PCB Bancorp. (PCB) Stock Forecast & Price Target

PCB Bancorp's stock outlook is bolstered by an impressive growth in the balance sheet, with estimates revised up by 8-9% due to successful margin expansion and a reduction in deposit costs, which exceeded initial expectations. The company's expense management has been noteworthy, with a controlled increase of just 3.5% despite higher professional fees, indicating efficient cost management. Overall, these developments contribute to a projected 3-4% increase in net interest income, forecasting growth of 18% in 2025 and 10% in 2026, signaling strong financial performance ahead.

PCB Bancorp is experiencing a material weakness in financial controls related to infrequent derivative contracts, which could lead to increased professional fees in the short term. The company’s tangible common equity (TCE) is now lower, placing its shares trading at 1.0x tangible book value (TBV), which, despite being somewhat above peers at 0.9x TBV, still reflects a lower level of profitability with a return on tangible common equity (ROTCE) that is 150 basis points below that of small- to mid-cap banks. Furthermore, the outlook is compounded by potential risks such as increased credit costs, diminished loan growth, and margin pressure, all of which could negatively impact earnings.