Updated 3/13/25
PCB Bancorp (NASDAQ: PCB) is a small but steady player in the regional banking sector, primarily serving businesses and individuals in Southern California. As a community bank, its focus is on building strong relationships and maintaining financial stability rather than making flashy moves. For dividend investors, that kind of approach can be attractive—consistent earnings, a reliable dividend, and a stock that tends to avoid wild price swings.
With a market cap of $267 million, PCB is on the smaller end of publicly traded banks, but that doesn’t mean it should be overlooked. The company has a strong history of profitability and a dividend yield that sits comfortably above the industry average. Investors looking for income and stability may find PCB to be a compelling choice, especially given its low valuation relative to book value.
📊 Key Dividend Metrics
💰 Dividend Yield: 4.31%
📈 5-Year Average Yield: 3.39%
🔄 Dividend Growth: Modest but steady
💵 Payout Ratio: 41.38% (Allows room for growth)
📆 Ex-Dividend Date: February 14, 2025
🏦 Book Value Per Share: $20.52 (Stock trading slightly below book value)
📉 P/E Ratio: 10.67 (Lower than many peers)
🚀 Stock Price: $18.87, with a 52-week range of $14.50 – $22.20
Dividend Overview
PCB Bancorp offers a dividend yield of 4.31%, which is quite strong for a regional bank of its size. This yield is also higher than the company’s five-year average of 3.39%, suggesting that investors today are getting a relatively attractive payout. Over the past several years, PCB has maintained a stable dividend policy, with small but consistent increases.
The trailing annual dividend sits at $0.72 per share, while the forward annual dividend is projected to be $0.80 per share. That puts the payout ratio at a comfortable 41.38%, meaning the company is returning value to shareholders while still keeping plenty of its earnings for growth and stability.
For income investors, this is a good balance—there’s a decent yield today, but there’s also room for the dividend to grow over time. Given that PCB has grown revenue by 6.5% year over year, the fundamentals appear to be in place for continued payouts.
Dividend Growth and Safety
PCB’s dividend growth strategy is measured and consistent, rather than aggressive. While the company isn’t increasing its payout at a rapid pace, it’s also not overextending itself.
Factors Supporting Dividend Safety
✔ The payout ratio of 41.38% is conservative, meaning the dividend isn’t at risk of being cut barring an extreme downturn.
✔ Net income of $24.98 million provides solid earnings coverage for the dividend.
✔ A strong operating margin of 42.6% suggests the bank is efficiently managing costs.
✔ Revenue is trending upward (+6.5% YoY growth), which supports future dividend increases.
Because PCB is a smaller regional bank, it’s not subject to the same pressures as the biggest national players, but it also doesn’t have their financial muscle. That means it has to be a bit more cautious in how it allocates cash. So far, management has done a solid job of keeping the dividend well-covered while still allowing for reinvestment in the business.
With only 0.29% of the float sold short, it’s clear that most investors aren’t expecting a major decline, which further supports the view that the dividend is stable.
Chart Analysis
Price Movement and Trend
PCB Bancorp’s stock has gone through a strong uptrend since mid-2024, rising significantly from its lows. However, after peaking above 22, the stock has pulled back and is now sitting near the 200-day moving average. The 50-day moving average, which had been trending upward, has recently turned downward, signaling a potential shift in momentum.
The stock opened at 18.32 and closed at 18.87, showing some intraday strength. However, the lower high pattern that has formed over the past few months suggests the stock may be struggling to regain bullish momentum.
Support and Resistance Levels
The 200-day moving average has acted as a key support level, and PCB is currently testing this area. If this level holds, it could lead to a short-term bounce. However, if the stock fails to reclaim the 50-day moving average, it may continue its downward movement.
The 20 level appears to be a key resistance point. The stock has attempted to move above this level multiple times in recent months but has struggled to hold gains. A break above 20 could indicate renewed bullish strength, while a failure to clear this level would reinforce the recent downtrend.
Volume and Buying/Selling Pressure
Volume has remained relatively steady, though there were noticeable spikes in trading activity during key price movements. The largest volume bars occurred on sharp upward and downward moves, which suggests strong institutional participation.
The recent decline has not been accompanied by significant selling volume, which could indicate that sellers are not aggressively pushing the price lower. However, the lack of strong buying volume suggests that investors are hesitant to step in at current levels.
Relative Strength Index (RSI) and Momentum
The RSI is hovering in the mid-range, indicating that the stock is neither overbought nor oversold. It has cooled off from the higher levels reached in late 2024, which aligns with the stock’s pullback.
The RSI’s failure to push back above 70 in recent months suggests waning bullish momentum. If it dips below 40, it could confirm further weakness, while a bounce above 60 would indicate renewed strength.
Recent Candle Patterns
The last five candles show mixed signals. There has been some buying pressure, as indicated by lower wicks on recent candles, but the stock has not been able to push significantly higher. The most recent candle closed near the high of the day, suggesting some intraday strength.
The stock’s ability to hold above its recent low of 18.16 will be important in determining whether this is a short-term bottom or if more downside is ahead.
Analyst Ratings
📈 Recent Upgrades
🔹 In December 2024, Keefe, Bruyette & Woods adjusted their outlook on PCB Bancorp. They increased the price target from $20.00 to $23.00, maintaining a “market perform” rating. This upward revision was based on PCB’s strong financial results and stable operational performance. The bank’s ability to maintain consistent earnings and prudent management contributed to this positive reassessment.
📉 Recent Downgrades
🔹 In October 2024, Piper Sandler issued a “hold” rating for PCB Bancorp, setting a price target of $21.00. Analysts expressed concerns about the regional banking sector’s exposure to economic uncertainties and interest rate fluctuations. With potential pressure on net interest margins and slower loan growth, some analysts have taken a more cautious stance.
🎯 Consensus Price Target
📌 As of the latest updates, PCB Bancorp holds a consensus price target of approximately $22.50. This estimate suggests moderate upside potential from current levels, reflecting analysts’ expectations for the bank’s performance in the coming year. Factors such as the company’s financial stability, market conditions, and regional economic trends play a role in shaping this target.
PCB Bancorp has received a mix of positive and cautious ratings, indicating that while analysts see growth potential, there are also concerns tied to macroeconomic trends. Investors should consider these insights while factoring in their own risk tolerance and market outlook before making any investment decisions.
Earnings Report Summary
PCB Bancorp’s latest earnings report showed that the bank is holding steady despite a tricky economic backdrop. Net income ticked up, thanks to solid loan growth and a stable deposit base. Interest rates have been moving around quite a bit, which put some pressure on margins, but the bank managed to keep things profitable by keeping costs in check and maintaining a well-balanced loan portfolio.
Revenue saw a slight year-over-year boost, mostly driven by higher interest income from lending. Net interest margins held up reasonably well, though there are signs that they’re feeling the squeeze from changing rate conditions. Even so, PCB’s conservative financial approach seems to be paying off, keeping its balance sheet in good shape.
On the expense side, operating costs were well managed, with only a small increase in non-interest expenses. The bank is continuing to invest in digital banking and tech improvements, which should help efficiency in the long run. Credit quality is another bright spot—non-performing loans stayed low, and loan loss provisions didn’t see any major adjustments, showing confidence in the current lending environment.
Deposits grew at a healthy pace, with both personal and business accounts adding to the bank’s total. This is a good sign that PCB is still attracting and keeping customers even as competition in the banking space heats up. Capital ratios also remain strong, giving the bank a solid cushion to handle any economic bumps in the road while continuing to pay out dividends.
That said, it wasn’t all smooth sailing. The broader banking industry is dealing with uncertainty around interest rates, which could put more pressure on earnings in the months ahead. Loan demand is holding up for now, but if the economy slows down, it could start to cool off.
All in all, this was another solid quarter for PCB Bancorp. The bank is managing to balance growth and risk well, keeping profitability intact while navigating shifting market conditions. Going forward, how it handles the changing interest rate environment and continues to grow its loan book will be key to its performance.
Financial Health and Stability
One of the reasons PCB can sustain its dividend is its strong financial foundation. The bank has $198.79 million in total cash and only $33.67 million in debt, putting it in a strong liquidity position.
Key Financial Metrics
✔ Return on Assets (ROA): 0.88% – Not the highest in the industry, but stable.
✔ Return on Equity (ROE): 7.24% – Indicates the bank is generating a reasonable return for shareholders.
✔ Low debt levels – The bank operates with financial flexibility, reducing risk.
✔ Book Value Per Share: $20.52 – The stock is currently trading slightly below this, suggesting an undervalued opportunity.
PCB is not a high-growth bank, but it is well-managed and financially stable. The fact that it’s trading at a price-to-book ratio of 0.91 adds to the appeal for value investors. Typically, when a bank’s stock price is below its book value, it means the market may be underestimating its financial strength.
Valuation and Stock Performance
At $18.87 per share, PCB is trading near the lower end of its 52-week range ($14.50 – $22.20). With a P/E ratio of 10.67, the stock appears to be trading at a discount compared to many peers in the regional banking space.
Recent Stock Performance Trends
📊 50-day moving average: $19.51 (Current price is slightly below this)
📉 200-day moving average: $18.58 (Stock is hovering near long-term support)
📌 Beta: 0.64 (Lower volatility than the market average)
The stock’s low beta of 0.64 means it tends to be less volatile than the overall market. That’s good news for dividend investors who prefer stability over sharp price movements. Since the stock has pulled back slightly below its 50-day moving average, this could present an opportunity to lock in a slightly higher yield than usual.
Risks and Considerations
While PCB Bancorp offers strong income potential, no investment is without risk. Here are a few key things to keep in mind:
⚠ Regional Bank Exposure – PCB is heavily focused on Southern California. If the local economy weakens, it could impact the bank’s loan portfolio.
⚠ Interest Rate Sensitivity – Like all banks, PCB’s earnings depend on interest rates. If rates fall significantly, profit margins could tighten.
⚠ Liquidity Considerations – Smaller banks sometimes face liquidity issues during economic downturns, though PCB’s cash position is strong.
⚠ Stock Liquidity – PCB isn’t the most actively traded stock, with daily average volume around 25,000 shares. That means buying or selling large positions could take time.
Final Thoughts
For dividend investors looking for a steady, income-generating stock, PCB Bancorp is an intriguing option. The 4.31% dividend yield is well-covered by earnings, and the stock is trading at a discount to book value, which may provide some downside protection.
While PCB doesn’t have the name recognition of larger banks, it does offer a combination of reliable dividends, reasonable valuation, and strong financial health. Investors comfortable with regional banks may find this to be a solid long-term income play.
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