Piper Sandler & Co analyst Matthew T. Clark assumed coverage of PCB Bancorp (NASDAQ:PCB) at a Neutral rating with a price target of $17.
The analyst expects a consistently pressured net interest margin (declining 10 bps-12 bps per month) coupled with modest operating expense growth to increase the efficiency ratio to 55.0% in N-T and projects a further rise in 2024.
Also, the analyst is concerned about PCB’s unguaranteed SBA loan portfolio, amounting to around 8% of the loan portfolio, making it vulnerable amid challenging market conditions.
Nevertheless, Clark sees PCB’s excess capital position as paving the way for dividend raises, higher share buybacks, and acquisitions.
The analyst expects EPS of $2.17 in 2023 and $1.80 in 2024, respectively, in the assumption of low-to-mid single digits loan growth, increased net interest margin pressure, controlled net interest expense, and higher buyback this year.
Price Action: PCB shares are trading lower by 3.24% at $15.51 on the last check Friday.
