What changed in this filing

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Item 1. Business

2025-03-13 compared with 2024-03-12 · 35 added, 42 removed, 502 unchanged (13% of the section changed)

3 unchanged sentences

The Bank’s deposit accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to the maximum amount currently allowable under federal law.

The Bank is a single operating segment that operates 11 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 Palisade Park, New Jersey), two full-service branches in Texas (Carrollton and Dallas), and seven loan production offices (“LPOs”) located in Los Angeles and Orange Counties, California;

Annandale, Virginia;

Atlanta, Georgia;

Aurora, Colorado;

As of December 31, 2024, the Bank is a single operating segment that operates 11 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), two full-service branches in Texas (Carrollton and Dallas), and four loan production offices (“LPOs”) located in Los Angeles and Orange Counties, California;

Bellevue, Washington;

and Carrollton, Texas.

and Atlanta, Georgia.

The Bank offers a broad range of loans, deposits, and other products and services predominantly to small and middle market businesses and individuals.

4 unchanged sentences

Reference to the Company’s website address is not intended to incorporate any of the information contained on the Company’s website into this document.

Subsidiary Name Change

On August 25, 2022, the Bank changed its name to “PCB Bank” from “Pacific City Bank.” In addition, the Company introduced a new logo, which was also utilized by the Bank after its name change.

In accordance with the name change, the Bank updated its website, branch signage and marketing collateral.

Corporate Name Change

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

Business Overview

44 unchanged sentences

problem loan identification;

maintenance of an adequate allowance for credit losses and other matters relating to lending practices.

maintenance of an adequate ACL and other matters relating to lending practices.

Loan Category

The Company’s loan portfolio consists primarily of three major categories:

CRE loans, C&I and consumer loans.

CRE, C&I and consumer loans.

Within these three broad categories, the loan portfolio is further segmented as follows:

7 unchanged sentences

• Other consumer loans – Other consumer loans primarily include automobile loans, as well as unsecured lines of credit and term loans to high net worth individuals.

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

December 31, 2023

($ in thousands) Amount Percentage to Total

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

($ in thousands) Amount Percentage to Total Amount Percentage to Total

Commercial real estate:

3 unchanged sentences

Multifamily 194,220 7.4 % 132,500 5.7 %

21,854 0.8 % 24,843 1.1 %

Total commercial real estate 1,752,552 66.7 % 1,571,385 67.6 %

6 unchanged sentences

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

December 31, 2023

($ in thousands) Amount Percentage to Total

($ in thousands) Amount Percentage to Total Amount Percentage to Total

Commercial real estate:

Commercial property

$ 3,307 52.6 % $ — — %

Business property 713 11.3 % 2,802 54.4 %

22 unchanged sentences

The policy maximum LTV for construction loans is 70% and for land development loans is 50%.

C&I loans includes commercial term loans and commercial lines of credit.

C&I loans include commercial term loans and commercial lines of credit.

Commercial term loans are typically extended to finance business acquisitions, permanent working capital needs, and/or equipment purchases.

1 unchanged sentence

Commercial lines of credit are generally provided to finance short-term working capital needs and warehouse lending credit facilities.

Warehouse lending is a line of credit given to a loan originator, the funds from which are used to finance a mortgage that a borrower uses to purchase SFR property or refinance an existing mortgage.

Warehouse lending is a line of credit given to a loan originator.

The funds are used to finance a residential mortgage or CRE loan that a borrower uses to purchase property or refinance an existing loan.

Commercial term loans (usually five to seven years) normally provide for monthly payments of both principal and interest.

64 unchanged sentences

Board ALCO establishes risk limits and policy for conducting investment activities and approves investment strategies and meets quarterly to review investment reports and monitor investment activities.

The Company also formed a management Asset Liability Committee (“Management ALCO,” together with Board ALCO, “ALCOs”), which is comprised of its senior management team and Chief Executive Officer, to proactively monitor investment activities.

The Company also formed a management Asset Liability Committee (“Management ALCO,” and together with Board ALCO, “ALCOs”), which is comprised of its senior management team and Chief Executive Officer, to proactively monitor investment activities.

ALCOs are responsible for ensuring compliance and implementation of investment policy guidelines.

27 unchanged sentences

A prepayment penalty is usually imposed for early repayment of these advances.

As of December 31, 2023, the Company had outstanding term FHLB advances of $39.0 million and maintained additional borrowing capacity of $603.0 million.

As of December 31, 2024, the Company had no outstanding FHLB advances and maintained additional borrowing capacity of $722.4 million.

The Company also maintains overnight federal funds lines with correspondent financial institutions.

The Company had an overnight borrowing of $15.0 million and unused borrowing capacity of $50.0 million at December 31, 2024.

For additional information, see Note 10 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

10 unchanged sentences

The Company is headquartered in Los Angeles, California and operates 11 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 Palisade Park, New Jersey), two full-service branches in Texas (Carrollton and Dallas), and seven LPOs located in Los Angeles and Orange Counties, California;

Annandale, Virginia;

Atlanta, Georgia;

Aurora, Colorado;

and Englewood Cliffs and Palisades Park, New Jersey), two full-service branches in Texas (Carrollton and Dallas), and four LPOs located in Los Angeles and Orange Counties, California;

Bellevue, Washington;

and Carrollton, Texas.

and Atlanta, Georgia as of December 31, 2024.

The Company operates in highly competitive market areas.

13 unchanged sentences

Furthering the Company’s philosophy to attract and retain a pool of talented and motivated employees who will continue to advance the purpose and contribute to the Company’s overall success, compensation and benefits programs include:

equity-based compensation plan, health/dental/vision insurances, life insurance, 401(K) plan, benefits under the Family Medical Leave Act, workers’ compensation, paid time off, holiday pay, training/education, leave for bereavement, wedding and jury duty.

an equity-based compensation plan, health/dental/vision insurances, life insurance, 401(K) plan, benefits under the Family Medical Leave Act, workers’ compensation, paid time off, holiday pay, training/education, and leave for bereavement, wedding and jury duty.

The Company invests in its employees’ future by sponsoring and prioritizing continued education throughout its employee ranks.

5 unchanged sentences

The Company believes that employees’ well-being and personal and professional development is fostered by outreach to the communities it serves.

The Company’s employees’ desire for active community involvement enables the Company to sponsor a number of local community events and initiatives, including hosting annual PCB scholarship that provides financial assistance to local low-to-moderate income community, conducting financial literacy training to seniors in affordable housing facilities, and participating in the Volunteer Income Tax Assistance annually to assist the community in free tax preparation.

The Company’s employees’ desire for active community involvement enables the Company to sponsor a number of local community events and initiatives, including hosting an annual PCB scholarship that provides financial assistance to local low-to-moderate income communities, conducting financial literacy training to seniors in affordable housing facilities, and participating in the Volunteer Income Tax Assistance annually to assist the community in free tax preparation.

Supervision and Regulation

19 unchanged sentences

banking organizations.

Generally, the Basel III Capital Rules apply to both banks and their holding companies, on a consolidated basis.

However, under the Federal Reserve’s Small Bank Holding and Savings and Loan Holding Company Policy Statement (the “Small Bank Holding Company Policy Statement”), qualifying bank holding companies with total consolidated assets of less than $3 billion, such as the Company, are exempt from the Basel III Capital Rules’ consolidated capital requirements.

When the Company reaches the $3 billion asset level, the Company will be subject to the Basel III Capital Rules independent of the Bank.

The Basel III Capital Rules apply to both banks and their holding companies, on a consolidated basis.

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 the $3.0 billion as of December 31, 2024, the Company is now subject to Federal Reserve’s consolidated capital requirements separate and in addition to those of the Bank.

The Basel III Capital Rules establish minimum risk-based capital requirements (Tier 1 capital, common equity Tier 1 capital (“CET1”) and total capital) and leverage capital requirements, as well as guidelines that define components of the calculation of capital and the level of risk associated with various types of assets.

The CET1 capital ratio is the ratio of the institution’s common equity Tier 1 capital to its total risk-weighted assets.

The CET1 capital ratio is the ratio of the institution’s CET1 capital to its total risk-weighted assets.

The Tier 1 risk-based capital ratio is the ratio of the institution’s Tier 1 capital to its total risk-weighted assets.

22 unchanged sentences

As of December 31, 2024, the Bank’s capital ratios exceeded the required minimums under the Basel III Capital Rules, including the capital conservation buffer.

In 2019, the federal bank regulators issued a rule establishing a “community bank leverage ratio” (the ratio of a bank’s Tier 1 capital to average total consolidated assets) that qualifying institutions with less than $10 billion in assets may elect to use in lieu of the generally applicable leverage and risk-based capital requirements under Basel III.

A qualifying banking organization that elects to use the new ratio is considered to have met all applicable federal regulatory capital and leverage requirements, including the minimum capital levels required to be considered “well capitalized,” if it maintains community bank leverage ratio capital exceeding 9%.

73 unchanged sentences

Loans to One Borrower

With certain limited exceptions, the maximum amount that a California bank may lend to any borrower at any one time (including the obligations to the bank of certain related entities of the borrower) may not exceed 25% (and unsecured loans may not exceed 15%) of the bank’s shareholders’ equity, allowance for credit loss on loans, and any capital notes and debentures of the bank.

With certain limited exceptions, the maximum amount that a California bank may lend to any borrower at any one time (including the obligations to the bank of certain related entities of the borrower) may not exceed 25% (and unsecured loans may not exceed 15%) of the bank’s shareholders’ equity, ACL on loans, and any capital notes and debentures of the bank.

Tie in Arrangements

24 unchanged sentences

The payment of dividends by any financial institution is affected by the requirement to maintain adequate capital pursuant to applicable capital adequacy guidelines and regulations, and a financial institution generally is prohibited from paying any dividends if, following payment thereof, the institution would be undercapitalized.

In addition, under the Basel III Rule, institutions must maintain a capital conservation buffer of 2.5% in CET1 attributable to avoid restrictions on dividend payments.

In addition, under the Basel III Capital Rule, institutions must maintain a capital conservation buffer of 2.5% in CET1 attributable to avoid restrictions on dividend payments.

See “Supervision and Regulation - Regulatory Capital Requirements” above.

24 unchanged sentences

and comprehensive internal controls.

On November 23, 2021, the federal banking agencies issued a final rule requiring banking organizations that experience a computer-security incident to notify its primary Federal regulator of the occurrence of an event that rises to the level of a “notification incident” as soon as possible and no later than 36 hours after the banking organization has determined that a notification incident has occurred.

A banking organization that experiences a computer-security incident to notify its primary Federal regulator of the occurrence of an event that rises to the level of a “notification incident” as soon as possible and no later than 36 hours after the banking organization has determined that a notification incident has occurred.

Community Reinvestment Act Requirements

6 unchanged sentences

The Bank received a “satisfactory” rating on its most recent CRA performance evaluation, dated July 29, 2024.

On May 5, 2022, the Federal Reserve, the FDIC and the OCC issued a joint notice of proposed rulemaking to strengthen and modernize the CRA regulatory framework.

The proposal clarifies the activities and investments that qualify for credit under the CRA and would establish an evaluation framework tailored for differences in bank size and business models.

On October 24, 2024, the federal banking agencies issued a final rule to strengthen and modernize the CRA regulations.

Under the final rule, banks with assets of at least $600 million as of December 31 in both of the prior two calendar years and less than $2 billion as of December 31 in either of the prior two calendar years will be an “intermediate bank,” and banks with assets of at least $2 billion as of December 31 in both of the prior two calendar years will be a “large bank.” The agencies will evaluate bank classified as large banks, such as the Bank, under four performance tests:

the Retail Lending Test, the Retail Services and Products Test, the Community Development Financing Test, and the Community Development Services Test.

The applicability date for the majority of the provisions in the CRA regulations is January 1, 2026, and additional requirements will be applicable on January 1, 2027.

Anti-Money Laundering and Office of Foreign Assets Control Regulation

37 unchanged sentences

In general, however, banks with assets of $10 billion or less, such as the Bank, will continue to be examined for consumer compliance by their primary bank regulator.

On June 9, 2022, the CDFPI’s proposed commercial financing disclosure regulations were approved, which became effective on December 9, 2022.

The regulations require commercial financing providers to disclose certain information to assist small businesses in making more informed decisions, including the amount of funding the small business will receive, the Annual Percentage Rate calculated for the transaction, the term, details related to prepayment policies and an average monthly cost.

Mortgage and Mortgage-Related Products

5 unchanged sentences

Mortgage lenders are required to make additional disclosures prior to the extension of credit, in each billing statement and for negative amortization loans and hybrid adjustable-rate mortgages.

Additionally, mortgage originators are prohibited from receiving compensation based on the terms of residential mortgage loans, other that the loan amount.

Additionally, mortgage originators are prohibited from receiving compensation based on the terms of residential mortgage loans, other than the loan amount.

The Dodd-Frank Act generally requires lenders or securitizers to retain an economic interest in the credit risk relating to loans that the lender sells, and other asset-backed securities that the securitizer issues, if the loans do not comply with the ability-to-repay standards described above.

35 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business