PCB Bancorp Lifts Net Interest Income After Margin Reversal

The Tip Desk · November 10, 2026 · 3 min read

Net interest income reached $28.8 million in the third quarter as the net interest margin widened 2 bps to 3.35%.

PCB Bancorp (PCB), the holding company of PCB Bank, reported net income available to common shareholders of $12.1 million, or $0.85 a share, for the third quarter of 2026, up from $10.4 million, or $0.73 a share, in the second quarter.

Net interest income rose 4.8% to $28.8 million, following a 2.6% sequential increase in the second quarter. The net interest margin expanded 2 bps to 3.35% after compressing 3 bps to 3.33% in the prior quarter. The company attributed the latest move to a higher average yield on interest-earning assets, partially offset by a higher average cost of interest-bearing deposits. Average loan yield was 6.45%, up from 6.38%. Average cost of interest-bearing deposits was 3.77%.

Average loans increased 0.6% to $2.90 billion. Period-end loans held-for-investment fell 3.0% to $2.84 billion, following a 2.0% sequential rise in the second quarter. President and CEO Henry Kim said the bank selectively reduced certain large commercial lending relationships that no longer met its risk and return objectives, actions that contributed to lower loan balances and strengthened liquidity. Commercial and industrial loans fell 9.2% to $449.3 million. Commercial property declined 1.8% to $1.10 billion and business property fell 6.7% to $650.6 million. Multifamily rose 2.3% to $213.6 million.

Total deposits increased 5.3% to $3.08 billion, accelerating from a 1.2% sequential increase in the second quarter. Average interest-bearing deposits rose 5.1% to $2.45 billion. Total assets were $3.54 billion at September 30, 2026, up 1.9% from June 30. The company said the quarter’s asset increase was primarily due to higher cash and cash equivalents, partially offset by the decline in loans held-for-investment.

The provision for credit losses swung to a $705 thousand reversal from a $926 thousand provision in the second quarter. The loan reversal was attributed primarily to a decrease in loans held-for-investment, partially offset by an increase in nonaccrual loans. The allowance for credit losses on loans to loans held-for-investment was 1.20% at September 30, 2026.

Nonaccrual loans rose 40.5% to $12.25 million, with nonperforming loans to loans held-for-investment at 0.43%. Commercial real estate nonaccruals increased 134.5% to $6.24 million. Classified assets were $13.63 million.

Gain on sale of loans increased 37.6% to $1.63 million on $23.0 million of SBA loans sold, after a sequential decline in the second quarter. Noninterest income was $3.57 million. Noninterest expense rose 6.2% to $16.05 million, with salaries and employee benefits up 5.0% on wages, SBA sales incentives, vacation accrual and group insurance. The efficiency ratio was 49.56%.

Kim said the company is well positioned to deploy excess liquidity and capitalize on growth opportunities as it looks to the remainder of 2026 and into 2027.