December 31, 2024

Term Loan Funding

Term Loan Pay-downs and Pay-offs(1)

Lines of Credit Increase (Decrease)

Charge-offs

Re-classification

December 31, 2025

Commercial real estate:

Commercial property

$

940,931 

$

248,409 

$

(117,275)

$

(5,474)

$

— 

$

4,805 

$

1,071,396 

Business property

595,547 

226,585 

(178,056)

(901)

(307)

(4,805)

638,063 

Multifamily

194,220 

40,361 

(59,002)

— 

— 

— 

175,579 

Construction

21,854 

— 

— 

(3,293)

— 

— 

18,561 

Total commercial real estate

1,752,552 

515,355 

(354,333)

(9,668)

(307)

— 

1,903,599 

Commercial and industrial

472,763 

76,469 

(33,045)

(6,606)

(919)

— 

508,662 

Consumer:

Residential mortgage

392,456 

60,592 

(51,711)

— 

— 

— 

401,337 

Other consumer

11,616 

— 

(4,839)

107 

(82)

— 

6,802 

Total consumer

404,072 

60,592 

(56,550)

107 

(82)

— 

408,139 

Loans held-for-investment

$

2,629,387 

$

652,416 

$

(443,928)

$

(16,167)

$

(1,308)

$

— 

$

2,820,400 

(1) Net of changes in deferred loan fees and discount on loans

The following table presents the contractual maturities of loans held-for-investment and the distribution between fixed and floating interest rate loans at the date indicated:

December 31, 2025

($ in thousands)

Within One Year

Due After One Year to Five Years

Due After Five Years to 15 Years

Due After 15 Years

Total

Commercial real estate:

Commercial property

$

157,883 

$

619,320 

$

269,240 

$

24,953 

$

1,071,396 

Business property

56,388 

337,165 

150,788 

93,722 

638,063 

Multifamily

11,101 

127,623 

36,855 

— 

175,579 

Construction

18,561 

— 

— 

— 

18,561 

Total commercial real estate

243,933 

1,084,108 

456,883 

118,675 

1,903,599 

Commercial and industrial

342,232 

70,062 

96,368 

— 

508,662 

Consumer:

Residential mortgage

— 

— 

— 

401,337 

401,337 

Other consumer

3,095 

3,707 

— 

— 

6,802 

Total consumer

3,095 

3,707 

— 

401,337 

408,139 

Loans held-for-investment

$

589,260 

$

1,157,877 

$

553,251 

$

520,012 

$

2,820,400 

Loans with variable (floating) interest rates

$

459,490 

$

398,067 

$

186,622 

$

164,711 

$

1,208,890 

Loans with adjustable (fixed to floating) interest rates

— 

403,694 

366,629 

348,031 

1,118,354 

Loans with predetermined (fixed) interest rates

129,770 

356,116 

— 

7,270 

493,156 

Total

$

589,260 

$

1,157,877 

$

553,251 

$

520,012 

$

2,820,400 

56

The following table reflects the allocation of the ACL on loans by loan category and the ratio of each loan category to total loans as of the dates indicated:

December 31,

2025

2024

2023

January 1, 2023

($ in thousands)

ACL on Loans

Percentage of Loans to Total Loans

ACL on Loans

Percentage of Loans to Total Loans

ACL on Loans

Percentage of Loans to Total Loans

ACL on Loans

Percentage of Loans to Total Loans

Commercial real estate:

Commercial property

$

9,348 

38.0 

%

$

12,923 

35.9 

%

$

12,665 

36.8 

%

$

6,740 

37.8 

%

Business property

4,347 

22.6 

%

3,967 

22.6 

%

4,739 

24.0 

%

6,645 

25.7 

%

Multifamily

1,282 

6.2 

%

2,371 

7.4 

%

1,441 

5.7 

%

1,390 

6.1 

%

Construction

123 

0.7 

%

81 

0.8 

%

135 

1.1 

%

151 

0.8 

%

Total commercial real estate

15,100 

67.5 

%

19,342 

66.7 

%

18,980 

67.6 

%

14,926 

70.4 

%

Commercial and industrial

15,357 

18.0 

%

8,713 

18.0 

%

6,245 

14.7 

%

9,846 

12.2 

%

Consumer:

Residential mortgage

2,871 

14.3 

%

2,506 

14.9 

%

2,226 

16.8 

%

1,157 

16.3 

%

Other consumer

53 

0.2 

%

67 

0.4 

%

82 

0.9 

%

80 

1.1 

%

Total consumer

2,924 

14.5 

%

2,573 

15.3 

%

2,308 

17.7 

%

1,237 

17.4 

%

Total

$

33,381 

100.0 

%

$

30,628 

100.0 

%

$

27,533 

100.0 

%

$

26,009 

100.0 

%

ACL on loans to loans held-for-investment

1.18 

%

1.16 

%

1.19 

%

1.27 

%

The following table reflects the allocation of the allowance for loan losses by legacy loan segments and the ratio of each legacy loan category to total loans as of the dates indicated:

December 31,

2022

2021

($ in thousands)

Allowance for Loan Losses

Percentage of Loans to Total Loans

Allowance for Loan Losses

Percentage of Loans to Total Loans

Real estate loans:

Commercial property

$

14,059 

63.0 

%

$

13,586 

63.9 

%

Residential property

3,691 

16.3 

%

1,869 

12.1 

%

SBA property

1,326 

6.6 

%

1,253 

7.5 

%

Construction

151 

0.8 

%

89 

0.5 

%

Total real estate loans

19,227 

86.7 

%

16,797 

84.0 

%

Commercial and industrial loans:

Commercial term

2,100 

3.8 

%

2,715 

4.2 

%

Commercial lines of credit

3,036 

7.5 

%

2,071 

5.8 

%

SBA commercial term

366 

0.8 

%

524 

1.0 

%

SBA PPP

— 

0.1 

%

— 

3.8 

%

Total commercial and industrial loans

5,502 

12.2 

%

5,310 

14.8 

%

Other consumer loans

213 

1.1 

%

274 

1.2 

%

Total

$

24,942 

100.0 

%

$

22,381 

100.0 

%

Allowance for loan losses to loans held-for-investment

1.22%

1.29 

%

57

The following table presents activities in ACL for the periods indicated:

Year Ended December 31,

($ in thousands)

2025

2024

2023

2022

2021

ACL on loans

Balance at beginning of period

$

30,628 

$

27,533 

$

24,942 

$

22,381 

$

26,510 

Impact of ASC 326 adoption

— 

— 

1,067 

— 

— 

Charge-offs

(1,308)

(691)

(132)

(1,199)

(227)

Recoveries

386 

298 

1,159 

158 

694 

Provision (reversal) for credit losses on loans

3,675 

3,488 

497 

3,602 

(4,596)

Balance at end of period

$

33,381 

$

30,628 

$

27,533 

$

24,942 

$

22,381 

ACL on off-balance sheet credit exposures

Balance at beginning of period

$

1,190 

$

1,277 

$

299 

$

214 

$

238 

Impact of ASC 326 adoption

— 

— 

1,607 

— 

Provision (reversal) for credit losses on off-balance sheet credit exposure (1)

353 

(87)

(629)

85 

(24)

Balance at end of period

$

1,543 

$

1,190 

$

1,277 

$

299 

$

214 

(1)     Provision (reversal) for credit losses on off-balance sheet credit exposures for the years ended December 31, 2022 and 2021 was recorded in Other Expense on the Consolidated Income Statement.

The increase in ACL for the year ended December 31, 2025 was primarily due to increases in loans held-for-investment, quantitatively measured loss reserves and reserves on individually evaluated loans, partially offset by a decrease in overall reserve related to qualitative adjustment factors.

The increase in the quantitatively measured loss reserve requirement was primarily due to the changes in the macroeconomics outlook and prepayment assumption updates. The Company utilizes forecasts published by the Federal Open Market Committee (“FOMC”). The next year-end year-over-year change in forecasted real GDP increased to 2.3% in the December 2025 FOMC meeting from 2.1% in December 2024. However, the projected percent change in year-over-year real GDP over the first 3 quarters of the forecast period were lower for December 2025 ACL measurement than those used prior year. The forecasted next year-end national unemployment rate increased to 4.4% in the December 2025 FOMC meeting from 4.3% in December 2024. Overall changes in macroeconomic projections resulted in the increases of PD and LGD rates across majority of the loan segments leading to higher overall expected loss measurements.

The decrease in qualitative reserve was primarily due to decreases in the maximum loss rate of few large segments combined with general improvements in the factors that impacted the risk status ratings across loan segments. Also, management implemented an expanded risk status ratings scale during the year that made each risk rating more granular. This change enabled the Bank to apply rating changes in a comparatively more reactive manner to the changes in the underlying factors.

Loans individually evaluated for impairment totaled $53.2 million and $52.0 million, respectively, and related reserve totaled $206 thousand and $59 thousand, respectively, at December 31, 2025 and 2024.

Management believes that the projections used are reasonable and align with the Company’s expectation of the economic environment over the next 4 quarters.

58

The following table presents net charge-offs as a percentage to the average loan held for investment balances in each of the loan categories for the periods indicated:

For the Year Ended December 31,

2025

2024

2023

($ in thousands)

Average Balance

Net Charge-offs (Recoveries)

Percentage

Average Balance

Net Charge-offs (Recoveries)

Percentage

Average Balance

Net Charge-offs (Recoveries)

Percentage

Commercial real estate:

Commercial property

$

927,453 

$

— 

— 

%

$

862,697 

$

— 

— 

%

$

794,642 

$

— 

— 

%

Business property

721,715 

303 

0.04 

%

584,664 

100 

0.02 

%

537,044 

(5)

(0.01)

%

Multifamily

177,019 

— 

— 

%

156,965 

20 

0.01 

%

127,338 

— 

— 

%

Construction

25,288 

— 

— 

%

26,136 

— 

— 

%

18,565 

— 

— 

%

Total commercial real estate

1,851,475 

303 

0.02 

%

1,630,462 

120 

0.01 

%

1,477,589 

(5)

(0.01)

%

Commercial and industrial

478,565 

542 

0.11 

%

403,172 

398 

0.11 

%

263,447 

(1,062)

(0.40)

%

Consumer:

Residential mortgage

403,190 

— 

— 

%

386,512 

— 

— 

%

358,303 

— 

— 

%

Other consumer

9,223 

77 

0.83 

%

16,923 

(125)

(0.92)

%

21,602 

40 

0.19 

%

Total consumer

412,413 

77 

0.02 

%

403,435 

(125)

(0.04)

%

379,905 

40 

0.01 

%

Total loans held-for-investment

$

2,742,453 

$

922 

0.03 

%

$

2,437,069 

$

393 

0.02 

%

$

2,120,941 

$

(1,027)

(0.05)

%

The following table presents net charge-offs as a percentage to the average loan held for investment balances in each of the legacy loan categories for the periods indicated:

For the Year Ended December 31,

2022

2021

($ in thousands)

Average Balance

Net Charge-offs (Recoveries)

Percentage

Average Balance

Net Charge-offs (Recoveries)

Percentage

Real estate loans:

Commercial property

$

1,201,405 

$

— 

— 

%

$

983,129 

$

— 

— 

%

Residential property

261,576 

— 

— 

%

197,741 

— 

— 

%

SBA property

115,488 

— 

— 

%

125,051 

(39)

(0.03)

%

Construction

12,202 

— 

— 

%

12,715 

— 

— 

%

Total real estate loans

1,590,671 

— 

— 

%

1,318,636 

(39)

(0.01)

%

Commercial and industrial loans:

Commercial term

74,934 

(8)

(0.01)

%

77,383 

(200)

(0.26)

%

Commercial lines of credit

111,864 

1,063 

0.95 

%

92,874 

(146)

(0.16)

%

SBA commercial term

16,262 

(21)

(0.13)

%

19,390 

(104)

(0.54)

%

SBA PPP

13,732 

— 

— 

%

150,043 

— 

— 

%

Total commercial and industrial loans

216,792 

1,034 

0.48 

%

339,690 

(450)

(0.13)

%

Other consumer loans

21,991 

7 

0.03 

%

21,101 

22 

0.10 

%

Total loans held-for-investment

$

1,829,454 

$

1,041 

0.06 

%

$

1,679,427 

$

(467)

(0.03)

%

59

Loans 30 to 89 Days Past Due and Still Accruing

The following table presents a summary of loans 30 to 89 days past due and still accruing as of the dates indicated:

December 31,

($ in thousands)

2025

2024

2023

2022

2021

Commercial real estate:

Commercial property

$

— 

$

433 

$

— 

N/A

N/A

Business property

140 

333 

560 

N/A

N/A

Total commercial real estate

140 

766 

560 

$

— 

$

— 

Commercial and industrial

26 

— 

217 

— 

— 

Consumer:

Residential mortgage

674 

3,982 

604 

— 

461 

Other consumer

115 

154 

47 

134 

93 

Total consumer

789 

4,136 

651 

134 

554 

Total

$

955 

$

4,902 

$

1,428 

$

134 

$

554 

Nonperforming Loans and Nonperforming Assets

The following table presents a summary of total NPLs and NPAs as of the dates indicated:

December 31,

($ in thousands)

2025

2024

2023

2022

2021

Nonaccrual loans held-for-investment:

Commercial real estate:

Commercial property (1)

N/A

N/A

N/A

$

2,400 

$

— 

SBA property (1)

N/A

N/A

N/A

585 

746 

Commercial property

$

1,403 

$

1,851 

$

958 

N/A

N/A

Business property

938 

2,336 

2,865 

N/A

N/A

Multifamily

— 

— 

— 

— 

0

Construction

— 

— 

— 

— 

0

Total commercial real estate

2,341 

4,187 

3,823 

2,985 

746 

Commercial and industrial

161 

79 

68 

— 

213 

Consumer:

Residential property

5,403 

403 

— 

372 

— 

Other consumer

5 

24 

25 

3 

35 

Total consumer

5,408 

427 

25 

375 

35 

Total nonaccrual loans held-for-investment

7,910 

4,693 

3,916 

3,360 

994 

Loans past due 90 days or more still on accrual

— 

— 

— 

— 

— 

NPLs held-for-investment

7,910 

4,693 

3,916 

3,360 

994 

NPLs held-for-sale

— 

— 

— 

4,000 

— 

Total NPLs

7,910 

4,693 

3,916 

7,360 

994 

Other real estate owned

— 

— 

2,558 

— 

— 

NPAs

$

7,910 

$

4,693 

$

6,474 

$

7,360 

$

994 

Nonaccrual loans held-for-investment to loans held-for-investment

0.28 

%

0.18 

%

0.17 

%

0.16 

%

0.06 

%

NPLs held-for-investment to loans held-for-investment

0.28 

%

0.18 

%

0.17 

%

0.16 

%

0.06 

%

NPAs to total assets

0.24 

%

0.15 

%

0.23 

%

0.30 

%

0.05 

%

ACL on loans to nonaccrual loans held-for-investment

422.01 

%

652.63 

%

703.09 

%

742.32 

%

2,251.61 

%

(1) Under the legacy loan segments

Total nonaccrual loans held-for-investment were $7.9 million at December 31, 2025, an increase of $3.2 million, or 68.5%, from $4.7 million at December 31, 2024. The increase was primarily due to loans placed on nonaccrual status during the year ended December 31, 2025 of $6.1 million, partially offset by payoffs and paydowns of $2.3 million and charge-offs of $582 thousand.

60

Loans are generally placed on nonaccrual status when they become 90 days past due, unless management believes the loan is well secured and in the process of collection. Past due loans may or may not be adequately collateralized, but collection efforts are continuously pursued. Loans may be restructured by management when a borrower experiences changes to their financial condition, causing an inability to meet the original repayment terms, and where management believes the borrower will eventually overcome those circumstances and repay the loan in full.

Additional income of approximately $624 thousand would have been recorded during the year ended December 31, 2025, had these loans been paid in accordance with their original terms throughout the periods indicated.

CRE Concentration

The Bank has policies and procedures in place to monitor compliance with the CRE Concentration Guidance. The Bank has set targets for CRE concentration limits as a percentage of total capital in accordance with interagency guidelines and actively manages the Bank’s exposure to CRE lending. The Bank’s construction and land development loans remain a small portion of the loan portfolio and as a percentage of total capital (as defined by the federal bank regulators) were 7.7% and 6.3%, respectively, at December 31, 2025 and 2024. As of December 31, 2025, using regulatory definitions in the CRE Concentration Guidance, CRE loans represented 307.7% of total risk-based capital, as compared to 297.0%, 280.7%, 253.9% and 269.8% as of December 31, 2024, 2023, 2022 and 2021, respectively.

The management believes that the Bank has a robust risk management framework in place for CRE concentration issues including board approved CRE concentration contingency plans. The CRE concentration contingency plan contains an overview of the Bank’s strategies to mitigate and manage the concentration risks including the plans in maintaining stable capital levels, having access to additional capital, maintaining adequate amount of ACL, potentially implementing more conservative growth/lending strategies if necessary, maintaining liquidity within the CRE portfolio, and strengthening the loan workout infrastructure.

Loans Held-For-Sale

Loans held-for-sale are carried at the lower of cost or fair value. When a determination is made at the time of commitment to originate as held-for-investment, it is the Company’s intent to hold these loans to maturity or for the “foreseeable future,” subject to periodic reviews under the Company’s management evaluation processes, including asset/liability management and credit risk management. When the Company subsequently changes its intent to hold certain loans, the loans are transferred to held-for-sale at the lower of cost or fair value. Certain loans are transferred to held-for-sale with write-downs to ACL on loans.

The following table presents the composition of the Company’s loans held-for-sale as of the dates indicated:

December 31,

($ in thousands)

2025

2024

2023

2022

2021

Commercial real estate:

SBA property (1)

N/A

N/A

N/A

$

16,473 

$

33,603 

Commercial property

$

3,750 

$

3,307 

$

— 

N/A

N/A

Business property

2,734 

713 

2,802 

N/A

N/A

Total commercial real estate

6,484 

4,020 

2,802 

16,473 

33,603 

Commercial and industrial

5,593 

2,272 

2,353 

6,338 

3,423 

Loans held-for-sale

$

12,077 

$

6,292 

$

5,155 

$

22,811 

$

37,026 

(1) Under the legacy loan segments

Loans held-for-sale were $12.1 million at December 31, 2025, an increase of $5.8 million, or 91.9%, from $6.3 million at December 31, 2024. The increase was primarily due to originations of $92.2 million, partially offset by sales of $85.8 million and pay-downs and pay-offs of $643 thousand.

61

Deposits

The Bank gathers deposits primarily through its branch locations. The Bank offers a variety of deposit products including demand deposits accounts, NOW and money market accounts, savings accounts and time deposits. The following table presents a summary of the Company’s deposits as of the dates indicated:

December 31,

Amount Change

Percentage Change

($ in thousands)

2025

2024

Noninterest-bearing demand deposits

$

555,645 

$

547,853 

$

7,792 

1.4 

%

Interest-bearing deposits:

Savings

6,077 

5,765 

312 

5.4 

%

NOW

13,928 

13,761 

167 

1.2 

%

Retail money market accounts

656,069 

447,360 

208,709 

46.7 

%

Brokered money market accounts

1 

1 

— 

— 

%

Retail time deposits of:

$250,000 or less

574,519 

493,644 

80,875 

16.4 

%

More than $250,000

648,633 

605,124 

43,509 

7.2 

%

Brokered time deposits

280,540 

442,283 

(161,743)

(36.6)

%

Time deposits from California State Treasurer

60,000 

60,000 

— 

— 

%

Total interest-bearing deposits

2,239,767 

2,067,938 

171,829 

8.3 

%

Total deposits

$

2,795,412 

$

2,615,791 

$

179,621 

6.9 

%

Total deposits not covered by deposit insurance

$

1,270,159 

$

1,036,451 

$

233,708 

22.5 

%

Time deposits not covered by deposit insurance

$

499,745 

$

459,835 

$

39,910 

8.7 

%

The increase in retail time deposits was primarily due to new accounts of $367.4 million, renewals of the matured accounts of $898.6 million and balance increases of $44.1 million, partially offset by matured and closed accounts of $1.18 billion.

As of December 31, 2025 and 2024, total deposits were comprised of 19.9% and 20.9%, respectively, of noninterest-bearing demand accounts, 24.2% and 17.9%, respectively, of savings, NOW and money market accounts and 55.9% and 61.2%, respectively, of time deposits.

The following table presents the maturity of time deposits as of the dates indicated:

($ in thousands)

Three Months or Less

Three to Six Months

Six Months to One Year

Over One Year

Total

December 31, 2025

Time deposits of $250,000 or less

$

243,468 

$

316,179 

$

293,888 

$

1,524 

$

855,059 

Time deposits of more than $250,000

309,465 

147,875 

248,401 

2,892 

708,633 

Total

$

552,933 

$

464,054 

$

542,289 

$

4,416 

$

1,563,692 

Not covered by deposit insurance

$

233,697 

$

103,783 

$

159,928 

$

2,337 

$

499,745 

December 31, 2024

Time deposits of $250,000 or less

$

310,662 

$

286,304 

$

336,629 

$

2,332 

$

935,927 

Time deposits of more than $250,000

295,977 

138,664 

228,533 

1,950 

665,124 

Total

$

606,639 

$

424,968 

$

565,162 

$

4,282 

$

1,601,051 

Not covered by deposit insurance

$

217,542 

$

96,493 

$

144,232 

$

1,568 

$

459,835 

62

Shareholders’ Equity and Regulatory Capital

Capital Resources

Shareholders’ equity is influenced primarily by earnings, dividends paid on common stock and preferred stock, sales and redemptions of common stock and preferred stock, and changes in accumulated other comprehensive income caused primarily by fluctuations in unrealized gains or losses, net of taxes, on securities available-for-sale.

Shareholders’ equity was $390.0 million at December 31, 2025, an increase of $26.2 million, or 7.2%, from $363.8 million at December 31, 2024. The increase was primarily due to the net income of $37.5 million, a decrease in other comprehensive loss from the fair value change in securities available-for-sale of $4.5 million and stock options exercised of $2.3 million, partially offset by cash dividends declared on common stock of $11.5 million, preferred stock dividends of $300 thousand and repurchase of common stock of $7.1 million.

Regulatory Capital Requirements

The following table presents a summary of the minimum capital requirements applicable to the Company and the Bank in order to be considered “well-capitalized” from a regulatory perspective as of the dates indicated:

PCB Bancorp

PCB Bank

Minimum Regulatory Requirements

Well Capitalized Requirements (Bank)

December 31, 2025

Common tier 1 capital (to risk-weighted assets)

11.46 

%

13.49 

%

4.5 

%

6.5 

%

Total capital (to risk-weighted assets)

15.13 

%

14.72 

%

8.0 

%

10.0 

%

Tier 1 capital (to risk-weighted assets)

13.89 

%

13.49 

%

6.0 

%

8.0 

%

Tier 1 capital (to average assets)

11.89 

%

11.55 

%

4.0 

%

5.0 

%

December 31, 2024

Common tier 1 capital (to risk-weighted assets)

11.44 

%

13.72 

%

4.5 

%

6.5 

%

Total capital (to risk-weighted assets)

15.24 

%

14.92 

%

8.0 

%

10.0 

%

Tier 1 capital (to risk-weighted assets)

14.04 

%

13.72 

%

6.0 

%

8.0 

%

Tier 1 capital (to average assets)

12.45 

%

12.16 

%

4.0 

%

5.0 

%

The Company and the Bank’s capital conservation buffer was 6.96% and 6.72%, respectively, as of December 31, 2025, and 6.94% and 6.92%, respectively, as of December 31, 2024.

Stock Repurchases

During the year ended December 31, 2025, the Company repurchased and retired 358,251 shares of common stock at a weighted-average price of $19.82 per share under a stock repurchase program approved by the Board of Directors on August 2, 2023 authorizing the repurchase of up to 720,000 shares. On July 23, 2025, the Company announced that the term of the stock repurchase program would be extended to July 31, 2026. As of December 31, 2025, the Company was authorized to purchase 219,526 additional shares under the stock repurchase program.

During the year ended December 31, 2024, the Company repurchased and retired 14,947 shares of common stock at a weighted-average price of $14.88 per share.

During the year ended December 31, 2023, the Company repurchased and retired 512,657 shares of common stock at a weighted-average price of $17.22 per share.

From January 1, 2021 through December 31, 2025, the Company has repurchased and retired at total of 1,928,681 shares of common stock at a weighted-average price of $17.51 per share under several stock repurchase programs.

63

Emergency Capital Investment Program

On May 24, 2022, the Company issued 69,141 shares of Series C Preferred Stock with a liquidation preference of $1,000 per share for the capital investment of $69.1 million from the U.S. Treasury under the ECIP. The ECIP investment qualifies as tier 1 capital for the purposes of the bank regulatory capital requirements.

The Series C Preferred Stock accrued no dividend for the first 24 months following the investment date. Thereafter, the dividend rate is adjusted based on the qualified lending growth criteria listed in the terms of the ECIP investment with the annual dividend rate up to 2%. After the tenth anniversary of the investment date, the dividend rate will be fixed based on the average annual amount of lending in years 2 through 10. Dividends are payable quarterly in arrears on March 15, June 15, September 15, and December 15.

Established by the Consolidated Appropriations Act, 2021, the ECIP was created to encourage low- and moderate-income community financial institutions and minority depository institutions to provide loans, grants, and forbearance for small businesses, minority-owned businesses, and consumers, especially low-income and underserved communities, including persistent poverty counties, that may be disproportionately impacted by the economic effect of the COVID-19 pandemic by providing direct and indirect capital investments in low- and moderate-income community financial institutions.

The Series C Preferred Stock may be redeemed at the option of the Company on or after the fifth anniversary of issuance (or earlier in the event of loss of regulatory capital treatment), subject to the approval of the appropriate federal banking regulator and in accordance with the federal banking agencies’ regulatory capital regulations.

On January 16, 2025, the Company entered into an ECIP Securities Purchase Option Agreement (the “Option Agreement”) with the U.S. Treasury, which grants the Company the conditional option to repurchase the Series C Preferred Stock during the first 15 years following the Company’s issuance of the Series C Preferred Stock. The Option Agreement provides that if the Company meets certain conditions, the Company or the Company’s qualifying designee may repurchase the Series C Preferred Stock, potentially at a substantial discount (the “Repurchase Option”). The purchase price for the Preferred Stock under the Option Agreement is based on a formula equal to the present value of the Preferred Stock, calculated as set forth in the Option Agreement, together with any accrued and unpaid dividends thereon and could represent a discount from the Series C Preferred Stock’s liquidation amount.

The purchase option may not be exercised during the first 10 years following the Company’s sale of the Series C Preferred Stock (the “ECIP Period”) unless and until the Company meets at least one of following three conditions (the “Threshold Conditions”): (1) an average of at least 60% of the Company’s loan originations qualify as “Deep Impact Lending” over any 16 consecutive quarters, (2) an average of at least 85% of the Company’s “total originations qualify as “Qualified Lending” over any 24 quarters or (3) the Series C Preferred Stock has a dividend rate of no more than 0.5% at each of six consecutive “Reset Dates,” in each case as defined in Option Agreement and the terms of the Series C Preferred. In addition to satisfying a Threshold Condition, the Option Agreement requires that the Company meet certain other eligibility conditions in order to exercise the purchase option in the future, including compliance with the terms of the original ECIP purchase agreement and the terms of the Series C Preferred Stock, maintaining qualification as either a certified community development financial institution or a minority depository institution and satisfying other legal and regulatory criteria.

The earliest possible date by which a Threshold Condition may be met is June 30, 2026. However, the Company does not currently meet any of the Threshold Conditions necessary to exercise the purchase option, and there can be no assurance whether and when the Threshold Conditions will be met.

The following table presents the estimated purchase price based on the formula set forth in the Option Agreement as if the Company met all Threshold Conditions as of December 31, 2025:

Dividend Rate at the Reset Date Immediately Preceding the Purchase Date

($ in thousands)

0.50%

1.25%

2.00%

Purchase price

$

4,742 

$

11,855 

$

18,969 

Discount

64,399 

57,286 

50,172 

The Company began paying quarterly dividends on the Series C Preferred Stock at 2% beginning in the three months ended June 30, 2024. Dividends on the Series C Preferred Stock totaled $300 thousand and $834 thousand for the years ended December 31, 2025 and 2024, respectively.

64

Liquidity

Liquidity refers to the measure of ability to meet the cash flow requirements of depositors and borrowers, while at the same time meeting operating, capital and strategic cash flow needs, all at a reasonable cost. The Company continuously monitors its liquidity position to ensure that assets and liabilities are managed in a manner that will meet all short-term and long-term cash requirements, while maintaining an appropriate balance between assets and liabilities to meet the return on investment objectives of the Company’s shareholders.

The Company’s liquidity position is supported by management of liquid assets and liabilities and access to alternative sources of funds. Liquid assets include cash, interest-bearing deposits in financial institutions, federal funds sold, and unpledged securities available-for-sale. Liquid liabilities may include core deposits, federal funds purchased, securities sold under repurchase agreements and other borrowings. Other sources of liquidity include the sale of loans, the ability to acquire additional national market noncore deposits, additional collateralized borrowings such as FHLB advances and Federal Reserve Discount Window, and the issuance of debt securities and preferred or common securities.

The Company’s short-term and long-term liquidity requirements are primarily to fund on-going operations, including payment of interest on deposits and debt, extensions of credit to borrowers, capital expenditures and shareholder dividends. These liquidity requirements are met primarily through cash flow from operations, redeployment of prepaying and maturing balances in loan and investment securities portfolios, increases in debt financing and other borrowings, and increases in customer deposits.

Integral to the Company’s liquidity management is the administration of borrowings. To the extent the Company is unable to obtain sufficient liquidity through core deposits, the Company seeks to meet its liquidity needs through wholesale funding or other borrowings on either a short- or long-term basis.

The following table presents a summary of the Company’s liquidity position as of the dates indicated:

December 31,

Amount Change

Percentage Change

($ in thousands)

2025

2024

Cash and cash equivalents

$

207,142 

$

198,792 

$

8,350 

4.2 

%

Cash and cash equivalents to total assets

6.3 

%

6.5 

%

Available borrowing capacity:

FHLB advances

$

840,607 

$

722,439 

118,168 

16.4 

%

Federal Reserve Discount Window

841,563 

586,525 

255,038 

43.5 

%

Overnight federal funds lines

65,000 

50,000 

15,000 

30.0 

%

Total

$

1,747,170 

$

1,358,964 

$

388,206 

28.6 

%

Total available borrowing capacity to total assets

53.2 

%

44.4 

%

The Company also maintains relationships in the capital markets with brokers and dealers to issue time deposits and money market accounts.

PCB Bancorp, on a stand-alone holding company basis, must provide for its own liquidity and its main source of funding is dividends from the Bank. There are statutory, regulatory and debt covenant limitations that affect the ability of the Bank to pay dividends to the holding company. Management believes that these limitations will not impact the Company’s ability to meet its ongoing short- and long-term cash obligations.

65

Off-Balance Sheet Arrangements

The Company has limited off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on financial condition, results of operations, liquidity, capital expenditures or capital resources.

In the ordinary course of business, the Company enters into financial commitments to meet the financing needs of its customers. These financial commitments include commitments to extend credit, unused lines of credit, commercial and similar letters of credit and standby letters of credit. Those instruments involve to varying degrees, elements of credit and interest rate risk not recognized in the Company’s financial statements.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Since many of the commitments are expected to expire without being drawn upon, the total amounts do not necessarily represent future cash requirements. The Company evaluates each client’s credit worthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary is based on management’s credit evaluation of the customer. The following table presents outstanding financial commitments whose contractual amount represents credit risk as of the dates indicated:

December 31,

2025

2024

($ in thousands)

Fixed Rate

Variable Rate

Fixed Rate

Variable Rate

Unused lines of credit

$

12,663 

$

348,287 

$

12,923 

$

370,313 

Unfunded loan commitments

— 

7,132 

— 

17,339 

Standby letters of credit

5,705 

1,625 

5,279 

1,516 

Total

$

18,368 

$

357,044 

$

18,202 

$

389,168 

The Company applies an expected credit loss estimation methodology applied to each respective loan segment for determining the ACL on off-balance sheet credit exposures. The loss estimation process includes assumptions for utilization at default. These assumptions are based on the Company’s own historical internal loan data. As of December 31, 2025 and 2024, the Company maintained an ACL on off-balance sheet credit exposures of $1.5 million and $1.2 million in Accrued Interest Payable and Other Liabilities in the Consolidated Balance Sheets, respectively.

Contractual Obligations

The following table presents supplemental information regarding total contractual obligations as of the dates indicated:

($ in thousands)

Within One Year

One to Three Years

Three to Five Years

Over Five Years

Total

December 31, 2025

Time deposits

$

1,559,276 

$

4,293 

$

123 

$

— 

$

1,563,692 

FHLB advances

34,000 

— 

— 

— 

34,000 

Operating leases

3,562 

6,277 

5,708 

7,585 

23,132 

Total

$

1,596,838 

$

10,570 

$

5,831 

$

7,585 

$

1,620,824 

December 31, 2024

Time deposits

$

1,596,769 

$

4,099 

$

183 

$

— 

$

1,601,051 

Other short-term borrowings

15,000 

— 

— 

— 

15,000 

Operating leases

3,397 

5,716 

4,910 

9,111 

23,134 

Total

$

1,615,166 

$

9,815 

$

5,093 

$

9,111 

$

1,639,185 

Management believes that the Company will be able to meet its contractual obligations as they come due through the maintenance of adequate cash levels. Management expects to maintain adequate cash levels through profitability, loan and securities repayment and maturity activity and continued deposit gathering activities. The Company has in place various borrowing mechanisms for both short-term and long-term liquidity needs.

66