PCB Bancorp. (PCB) Stock Forecast & Price Target

PCB Bancorp's positive outlook is underpinned by a projected 8-9% increase in estimates, driven by successful balance sheet growth and margin expansion, highlighting the company's effective management in lowering deposit costs. Additionally, expenses have been well-controlled, with a modest 3.5% increase while managing higher professional fees related to the ECIP restatement, indicating operational efficiency. The larger balance sheet and improved margin outlook are expected to boost net interest income (NII) by 3-4%, forecasting 18% growth in 2025 and 10% in 2026.

PCB Bancorp's recent performance indicates a troubling trend, with core net interest earnings (NIE) underperforming guidance and ending up at $14.9 million, which is below the anticipated $15.5 million. Additionally, end-of-period loan balances saw a marked decline of 6% quarter-over-quarter, primarily driven by a significant decrease in commercial and industrial loans, particularly within the mortgage warehouse sector, reflecting heightened loan payoffs and reduced production. Overall, the company faces challenges with profitability, as shown by a return on tangible common equity (ROTCE) that remains 150 basis points lower than its small- and mid-sized bank peers, compounded by potential risks stemming from increased credit costs and pressure on margins.