pcb-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-38621

PCB BANCORP

(Exact name of registrant as specified in its charter)


California			20-8856755
(State or other jurisdiction of incorporation or organization)			(IRS Employer Identification No.)

3701 Wilshire Boulevard, Suite 900, Los Angeles, California 90010

(Address of principal executive offices) (Zip Code)

(213) 210-2000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, no par value	PCB	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes ☐ No ☒

As of April 30, 2025, the registrant had outstanding 14,309,232 shares of common stock.

PCB Bancorp and Subsidiary

Quarterly Report on Form 10-Q

March 31, 2025

Table of Contents


Part I - Financial Information

Item 1.	Consolidated Financial Statements	5

	Consolidated Balance Sheets - March 3 1 , 202 5 (Unaudited) and December 31, 202 4	5
	Consolidated Statements of Income (Unaudited) - Three Months Ended March 3 1 , 202 5 and 202 4	6
	Consolidated Statements of Comprehensive Income (Unaudited) - Three Months Ended March 3 1 , 202 5 and 20 24	7
	Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) - Three Months Ended March 31, 20 25 and 2024	8
	Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended March 31, 2025 and 2024	9
	Notes to Consolidated Financial Statements (Unaudited)	11

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	61

Item 4.	Controls and Procedures	63

Part II - Other Information

Item 1.	Legal Proceedings	64

Item 1A.	Risk Factors	64

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	65

Item 3.	Defaults Upon Senior Securities	65

Item 4.	Mine Safety Disclosures	65

Item 5.	Other Information	65

Item 6.	Exhibits	66

Signatures		67

Forward-looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. The forward-looking statements reflect current views of PCB Bancorp (collectively, with its consolidated subsidiary, the “Company,” “we,” “us” or “our”) with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “might,” “should,” “could,” “predict,” “potential,” “believe,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “goal,” “target,” “outlook,” “aim,” “would,” and “annualized” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our business and industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

A number of important factors could cause our actual results to differ materially from those indicated in these forward-looking statements, including those factors identified in “Risk Factors” or “Management’s Discussion and Analysis of Financial Condition and Results of Operations” or the following:

•the effectiveness of our internal control over financial reporting and our ability to remediate any weakness in our internal control over financial reporting;

•our ability to satisfy the lending and other conditions necessary to repurchase our Series C Preferred Stock under our Option Agreement with the U.S. Treasury and to qualify to pay a lower rate of dividends on such preferred stock;

•changes in the value of our Option Agreement with the U.S. Treasury, which may impact our financial results and condition;

•business and economic conditions, particularly those affecting the financial services industry and our primary market areas and arising from recent inflationary pressures and governmental and societal responses thereto;

•our ability to successfully manage our credit risk and the sufficiency of our allowance for credit loss;

•factors that can impact the performance of our loan portfolio, including real estate values and liquidity in our primary market areas, the financial health of our commercial borrowers and the success of construction projects that we finance;

•governmental monetary and fiscal policies, and changes in market interest rates;

•the current inflationary environment and government and regulatory responses thereto;

•adverse developments at other banks, including bank failures, that impact general sentiment regarding the stability and liquidity of banks and may affect our customers’ behavior and our stock price;

•a significant portion of our loan portfolio that is comprised of real estate loans;

•our ability to attract and retain Korean-American customers;

•our ability to identify and address cyber-security risks, fraud and systems errors;

•our ability to effectively execute our strategic plan and manage our growth;

•changes in our senior management team and our ability to attract, motivate and retain qualified personnel;

•cyber-attacks, ransomware attacks, computer viruses or other malware that may breach the security of our websites or other systems to obtain unauthorized access to confidential information, destroy data, disable or degrade service, or sabotage our systems;

•liquidity issues, including fluctuations in the fair value and liquidity of the securities we hold and our ability to raise additional capital, if necessary;

•costs and obligations associated with operating as a public company;

•effects of competition from a wide variety of local, regional, national and other providers of financial, investment and insurance services;

•the effects of severe weather, natural disasters, acts of war or terrorism, health epidemics or pandemics (or expectations about them) and other external events on our business;

•the effects of sanctions, tariffs and other trade polices of the United States and its global trading partners and trade tensions related to the same;

•the impact of any claims or legal actions to which we may be subject, including any effect on our reputation; and

•changes in federal tax laws or policies.

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements and the risks described under “Part I. Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, in “Part II, Item 1A - Risk Factors” of this Quarterly Report on Form 10-Q and in other documents that we file with the Securities and Exchange Commission (“SEC”). Because of these risks and other uncertainties, our actual future results, performance or achievement, or industry results, may be materially different from the results indicated by the forward looking statements in this report. In addition, our past results of operations are not necessarily indicative of our future results. You should not rely on any forward looking statements, which represent our beliefs, assumptions and estimates only as of the dates on which they were made, as predictions of future events. Any forward-looking statement speaks only as of the date on which it is initially made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

Part I - Financial Information

Item 1 - Consolidated Financial Statements

PCB Bancorp and Subsidiary

Consolidated Balance Sheets

($ in thousands, except share data)


	March 31, 2025		December 31, 2024
	(Unaudited)
Assets
Cash and due from banks	$	28,852	$	27,100
Interest-bearing deposits in other financial institutions	185,496		171,692
Total cash and cash equivalents	214,348		198,792
Securities available-for-sale, at fair value (amortized cost of $158,364 and $159,742, respectively, and allowance for credit losses of $0 and $0, respectively, at March 31, 2025 and December 31, 2024)	148,190		146,349
Loans held-for-sale, at lower of cost or fair value	12,101		6,292
Loans held-for-investment, net of deferred fees and costs	2,727,610		2,629,387
Allowance for credit losses on loans	(31,942)		(30,628)
Net loans held-for-investment	2,695,668		2,598,759
Premises and equipment, net	8,420		8,280
Federal Home Loan Bank and other restricted stock, at cost	14,042		14,042

Bank-owned life insurance	32,013		31,766
Deferred tax assets, net	6,736		7,249
Servicing assets	5,631		5,837
Operating lease assets	17,779		17,254
Option derivative	35,778		—
Accrued interest receivable	10,967		10,466
Other assets	17,863		18,885
Total assets	$	3,219,536	$	3,063,971
Liabilities and Shareholders’ Equity
Deposits:
Noninterest-bearing demand	$	564,407	$	547,853
Savings, NOW and money market accounts	512,739		466,887
Time deposits of $250,000 or less	924,795		935,927
Time deposits of more than $250,000	712,458		665,124
Total deposits	2,714,399		2,615,791
Other short-term borrowings	—		15,000
Federal Home Loan Bank advances	30,000		—

Operating lease liabilities	19,465		18,671
Accrued interest payable and other liabilities	49,030		50,695
Total liabilities	2,812,894		2,700,157
Commitments and contingencies
Preferred stock, 10,000,000 shares authorized, no par value:
Series C, senior non-cumulative perpetual, $1,000 per share liquidation preference, 69,141 and 69,141 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively	69,141		69,141
Common stock, 60,000,000 shares authorized, no par value; 14,387,176 and 14,380,651 shares issued and outstanding, respectively, and included 114,100 and 119,100 shares of unvested restricted stock, respectively, at March 31, 2025 and December 31, 2024	178,934		143,195
Retained earnings	165,611		160,797
Accumulated other comprehensive loss, net	(7,044)		(9,319)
Total shareholders’ equity	406,642		363,814
Total liabilities and shareholders’ equity	$	3,219,536	$	3,063,971

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

PCB Bancorp and Subsidiary

Consolidated Statements of Income (Unaudited)

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


	Three Months Ended March 31,
	2025		2024
Interest and dividend income:
Loans, including fees	$	43,026	$	39,251
Tax-exempt investment securities	22		28
Taxable investment securities	1,386		1,218
Other interest-earning assets	2,458		3,058
Total interest income	46,892		43,555
Interest expense:
Deposits	22,564		21,967
Borrowings	45		589
Total interest expense	22,609		22,556
Net interest income	24,283		20,999
Provision for credit losses	1,598		1,090
Net interest income after provision for credit losses	22,685		19,909
Noninterest income:
Service charges and fees on deposits	372		378
Loan servicing income	725		919
Bank-owned life insurance income	247		228
Gain on sale of loans	887		1,078

Other income	349		342
Total noninterest income	2,580		2,945
Noninterest expense:
Salaries and employee benefits	9,075		9,218
Occupancy and equipment	2,289		2,358
Professional fees	628		1,084
Marketing and business promotion	243		319
Data processing	333		402
Director fees and expenses	226		232
Regulatory assessments	344		298
Other expense	1,336		2,441
Total noninterest expense	14,474		16,352
Income before income taxes	10,791		6,502
Income tax expense	3,056		1,817
Net income	7,735		4,685
Preferred stock dividends	40		—
Net income available to common shareholders	$	7,695	$	4,685

Earnings per common share, basic	$	0.53	$	0.33
Earnings per common share, diluted	$	0.53	$	0.33

Weighted-average common shares outstanding, basic	14,272,267		14,235,419
Weighted-average common shares outstanding, diluted	14,403,769		14,330,204

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

PCB Bancorp and Subsidiary

Consolidated Statements of Comprehensive Income (Unaudited)

($ in thousands)


	Three Months Ended March 31,
	2025		2024
Net income	$	7,735	$	4,685
Other comprehensive income (loss):
Unrealized gain (loss) on securities available-for-sale arising during the period	3,219		(1,627)
Income tax benefit (expense) related to items of other comprehensive income (loss)	(944)		472
Total other comprehensive income (loss), net of tax	2,275		(1,155)
Total comprehensive income	$	10,010	$	3,530

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

PCB Bancorp and Subsidiary

Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)

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


	Three Months Ended
	Shares Outstanding		Shareholders’ Equity
	Preferred Stock	Common Stock	Preferred Stock		Common Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Total
Balance at January 1, 2024	69,141	14,260,440	$	69,141	$	142,563	$	146,092	$	(8,924)	$	348,872


Comprehensive income (loss)
Net income	—	—	—		—		4,685		—		4,685
Other comprehensive loss, net of tax	—	—	—		—		—		(1,155)		(1,155)






Share-based compensation expense	—	—	—		136		—		—		136
Stock options exercised	—	3,351	—		35		—		—		35
Cash dividends declared on common stock ($0.18 per share)	—	—	—		—		(2,568)		—		(2,568)
Balance at March 31, 2024	69,141	14,263,791	$	69,141	$	142,734	$	148,209	$	(10,079)	$	350,005

Balance at January 1, 2025	69,141	14,380,651	$	69,141	$	143,195	$	160,797	$	(9,319)	$	363,814
Comprehensive income
Net income	—	—	—		—		7,735		—		7,735
Other comprehensive income, net of tax	—	—	—		—		—		2,275		2,275
Recognition of option derivative	—	—	—		35,778		—		—		35,778





Repurchase of common stock	—	(50,676)	—		(953)		—		—		(953)
Share-based compensation expense	—	—	—		230		—		—		230
Stock options exercised	—	57,201	—		684		—		—		684
Preferred stock dividends	—	—	—		—		(40)		—		(40)
Cash dividends declared on common stock ($0.20 per share)	—	—	—		—		(2,881)		—		(2,881)
Balance at March 31, 2025	69,141	14,387,176	$	69,141	$	178,934	$	165,611	$	(7,044)	$	406,642

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

PCB Bancorp and Subsidiary

Consolidated Statements of Cash Flows (Unaudited)

($ in thousands)


	Three Months Ended March 31,
	2025		2024
Cash flows from operating activities
Net income	$	7,735	$	4,685
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of premises and equipment	564		551
Net amortization of premiums on securities	31		41
Net accretion of discounts on loans	(872)		(573)
Net accretion of deferred loan fees	(266)		(334)
Amortization of servicing assets	549		374
Provision for credit losses	1,598		1,090
Bank-owned life insurance income	(247)		(228)
Deferred tax benefit	(431)		(138)
Stock-based compensation	230		136

Gain on sale of loans	(887)		(1,078)
Originations of loans held-for-sale	(22,458)		(19,075)
Proceeds from sales of and principal collected on loans held-for-sale	17,593		22,400
Change in accrued interest receivable and other assets	754		(2,117)
Change in accrued interest payable and other liabilities	(1,545)		2,512
Net cash provided by operating activities	2,348		8,246
Cash flows from investing activities
Purchase of securities available-for-sale	(2,971)		—

Proceeds from maturities and paydowns of securities available-for-sale	4,318		3,485

Net change in loans held-for-investment	(97,762)		(74,328)


Proceeds from sale of other real estate owned	—		2,571
Purchases of premises and equipment	(749)		(2,220)

Net cash used in investing activities	(97,164)		(70,492)
Cash flows from financing activities
Net change in deposits	98,608		51,228
Net change in short-term Federal Home Loan Bank advances and other borrowings	15,000		—
Proceeds from long-term Federal Home Loan Bank advances	—		50,000
Repayment of long-term Federal Home Loan Bank advances	—		(39,000)
Stock options exercised	684		35




Repurchase of common stock	(953)		—
Cash dividends paid on preferred stock	(86)		—
Cash dividends paid on common stock	(2,881)		(2,568)
Net cash provided by financing activities	110,372		59,695
Net increase (decrease) in cash and cash equivalents	15,556		(2,551)
Cash and cash equivalents at beginning of period	198,792		242,342
Cash and cash equivalents at end of period	$	214,348	$	239,791

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

PCB Bancorp and Subsidiary

Consolidated Statements of Cash Flows, Continued (Unaudited)

($ in thousands)


	Three Months Ended March 31,
	2025		2024
Supplemental disclosures of cash flow information:
Interest paid	$	25,659	$	23,866
Income taxes paid	30		14
Supplemental disclosures of non-cash investment activities:


Right of use assets obtained in exchange for lease obligations	$	1,345	$	—

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

PCB Bancorp and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

Note 1 - Basis of Presentation and Significant Accounting Policies

Nature of Operations

PCB Bancorp is a bank holding company whose subsidiary is PCB Bank (the “Bank”), which is a single operating segment. As of March 31, 2025, the Bank operated nine full-service branches in Los Angeles and Orange counties, California, three full-service branches on the East Coast (Bayside, New York; and Englewood Cliffs and Palisades Park, New Jersey), and two full-service branches in Texas (Carrollton and Dallas), and four loan production offices (“LPOs”) in Los Angeles and Orange Counties, California; Atlanta, Georgia; and Bellevue, Washington. The Bank offers a broad range of loans, deposits, and other products and services predominantly to small and middle market businesses and individuals.

Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared pursuant to Article 10 of SEC Regulation S-X and other SEC rules and regulations for reporting on the Quarterly Report on Form 10-Q. Accordingly, certain disclosures required by U.S. generally accepted accounting principles (“GAAP”) are not included herein. These interim statements should be read in conjunction with the audited consolidated financial statements and notes included in the Annual Report on Form 10-K for the year ended December 31, 2024 filed by the Company with the SEC. The December 31, 2024 balance sheet presented herein has been derived from the audited financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC, but does not include all of the disclosures required by GAAP for complete financial statements.

In the opinion of management of the Company, the accompanying unaudited interim consolidated financial statements reflect all of the adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the consolidated financial condition and consolidated results of operations as of the dates and for the periods presented. Certain reclassifications have been made in the prior period financial statements to conform to the current period presentation. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

Principles of Consolidation

The consolidated financial statements include the accounts of PCB Bancorp and its wholly owned subsidiary as of March 31, 2025 and December 31, 2024, and for the three months ended March 31, 2025 and 2024. Significant inter-company accounts and transactions have been eliminated in consolidation. Unless the context requires otherwise, all references to the Company include its wholly owned subsidiary.

Significant Accounting Policies

The accounting and reporting policies of the Company are based upon GAAP and conform to predominant practices within the banking industry. Other than the disclosed below, the Company has not made any significant changes in its critical accounting policies from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC.

Option Derivative

On January 16, 2025, the Company entered into an Emergency Capital Investment Program (“ECIP”) Securities Purchase Option Agreement (the “Option Agreement”) with the U.S. Treasury, which grants the Company the conditional option to repurchase the outstanding shares of its Senior Non-Cumulative Perpetual Preferred Stock, Series C (the “Series C Preferred Stock”). The Company evaluated this purchase option in accordance with Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging, and determined that this purchase option was a derivative. As no consideration is paid to the U.S. Treasury, who is the existing shareholder, the fair value of option is considered capital contribution and recorded in Common Stock on the Consolidated Balance Sheet (Unaudited) in accordance with ASC 505, Equity. Subsequent changes in fair value will be recognized in earnings. The fair value change from January 16, 2025 to March 31, 2025 was deemed immaterial.

See Notes 2 and 9 for additional information regarding valuation methodology and this purchase option.

Use of Estimates in the Preparation of Financial Statements

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. These estimates are subject to change and such change could have a material effect on the consolidated financial statements. Actual results may differ from those estimates.

Adopted Accounting Pronouncements

During the three months ended March 31, 2025, there were no significant accounting pronouncements applicable to the Company that were adopted or became effective.

Recent Accounting Pronouncements Not Yet Adopted

The following recently issued accounting pronouncement applicable to the Company has not yet been adopted:

In December 2023, the FASB issued Accounting Standard Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This ASU requires public business entities to disclose in the rate reconciliation table additional categories of information about federal, state, and foreign income taxes and to provide more details about the reconciling items in some categories if items meet a quantitative threshold. It also requires all entities to disclose income taxes paid, net of refunds, disaggregated by federal, state, and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold. This ASU is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for periods for which financial statements have not yet been issued. This ASU is not expected to have a significant impact on the Company’s Consolidated Financial Statements.

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This ASU requires disaggregated disclosure of income statement expenses for public business entities. This ASU requires new financial statement disclosures in tabular format, disaggregating information about prescribed categories underlying any relevant income statement expense caption. The prescribed categories include, among other things, employee compensation, depreciation, and intangible asset amortization. Additionally, entities must disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. This ASU is effective for annual reporting periods beginning after December 15, 2026, and for interim reporting periods within fiscal years beginning after December 15, 2027. The guidance can be applied prospectively with an option for retrospective application and early adoption is permitted. This ASU is not expected to have a significant impact on the Company’s Consolidated Financial Statements.

Note 2 - Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value including a three-level valuation hierarchy, and expands disclosures about fair value measurements. Fair value is the exchange price that would be received for an asset or paid to transfer a liability (i.e. an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The three-level fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value are defined as follows:

•Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

•Level 2: Significant observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

•Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

Fair value is measured on a recurring basis for certain assets and liabilities in which fair value is the primary basis of accounting. Additionally, fair value is used on a non-recurring basis to evaluate certain assets or liabilities for impairment or for disclosure purposes. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company records securities available-for-sale at fair value on a recurring basis. Certain other assets, such as loans held-for-sale, loans individually evaluated, servicing assets and other real estate owned (“OREO”) are recorded at fair value on a non-recurring basis. Non-recurring fair value measurements typically involve assets that are periodically evaluated for impairment and for which any impairment is recorded in the period in which the re-measurement is performed. The following is a description of valuation methodologies used for assets and liabilities recorded at fair value:

Investment securities: The fair values of securities available-for-sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1) or matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2). Management reviews the valuation techniques and assumptions used by the provider and determines that the provider uses widely accepted valuation techniques based on observable market inputs appropriate for the type of security being measured. Securities held-to-maturity are not measured at fair value on a recurring basis.

Loans held-for-sale: The Company records SBA loans held-for-sale, residential property loans held-for-sale and certain non-residential real estate loans held-for-sale at the lower of cost or fair value, on an aggregate basis. The Company obtains fair values from a third party independent valuation service provider. Loans held-for-sale accounted for at the lower of cost or fair value are considered to be recognized at fair value when they are recorded at below cost, on an aggregate basis, and are classified as Level 2.

Loans individually evaluated: Certain collateral-dependent loans individually evaluated are recognized at fair value when they reflect partial write-downs, through charge-offs or specific reserve allowances, that are based on the current appraised or market-quoted value of the underlying collateral. In some cases, the properties for which market quotes or appraised values have been obtained are located in areas where comparable sales data is limited, outdated, or unavailable. Fair value estimates for collateral-dependent loans individually evaluated are obtained from real estate brokers or other third-party consultants, and are classified as Level 3.

Option derivative: The fair value of the option derivative is based on the probability-weighted scenario discounted cash flow method. The model uses inputs such as the hypothetical purchase price of Series C Preferred Stock calculated using the formula set forth in the Option Agreement, expected terms when the Company expects to be able to exercise, dividend rates that determine the purchase price at the time of exercise, discount rate, and probability of exercise. The Company expects to be able to exercise this option between 2029 and 2037, and dividend rates would be range between 0.50% and 2.00%. The Company utilized the predetermined cost of capital on the Option Agreement as a discount rate. The Company also applied redemption probability derived from considering business and regulatory factors for a variety of redemption scenarios. Because the redemption probability, expected terms and dividend rates are subject to management’s judgment, measurement uncertainty is inherent in this valuation. Due to the unobservable nature of redemption probability used in deriving the estimated fair value, the option derivative is classified as Level 3.

Other real estate owned: The Company initially records OREO at fair value at the time of foreclosure. Thereafter, OREO is recorded at the lower of cost or fair value based on their subsequent changes in fair value. The fair value of OREO is generally based on recent real estate appraisals adjusted for estimated selling costs. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments may be significant and result in a Level 3 classification due to the unobservable inputs used for determining fair value. Only OREO with a valuation allowance are considered to be carried at fair value.

Servicing Assets: Servicing assets represent the value associated with servicing loans that have been sold. The fair value for servicing assets is determined through discounted cash flow analysis and utilizes discount rates and prepayment speed assumptions as inputs. All of these assumptions require a significant degree of management estimation and judgment. The fair market valuation is performed on a quarterly basis for servicing assets. Servicing assets are accounted for at the lower of cost or market value and considered to be recognized at fair value when they are recorded at below cost and are classified as Level 3.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of dates indicated:


	Fair Value Measurement Level
($ in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
March 31, 2025
Securities available-for-sale:
U.S. government agency and U.S. government sponsored enterprise securities:
Residential mortgage-backed securities	$	—	$	114,222	$	—	$	114,222
Residential collateralized mortgage obligations	—		21,075		—		21,075
SBA loan pool securities	—		5,785		—		5,785
Municipal bonds	—		2,399		—		2,399
Corporate bonds	—		4,709		—		4,709
Total securities available-for-sale	—		148,190		—		148,190
Option derivative	—		—		35,778		35,778
Total assets measured at fair value on a recurring basis	$	—	$	148,190	$	35,778	$	183,968
Total liabilities measured at fair value on a recurring basis	$	—	$	—	$	—	$	—
December 31, 2024
Securities available-for-sale:
U.S. government agency and U.S. government sponsored enterprise securities:
Residential mortgage-backed securities	$	—	$	112,439	$	—	$	112,439
Residential collateralized mortgage obligations	—		21,237		—		21,237
SBA loan pool securities	—		6,008		—		6,008
Municipal bonds	—		2,420		—		2,420
Corporate bonds	—		4,245		—		4,245
Total securities available-for-sale	—		146,349		—		146,349
Total assets measured at fair value on a recurring basis	$	—	$	146,349	$	—	$	146,349
Total liabilities measured at fair value on a recurring basis	$	—	$	—	$	—	$	—

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The following table presents the Company’s assets and liabilities measured at fair value on a non-recurring basis as of dates indicated:


	Fair Value Measurement Level
($ in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
March 31, 2025







Total assets measured at fair value on a non-recurring basis	$	—	$	—	$	—	$	—
Total liabilities measured at fair value on a non-recurring basis	$	—	$	—	$	—	$	—
December 31, 2024
Loans individually evaluated:
Business property	$	—	$	—	$	994	$	994


Total loans individually evaluated	—		—		994		994
Total assets measured at fair value on a non-recurring basis	$	—	$	—	$	994	$	994
Total liabilities measured at fair value on a non-recurring basis	$	—	$	—	$	—	$	—

The following table presents quantitative information about level 3 fair value measurements for assets measured at fair value on a non-recurring basis as of the date indicated:

($ in thousands)

Fair Value

Valuation Technique(s)

Unobservable Input(s)

Weighted-Average

December 31, 2024

Loans individually evaluated:

Business property

994

Fair value of collateral

Selling Cost

The following table presents gains or losses, including charge-offs, recoveries, and specific reserves recorded, for assets measured at fair value for the periods indicated:


	Three Months Ended March 31,
($ in thousands)	2025		2024
Loans individually evaluated:

Business property	$	—	$	13





Net gains recognized	$	—	$	13

Fair Value of Financial Instruments

The following table presents the carrying value and estimated fair values of financial assets and liabilities as of the dates indicated:


	Carrying Value		Fair Value		Fair Value Measurements
($ in thousands)					Level 1		Level 2		Level 3
March 31, 2025
Financial assets:
Interest-bearing deposits in other financial institutions	$	185,496	$	185,496	$	185,496	$	—	$	—
Securities available-for-sale	148,190		148,190		—		148,190		—
Loans held-for-sale	12,101		12,982		—		12,982		—
Net loans held-for-investment	2,695,668		2,690,704		—		—		2,690,704
Federal Home Loan Bank (“FHLB”) and other restricted stock	14,042		N/A		N/A		N/A		N/A
Accrued interest receivable	10,967		10,967		310		502		10,155
Financial liabilities:
Deposits	$	2,714,399	$	2,724,924	$	—	$	—	$	2,724,924

FHLB advances	30,000		30,000		—		30,000		—
Accrued interest payable	21,357		21,357		—		4		21,353
December 31, 2024
Financial assets:
Interest-bearing deposits in other financial institutions	$	171,692	$	171,692	$	171,692	$	—	$	—
Securities available-for-sale	146,349		146,349		—		146,349		—
Loans held-for-sale	6,292		6,783		—		6,783		—
Net loans held-for-investment	2,598,759		2,593,839		—		—		2,593,839
FHLB and other restricted stock	14,042		N/A		N/A		N/A		N/A
Accrued interest receivable	10,466		10,466		139		548		9,779
Financial liabilities:
Deposits	$	2,615,791	$	2,620,750	$	—	$	—	$	2,620,750
Other short-term borrowings	15,000		15,000		—		15,000		—

Accrued interest payable	24,407		24,407		—		2		24,405

Note 3 - Investment Securities

The following table presents the amortized cost and fair value of the securities available-for-sale as of the dates indicated:


($ in thousands)	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value
March 31, 2025
Securities available-for-sale:
U.S. government agency and U.S. government sponsored enterprise securities:
Residential mortgage-backed securities	$	122,801	$	470	$	(9,049)	$	114,222
Residential collateralized mortgage obligations	22,084		63		(1,072)		21,075
SBA loan pool securities	6,024		—		(239)		5,785
Municipal bonds	2,455		—		(56)		2,399
Corporate bonds	5,000		—		(291)		4,709
Total securities available-for-sale	$	158,364	$	533	$	(10,707)	$	148,190
December 31, 2024
Securities available-for-sale:
U.S. government agency and U.S. government sponsored enterprise securities:
Residential mortgage-backed securities	$	123,209	$	168	$	(10,938)	$	112,439
Residential collateralized mortgage obligations	22,753		1		(1,517)		21,237
SBA loan pool securities	6,328		—		(320)		6,008
Municipal bonds	2,452		—		(32)		2,420
Corporate bonds	5,000		—		(755)		4,245
Total securities available-for-sale	$	159,742	$	169	$	(13,562)	$	146,349

As of March 31, 2025 and December 31, 2024, pledged securities were $75.4 million and $72.5 million, respectively. These securities were pledged for the State Deposit from the California State Treasurer.

The Company elected to exclude accrued interest receivable from the amortized cost of its securities available-for-sale. Accrued interest receivable on securities available-for-sale totaled $503 thousand and $548 thousand at March 31, 2025 and December 31, 2024, respectively.

As of March 31, 2025 and December 31, 2024, there were no holdings of securities available-for-sale of any one issuer, other than the U.S. government agency and U.S. government sponsored enterprise, in an amount greater than 10% of shareholders’ equity.

The following table presents the amortized cost and fair value of the securities available-for-sale by contractual maturity as of the date indicated. Expected maturities may differ from contractual maturities, if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.


	March 31, 2025
($ in thousands)	Amortized Cost		Fair Value
Within one year	$	—	$	—
One to five years	83		82
Five to ten years	6,099		5,786
Greater than ten years	1,273		1,240
Residential mortgage-backed securities, residential collateralized mortgage obligations and SBA loan pool securities	150,909		141,082
Total	$	158,364	$	148,190

The Company had no proceeds from sales and calls of securities available-for-sale for the three months ended March 31, 2025 or 2024.

The following table summarizes the investment securities with unrealized losses by security type and length of time in a continuous unrealized loss position for which an allowance for credit losses (“ACL”) was not recorded as of the dates indicated:


	Length of Time that Individual Securities Have Been In a Continuous Unrealized Loss Position
	Less Than 12 Months					12 Months or Longer					Total
($ in thousands)	Fair Value		Gross Unrealized Losses		Number of Securities	Fair Value		Gross Unrealized Losses		Number of Securities	Fair Value		Gross Unrealized Losses		Number of Securities
March 31, 2025
Securities available-for-sale:
U.S. government agency and U.S. government sponsored enterprise securities:
Residential mortgage-backed securities	$	12,458	$	(89)	9	$	67,172	$	(8,960)	110	$	79,630	$	(9,049)	119
Residential collateralized mortgage obligations	3,857		(6)		3	12,398		(1,066)		35	16,255		(1,072)		38
SBA loan pool securities	399		(1)		4	5,158		(238)		13	5,557		(239)		17
Municipal bonds	2,399		(56)		7	—		—		—	2,399		(56)		7
Corporate bonds	—		—		—	4,709		(291)		1	4,709		(291)		1
Total securities available-for-sale	$	19,113	$	(152)	23	$	89,437	$	(10,555)	159	$	108,550	$	(10,707)	182
December 31, 2024
Securities available-for-sale:
U.S. government agency and U.S. government sponsored enterprise securities:
Residential mortgage-backed securities	$	26,250	$	(392)	17	$	67,640	$	(10,546)	109	$	93,890	$	(10,938)	126
Residential collateralized mortgage obligations	4,963		(26)		3	13,375		(1,491)		36	18,338		(1,517)		39
SBA loan pool securities	396		(1)		3	5,316		(319)		13	5,712		(320)		16
Municipal bonds	2,050		(32)		6	—		—		—	2,050		(32)		6
Corporate bonds	—		—		—	4,245		(755)		1	4,245		(755)		1
Total securities available-for-sale	$	33,659	$	(451)	29	$	90,576	$	(13,111)	159	$	124,235	$	(13,562)	188

As of March 31, 2025 and December 31, 2024, 95.3% 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 March 31, 2025 and December 31, 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 March 31, 2025 and December 31, 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 March 31, 2025 and December 31, 2024.

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

Note 4 - Loans and Allowance for Credit Losses on Loans

Loans Held-For-Investment

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


($ in thousands)	March 31, 2025		December 31, 2024
Commercial real estate:
Commercial property	$	965,302	$	940,931
Business property	618,771		595,547
Multifamily	207,096		194,220
Construction	23,978		21,854
Total commercial real estate	1,815,147		1,752,552
Commercial and industrial	494,697		472,763
Consumer:
Residential mortgage	406,774		392,456
Other consumer	10,992		11,616
Total consumer	417,766		404,072
Loans held-for-investment	2,727,610		2,629,387
Allowance for credit losses on loans	(31,942)		(30,628)
Net loans held-for-investment	$	2,695,668	$	2,598,759

In the ordinary course of business, the Company may grant loans to certain of its officers and directors, and the companies with which they are associated. As of March 31, 2025 and December 31, 2024, the Company had no such loans outstanding.

Allowance for Credit Losses on Loans

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


	Three Months Ended March 31,
($ in thousands)	2025		2024
Provision for credit losses on loans	$	1,591	$	922
Provision for credit losses on off-balance sheet credit exposures	7		168
Total provision for credit losses	$	1,598	$	1,090

The following tables present the activities in ACL on loans for the periods indicated:


($ in thousands)	Commercial Property		Business Property		Multifamily		Construction		Commercial and Industrial		Residential Mortgage		Other Consumer		Total
Balance at January 1, 2025	$	12,923	$	3,967	$	2,371	$	81	$	8,713	$	2,506	$	67	$	30,628
Charge-offs	—		—		—		—		(351)		—		(2)		(353)
Recoveries	—		1		—		—		71		—		4		76
Provision (reversal) for credit losses on loans	(868)		224		272		(35)		1,148		873		(23)		1,591
Balance at March 31, 2025	$	12,055	$	4,192	$	2,643	$	46	$	9,581	$	3,379	$	46	$	31,942

Balance at January 1, 2024	$	12,665	$	4,739	$	1,441	$	135	$	6,245	$	2,226	$	82	$	27,533

Charge-offs	—		—		—		—		(155)		—		(30)		(185)
Recoveries	—		2		—		—		9		—		51		62
Provision (reversal) for credit losses on loans	(546)		73		(126)		(26)		1,489		108		(50)		922
Balance at March 31, 2024	$	12,119	$	4,814	$	1,315	$	109	$	7,588	$	2,334	$	53	$	28,332

The increase in overall ACL for the three months ended March 31, 2025 was primarily due to increases in loans held-for-investment, net charge-offs, and quantitatively measured loss reserves, partially offset by the decreases in maximum loss rate used for qualitative factor reserves and reserves on individually evaluated loans.

Credit Quality Indicators

The Company classifies loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, collateral adequacy, credit documentation, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans in regards to credit risk. This analysis typically includes non-homogeneous loans, such as commercial property and commercial and industrial loans, and is performed on an ongoing basis as new information is obtained. The Company uses the following definitions for risk ratings:

Pass - Loans classified as pass include non-homogeneous loans not meeting the risk ratings defined below and smaller, homogeneous loans not assessed on an individual basis.

Special Mention - Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard - Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful - Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

The following table summarizes the Company’s loans held-for-investment by loan segment, internal risk ratings and vintage year as of March 31, 2025 and gross write offs for the three months ended March 31, 2025. The vintage year is the year of origination, renewal or major modification. Revolving loans that are converted to term loans presented in the table below are excluded from the Term Loans by Origination Year columns.


	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term
($ in thousands)	2025		2024		2023		2022		2021		Prior						Total
March 31, 2025
Commercial Real Estate:
Commercial property
Pass	$	71,294	$	192,738	$	141,854	$	256,925	$	121,904	$	156,067	$	21,039	$	384	$	962,205
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		129		387		251		2,330		—		—		3,097
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	71,294	$	192,738	$	141,983	$	257,312	$	122,155	$	158,397	$	21,039	$	384	$	965,302
Year-to-date period gross write offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Business property
Pass	$	49,572	$	92,440	$	99,723	$	93,244	$	146,812	$	118,595	$	6,521	$	4,896	$	611,803
Special mention	—		—		—		5,010		—		—		—		—		5,010
Substandard	—		—		—		446		862		650		—		—		1,958
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	49,572	$	92,440	$	99,723	$	98,700	$	147,674	$	119,245	$	6,521	$	4,896	$	618,771
Year-to-date period gross write offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Multifamily
Pass	$	18,121	$	30,707	$	52,981	$	39,666	$	37,845	$	26,776	$	1,000	$	—	$	207,096
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	18,121	$	30,707	$	52,981	$	39,666	$	37,845	$	26,776	$	1,000	$	—	$	207,096
Year-to-date period gross write offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Construction
Pass	$	—	$	1,342	$	8,436	$	14,200	$	—	$	—	$	—	$	—	$	23,978
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	—	$	1,342	$	8,436	$	14,200	$	—	$	—	$	—	$	—	$	23,978
Year-to-date period gross write offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—


	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term
($ in thousands)	2025		2024		2023		2022		2021		Prior						Total
March 31, 2025 (Continued)
Commercial and Industrial
Pass	$	4,144	$	44,923	$	31,856	$	20,622	$	6,768	$	9,032	$	373,865	$	3,421	$	494,631
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		66		—		—		66
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	4,144	$	44,923	$	31,856	$	20,622	$	6,768	$	9,098	$	373,865	$	3,421	$	494,697
Year-to-date period gross write offs	$	—	$	—	$	80	$	—	$	149	$	122	$	—	$	—	$	351
Consumer
Residential mortgage
Pass	$	27,812	$	34,603	$	68,011	$	147,789	$	71,736	$	53,670	$	—	$	—	$	403,621
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		2,466		—		—		687		—		—		3,153
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	27,812	$	34,603	$	70,477	$	147,789	$	71,736	$	54,357	$	—	$	—	$	406,774
Year-to-date period gross write offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Other consumer
Pass	$	101	$	—	$	2,565	$	3,596	$	1,187	$	250	$	3,287	$	—	$	10,986
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		6		—		—		—		—		6
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	101	$	—	$	2,565	$	3,602	$	1,187	$	250	$	3,287	$	—	$	10,992
Year-to-date period gross write offs	$	—	$	—	$	1	$	—	$	1	$	—	$	—	$	—	$	2
Total loans held-for-investment
Pass	$	171,044	$	396,753	$	405,426	$	576,042	$	386,252	$	364,390	$	405,712	$	8,701	$	2,714,320
Special mention	—		—		—		5,010		—		—		—		—		5,010
Substandard	—		—		2,595		839		1,113		3,733		—		—		8,280
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	171,044	$	396,753	$	408,021	$	581,891	$	387,365	$	368,123	$	405,712	$	8,701	$	2,727,610
Year-to-date period gross write offs	$	—	$	—	$	81	$	—	$	150	$	122	$	—	$	—	$	353

The following table summarizes the Company’s loans held-for-investment by loan segment, internal risk ratings and vintage year as of December 31, 2024. The vintage year is the year of origination, renewal or major modification. Revolving loans that are converted to term loans presented in the table below are excluded from term loans by vintage year columns.


	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term
($ in thousands)	2024		2023		2022		2021		2020		Prior						Total
December 31, 2024
Commercial Real Estate:
Commercial property
Pass	$	196,454	$	142,455	$	259,222	$	138,837	$	76,462	$	102,666	$	21,031	$	385	$	937,512
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		131		399		258		—		2,631		—		—		3,419
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	196,454	$	142,586	$	259,621	$	139,095	$	76,462	$	105,297	$	21,031	$	385	$	940,931
Year-to-date period gross write offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Business property
Pass	$	93,973	$	100,337	$	95,024	$	148,382	$	44,239	$	95,372	$	6,431	$	3,750	$	587,508
Special mention	—		—		5,034		—		—		—		—		—		5,034
Substandard	—		—		447		859		—		1,699		—		—		3,005
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	93,973	$	100,337	$	100,505	$	149,241	$	44,239	$	97,071	$	6,431	$	3,750	$	595,547
Year-to-date period gross write offs	$	—	$	—	$	77	$	—	$	—	$	27	$	—	$	—	$	104
Multifamily
Pass	$	34,104	$	53,020	$	39,870	$	38,104	$	25,751	$	2,370	$	1,001	$	—	$	194,220
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	34,104	$	53,020	$	39,870	$	38,104	$	25,751	$	2,370	$	1,001	$	—	$	194,220
Year-to-date period gross write offs	$	—	$	—	$	—	$	20	$	—	$	—	$	—	$	—	$	20
Construction
Pass	$	886	$	7,589	$	13,379	$	—	$	—	$	—	$	—	$	—	$	21,854
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	886	$	7,589	$	13,379	$	—	$	—	$	—	$	—	$	—	$	21,854
Year-to-date period gross write offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—


	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term
($ in thousands)	2024		2023		2022		2021		2020		Prior						Total
December 31, 2024 (Continued)
Commercial and Industrial
Pass	$	46,644	$	34,737	$	21,700	$	7,312	$	3,125	$	8,044	$	347,605	$	3,517	$	472,684
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		8		—		71		—		—		79
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	46,644	$	34,737	$	21,700	$	7,320	$	3,125	$	8,115	$	347,605	$	3,517	$	472,763
Year-to-date period gross write offs	$	—	$	—	$	—	$	—	$	—	$	126	$	248	$	150	$	524
Consumer
Residential mortgage
Pass	$	37,548	$	73,833	$	151,922	$	73,183	$	10,840	$	44,727	$	—	$	—	$	392,053
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		403		—		—		403
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	37,548	$	73,833	$	151,922	$	73,183	$	10,840	$	45,130	$	—	$	—	$	392,456
Year-to-date period gross write offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Other consumer
Pass	$	346	$	2,914	$	4,243	$	1,530	$	394	$	8	$	2,157	$	—	$	11,592
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		23		—		1		—		—		—		24
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	346	$	2,914	$	4,266	$	1,530	$	395	$	8	$	2,157	$	—	$	11,616
Year-to-date period gross write offs	$	—	$	18	$	15	$	—	$	10	$	—	$	—	$	—	$	43
Total loans held-for-investment
Pass	$	409,955	$	414,885	$	585,360	$	407,348	$	160,811	$	253,187	$	378,225	$	7,652	$	2,617,423
Special mention	—		—		5,034		—		—		—		—		—		5,034
Substandard	—		131		869		1,125		1		4,804		—		—		6,930
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	409,955	$	415,016	$	591,263	$	408,473	$	160,812	$	257,991	$	378,225	$	7,652	$	2,629,387
Year-to-date period gross write offs	$	—	$	18	$	92	$	20	$	10	$	153	$	248	$	150	$	691

Nonaccrual Loans

The following table presents the loans on nonaccrual status by loan segments as of the date indicated:


($ in thousands)	Total Nonaccrual Loans		Nonaccrual Loans with ACL		ACL on Nonaccrual Loans		Collateral Dependent Nonaccrual Loans		ACL on Collateral Dependent Nonaccrual Loans
March 31, 2025
Commercial real estate:
Commercial property	$	1,538	$	—	$	—	$	1,538	$	—
Business property	1,485		—		—		1,485		—


Total commercial real estate	3,023		—		—		3,023		—
Commercial and industrial	66		—		—		66		—
Consumer:
Residential mortgage	3,153		—		—		3,153		—
Other consumer	6		6		—		—		—
Total consumer	3,159		6		—		3,153		—
Total	$	6,248	$	6	$	—	$	6,242	$	—
December 31, 2024
Commercial real estate:
Commercial property	$	1,851	$	—	$	—	$	1,851	$	—
Business property	2,336		1,032		38		2,336		38


Total commercial real estate	4,187		1,032		38		4,187		38
Commercial and industrial	79		8		8		79		8
Consumer:
Residential mortgage	403		—		—		403		—
Other consumer	24		24		—		—		—
Total consumer	427		24		—		403		—
Total	$	4,693	$	1,064	$	46	$	4,669	$	46

There were no nonaccrual loans guaranteed by a U.S. government agency at March 31, 2025 and December 31, 2024.

Collateral Dependent Loans

Loans that have been classified as collateral dependent are loans where substantially all repayment of the loan is expected to come from the operation of or eventual liquidation of the collateral. Collateral dependent loans are evaluated individually for purposes of determining the ACL, which is determined based on the estimated fair value of the collateral. Estimates for costs to sell are included in the determination of the ACL when liquidation of the collateral is anticipated. In cases where the loan is well secured and the estimated value of the collateral exceeds the amortized cost of the loan, no ACL is recorded. The following table presents the collateral dependent loans by loan segments as of the date indicated:


($ in thousands)	Hotel / Motel		Restaurant		Car Wash		Retail		Single Family Residential		Other		Total
March 31, 2025
Commercial real estate:
Commercial property	$	1,538	$	—	$	—	$	—	$	—	$	—	$	1,538
Business property	—		196		666		589		—		34		1,485


Total commercial real estate	1,538		196		666		589		—		34		3,023
Commercial and industrial	10		—		—		—		56		—		66
Consumer:
Residential mortgage	—		—		—		—		3,153		—		3,153

Total consumer	—		—		—		—		3,153		—		3,153
Total	$	1,548	$	196	$	666	$	589	$	3,209	$	34	$	6,242
December 31, 2024
Commercial real estate:
Commercial property	$	1,851	$	—	$	—	$	—	$	—	$	—	$	1,851
Business property	—		—		1,695		606		—		35		2,336


Total commercial real estate	1,851		—		1,695		606		—		35		4,187
Commercial and industrial	11		—		8		—		60		—		79
Consumer:
Residential mortgage	—		—		—		—		403		—		403

Total consumer	—		—		—		—		403		—		403
Total	$	1,862	$	—	$	1,703	$	606	$	463	$	35	$	4,669

Past Due Loans

The following table presents the aging of past due in accruing loans and nonaccrual loans by loan segments as of date indicated:


	Still Accruing								Nonaccrual
($ in thousands)	30 to 59 Days Past Due		60 to 89 Days Past Due		90 or More Days Past Due		Total		30 to 59 Days Past Due		60 to 89 Days Past Due		90 or More Days Past Due		Total		Total Loans Past Due
March 31, 2025
Commercial real estate:
Commercial property	$	435	$	—	$	—	$	435	$	957	$	—	$	—	$	957	$	1,392
Business property	1,549		—		—		1,549		690		—		701		1,391		2,940


Total commercial real estate	1,984		—		—		1,984		1,647		—		701		2,348		4,332
Commercial and industrial	241		58		—		299		50		—		16		66		365
Consumer:
Residential mortgage	2,989		—		—		2,989		—		—		2,862		2,862		5,851
Other consumer	22		43		—		65		—		—		—		—		65
Total consumer	3,011		43		—		3,054		—		—		2,862		2,862		5,916
Total	$	5,236	$	101	$	—	$	5,337	$	1,697	$	—	$	3,579	$	5,276	$	10,613
December 31, 2024
Commercial real estate:
Commercial property	$	433	$	—	$	—	$	433	$	—	$	984	$	269	$	1,253	$	1,686
Business property	333		—		—		333		508		—		698		1,206		1,539


Total commercial real estate	766		—		—		766		508		984		967		2,459		3,225
Commercial and industrial	—		—		—		—		—		71		—		71		71
Consumer:
Residential mortgage	3,679		303		—		3,982		—		403		—		403		4,385
Other consumer	154		—		—		154		—		—		24		24		178
Total consumer	3,833		303		—		4,136		—		403		24		427		4,563
Total	$	4,599	$	303	$	—	$	4,902	$	508	$	1,458	$	991	$	2,957	$	7,859

Loan Modification

Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay, interest rate reduction or combination of at above mentioned modifications. When principal forgiveness is provided, the amount of forgiveness is charged-off against the ACL. These loans are placed on nonaccrual status at the time of such modification.

There were no loans that the borrowers were both experiencing financial difficulty and modified for the three months ended March 31, 2025. The following tables present loans that the borrowers were both experiencing financial difficulty and modified during the period indicated by loan segments and modification type:


	Three Months Ended
($ in thousands)	Combination of Other-Than-Insignificant Payment Delay and Term Extension		Total		Percentage to Each Loan Segment

















March 31, 2024






Commercial and industrial	$	45	$	45	0.1	%




Total	$	45	$	45	0.1	%

The Company had no commitments to lend to any borrower included in the above table.

The following tables present the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the periods indicates:

Three Months Ended

Combination of Other-Than-Insignificant Payment Delay and Term Extension

March 31, 2024

Commercial and industrial

6-month interest-only payment and 6-month term extension

The following table presents the performance of loans that the borrowers were both experiencing financial difficulty and modified in the last 12 months:


($ in thousands)	30 to 59 Days Past Due		60 to 89 Days Past Due		90 or More Days Past Due		Total
March 31, 2025
Commercial real estate:

Business property	$	495	$	—	$	666	$	1,161


Total commercial real estate	495		—		666		1,161





Total	$	495	$	—	$	666	$	1,161
December 31, 2024
Commercial real estate:

Business property	$	508	$	—	$	664	$	1,172


Total commercial real estate	508		—		664		1,172





Total	$	508	$	—	$	664	$	1,172

Purchases, Sales, and Transfers

The Company had no loans that were transferred from loans held-for-investment to loans held-for-sale during three months ended March 31, 2025 or 2024.

The Company had no loans that were transferred from loans held-for-sale to loans held-for investment during three months ended March 31, 2025 or 2024.

The Company had no purchases of loans held-for-investment during three months ended March 31, 2025 or 2024.

Loans Held-For-Sale

The following table presents a composition of loans held-for-sale as of the date indicated:


($ in thousands)	March 31, 2025		December 31, 2024
Commercial real estate:
Commercial property	$	—	$	3,307
Business property	8,436		713


Total commercial real estate	8,436		4,020
Commercial and industrial	3,665		2,272




Total	$	12,101	$	6,292

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.

Note 5. Other Real Estate Owned

The following table presents activity in OREO for the periods indicated:


	Three Months Ended March 31,
($ in thousands)	2025		2024
Balance at beginning of year	$	—	$	2,558
Additions	—		—
Sales	—		(2,558)

Balance at end of year	$	—	$	—

The following table presents activity in OREO valuation allowance for the periods indicated:


	Three Months Ended March 31,
($ in thousands)	2025		2024
Balance at beginning of year	$	—	$	—
Additions	—		—
Net direct write-downs and removal from sale	—		—
Balance at end of year	$	—	$	—

The following table presents expenses related to OREO for the periods indicated:


	Three Months Ended March 31,
($ in thousands)	2025		2024
Net gain on sales	$	—	$	(13)
Operating expenses, net of rental income	—		2
Total expenses	$	—	$	(11)

The Company did not provide loans to finance the sale of its OREO properties during the three months ended March 31, 2024.

Note 6 - Servicing Assets

The Company sells SBA and certain residential mortgage loans with servicing retained. SBA loans are included in commercial real estate loans (“CRE SBA”) and commercial and industrial loans (“C&I SBA”). The Company sold loans of $16.6 million and $19.4 million, respectively, with the servicing rights retained and recognized a net gain on sale of $887 thousand and $1.1 million, respectively, during the three months ended March 31, 2025 and 2024. Loan servicing income was $725 thousand and $919 thousand, respectively, for the three months ended March 31, 2025 and 2024.

The following table presents the composition of servicing assets with key assumptions used to estimate the fair value as of the dates indicated:


	March 31, 2025											December 31, 2024
($ in thousands)	Residential Mortgage			CRE SBA			C&I SBA			Total		Residential Mortgage			CRE SBA			C&I SBA			Total
Carrying amount	$	38		$	5,084		$	509		$	5,631	$	42		$	5,226		$	569		$	5,837
Fair value	$	81		$	9,123		$	1,018		$	10,222	$	84		$	7,750		$	894		$	8,728
Discount rate	7.85		%	13.50		%	13.50		%			7.85		%	12.14		%	15.85		%
Prepayment speed	13.85		%	16.60		%	16.60		%			13.93		%	17.82		%	13.02		%
Weighted-average remaining life	22.7 years			20.1 years			7.3 years					23.8 years			20.7 years			7.4 years
Underlying loans being serviced	$	8,490		$	437,823		$	64,614		$	510,927	$	9,072		$	445,601		$	70,909		$	525,582

The following tables present activity in servicing assets for the periods indicated:


	Three Months Ended March 31,
	2025								2024
($ in thousands)	Residential Mortgage		CRE SBA		C&I SBA		Total		Residential Mortgage		CRE SBA		C&I SBA		Total
Balance at beginning of period	$	42	$	5,226	$	569	$	5,837	$	49	$	6,135	$	482	$	6,666
Additions	—		273		70		343		—		177		75		252
Amortization	(4)		(415)		(130)		(549)		(2)		(327)		(45)		(374)

Balance at end of period	$	38	$	5,084	$	509	$	5,631	$	47	$	5,985	$	512	$	6,544

Note 7 - Operating Leases

The following table presents operating lease cost and supplemental cash flow information related to leases for the periods indicated:


	Three Months Ended March 31,
($ in thousands)	2025		2024
Operating lease cost (1)	$	961	$	943
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	931	$	875
Right of use assets obtained in exchange for lease obligations	$	1,345	$	—

(1) Included in Occupancy and Equipment on the Consolidated Statements of Income (Unaudited).

During the three months ended March 31, 2025, the Company recognized an impairment loss of $146 thousand on operating lease assets due to a new sublease contract. The impairment is recorded in Other Expenses on the Consolidated Statements of Income (Unaudited).

The Company used the incremental borrowing rate based on the information available at lease commencement in determining the present value of lease payments. The following table presents supplemental balance sheet information related to leases as of the dates indicated:


($ in thousands)	March 31, 2025			December 31, 2024
Operating leases:
Operating lease assets	$	17,779		$	17,254
Operating lease liabilities	$	19,465		$	18,671
Weighted-average remaining lease term	7.8 years			7.8 years
Weighted-average discount rate	4.77		%	4.72		%

The following table presents maturities of operating lease liabilities as of the date indicated:


($ in thousands)	March 31, 2025
Maturities:
2025	$	2,668
2026	3,216
2027	2,836
2028	2,719
2029	2,553
After 2029	10,147
Total lease payment	24,139
Imputed Interest	(4,674)
Present value of operating lease liabilities	$	19,465

Note 8 - Federal Home Loan Bank Advances and Other Borrowings

FHLB Advances

The Company had an overnight FHLB advance of $30.0 million with an interest rate of 4.65% at March 31, 2025. At December 31, 2024, the Company had no FHLB advances. The Company repaid the advance upon maturity.

At March 31, 2025 and December 31, 2024, loans pledged to secure borrowings from the FHLB were $1.11 billion and $977.6 million, respectively. The Company’s investment in capital stock of the FHLB of San Francisco totaled $13.9 million and $13.9 million at March 31, 2025 and December 31, 2024, respectively. The Company had additional borrowing capacity of $735.7 million and $722.4 million from the FHLB as of March 31, 2025 and December 31, 2024, respectively.

Federal Reserve Discount Window

The Company had $679.0 million of unused borrowing capacity from the Federal Reserve Discount Window, to which the Company pledged loans with a carrying value of $836.5 million with no outstanding borrowings at March 31, 2025. At December 31, 2024, the Company had $586.5 million of unused borrowing capacity from the Federal Reserve Discount Window, to which the Company pledged loans with a carrying value of $724.0 million with no outstanding borrowings.

Overnight Federal Funds Lines

The Company maintains overnight federal funds lines with correspondent financial institutions. The Company maintained available borrowing capacity of $65.0 million and had no borrowings at March 31, 2025. At December 31, 2024, the Company had an overnight borrowing of $15.0 million with an interest rate of 4.65% and unused borrowing capacity of $50.0 million.

Note 9 - Shareholders’ Equity

Series C, Senior Non-Cumulative Perpetual Preferred Stock

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 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 will be 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 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 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 the 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 meet all Threshold Conditions as of March 31, 2025:


	Dividend Rate at the Reset Date Immediately Preceding the Purchase Date
($ in thousands)	0.50%		1.25%		2.00%
Purchase price	$	4,869	$	12,173	$	19,476
Discount	64,272		56,968		49,665

The Company began paying quarterly dividends on the Series C Preferred Stock beginning in the three months ended June 30, 2024. Dividends on the Series C Preferred Stock totaled $40 thousand for the three months ended March 31, 2025.

Stock Repurchases

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 under a stock repurchase program approved by the Board of Directors on August 2, 2023. On July 25, 2024, the Company announced that the term of the stock repurchase program would be to August 1, 2025.

During the three months ended March 31, 2025, the Company repurchased and retired 50,676 shares of common stock at a weighted-average price of $18.80 per share. As of March 31, 2025, the Company was authorized to purchase 527,101 additional shares under the stock repurchase program.

Note 10 - Share-Based Compensation

On May 25, 2023, the Company adopted the 2023 Equity Based Compensation Plan (“2023 EBC Plan”) approved by its shareholders to replace the 2013 Equity Based Stock Compensation Plan. The 2023 EBC Plan provides 700,000 shares of common stock for equity based compensation awards including incentive and non-qualified stock options, and restricted stock awards. As of March 31, 2025, there were 382,800 shares available for future grants.

Share-Based Compensation Expense

The following table presents share-based compensation expense and the related tax benefits for the periods indicated:


	Three Months Ended March 31,
($ in thousands)	2025		2024
Share-based compensation expense related to:
Stock options	$	68	$	72
Restricted stock awards	162		64
Total share-based compensation expense	$	230	$	136
Related tax benefits	$	61	$	34

The following table presents unrecognized share-based compensation expense as of the date indicated:

March 31, 2025

($ in thousands)

Unrecognized Expense

Weighted-Average Remaining Expected Recognition Period

Unrecognized share-based compensation expense related to:

Stock options

454

1.8 years

Restricted stock awards

2,130

3.5 years

Total unrecognized share-based compensation expense

2,584

3.2 years

Stock Options

The following tables represent stock option activity for the periods indicated:


	Three Months Ended March 31, 2025
($ in thousands except per share data)	Number of Shares	Weighted-Average Exercise Price Per Share		Weighted-Average Contractual Term	Aggregated Intrinsic Value
Outstanding at beginning of period	576,412	$	14.20	5.0 years	$	3,481

Exercised	(57,201)	$	11.96	3.4 years

Outstanding at end of period	519,211	$	14.45	4.9 years	$	2,213
Exercisable at end of period	347,552	$	13.75	3.2 years	$	1,725

The following table represents information regarding unvested stock options for the periods indicated:


	Three Months Ended March 31, 2025
	Number of Shares	Weighted-Average Exercise Price Per Share
Outstanding at beginning of period	179,659	$	15.93

Vested	(8,000)	$	17.40

Outstanding at end of period	171,659	$	15.87

Restricted Stock Awards

The following table represents restricted stock award activity for the periods indicated:


	Three Months Ended March 31, 2025
	Number of Shares	Weighted-Average Grant Date Fair Value Per Share
Outstanding at beginning of period	119,100	$	20.40

Vested	(5,000)	$	21.96

Outstanding at end of period	114,100	$	20.34

Note 11 - Income Taxes

Income tax expense was $3.1 million and $1.8 million, respectively, and the effective tax rate was 28.3% and 27.9%, respectively, for the three months ended March 31, 2025 and 2024.

At March 31, 2025 and December 31, 2024, the Company had no unrecognized tax benefits or related accrued interest.

The Company and its subsidiaries are subject to U.S. federal and various state jurisdictions income tax examinations. As of March 31, 2025, the Company is no longer subject to examination by taxing authorities for tax years before 2021 for federal taxes and before 2020 for various state jurisdictions. The statute of limitations vary by state, and state taxes other than California have been minimal and immaterial to the Company’s financial results.

Note 12 - Earnings Per Share

The following table presents the computations of basic and diluted earnings per share (“EPS”) for the periods indicated:


	Three Months Ended March 31,
($ in thousands, except per share)	2025		2024
Basic earnings per share:
Net income available to common shareholders	$	7,695	$	4,685
Less: income allocated to unvested restricted stock	(61)		(9)
Net income allocated to common stock	$	7,634	$	4,676
Weighted-average total common shares outstanding	14,386,422		14,262,235
Less: weighted-average unvested restricted stock	(114,155)		(26,816)
Weighted-average common shares outstanding, basic	14,272,267		14,235,419
Basic earnings per share	$	0.53	$	0.33
Diluted earnings per share:
Net income allocated to common stock	$	7,634	$	4,676
Weighted-average common shares outstanding, basic	14,272,267		14,235,419
Diluted effect of stock options	131,502		94,785
Weighted-average common shares outstanding, diluted	14,403,769		14,330,204
Diluted earnings per share	$	0.53	$	0.33

There were 60,000 and 263,000 stock options excluded in computing diluted EPS because they were anti-dilutive for three months ended March 31, 2025 and 2024, respectively.

Note 13 - Off-Balance Sheet Credit Exposures, Commitments and Other Contingencies

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 and letters of credit. Those instruments involve to varying degrees, elements of credit, and interest rate risk not recognized in the Company’s consolidated financial statements.

The Company had the following outstanding financial commitments whose contractual amount represents credit risk as of the dates indicated:


	March 31, 2025				December 31, 2024
($ in thousands)	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Unused lines of credit	$	12,989	$	357,232	$	12,923	$	370,313
Unfunded loan commitments	—		14,442		—		17,339
Standby letters of credit	5,009		1,786		5,279		1,516

Total	$	17,998	$	373,460	$	18,202	$	389,168

Unfunded loan commitments are generally made for periods of 90 days or less, except for SBA loans that are generally made for periods of 180 days or less.

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 March 31, 2025 and December 31, 2024, the Company maintained an ACL on off-balance sheet credit exposures of $1.2 million and $1.2 million in Accrued Interest Payable and Other Liabilities in the Consolidated Balance Sheets, respectively.

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 by the Company is based on management’s credit evaluation of the customer.

Litigation

The Company is involved in various matters of litigation, which have arisen in the ordinary course of business. In the opinion of management, the disposition of pending matters of litigation will not have a material effect on the Company’s consolidated financial statements.

Note 14 - Regulatory Matters

Under the final rules implementing Basel Committee on Banking Supervision’s capital guidelines for U.S. banks (“Basel III rules”), the Company and Bank must hold a capital conservation buffer of 2.50% above the adequately capitalized risk-based capital ratios to avoid restrictions on dividends, stock repurchase, discretionary bonuses and other payments. Management believes as of March 31, 2025 and December 31, 2024, the Company and the Bank met all capital adequacy requirements to which they are subject. Historically, the Company has operated under the Federal Reserve’s Small Bank Holding Company Policy Statement, which exempts bank holding companies with total consolidated assets of less than $3.0 billion from the Federal Reserve's risk-based and leverage consolidated capital requirements. Because the Company's total consolidated assets exceeded $3.0 billion as of December 31, 2024, the Company is now subject to the Federal Reserve's consolidated capital requirements separate in addition to those of the Bank. The Company and the Bank’s capital conservation buffers were 8.02% and 6.63%, respectively, as of March 31, 2025, and 6.94% and 6.92%, respectively, as of December 31, 2024. Unrealized gain or loss on securities available-for-sale is not included in computing regulatory capital. The following table presents the regulatory capital amounts and ratios for the Company and the Bank as of dates indicated:


	Actual				Minimum Capital Adequacy Requirement				To Be Well Capitalized Under Prompt Corrective Provisions
($ in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
March 31, 2025
PCB Bancorp
Common tier 1 capital (to risk-weighted assets)	$	344,037	12.52	%	$	123,614	4.5	%	N/A		N/A
Total capital (to risk-weighted assets)	446,318		16.25	%	219,758		8.0	%	N/A		N/A
Tier 1 capital (to risk-weighted assets)	413,178		15.04	%	164,818		6.0	%	N/A		N/A
Tier 1 capital (to average assets)	413,178		13.16	%	125,571		4.0	%	N/A		N/A
PCB Bank
Common tier 1 capital (to risk-weighted assets)	$	367,564	13.42	%	$	123,243	4.5	%	$	178,018	6.5	%
Total capital (to risk-weighted assets)	400,704		14.63	%	219,099		8.0	%	273,874		10.0	%
Tier 1 capital (to risk-weighted assets)	367,564		13.42	%	164,325		6.0	%	219,099		8.0	%
Tier 1 capital (to average assets)	367,564		11.82	%	124,356		4.0	%	155,445		5.0	%
December 31, 2024
PCB Bancorp
Common tier 1 capital (to risk-weighted assets)	$	303,423	11.44	%	$	119,387	4.5	%	N/A		N/A
Total capital (to risk-weighted assets)	404,383		15.24	%	212,243		8.0	%	N/A		N/A
Tier 1 capital (to risk-weighted assets)	372,564		14.04	%	159,182		6.0	%	N/A		N/A
Tier 1 capital (to average assets)	372,564		12.45	%	119,666		4.0	%	N/A		N/A
PCB Bank
Common tier 1 capital (to risk-weighted assets)	$	363,786	13.72	%	$	119,340	4.5	%	$	172,380	6.5	%
Total capital (to risk-weighted assets)	395,606		14.92	%	212,160		8.0	%	265,200		10.0	%
Tier 1 capital (to risk-weighted assets)	363,786		13.72	%	159,120		6.0	%	212,160		8.0	%
Tier 1 capital (to average assets)	363,786		12.16	%	119,636		4.0	%	149,545		5.0	%

The California Financial Code provides that a bank generally may not make a cash distribution to its shareholders in excess of the lesser of the bank’s undivided profits or the bank’s net income for its last three fiscal years less the amount of any distribution made to the bank’s shareholders during the same period. This law limits the distributions the Bank is permitted to make to the Company. As a California corporation, the Company is subject to the limitations of the California Corporations Code, which allows a corporation to distribute cash or property to shareholders, including a dividend or repurchase or redemption of shares, if the corporation meets either a retained earnings test or a balance sheet test. Under the retained earnings test, the Company may make a distribution from retained earnings to the extent that its retained earnings exceed the sum of (a) the amount of the distribution plus (b) the amount, if any, of dividends in arrears on shares with preferential dividend rights. Under the balance sheet test, the Company may also make a distribution if, immediately after the distribution, the value of its assets equals or exceeds the sum of (a) its total liabilities plus (b) the liquidation preference of any shares which have a preference upon dissolution over the rights of shareholders receiving the distribution. Indebtedness is not considered a liability if the terms of such indebtedness provide that payment of principal and interest thereon are to be made only if, and to the extent that, a distribution to shareholders could be made under the balance sheet test.

The Federal Reserve, the Federal Deposit Insurance Corporation (the “FDIC”) and the California Department of Financial Protection and Innovation periodically examine the Company, the Bank and their businesses, including for compliance with laws and regulations. If, as a result of an examination, a banking agency were to determine that the Company’s or the Bank’s financial condition, capital resources, asset quality, earnings prospects, management, liquidity or other aspects of any of their operations had become unsatisfactory, or that the Company or the Bank was in violation of any law or regulation, they may take a number of different remedial actions as they deem appropriate. These actions include the power to enjoin “unsafe or unsound” practices, to require affirmative action to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in the Company’s or the Bank’s capital, to restrict growth, to assess civil money penalties, to fine or remove officers and directors and, if it is concluded that such conditions cannot be corrected or there is an imminent risk of loss to depositors, to terminate the Bank’s deposit insurance and place the Bank into receivership or conservatorship.

Note 15 - Revenue Recognition

The following table presents revenue from contracts with customers within the scope of ASC 606, Revenue from Contracts with Customers, for the periods indicated:


	Three Months Ended March 31,
($ in thousands)	2025		2024
Noninterest income in-scope of Topic 606
Service charges and fees on deposits:
Monthly service fees	$	29	$	31
Account analysis fees	218		234
Non-sufficient funds charges	100		89
Other deposit related fees	25		24
Total service charges and fees on deposits	372		378
Debit card fees	86		81
Gain on sale of other real estate owned	—		13
Wire transfer fees	153		141
Other service charges	55		58
Total	$	666	$	671

Note 16 - Segment Information

The Company operates as a single operating segment, the banking segment or the Bank, providing financial services within the U.S. The Bank provides a full range of deposit products, and commercial and residential loans, primarily to individuals, small businesses and commercial clients. All operations are domestic.

The Chief Operating Decision Maker (“CODM”), the Chief Executive Officer, evaluates the performance and allocates resources to the Bank as a whole. The CODM relies on the Executive Management Team, which includes the Chief Financial Officer, Chief Risk Officer, Chief Banking Officer, Chief Credit Officer and others, to provide detailed financial and operational reports. These reports help the CODM assess the performance of the Bank and determine the appropriate allocation of resources. Although the Bank management team provides valuable insights into various functional areas, all significant decisions related to performance evaluation and resource allocation are ultimately made by the CODM in the context of the Bank as a single operating segment.

The CODM evaluates the performance of the Bank based on both financial and non-financial measures. The CODM reviews revenue to evaluate product pricing and net income, including significant expenses, to assess performance and profitability. In conjunction with these measures, the CODM utilizes profitability ratios, EPS, net interest margin, loan and deposit growth, credit quality, capital adequacy, and liquidity as these measures provide additional insight of the Bank's business activities. The CODM also considers non-financial factors such as the Bank’s reputation, regulatory compliance and human resources.

The following table presents financial measures the CODM reviews to allocate recourses to the Bank as of the dates or for the periods indicated:


	As of or For the Three Months Ended March 31,
($ in thousands)	2025			2024
Revenue
Interest income	$	46,892		$	43,555
Interest expense	22,609			22,556
Net interest income	24,283			20,999
Gain on sale of loans	887			1,078
Other income	1,693			1,867
Total revenue, net of interest expense	26,863			23,944
Expenses
Provision for credit losses	1,598			1,090
Salaries and employee benefits	9,075			9,218
Premises expense	1,725			1,807
Depreciation expense	564			551
Other expense	3,110			4,776
Total expense	16,072			17,442
Income before income taxes	10,791			6,502
Income taxes	3,056			1,817
Net income	$	7,735		$	4,685

Earnings per share, diluted	$	0.53		$	0.33
Return on average assets	1.00		%	0.67		%
Return on average shareholders' equity	7.90		%	5.39		%
Net interest margin	3.28		%	3.10		%
Loans held-for-investment growth percentage	3.7		%	3.2		%
Total deposits growth percentage	3.8		%	2.2		%
Tier 1 leverage ratio (consolidated)	13.16		%	12.73		%
ACL on loans to loans held-for-investment	1.17		%	1.18		%

Note 17 - Subsequent Events

Dividend Declared on Common Stock

On April 23, 2025, the Company’s Board of Directors declared a quarterly cash dividend of $0.20 per common share. The dividend will be paid on or about May 9, 2025, to shareholders of record as of the close of business on May 16, 2025.

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, 2025. This analysis should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 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, 2024 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, 2025, the quantitative estimate of the ACL would increase by approximately $19.9 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.

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.

Option Derivative

On January 16, 2025, the Company entered into the Option Agreement with the U.S. Treasury, which grants the Company the conditional option to repurchase the Series C Preferred Stock. The Company evaluated this purchase option in accordance with ASC 815, Derivatives and Hedging, and determined that this purchase option was a derivative. As no consideration is paid to the U.S. Treasury, whom is the existing shareholder, the fair value of option is considered capital contribution and recorded in Common Stock on the Consolidated Balance Sheet (Unaudited) in accordance with ASC 505, Equity. Subsequent changes in fair value will be recognized in earnings. The fair value change from January 16, 2025 to March 31, 2025 was deemed immaterial.

The fair value of the option derivative is based on the probability-weighted scenario discounted cash flow method. The model uses inputs such as the hypothetical purchase price of preferred stock calculated using the formula set forth in the Option Agreement, expected terms when the Company expects to be able to exercise, dividend rates that determine the purchase price at the time of exercise, discount rate, and probability of exercise.

For additional information, See Notes 2 and 9 to the Consolidated Financial Statements (Unaudited) included in Item 1 of the Quarterly Report on Form 10-Q for additional information regarding the valuation methodology and this purchase option.

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)	2025			2024
Average total shareholders' equity	$	397,009		$	349,644
Less: average preferred stock	69,141			69,141
Average tangible common equity	$	327,868		$	280,503
Net income	$	7,735		$	4,685
Annualized return on average shareholders’ equity	7.90		%	5.39		%
Net income available to common shareholders	$	7,695		$	4,685
Annualized return on average tangible common equity	9.52		%	6.72		%


($ in thousands, except per share data)	March 31, 2025			December 31, 2024			March 31, 2024
Total shareholders' equity	$	406,642		$	363,814		$	350,005
Less: preferred stock	69,141			69,141			69,141
Tangible common equity	$	337,501		$	294,673		$	280,864
Outstanding common shares	14,387,176			14,380,651			14,263,791
Book value per common share	$	28.26		$	25.30		$	24.54
Tangible common equity per common share	$	23.46		$	20.49		$	19.69
Total assets	$	3,219,536		$	3,063,971		$	2,854,292
Total shareholders' equity to total assets	12.63		%	11.87		%	12.26		%
Tangible common equity to total assets	10.48		%	9.62		%	9.84		%

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)	2025			2024
Selected balance sheet data:
Cash and cash equivalents	$	214,348		$	239,791
Securities available-for-sale	148,190			138,170
Loans held-for-sale	12,101			3,256
Loans held-for-investment	2,727,610			2,397,964
ACL on loans	(31,942)			(28,332)
Total assets	3,219,536			2,854,292
Total deposits	2,714,399			2,402,840
Shareholders’ equity	406,642			350,005
Selected income statement data:
Interest income	$	46,892		$	43,555
Interest expense	22,609			22,556
Net interest income	24,283			20,999
Provision for credit losses	1,598			1,090
Noninterest income	2,580			2,945
Noninterest expense	14,474			16,352
Income before income taxes	10,791			6,502
Income tax expense	3,056			1,817
Net income	7,735			4,685
Preferred stock dividends	40			—
Net income available to common shareholders	7,695			4,685
Per share data:
Earnings per common share, basic	$	0.53		$	0.33
Earnings per common share, diluted	0.53			0.33
Book value per common share (1)	28.26			24.54
Tangible common equity per common share (9)	23.46			19.69
Cash dividends declared per common share	0.20			0.18
Outstanding share data:
Number of common shares outstanding	14,387,176			14,263,791
Weighted-average common shares outstanding, basic	14,272,267			14,235,419
Weighted-average common shares outstanding, diluted	14,403,769			14,330,204
Selected performance ratios:
Return on average assets (2)	1.00		%	0.67		%
Return on average shareholders’ equity (2)	7.90		%	5.39		%
Dividend payout ratio (3)	37.74		%	54.55		%
Efficiency ratio (4)	53.88		%	68.29		%
Yield on average interest-earning assets (2)	6.33		%	6.42		%
Cost of average interest-bearing liabilities (2)	4.28		%	4.85		%
Net interest spread (2)	2.05		%	1.57		%
Net interest margin (2), (5)	3.28		%	3.10		%
Total loans to total deposits ratio (6)	100.93		%	99.93		%


	As of or For the Three Months Ended March 31,
($ in thousands, except per share data)	2025			2024















Asset quality:
Loans 30 to 89 days past due and still accruing	$	5,337		$	4,515

Nonperforming loans (7)	6,248			4,940
Nonperforming assets (8)	6,248			4,940
Net charge-offs	277			123
Loans 30 to 89 days past due and still accruing to loans held-for-investment	0.20		%	0.19		%


Nonperforming loans to loans held-for-investment	0.23		%	0.21		%
Nonperforming loans to ACL on loans	19.56		%	17.44		%
Nonperforming assets to total assets	0.19		%	0.17		%
ACL on loans to loans held-for-investment	1.17		%	1.18		%


ACL on loans to nonperforming loans	511.24		%	573.52		%
Net charge-offs (recoveries) to average loans held-for-investment (2)	0.04		%	0.02		%
Capital ratios:
Shareholders’ equity to total assets	12.63		%	12.26		%
Tangible common equity to total assets (9)	10.48		%	9.84		%
Average shareholders’ equity to average total assets	12.70		%	12.44		%
PCB Bancorp
Common tier 1 capital (to risk-weighted assets)	12.52		%	11.88		%
Total capital (to risk-weighted assets)	16.25		%	15.93		%
Tier 1 capital (to risk-weighted assets)	15.04		%	14.71		%
Tier 1 capital (to average assets)	13.16		%	12.73		%
PCB Bank
Common tier 1 capital (to risk-weighted assets)	13.42		%	14.37		%
Total capital (to risk-weighted assets)	14.63		%	15.59		%
Tier 1 capital (to risk-weighted assets)	13.42		%	14.37		%
Tier 1 capital (to average assets)	11.82		%	12.44		%

(1) Shareholders’ equity divided by common shares outstanding.

(2) Annualized.

(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) Nonperforming loans include nonaccrual loans and loans past due 90 days or more and still accruing.

(8) Nonperforming assets include nonperforming loans and other real estate owned.

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

Executive Summary

Q1 2025 Financial Highlights

•The Company recorded an option derivative of $35.8 million.

•Net income available for common shareholders was $7.7 million for the three months ended March 31, 2025, an increase of $3.0 million, or 64.2%, from $4.7 million for the three months ended March 31, 2024;

▪Recorded a provision for credit losses of $1.6 million for the three months ended March 31, 2025 compared with $1.1 million for the three months ended March 31, 2024.

▪ACL on loans to loans held-for-investment ratio was 1.17% at March 31, 2025 compared with 1.16% at December 31, 2024.

•Net interest income was $24.3 million for the three months ended March 31, 2025 compared with $21.0 million for the three months ended March 31, 2024. Net interest margin was 3.28% for the three months ended March 31, 2025 compared with 3.10% for the three months ended March 31, 2024.

•Gain on sale of loans was $887 thousand for the three months ended March 31, 2025 compared with $1.1 million for the three months ended March 31, 2024.

•Total assets were $3.22 billion at March 31, 2025, an increase of $155.6 million, or 5.1%, from $3.06 billion at December 31, 2024;

•Loans held-for-investment were $2.73 billion at March 31, 2025, an increase of $98.2 million, or 3.7%, from $2.63 billion at December 31, 2024; and

•Total deposits were $2.71 billion at March 31, 2025, an increase of $98.6 million, or 3.8%, from $2.62 billion at December 31, 2024.

Results 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.

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


	Three Months Ended March 31,
	2025						2024
($ in thousands)	Average Balance		Interest		Yield/ Cost (6)		Average Balance		Interest		Yield/ Cost (6)
Interest-earning assets:
Total loans (1)	$	2,649,037	$	43,026	6.59	%	$	2,370,027	$	39,251	6.66	%
Mortgage backed securities	112,825		1,075		3.86	%	101,852		839		3.31	%
Collateralized mortgage obligation	21,028		210		4.05	%	23,763		254		4.30	%
SBA loan pool securities	5,927		54		3.69	%	7,317		78		4.29	%
Municipal bonds - tax exempt (2)	2,424		22		3.68	%	3,300		28		3.41	%
Corporate bonds	4,336		47		4.40	%	4,227		47		4.47	%
Interest-bearing deposits in other financial institutions	195,333		2,148		4.46	%	204,286		2,776		5.47	%
FHLB and other bank stock	14,042		310		8.95	%	12,716		282		8.92	%
Total interest-earning assets	3,004,952		46,892		6.33	%	2,727,488		43,555		6.42	%
Noninterest-earning assets:
Cash and due from banks	24,656						21,365
Allowance for credit losses on loans	(30,676)						(27,577)
Other assets	127,875						88,532
Total noninterest earning assets	121,855						82,320
Total assets	$	3,126,807					$	2,809,808
Interest-bearing liabilities:
Deposits:
NOW and money market accounts	$	483,927	4,297		3.60	%	$	453,801	4,665		4.13	%
Savings	5,612		3		0.22	%	6,196		4		0.26	%
Time deposits	1,650,662		18,264		4.49	%	1,367,212		17,298		5.09	%
Borrowings	3,933		45		4.64	%	42,187		589		5.62	%
Total interest-bearing liabilities	2,144,134		22,609		4.28	%	1,869,396		22,556		4.85	%
Noninterest-bearing liabilities:
Demand deposits	516,630						542,811
Other liabilities	69,034						47,957
Total noninterest-bearing liabilities	585,664						590,768
Total liabilities	2,729,798						2,460,164
Shareholders’ equity	397,009						349,644
Total liabilities and shareholders’ equity	$	3,126,807					$	2,809,808
Net interest income			$	24,283					$	20,999
Net interest spread (3)					2.05	%					1.57	%
Net interest margin (4)					3.28	%					3.10	%
Cost of deposits					3.44	%					3.73	%
Cost of funds (5)					3.45	%					3.76	%

(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 of $266 thousand and $334 thousand, respectively, and net accretion of discount on loans of $872 thousand and $573 thousand, respectively, are included in the interest income for the three months ended March 31, 2025 and 2024.

(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 annualized interest expense on total interest-bearing liabilities by the sum of average total interest-bearing liabilities and noninterest-bearing demand deposits.

(6) Annualized.

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.


	Three Months Ended March 31,
	2025 vs. 2024
	Increase (Decrease) Due to				Net Increase (Decrease)
($ in thousands)	Volume		Rate
Interest earned on:
Total loans	$	4,220	$	(445)	$	3,775
Investment securities	50		112		162
Other interest-earning assets	(112)		(488)		(600)
Total interest income	4,158		(821)		3,337
Interest incurred on:
Savings, NOW, and money market deposits	331		(700)		(369)
Time deposits	3,096		(2,130)		966
Borrowings	(535)		(9)		(544)
Total interest expense	2,892		(2,839)		53
Change in net interest income	$	1,266	$	2,018	$	3,284

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

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


	Three Months Ended March 31,				Amount Change		Percentage Change
($ in thousands)	2025		2024
Interest and dividend income:
Loans, including fees	$	43,026	$	39,251	$	3,775	9.6	%
Investment securities	1,408		1,246		162		13.0	%
Other interest-earning assets	2,458		3,058		(600)		(19.6)	%
Total interest income	46,892		43,555		3,337		7.7	%
Interest expense:
Deposits	22,564		21,967		597		2.7	%
Borrowings	45		589		(544)		NM
Total interest expense	22,609		22,556		53		0.2	%
Net interest income	$	24,283	$	20,999	$	3,284	15.6	%

Net interest income increased primarily due to a 10.2% increase in average balance of interest-earning assets and a 57 basis point decrease in average cost, partially offset by a 14.7% increase in average balance of interest-bearing liabilities and a 9 basis point decrease in average yield.

Interest and fees on loans increased primarily due to an 11.8% increase in average balance, partially offset by a 7 basis point decrease in average yield. The decrease in average yield was primarily due to decreases in market rates and net amortization of deferred loan fees, partially offset by an increase in net accretion of discount on loans.

Interest on investment securities increased primarily due to a 4.3% increase in average balance and a 33 basis point increase in average yield. The increase in average yield was primarily due to a higher yield on newly purchased investment securities. For the three months ended March 31, 2025 and 2024, the average yield on total investment securities was 3.90% and 3.57%, respectively.

Interest income on other interest-earning assets decreased primarily due to a 3.5% decrease in average balance and a 91 basis point decrease in average yield. The decrease in average yield was primarily due to a decrease in interest rate on cash held at the Federal Reserve Bank. For the three months ended March 31, 2025 and 2024, the average yield on total other interest-earning assets was 4.76% and 5.67%, respectively.

Interest expense on deposits increased primarily due to a 17.1% increase in average balance of interest-bearing deposits, partially offset by a 56 basis point decrease in average cost of interest-bearing deposits. The decrease in average cost was primarily due to a decrease in market rates. For the three months ended March 31, 2025 and 2024, average cost on total interest-bearing deposits was 4.28% and 4.84%, respectively, and average cost on total deposits were 3.44% and 3.73%, respectively.

Interest expense on other borrowings decreased primarily due to a 90.7% decrease in average balance and 98 basis point decrease in average cost.

Provision for Credit Losses

The following tables present a composition of provision for credit losses for the periods indicated:


	Three Months Ended March 31,				Amount Change		Percentage Change
($ in thousands)	2025		2024
Provision for credit losses on loans	$	1,591	$	922	$	669	72.6	%
Provision for credit losses on off-balance sheet credit exposure	7		168		(161)		(95.8)	%
Total provision for credit losses	$	1,598	$	1,090	$	508	46.6	%

The provision for credit losses for the three months ended March 31, 2025 was primarily due to increases in loans held-for-investment, net charge-offs, and quantitatively measured loss reserves, partially offset by the decreases in maximum loss rate used for qualitative factor reserves and reserves on individually evaluated loans. See further discussion in “Allowance for Credit Losses.”

Noninterest Income

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

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


	Three Months Ended March 31,				Amount Change		Percentage Change
($ in thousands)	2025		2024
Service charges and fees on deposits	$	372	$	378	$	(6)	(1.6)	%
Loan servicing income	725		919		(194)		(21.1)	%
Bank-owned life insurance income	247		228		19		8.3	%
Gain on sale of loans	887		1,078		(191)		(17.7)	%

Other income	349		342		7		2.0	%
Total noninterest income	$	2,580	$	2,945	$	(365)	(12.4)	%

Loan servicing income decreased primarily due to a decrease in servicing fee income and an increase in servicing asset amortization. Servicing asset amortization was $549 thousand and $374 thousand, respectively, for the three months ended March 31, 2025 and 2024.

Gain on sale of loans decreased primarily due to decreases in level of premium on SBA loans in the secondary market and sales volume. The Company sold SBA loans of $16.6 million with a gain of $887 thousand during the three months ended March 31, 2025. During the three months ended March 31, 2024, the Company sold SBA loans of $19.4 million with a gain of $1.1 million.

Other income primarily included wire transfer fees of $153 thousand and $141 thousand, respectively, and debit card interchange fees of $86 thousand and $81 thousand, respectively, for the three months ended March 31, 2025 and 2024.

Noninterest Expense

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

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


	Three Months Ended March 31,				Amount Change		Percentage Change
($ in thousands)	2025		2024
Salaries and employee benefits	$	9,075	$	9,218	$	(143)	(1.6)	%
Occupancy and equipment	2,289		2,358		(69)		(2.9)	%
Professional fees	628		1,084		(456)		(42.1)	%
Marketing and business promotion	243		319		(76)		(23.8)	%
Data processing	333		402		(69)		(17.2)	%
Director fees and expenses	226		232		(6)		(2.6)	%
Regulatory assessments	344		298		46		15.4	%
Other expenses	1,336		2,441		(1,105)		(45.3)	%
Total noninterest expense	$	14,474	$	16,352	$	(1,878)	(11.5)	%

Salaries and employee benefits decreased primarily due to a decrease in salaries and an increase in direct loan origination cost, which offsets and defers the recognition of salaries and benefits expense, partially offset by an increase in bonus accrual. The number of full-time equivalent employees was 257 at March 31, 2025 compared to 272 at March 31, 2024.

Professional fees decreased primarily due to professional fees incurred during the year-ago quarter related to a core system conversion that was completed in April 2024.

Marketing and business promotion expense decreased primarily due to a decrease in advertisements.

Data processing decreased primarily due to a decreased overall service charges after the core system conversion.

Regulatory assessments increased primarily due to an increase in the balance sheet.

Other expenses included $92 thousand and $94 thousand in loan related expenses, $478 thousand and $515 thousand in office expense, and $183 thousand and $204 thousand in armed guard expense for the three months ended March 31, 2025 and 2024, respectively. During the three months ended March 31, 2025, the Company recognized an impairment of operating lease assets of $146 thousand for a sublease contract and contingent liabilities for legal settlements of $183 thousand. During the three months ended March 31, 2024, the Company recognized 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 guaranty.

Income Tax Expense

Income tax expense was $3.1 million and $1.8 million, respectively, and the effective tax rate was 28.3% and 27.9%, respectively, for the three months ended March 31, 2025 and 2024.

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:


	March 31, 2025						December 31, 2024
($ in thousands)	Amortized Cost		Fair Value		Unrealized Loss		Amortized Cost		Fair Value		Unrealized Loss
Securities available-for-sale:
U.S. government agency and U.S. government sponsored enterprise securities:
Residential mortgage-backed securities	$	122,801	$	114,222	$	(8,579)	$	123,209	$	112,439	$	(10,770)
Residential collateralized mortgage obligations	22,084		21,075		(1,009)		22,753		21,237		(1,516)
SBA loan pool securities	6,024		5,785		(239)		6,328		6,008		(320)
Municipal bonds	2,455		2,399		(56)		2,452		2,420		(32)
Corporate bonds	5,000		4,709		(291)		5,000		4,245		(755)
Total securities available-for-sale	$	158,364	$	148,190	$	(10,174)	$	159,742	$	146,349	$	(13,393)

Total investment securities were $148.2 million at March 31, 2025, an increase of $1.8 million, or 1.3%, from $146.3 million at December 31, 2024. The increase was primarily due to purchases of $3.0 million and an increase in fair value of securities available-for-sale of $3.2 million, partially offset by principal paydowns of $4.3 million and net premium amortization of $31 thousand.

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

The following table presents the contractual maturity schedule for securities, at amortized cost, and their weighted-average yields as of the date indicated:


	March 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:
Residential mortgage-backed securities	$	18	1.49	%	$	1,168	1.76	%	$	6,956	2.08	%	$	114,659	3.60	%	$	122,801	3.50	%
Residential collateralized mortgage obligations	—		—	%	5,080		4.78	%	1,523		4.86	%	15,481		3.30	%	22,084		3.75	%
SBA loan pool securities	152		2.61	%	1,263		4.34	%	1,837		2.54	%	2,772		3.56	%	6,024		3.39	%
Municipal bonds	—		—	%	83		2.98	%	1,099		3.50	%	1,273		3.58	%	2,455		3.52	%
Corporate bonds	—		—	%	—		—	%	5,000		3.75	%	—		—	%	5,000		3.75	%
Total securities available-for-sale	$	170	2.49	%	$	7,594	4.22	%	$	16,415	2.99	%	$	134,185	3.56	%	$	158,364	3.54	%

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.

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 allowance for credit losses on loans.

Loans held-for-sale were $12.1 million at March 31, 2025, an increase of $5.8 million, or 92.3%, from $6.3 million at December 31, 2024. The increase was primarily due to new funding of $22.5 million, partially offset by sales of $16.6 million and pay-offs and pay-downs of $45 thousand.

Loans Held-For-Investment and Allowance for Credit Losses

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


	March 31, 2025					December 31, 2024
($ in thousands)	Amount			Percentage to Total		Amount			Percentage to Total
Commercial real estate:
Commercial property	$	965,302		35.4	%	$	940,931		35.9	%
Business property	618,771			22.7	%	595,547			22.6	%
Multifamily	207,096			7.6	%	194,220			7.4	%
Construction	23,978			0.9	%	21,854			0.8	%
Total commercial real estate	1,815,147			66.6	%	1,752,552			66.7	%
Commercial and industrial	494,697			18.1	%	472,763			18.0	%
Consumer:
Residential mortgage	406,774			14.9	%	392,456			14.9	%
Other consumer	10,992			0.4	%	11,616			0.4	%
Total consumer	417,766			15.3	%	404,072			15.3	%
Loans held-for-investment	2,727,610			100.0	%	2,629,387			100.0	%
Allowance for credit losses on loans	(31,942)					(30,628)
Net loans held-for-investment	$	2,695,668				$	2,598,759

ACL on loans to loans held-for-investment	1.17		%			1.16		%

Loans held-for-investment were $2.73 billion at March 31, 2025, an increase of $98.2 million, or 3.7%, from $2.63 billion at December 31, 2024. The increase was primarily due to new funding of term loans of $154.0 million and net increase of lines of credit of $29.3 million, partially offset by pay-downs and pay-offs of term loans of $84.8 million and charge-offs of $353 thousand.

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


	Three Months Ended March 31,
($ in thousands)	2025		2024
ACL on loans
Balance at beginning of period	$	30,628	$	27,533

Charge-offs	(353)		(185)
Recoveries	76		62
Provision for credit losses on loans	1,591		922
Balance at end of period	$	31,942	$	28,332
ACL on off-balance sheet credit exposures
Balance at beginning of period	$	1,190	$	1,277

Provision for credit losses on off-balance sheet credit exposure	7		168
Balance at end of period	$	1,197	$	1,445

The increase in ACL for the three months ended March 31, 2025 was primarily due to increases in loans held-for-investment, net charge-off, and quantitatively measured loss reserves, partially offset by the decreases in maximum loss rate used for qualitative factor reserves and reserves on individually evaluated loans.

The increase in the quantitatively measured loss reserve requirement was primarily due to the worsened year-over-year change in real GDP forecast and the increased unemployment rate forecast. The Company utilizes these forecasts published by the Federal Open Market Committee (“FOMC”). The 2025 year-end year-over-year change in forecasted real GDP decreased to 1.7% in the March 2025 FOMC meeting from 2.1% in December 2024. The forecasted year-end national unemployment rate increased to 4.4% in the March 2025 FOMC meeting from 4.3% in December 2024. Overall changes in macroeconomic projections resulted the increases of PD and LGD rates across majority of the loan segments leading to higher overall expected loss measurements.

The decrease in the qualitative adjustment factors was primarily due to credit quality improvements in commercial property loans and the overall decrease in maximums rates used as the high watermark.

Loans individually evaluated for impairment totaled $55.5 million and $52.0 million, respectively, and related reserve totaled $5 thousand and $59 thousand, respectively, at March 31, 2025 and December 31, 2024.

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

The following tables present net charge-offs (recoveries) as a percentage to the average loan held-for-investment balances in each of the loan segments for the periods indicated:


	Three Months Ended March 31,
	2025						2024
($ in thousands)	Average Balance		Net Charge-Offs (Recoveries)		Percentage		Average Balance		Net Charge-Offs (Recoveries)		Percentage
Commercial real estate:
Commercial property	$	944,321	$	—	—	%	$	860,145	$	—	—	%
Business property	613,022		(1)		(0.01)	%	573,133		(2)		(0.01)	%
Multifamily	198,124		—		—	%	134,333		—		—	%
Construction	22,574		—		—	%	26,790		—		—	%
Total commercial real estate	1,778,041		(1)		(0.01)	%	1,594,401		(2)		(0.01)	%
Commercial and industrial	447,645		280		0.25	%	354,966		146		0.16	%
Consumer:
Residential mortgage	400,784		—		—	%	389,280		—		—	%
Other consumer	10,942		(2)		(0.07)	%	21,052		(21)		(0.40)	%
Total consumer	411,726		(2)		—	%	410,332		(21)		(0.02)	%
Total	$	2,637,412	$	277	0.04	%	$	2,359,699	$	123	0.02	%

Nonperforming Loans and Nonperforming Assets

The following table presents a summary of total non-performing assets as of the dates indicated:


($ in thousands)	March 31, 2025			December 31, 2024			Amount Change		Percentage Change
Nonaccrual loans held-for-investment
Commercial real estate:
Commercial property	$	1,538		$	1,851		$	(313)	(16.9)	%
Business property	1,485			2,336			(851)		(36.4)	%


Total commercial real estate	3,023			4,187			(1,164)		(27.8)	%
Commercial and industrial	66			79			(13)		(16.5)	%
Consumer:
Residential mortgage	3,153			403			2,750		682.4	%
Other consumer	6			24			(18)		(75.0)	%
Total consumer	3,159			427			2,732		639.8	%
Total nonaccrual loans	6,248			4,693			1,555		33.1	%
Loans past due 90 days or more still on accrual	—			—			—		—	%
Nonperforming loans	6,248			4,693			1,555		33.1	%
Nonperforming loans held-for-sale	—			—			—		—	%
Total nonperforming loans	6,248			4,693			1,555		33.1	%
Other real estate owned	—			—			—		—	%
Nonperforming assets	$	6,248		$	4,693		$	1,555	33.1	%

Nonaccrual loans to loans held-for-investment	0.23		%	0.18		%
Nonperforming assets to total assets	0.19		%	0.15		%
ACL on loans to nonaccrual loans	511.24		%	652.63		%

The increase in nonaccrual loans held-for-investment was primarily due to loans placed on nonaccrual status of $3.0 million, partially offset by paydowns and payoffs of $1.4 million and charge-offs of $1 thousand during the three months ended March 31, 2025.

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. In all cases, loans are placed on nonaccrual if collection of principal or interest is considered doubtful. 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 $144 thousand would have been recorded during the three months ended March 31, 2025 had these loans been paid in accordance with their original terms throughout the periods indicated.

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:


($ in thousands)	March 31, 2025		December 31, 2024		Amount Change		Percentage Change
Noninterest-bearing demand deposits	$	564,407	$	547,853	$	16,554	3.0	%
Interest-bearing deposits:
Savings	5,185		5,765		(580)		(10.1)	%
NOW	15,219		13,761		1,458		10.6	%
Retail money market accounts	492,334		447,360		44,974		10.1	%
Brokered money market accounts	1		1		—		—	%
Retail time deposits of:
$250,000 or less	532,512		493,644		38,868		7.9	%
More than $250,000	652,458		605,124		47,334		7.8	%

Brokered time deposits	392,283		442,283		(50,000)		(11.3)	%
Time deposits from California State Treasurer	60,000		60,000		—		—	%
Total interest-bearing deposits	2,149,992		2,067,938		82,054		4.0	%
Total deposits	$	2,714,399	$	2,615,791	$	98,608	3.8	%

Estimated total deposits not covered by deposit insurance	$	1,125,068	$	1,036,451	88,617		8.6	%
Estimated time deposits not covered by deposit insurance	$	494,907	$	459,835	35,072		7.6	%

The increase in retail time deposits was primarily due to new accounts of $162.2 million and renewals of the matured accounts of $339.0 million, partially offset by matured and closed accounts of $430.9 million.

As of March 31, 2025 and December 31, 2024, total deposits were comprised of 20.8% and 20.9%, respectively, of noninterest-bearing demand accounts, 18.9% and 17.9%, respectively, of savings, NOW and money market accounts, and 60.3% and 61.2%, respectively, of time deposits.

Deposits from certain officers, directors and their related interests with which they are associated held by the Company were $3.9 million and $6.0 million, respectively, at March 31, 2025 and December 31, 2024.

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
March 31, 2025
Time deposits of $250,000 or less	$	290,719	$	158,410	$	474,339	$	1,327	$	924,795
Time deposits of more than $250,000	175,154		187,464		346,895		2,945		712,458
Total	$	465,873	$	345,874	$	821,234	$	4,272	$	1,637,253
Not covered by deposit insurance	$	127,655	$	141,848	$	223,085	$	2,319	$	494,907
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

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 $406.6 million at March 31, 2025, an increase of $42.8 million, or 11.8%, from $363.8 million at December 31, 2024. The increase was primarily due to net income of $7.7 million, a recognition of option derivative of $35.8 million as a capital contribution, a decrease in accumulated other comprehensive loss of $2.3 million and proceeds from stock option exercises of $684 thousand, partially offset by dividends declared on common stock of $2.9 million, repurchases of common stock of $953 thousand and preferred stock dividends of $40 thousand.

Regulatory Capital Requirements

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


	PCB Bancorp		PCB Bank		Minimum Regulatory Requirements		Well Capitalized Requirements
March 31, 2025
Common tier 1 capital (to risk-weighted assets)	12.52	%	13.42	%	4.5	%	6.5	%
Total capital (to risk-weighted assets)	16.25	%	14.63	%	8.0	%	10.0	%
Tier 1 capital (to risk-weighted assets)	15.04	%	13.42	%	6.0	%	8.0	%
Tier 1 capital (to average assets)	13.16	%	11.82	%	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	%

To avoid restrictions on dividends, share repurchases and discretionary compensation payments to executives, the federal banking agencies require a banking organization to maintain a capital conservation buffer of 2.50% in common tier 1 capital, in addition to the minimum capital ratios adequacy requirements. The capital conservation buffer increases the minimum common equity Tier 1 capital ratio to 7%, the minimum Tier 1 capital (to risk-weighted assets) ratio to 8.5% and the minimum total capital ratio (to risk-weighted assets) to 10.5% for banking organizations seeking to avoid the limitations on dividends, share repurchases and discretionary compensation payments to executives. The Company’s and the Bank’s capital conservation buffers were 8.02% and 6.63%, respectively, as of March 31, 2025, and 6.94% and 6.92%, respectively, as of December 31, 2024.

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 (“Series C Preferred Stock”) 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 purposes of the bank regulatory capital requirements.

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


	Dividend Rate at the Reset Date Immediately Preceding the Purchase Date
($ in thousands)	0.50%		1.25%		2.00%
Purchase price	$	4,869	$	12,173	$	19,476
Discount	64,272		56,968		49,665

The Company began paying quarterly dividends on the Series C Preferred Stock in the three months ended June 30, 2024. Dividends on the Series C Preferred Stock totaled $40 thousand for the three months ended March 31, 2025.

Stock Repurchases

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 cash flow and 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 non-core 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:


($ in thousands)	March 31, 2025			December 31, 2024			Amount Change		Percentage Change
Cash and cash equivalents	$	214,348		$	198,792		$	15,556	7.8	%
Cash and cash equivalents to total assets	6.7		%	6.5		%

Available borrowing capacity:
FHLB advances	$	735,732		$	722,439		13,293		1.8	%
Federal Reserve Discount Window	679,009			586,525			92,484		15.8	%
Overnight federal funds lines	65,000			50,000			15,000		30.0	%
Total	$	1,479,741		$	1,358,964		$	120,777	8.9	%
Total available borrowing capacity to total assets	46.0		%	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.

Off-Balance Credit Exposures and Contractual Obligations

Off-Balance Sheet Credit Exposures

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.

The Company’s exposure to loan loss in the event of nonperformance on these financial commitments is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments as it does for loans reflected in the consolidated 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:


	March 31, 2025				December 31, 2024
($ in thousands)	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Unused lines of credit	$	12,989	$	357,232	$	12,923	$	370,313
Unfunded loan commitments	—		14,442		—		17,339
Standby letters of credit	5,009		1,786		5,279		1,516

Total	$	17,998	$	373,460	$	18,202	$	389,168

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
March 31, 2025
Time deposits	$	1,632,981	$	4,080	$	192	$	—	$	1,637,253

FHLB advances	30,000		—		—		—		30,000
Operating leases	3,514		5,901		5,213		9,511		24,139
Total	$	1,666,495	$	9,981	$	5,405	$	9,511	$	1,691,392
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.

Item 3 - Quantitative and Qualitative Disclosures About Market Risk

Market risk represents the risk of loss due to changes in market values of assets and liabilities. Market risk occurs in the normal course of business through exposures to market interest rates, equity prices, and credit spreads.

Overview

Interest rate risk is the risk to earnings and value arising from changes in market interest rates. Interest rate risk arises from timing differences in the repricings and maturities of interest-earning assets and interest-bearing liabilities (repricing risk), changes in the expected maturities of assets and liabilities arising from embedded options, such as borrowers’ ability to prepay residential mortgage loans at any time and depositors’ ability to redeem certificates of deposit before maturity (option risk), changes in the shape of the yield curve where interest rates increase or decrease in a nonparallel fashion (yield curve risk), and changes in spread relationships between different yield curves, such as U.S. Treasuries and Secured Overnight Financing Rate (“SOFR”) (basis risk).

The Company’s Board Asset Liability Committee (“ALCO”) establishes broad policy limits with respect to interest rate risk. Board ALCO establishes specific operating guidelines within the parameters of the Board of Directors’ policies. In general, the Company seeks to minimize the impact of changing interest rates on net interest income and the economic values of assets and liabilities. Board ALCO meets quarterly to monitor the level of interest rate risk sensitivity to ensure compliance with the Board of Directors’ approved risk limits. The Company also has a Management ALCO, which is comprised of the senior management team and the Chief Executive Officer, to proactively monitor interest rate risk.

Interest rate risk management is an active process that encompasses monitoring loan and deposit flows complemented by investment and funding activities. Effective management of interest rate risk begins with understanding the dynamic characteristics of assets and liabilities and determining the appropriate interest rate risk posture given business forecasts, management objectives, market expectations, and policy constraints.

An asset sensitive position refers to a balance sheet position in which an increase in short-term interest rates is expected to generate higher net interest income, as rates earned on interest-earning assets would reprice upward more quickly than rates paid on interest-bearing liabilities, thus expanding net interest margin. Conversely, a liability sensitive position refers to a balance sheet position in which an increase in short-term interest rates is expected to generate lower net interest income, as rates paid on interest-bearing liabilities would reprice upward more quickly than rates earned on interest-earning assets, thus compressing net interest margin.

Measurement

Interest rate risk exposure is measured and monitored through various risk management tools, which include a simulation model that performs interest rate sensitivity analyses under multiple interest rate scenarios. Interest rate risk measurement is calculated and reported to the Board ALCO at least quarterly. The information reported includes period-end results and identifies any policy limits exceeded, along with an assessment of the policy limit breach and the action plan and timeline for resolution, mitigation, or assumption of the risk.

The Company uses two approaches to model interest rate risk: Net Interest Income at Risk (“NII at Risk”), and Economic Value of Equity (“EVE”). Under NII at Risk, net interest income is modeled utilizing various assumptions for assets, liabilities, and derivatives. The Company uses a static balance sheet to perform these analyses. EVE measures the period end market value of assets minus the market value of liabilities and the change in this value as rates change. EVE simulation reflects the effect of interest rate shifts on the value of the Company. In contrast to NII simulation, EVE simulation identifies risks arising from repricing or maturity gaps over the life of the balance sheet. The EVE approach provides a comparatively broader scope than the NII at Risk approach since it captures all anticipated cash flows.

Simulation results are highly dependent on input assumptions. To the extent the actual behavior is different from the assumption used in the models, there could be material changes in results. The assumptions applied in the model are documented, supported, and periodically back-tested to assess the reasonableness and effectiveness. The Company makes appropriate changes to the model as needed and these changes are reviewed by Board and Management ALCOs. The Company also continuously validates the model, methodology and results. Scenario results do not reflect strategies that the management could employ to limit the impact of changing interest rate expectations.

As part of the Company’s continuous evaluation and periodic enhancements to its NII and EVE calculations. The model incorporates deposit repricing assumptions impacting both consumer and wholesale deposits, deposit behavior assumption related to its non-maturity deposits, and prepayment assumptions related to its loan portfolio. The model modifications incorporated observed pricing and customer behavior in both rising and falling interest rate environments. The model is updated annually and was last evaluated during the three months ended September 30, 2024.

The following table presents the projected changes in NII at Risk and EVE that would occur upon an immediate change in interest rates based on independent analysis as of the dates indicated, but without giving effect to any steps that management might take to counteract changes:


	March 31, 2025				December 31, 2024
Simulated Rate Changes	Net Interest Income Sensitivity		Economic Value of Equity Sensitivity		Net Interest Income Sensitivity		Economic Value of Equity Sensitivity

+200	9.2	%	(3.3)	%	9.5	%	(4.1)	%
+100	4.6	%	(1.2)	%	4.7	%	(1.9)	%
-100	(6.5)	%	(1.4)	%	(6.2)	%	(1.1)	%
-200	(13.4)	%	(5.3)	%	(12.8)	%	(4.5)	%

On March 19, 2025, the FOMC maintained the upper range of the Fed Funds Target Rate at 4.50%. Beginning in April, the FOMC will slow the pace of decline in its securities holdings by reducing the monthly redemption cap on Treasury securities from $25 billion to $5 billion. The FOMC will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion. The FOMC remains attentive to the risks to both sides of its dual mandate, and will carefully assess incoming data, the evolving outlook and balance of risks. Their assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments. The FOMC is prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of its goals.

As of March 31, 2025, the Company’s net interest income sensitivity results exhibit an asset sensitive profile. Net interest income is expected to increase when interest rates rise, as the Company has a large proportion of variable rate loans in its loan portfolio, primarily linked to Prime Rate indices, that are sensitive to changes in short-term interest rates. The Company’s deposit portfolio is also sensitive to changes in short-term interest rates, even though a large portion of its deposit mix is composed of non-maturity deposits that are not directly tied to short-term interest rate indices. The modeled results are highly sensitive to reinvestment yield and deposit beta assumptions. Actual results in net interest income during a period of rising interest rates may vary from the Company’s net interest income sensitivity results, as the actual result reflects earnings asset growth and deposit mix changes based on customer preferences relative to the interest rate environment.

The Company’s EVE sensitivity reflects a slight liability sensitive profile due to the continuing deposit mix shift from non-maturity deposits to time deposits. The model result is highly sensitive to deposit behaviors as well as loan prepayment assumptions. Due to the uncertainty of the current economic forecast, and timing and direction of future interest rate movements, actual result may vary from the Company’s EVE sensitivity results.

Item 4 - Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as of March 31, 2025 was carried out under the supervision and with the participation of the Company’s Chief Executive Officer, Chief Financial Officer and other members of the Company’s senior management. Based on the evaluation, management identified a material weakness related to the Company’s internal control over financial reporting and, as a result, concluded that the Company’s disclosure controls and procedures were ineffective as of March 31, 2025. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements would not be prevented or detected on a timely basis. Management identified the following material weakness in the Company’s internal control over financial reporting:

•The Company has not designed and maintained all applicable internal controls to ensure that unusual or infrequent derivative contracts are evaluated for proper accounting treatment and disclosure.

Remediation Plans

Subsequent to the period covered by this Quarterly Report on Form 10-Q for the three months ended March 31, 2025, management has been developing and implementing a remediation plan to address the material weakness, which may include, among other things, having its disclosure committee discuss and review all new unusual or infrequent derivative or financial contracts each quarter and providing for third party reviews of accounting matters with respect to such transactions that could have a potential impact on the Company’s financial statements.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) under the Exchange Act) during the three months ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II - Other Information

Item 1 - Legal Proceedings

In the normal course of business, the Company is involved in various legal claims. Management has reviewed all legal claims against the Company with counsel and have taken into consideration the views of such counsel as to the potential outcome of the claims in determining the accrued loss contingency. The Company had accrued loss contingencies for legal claims of $183 thousand at March 31, 2025. It is reasonably possible the Company may incur losses in addition to the amounts currently accrued. However, at this time, the Company is unable to estimate the range of additional losses that are reasonably possible because of a number of factors, including the fact that certain of these litigation matters are still in their early stages and involve claims for which, at this point, the Company believes have little to no merit. Management has considered these and other possible loss contingencies and does not expect the amounts to be material to the consolidated financial statements.

Item 1A - Risk Factors

Management is not aware of any material changes to the risk factors that appeared under “Part I, Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, other than those additional risks described below. You should carefully consider such risks and the other information in this Quarterly Report on Form 10-Q, any of which could materially and adversely affect the Company’s business, financial condition, results of operations and stock price. The risks described in this Quarterly Report on Form 10-Q and in the Annual Report on Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not presently known to management or that management presently believes not to be material may also result in material and adverse effects on the Company’s business, financial condition, and results of operations.

The Company has identified a material weakness in its internal control over financial reporting.

As disclosed in “Part II - Item 4. Controls and Procedures,” of this Quarterly Report on Form 10-Q, management has identified a material weakness in the Company’s internal control over financial reporting. As a result, management concluded that the Company’s internal control over financial reporting and disclosure controls and procedures were not effective as of March 31, 2025. The Company is working to remediate the material weakness. However, there can be no assurance that these remediation efforts will be successful. In addition, these remediation efforts may place a burden on management and may result in additional expenses.

The Company cannot assure that additional significant deficiencies or material weaknesses in its internal control over financial reporting will not be identified in the future. Any failure to maintain or implement required new or improved controls, or any difficulties the Company experiences in their implementation, could result in additional material weaknesses, cause the Company to fail to meet its periodic SEC reporting obligations or result in material misstatements to its financial statements in future periods, any of which could cause investors or customers to lose confidence in the Company’s reported financial information, a decline in the trading price of the Company’s common stock or a delisting of the Company’s common stock from the Nasdaq Stock Market.

The Company may not qualify to repurchase its Series C Preferred Stock on favorable terms.

On May 24, 2022, the Company sold shares of its Series C Preferred Stock to the U.S. Treasury for the purchase price of $69.1 million under the Emergency Capital Investment Program, or “ECIP.” Under the ECIP program, the Treasury invested in depository institutions that are Community Development Financial Institutions or minority depository institutions (“MDIs”) to encourage lending to small businesses, minority-owned businesses and consumers in low-income and underserved communities.

Under terms of an ECIP Securities Purchase Option Agreement by between the Company and Treasury, 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”). To be eligible to exercise the Repurchase Option, the Company must, among other things, meet certain thresholds for “deep impact lending” or “qualified lending” (as defined in the ECIP’s guidelines), comply with the ECIP agreements and rules, continue to qualify as an MDI, and be “well-capitalized” under federal Prompt Corrective Action guidelines. The earliest possible date by which the Company could exercise the repurchase options (assuming it meets all required conditions) is June 30, 2026. There can be no assurance that the Company will ever satisfy the lending and other requirements necessary to exercise the Repurchase Option.

Changes in the fair value of the Company’s option to repurchase its Series C Preferred Stock may impact the Company’s operating results and financial condition. The Company carries the fair value of the Repurchase Option as an asset on its balance sheet. The Company’s valuation of the Repurchase Option may fluctuate, possibly significantly, depending on the likelihood that the Company will qualify to exercise the Repurchase Option and changes in the hypothetical repurchase price. Changes in the fair value are measured quarterly and will be recognized in earnings. Therefore, changes in the fair value of the Repurchase Option may affect the Company’s earning, potentially materially. For additional details, see Note 9 to the Company’s Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

There were no unregistered sales of equity securities during the three months ended March 31, 2025.

The following table presents share repurchase activities during the periods indicated:


($ in thousands, except per share data)	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Number of Shares That May Yet Be Purchased Under the Program
From January 1, 2025 to January 31, 2025	—	$	—	—	577,777
From February 1, 2025 to February 28, 2025	—	$	—	—	577,777
From March 1, 2025 to March 31, 2025	50,676	$	18.80	50,676	527,101
Total	50,676	$	18.80	50,676

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 three months ended March 31, 2025, the Company repurchased and retired 50,676 shares of common stock at a weighted-average price of $18.80 per share.

Item 3 - Defaults Upon Senior Securities

None.

Item 4 - Mine Safety Disclosures

Not applicable.

Item 5 - Other Information

During the three months ended March 31, 2025, no officer or director of the Company adopted or terminated any contract, instruction, or written plan for the purchase or sale of securities of the Company’s common stock that is intended to satisfy the affirmative defense conditions of Securities Exchange Act Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement as defined in 17 CFR § 229.408(c).

Item 6 - Exhibits


Exhibit Number	Description	Form	File No.	Exhibit	Filing Date
3.1	Articles of Incorporation of PCB Bancorp, as amended	10-Q	001-38621	3.1	August 8, 2019
3.2	Bylaws of PCB Bancorp	8-K	001-38621	3.1	May 23, 2024
3.3	Certificate of Determination for Senior Non-Cumulative Perpetual Preferred Stock, Series C	8-K	001-38621	3.1	May 24, 2022
4.1	Specimen common stock certificate of PCB Bancorp	10-Q	001-38621	4.1	August 8, 2019
4.2	Description of Capital Stock	10-Q	001-38621	4.2	August 4, 2022
4.3	Form of Certificate for Senior Non-Cumulative Perpetual Preferred Stock, Series C	8-K	001-38621	4.1	May 24, 2022
10.1	Employment Agreement, dated January 1, 2018, between Pacific City Financial Corporation and Henry Kim	S-1	333-226208	10.1	July 17, 2018
10.1A	First Amendment to Employment Agreement, dated August 26, 2021, among PCB Bancorp, Pacific City Bank and Henry Kim	10-Q	001-38621	10.1A	November 8, 2021
10.1B	Second Amendment to Employee Agreement, dated December 28, 2021, among PCB Bancorp, Pacific City Bank and Henry Kim	10-K	001-38621	10.1B	March 4, 2022
10.1C	Third Amendment to Employee Agreement, dated December 28, 202 3 , among PCB Bancorp, PCB Bank and Henry Kim*
10.2	2023 Equity Based Compensation Plan	S-8	333-272874	4.1	June 23, 2023
10.3	Form of Stock Option Award Agreement under 2023 Equity Based Compensation Plan	8-K	001-38621	10.1	July 27, 2023
10.4	Form of Restricted Stock Award Agreement under 2023 Equity Based Compensation Plan	8-K	001-38621	10.2	July 27, 2023
10.5	2013 Equity Based Compensation Plan, as amended	S-1	333-226208	10.2	July 17, 2018
10.6	Form of Stock Option Award Agreement under 2013 Equity Based Compensation Plan	S-1	333-226208	10.3	July 17, 2018
10.7	Form of Restricted Stock Award Agreement under 2013 Equity Based Compensation Plan	S-1	333-226208	10.4	July 17, 2018
10.8	Letter Agreement, dated May 24, 2022, between PCB Bancorp and the U.S. Department of Treasury, with respect to the issuance of Senior Non-Cumulative Perpetual Preferred Stock, Series C	8-K	001-38621	10.1	May 24, 2022
10.9	ECIP Securities Purchase Option Agreement between PCB Bancorp and the U.S. Department of the Treasury dated January 16, 2025	10-K	001-38621	10.1	March 13, 2025
19	Insider Trading Policy	10-K	001-38621	10.1	March 13, 2025
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
97	PCB Bancorp Compensation Clawback Policy dated March 11, 2024	10-K	001-38621	97	March 12, 2024
101.INS	The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	Inline XBRL Taxonomy Extension Schema Document*
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document*
104	Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101)*

* Filed herewith

** Furnished herewith

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		PCB Bancorp

Date:	June 6, 2025	/s/ Henry Kim
		Henry Kim
		President and Chief Executive Officer (Principal Executive Officer)

Date:	June 6, 2025	/s/ Timothy Chang
		Timothy Chang
		Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)