LOS ANGELES, Oct. 17, 2018 (GLOBE NEWSWIRE) -- Preferred Bank (NASDAQ: PFBC), an independent commercial bank, today reported results for the quarter ended September 30, 2018. Preferred Bank (“the Bank”) reported net income of $18.3 million or $1.20 per diluted share for the third quarter of 2018. This compares favorably to net income of $13.7 million or $0.94 per diluted share for the third quarter of 2017 and to net income of $17.4 million or $1.14 per diluted share for the second quarter of 2018. Net income for the nine months ended September 30, 2018 was $52.3 million or $3.42 per diluted share compared to net income of $35.7 million or $2.45 per diluted share for the same period last year. This represents a YTD increase in net income of $16.7 million or 46.7%, part of which is due to the federal tax rate decrease as a result of the Tax Cuts and Jobs Act. However, pre-tax income increased on a YTD basis by $14.1 million or 24.3%.

Highlights from the third quarter of 2018:

•   Return on Assets	1.84	%
•   Return on Beginning Equity	18.87	%
•   Linked quarter deposit growth	3.18	%
•   Linked quarter loan growth	2.81	%
•   Efficiency ratio	33.2	%
•   Net interest margin	4.04	%

Li Yu, Chairman and CEO, commented, “Our Bank continues to grow in the third quarter.  We reached $4.1 billion in total assets, and net interest income, net income and earnings per share have all reached new highs.  For the quarter, net income was $18.3 million or $1.20 per fully diluted share, which compares favorably with prior periods.

Our quarterly growth rate of deposits and loans was a little less than prior years but we are comfortable with this rate of growth, considering the current environment.  On the loan side we continue to experience heavy pay-offs especially to lenders offering fixed rate, long-term credit facilities.  Nevertheless, we have stepped up our origination effort and for the quarter our loans have increased $­89.6 million, or 2.8% on a linked-quarter basis.

The magnitude and frequency of market deposit rate adjustments has been unprecedented in our markets.  Many money-center banks and major financial institutions are now leading the rate parade, which is quite unusual.  Preferred Bank has been carefully balancing its effort, constantly weighing cost and growth.  Deposits in the quarter increased $108.5 million or 3.2% on a linked-quarter basis.

Our very asset sensitive balance sheet is the beneficiary of Federal Reserve Bank rate increases.  However, in this quarter, the benefit was offset by deposit rate increases and loan yield pressure.  The Bank’s net interest margin for the quarter decreased slightly to 4.04%.

The upgrading of our operating system is now largely completed.  Continued development of our digital capabilities will be an ongoing effort.  Operating expenses remain under control.”

Net Interest Income and Net Interest Margin. Net interest income before provision for loan and lease losses was $39.2 million for the third quarter of 2018. This compares favorably to the $35.4 million recorded in the third quarter of 2017 and to the $37.4 million recorded in the second quarter of 2018. The comparisons to both prior periods is favorable due primarily to loan growth partially offset by an increase in interest expense on deposits. The Bank’s taxable equivalent net interest margin was 4.04% for the third quarter of 2018, a nine basis point increase over the 3.95% achieved in the third quarter of 2017 and a three basis point decrease from the 4.07% posted in the second quarter of 2018. The margin compressed slightly this quarter compared to the second quarter of 2018 mainly due to deposit growth, which is being repriced quite rapidly in the marketplace. Partially offsetting these items is a full quarter’s benefit of the June 2018 rate hike,  however there has obviously been no benefit yet from the late September rate hike which will move yields on loans higher.

Noninterest Income. For the third quarter of 2018, noninterest income was $1,676,000 compared with $1,243,000 for the same quarter last year and compared to $1,756,000 for the second quarter of 2018. The increase from the third quarter of 2017 is primarily due to an increase in letter of credit (“LC”) fees of $459,000 over that period. The decrease from the second quarter of 2018 was mainly due to the gain on investment securities of $112,000 in that quarter.

Noninterest Expense. Total noninterest expense was $13.6 million for the third quarter of 2018, an increase of $1.4 million over the third quarter of 2017 but a decrease of $221,000 from the $13.8 million recorded in the second quarter of 2018. Salaries and benefits expense totaled $8.7 million for the third quarter of 2018, an increase of $788,000 over the $7.9 million recorded in the third quarter of 2017 and a slight decrease of $141,000 from the $8.8 million recorded in the second quarter of 2018. The increase the prior year is due mainly to staffing increases and additional administrative personnel. The decrease from last quarter is due to a small decrease in bonus expense as well as employees using accrued vacation this quarter, leading to an overall reversal of accrued vacation expense. Occupancy expense totaled $1.3 million for the quarter and was fairly even with the prior quarter as well as the same period last year,  the small increases over both periods due to regular rental rate increases on the Bank’s branch premises. Professional services expense was $1.3 million for the third quarter of 2018 compared to $1.0 million for the same quarter of 2017 and $1.7 million recorded in the second quarter of 2018. The decrease from the prior quarter is due to core system conversion costs, most of which were incurred in the first and second quarters of 2018. The increase over the prior year is primarily due to an increase in consulting and miscellaneous services expense. Other expenses were $1.5 million for the third quarter of 2018 compared to $1.3 million for the third quarter of 2017 and the second quarter of 2018.

Income Taxes

The Bank recorded a provision for income taxes of $7.1 million for the third quarter of 2018. This represents an effective tax rate (“ETR”) of 28.0% and flat from the ETR of 28.0% for the second quarter of 2018 but down significantly from the 41.0% recorded in the third quarter of 2017. The large decrease from last year was due to the passage of the Tax Cuts and Jobs Act in December 2017.

Balance Sheet Summary

Total gross loans and leases (both held for sale and held for investment) at September 30, 2018 were $3.28 billion, an increase of $89.6 million or 2.8% over the total of $3.14 billion as of June 30, 2018. Total deposits increased by $108.5 million over the $3.41 billion as of June 30, 2018. Total assets reached $4.08 billion as of September 30, 2018, an increase of $117.4 million or 3.0% over the total of $3.96 billion as of June 30, 2018.

Asset Quality

Loans
At the end of the quarter, the Bank elected to move the four New York nonaccrual loans ($47.3 million) back to the held-for-investment status. The Bank is moving forward with foreclosure proceedings with the goal to gain ownership of the properties and thus a sale of the notes is not likely at this point.

As of September 30, 2018, nonaccrual loans totaled $50.4 million, up from the total of $6.5 million as of December 31, 2017 and down slightly from the $50.5 million as of June 30, 2018. The increase over year end 2017 is due to the addition of the four aforementioned New York loans, which total $47.3 million. Total net recoveries for the third quarter of 2018 were $314,000 compared to net recoveries of $2,000 in the second quarter of 2018 and compared to net charge-offs of $407,000 for the third quarter of 2017. The Bank recorded a provision for loan loss of $1.88 million for the third quarter of 2018, compared to $1.3 million in the third quarter of 2017 and compared to $1.2 million recorded in the second quarter of 2018. The allowance for loan loss at September 30, 2018 was $32.0 million or 0.98% of total loans compared to $29.9 million or 1.02% of total loans at December 31, 2017.

OREO

As of September 30, 2018 and December 31, 2017, the Bank held one OREO property, a $4.1 million multi-family property located outside of California.

Capitalization
As of September 30, 2018, the Bank’s leverage ratio was 10.07%, the common equity tier 1 capital ratio was 10.23% and the total capital ratio was 13.65%. As of December 31, 2017, the Bank’s leverage ratio was 9.52%, the common equity tier 1 ratio was 10.07% and the total risk based capital ratio was 13.83%.

Conference Call and Webcast
A conference call with simultaneous webcast to discuss Preferred Bank’s third quarter 2018 financial results will be held tomorrow, October 18, 2018 at 2:00 p.m. Eastern / 11:00 a.m. Pacific. Interested participants and investors may access the conference call by dialing 844-826-3037 (domestic) or 412-317-5182 (international) and referencing “Preferred Bank.” There will also be a live webcast of the call available at the Investor Relations section of Preferred Bank's website at www.preferredbank.com. Web participants are encouraged to go to the website at least 15 minutes prior to the start of the call to register, download and install any necessary audio software.

Preferred Bank's Chairman and Chief Executive Officer Li Yu,  President and Chief Operating Officer Wellington Chen, Chief Financial Officer Edward J. Czajka, and Chief Credit Officer Nick Pi will be present to discuss Preferred Bank's financial results, business highlights and outlook. After the live webcast, a replay will remain available in the Investor Relations section of Preferred Bank's website. A replay of the call will also be available at 877-344-7529 (domestic) or 412-317-0088 (international) through November 1, 2018; the passcode is 10125401.

About Preferred Bank

Preferred Bank is one of the larger independent commercial banks in California. The bank is chartered by the State of California, and its deposits are insured by the Federal Deposit Insurance Corporation, or FDIC, to the maximum extent permitted by law. The Company conducts its banking business from its main office in Los Angeles, California, and through twelve full-service branch banking offices in the California cities of Alhambra, Century City,  City of Industry, Torrance, Arcadia, Irvine, Diamond Bar, Pico Rivera, Tarzana and San Francisco (2), and one office in Flushing New York. Preferred Bank offers a broad range of deposit and loan products and services to both commercial and consumer customers. The bank provides personalized deposit services as well as real estate finance, commercial loans and trade finance to small and mid-sized businesses, entrepreneurs, real estate developers, professionals and high net worth individuals. Although originally founded as a Chinese-American Bank, Preferred Bank now derives most of its customers from the diversified mainstream market but does continue to benefit from the significant migration to California of ethnic Chinese from China and other areas of East Asia.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the Bank’s future financial and operating results, the Bank's plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of the Bank’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: changes in economic conditions; changes in the California real estate market; the loss of senior management and other employees; natural disasters or recurring energy shortage; changes in interest rates; competition from other financial services companies; ineffective underwriting practices; inadequate allowance for loan and lease losses to cover actual losses; risks inherent in construction lending; adverse economic conditions in Asia; downturn in international trade; inability to attract deposits; inability to raise additional capital when needed or on favorable terms; inability to manage growth; inadequate communications, information, operating and financial control systems, technology from fourth party service providers; the U.S. government’s monetary policies; government regulation; environmental liability with respect to properties to which the bank takes title; and the threat of terrorism. Additional factors that could cause the Bank's results to differ materially from those described in the forward-looking statements can be found in the Bank’s 2017 Annual Report on Form 10-K filed with the Federal Deposit Insurance Corporation which can be found on Preferred Bank’s website. The forward-looking statements in this press release speak only as of the date of the press release, and the Bank assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those contained in the forward-looking statements. For additional information about Preferred Bank, please visit the Bank’s website at www.preferredbank.com.

Financial Tables to Follow

PREFERRED BANK
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except for net income per share and shares)
				For the Quarter Ended
				September 30,				June 30,				September 30,
				2018				2018				2017
Interest income:
	Loans, including fees			$	46,130			$	42,970			$	39,362
	Investment securities				3,734				3,301				3,172
	Fed funds sold				528				477				320
		Total interest income			50,392				46,748				42,854
Interest expense:
	Interest-bearing demand				3,911				3,343				2,263
	Savings				15				16				17
	Time certificates				5,684				4,432				3,601
	FHLB borrowings				14				20				21
	Subordinated debit				1,531				1,531				1,530
		Total interest expense			11,155				9,342				7,432
		Net interest income			39,237				37,406				35,422
Provision for loan losses					1,880				1,200				1,300
		Net interest  income after provision for loan losses			37,357				36,206				34,122
Noninterest income:
	Fees & service charges on deposit accounts				240				350				299
	Letters of credit fee income				1,091				889				632
	BOLI income				91				90				88
	Net gain on called and sale of investment securities				-				112				-
	Other income				254				315				224
		Total noninterest income			1,676				1,756				1,243
Noninterest expense:
	Salary and employee benefits				8,666				8,807				7,878
	Net occupancy expense				1,340				1,296				1,257
	Business development and promotion expense				203				181				251
	Professional services				1,337				1,736				963
	Office supplies and equipment expense				349				367				334
	Other real estate owned related expense				221				107				168
	Other				1,468				1,311				1,328
		Total noninterest expense			13,584				13,805				12,179
		Income before provision for income taxes			25,449				24,157				23,186
Income tax expense					7,126				6,752				9,516
		Net income		$	18,323			$	17,405			$	13,670
Dividend and earnings allocated to participating securities					(312	)			(297	)			(161	)
Net income available to common shareholders				$	18,011			$	17,108			$	13,509
Income per share available to common shareholders
		Basic		$	1.20			$	1.14			$	0.94
		Diluted		$	1.20			$	1.14			$	0.94
Weighted-average common shares outstanding
		Basic			15,063,685				15,063,450				14,378,552
		Diluted			15,063,685				15,063,450				14,426,522
Dividends per share				$	0.25			$	0.25			$	0.20

 

PREFERRED BANK
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except for net income per share and shares)
				For the Nine Months Ended
				September 30,				September 30,				Change
				2018				2017				%
Interest income:
	Loans, including fees			$	129,392			$	106,222			21.8	%
	Investment securities				9,985				8,594			16.2	%
	Fed funds sold				1,415				783			80.8	%
		Total interest income			140,792				115,599			21.8	%
Interest expense:
	Interest-bearing demand				9,676				5,672			70.6	%
	Savings				47				55			-15.0	%
	Time certificates				13,636				9,992			36.5	%
	FHLB borrowings				53				146			-63.6	%
	Subordinated debit				4,593				4,592			100.0	%
		Total interest expense			28,005				20,457			36.9	%
		Net interest income			112,787				95,142			18.5	%
Provision for loan losses					4,580				4,000			14.5	%
		Net interest  income after provision for loan losses			108,207				91,142			18.7	%
Noninterest income:
	Fees & service charges on deposit accounts				911				956			-4.7	%
	Letters of credit fee income				2,971				2,008			48.0	%
	BOLI income				270				262			3.0	%
	Net gain on called and sale of investment securities				112				0			100.0	%
	Other income				732				1,382			-47.0	%
		Total noninterest income			4,996				4,608			8.4	%
Noninterest expense:
	Salary and employee benefits				26,100				23,060			13.2	%
	Net occupancy expense				3,974				3,653			8.8	%
	Business development and promotion expense				534				679			-21.3	%
	Professional services				4,504				3,163			42.4	%
	Office supplies and equipment expense				1,091				997			9.5	%
	Other real estate owned related expense				434				394			10.2	%
	Other				4,482				5,825			-23.1	%
		Total noninterest expense			41,119				37,771			8.9	%
		Income before provision for income taxes			72,084				57,979			24.3	%
Income tax expense					19,745				22,311			-11.5	%
		Net income		$	52,339			$	35,668			46.7	%
Dividend and earnings allocated to participating securities					(862	)			(409	)		110.6	%
Net income available to common shareholders				$	51,477			$	35,259			46.0	%
Income per share available to common shareholders
		Basic		$	3.42			$	2.46			39.1	%
		Diluted		$	3.42			$	2.45			39.7	%
Weighted-average common shares outstanding
		Basic			15,054,237				14,347,396			4.9	%
		Diluted			15,057,164				14,405,770			4.5	%
Dividends per share				$	0.72			$	0.58			24.1	%

 

PREFERRED BANK
Condensed Consolidated Statements of Financial Condition
(unaudited)
(in thousands)
			September 30,				December 31,
			2018				2017
			(Unaudited)				(Audited)
Assets
Cash and due from banks			$	430,440			$	446,822
Fed funds sold				100,800				108,500
	Cash and cash equivalents			531,240				555,322
Securities held to maturity, at amortized cost				8,203				8,780
Securities available-for-sale, at fair value				173,953				188,203
Loans and leases				3,275,390				2,941,093
Less allowance for loan and lease losses				(31,966	)			(29,921	)
Less net deferred loan fees				(2,571	)			(3,099	)
	Net loans and leases			3,240,853				2,908,073
Loans held for sale, at lower of cost or fair value				-				440
Other real estate owned				4,112				4,112
Customers' liability on acceptances				6,256				7,272
Bank furniture and fixtures, net				5,438				5,684
Bank-owned life insurance				9,254				9,066
Accrued interest receivable				13,386				11,291
Investment in affordable housing				45,555				34,708
Federal Home Loan Bank stock				11,933				11,077
Deferred tax assets				18,847				17,476
Income tax receivable				-				2,713
Other assets				7,158				5,642
	Total assets		$	4,076,188			$	3,769,859
Liabilities and Shareholders' Equity
Liabilities:
Deposits:
	Demand		$	745,861			$	659,487
	Interest-bearing demand			1,360,237				1,353,974
	Savings			21,490				24,429
	Time certificates of $250,000 or more			737,465				621,648
	Other time certificates			653,697				603,152
		Total deposits		3,518,750				3,262,689
	Acceptances outstanding			6,256				7,272
	Advances from Federal Home Loan Bank			1,320				6,401
	Subordinated debt issuance			99,056				98,963
	Commitments to fund investment in affordable housing partnership			21,514				18,523
	Accrued interest payable			6,443				3,833
	Other liabilities			22,880				17,143
		Total liabilities		3,676,219				3,414,824
Commitments and contingencies
Shareholders' equity:
	Preferred stock. Authorized 25,000,000 shares; issued and no outstanding shares at September 30, 2018 and December 31, 2017			—				—
	Common stock, no par value. Authorized 100,000,000 shares; issued and outstanding 15,325,144 at September 30, 2018 and 15,122,313 at December 31, 2017, respectively.			210,882				207,948
	Treasury stock			(33,789	)			(33,233	)
	Additional paid-in-capital			44,425				39,462
	Accumulated income			180,793				139,684
	Accumulated other comprehensive income (loss):
		Unrealized gain (loss) on securities, available-for-sale, net of tax of $(866) and $504 at September 30, 2018 and December 31, 2017, respectively		(2,342	)			1,173
		Total shareholders' equity		399,969				355,034
	Total liabilities and shareholders' equity		$	4,076,188			$	3,769,859

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)
			For the Quarter Ended
			September 30,			June 30,			March 31,			December 31,			September 30,
			2018			2018			2018			2017			2017
Unaudited historical quarterly operations data:
	Interest income		$	50,392		$	46,748		$	43,652		$	42,001		$	42,854
	Interest expense			11,155			9,342			7,508			7,439			7,432
		Interest income before provision for credit losses		39,237			37,406			36,144			34,562			35,422
	Provision for credit losses			1,880			1,200			1,500			1,500			1,300
	Noninterest income			1,676			1,756			1,564			1,215			1,243
	Noninterest expense			13,584			13,805			13,730			11,776			12,179
	Income tax expense			7,126			6,752			5,867			14,775			9,516
		Net income	$	18,323		$	17,405		$	16,611		$	7,726		$	13,670
	Earnings per share
		Basic	$	1.20		$	1.14		$	1.09		$	0.52		$	0.94
		Diluted	$	1.20		$	1.14		$	1.09		$	0.52		$	0.94
Ratios for the period:
	Return on average assets			1.84	%		1.83	%		1.85	%		0.83	%		1.48	%
	Return on beginning equity			18.87	%		18.82	%		18.97	%		9.67	%		17.77	%
	Net interest margin (Fully-taxable equivalent)			4.04	%		4.07	%		4.14	%		3.86	%		3.95	%
	Noninterest expense to average assets			1.37	%		1.46	%		1.53	%		1.27	%		1.32	%
	Efficiency ratio			33.20	%		35.25	%		36.41	%		32.92	%		33.22	%
	Net charge-offs (recoveries) to average loans (annualized)			-0.04	%		0.00	%		0.39	%		0.05	%		0.06	%
Ratios as of period end:
	Tier 1 leverage capital ratio			10.07	%		10.04	%		10.07	%		9.52	%		8.54	%
	Common equity tier 1 risk-based capital ratio			10.23	%		10.14	%		10.03	%		10.07	%		9.24	%
	Tier 1 risk-based capital ratio			10.23	%		10.14	%		10.03	%		10.07	%		9.24	%
	Total risk-based capital ratio			13.65	%		13.62	%		13.58	%		13.83	%		13.08	%
	Allowances for credit losses to loans and leases at end of period			0.98	%		0.95	%		0.92	%		1.02	%		1.00	%
	Allowance for credit losses to non-performing
		loans and leases		63.42	%		58.92	%		861.44	%		461.28	%		415.32	%
Average balances:
	Total loans and leases		$	3,184,527		$	3,092,571		$	2,958,382		$	2,853,134		$	2,817,271
	Earning assets		$	3,861,346		$	3,696,854		$	3,550,333		$	3,572,826		$	3,579,578
	Total assets		$	3,946,924		$	3,804,557		$	3,648,857		$	3,678,237		$	3,658,833
	Total deposits		$	3,392,878		$	3,268,490		$	3,131,660		$	3,179,679		$	3,190,344

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)
			For the Nine Months Ended
			September 30,				September 30,
			2018				2017
	Interest income		$	140,792			$	115,599
	Interest expense			28,005				20,457
		Interest income before provision for credit losses		112,787				95,142
	Provision for credit losses			4,580				4,000
	Noninterest income			4,996				4,608
	Noninterest expense			41,119				37,771
	Income tax expense			19,745				22,311
		Net income	$	52,339			$	35,668
	Earnings per share
		Basic	$	3.42			$	2.46
		Diluted	$	3.42			$	2.45
Ratios for the period:
	Return on average assets			1.84	%			1.38	%
	Return on beginning equity			19.71	%			16.00	%
	Net interest margin (Fully-taxable equivalent)			4.06	%			3.78	%
	Noninterest expense to average assets			1.45	%			1.46	%
	Efficiency ratio			34.91	%			37.87	%
	Net charge-offs (recoveries) to average loans			0.11	%			0.09	%
Average balances:
	Total loans and leases		$	3,079,179			$	2,692,928
	Earning assets		$	3,723,961			$	3,384,472
	Total assets		$	3,801,176			$	3,452,951
	Total deposits		$	3,264,343			$	2,991,411

 

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)
				As of
				September 30,				June 30,				March 31,				December 31,				September 30,
				2018				2018				2018				2017				2017
Unaudited quarterly statement of financial position data:
Assets:
	Cash and cash equivalents			$	531,240			$	493,521			$	421,024			$	555,322			$	503,240
	Securities held-to-maturity, at amortized cost				8,203				8,370				8,556				8,780				9,076
	Securities available-for-sale, at fair value				173,953				176,930				177,823				188,203				193,890
	Securities equity, at fair value				-				-				4,667				-				-
	Loans and Leases:
		Real estate - Single and multi-family residential			559,050				508,470				552,828				513,953				507,738
		Real estate - Land			10,725				11,133				10,766				10,863				15,723
		Real estate - Commercial			1,337,794				1,319,664				1,315,296				1,244,486				1,279,981
		Real estate - For sale housing construction			122,225				112,236				95,884				85,199				94,033
		Real estate - Other construction			246,815				231,276				216,571				198,602				165,244
		Commercial and industrial, trade finance and other			998,781				955,663				904,798				887,990				815,880
			Gross loans		3,275,390				3,138,442				3,096,143				2,941,093				2,878,599
	Allowance for loan and lease losses				(31,966	)			(29,772	)			(28,570	)			(29,921	)			(28,756	)
	Net deferred loan fees				(2,571	)			(2,287	)			(1,935	)			(3,099	)			(3,376	)
		Net loans, excluding loans held for sale		$	3,240,853			$	3,106,383			$	3,065,638			$	2,908,073			$	2,846,467
	Loans held for sale			$	-			$	47,337			$	-			$	440			$	-
		Net loans and leases		$	3,240,853			$	3,153,720			$	3,065,638			$	2,908,513			$	2,846,467
	Other real estate owned			$	4,112			$	4,112			$	4,112			$	4,112			$	4,112
	Investment in affordable housing				45,555				47,201				33,650				34,708				35,939
	Federal Home Loan Bank stock				11,933				12,158				11,076				11,077				11,077
	Other assets				60,339				62,792				55,378				59,144				61,671
		Total assets		$	4,076,188			$	3,958,804			$	3,781,924			$	3,769,859			$	3,665,472
Liabilities:
	Deposits:
		Demand		$	745,861			$	713,492			$	677,629			$	659,487			$	599,722
		Interest-bearing demand			1,360,237				1,372,771				1,346,479				1,353,974				1,298,895
		Savings			21,490				21,918				25,373				24,429				27,132
		Time certificates of $250,000 or more			737,465				683,561				627,031				621,648				617,231
		Other time certificates			653,697				618,493				585,165				603,152				651,502
			Total deposits	$	3,518,750			$	3,410,235			$	3,261,677			$	3,262,690			$	3,194,482
	Advances from Federal Home Loan Bank			$	6,256			$	8,313			$	4,272			$	7,272			$	6,431
	Subordinated debt issuance				99,056				99,025				98,994				98,963				98,932
	Commitments to fund investment in affordable housing partnership				21,514				29,116				17,861				18,523				20,684
	Other liabilities				30,643				26,889				28,092				27,377				27,918
		Total liabilities		$	3,676,219			$	3,573,578			$	3,410,896			$	3,414,825			$	3,348,447
Equity:
	Net common stock, no par value			$	221,518			$	220,669			$	219,423			$	214,177			$	180,700
	Retained earnings				180,793				166,302				152,728				139,684				135,497
	Accumulated other comprehensive income				(2,342	)			(1,745	)			(1,123	)			1,173				828
		Total shareholders' equity		$	399,969			$	385,226			$	371,028			$	355,034			$	317,025
		Total liabilities and shareholders' equity		$	4,076,188			$	3,958,804			$	3,781,924			$	3,769,859			$	3,665,472

 

Preferred Bank
Loan and Credit Quality Information
Allowance For Credit Losses & Loss History
					Nine Months Ended				Year ended
					September 30, 2018				December 31, 2017
					(Dollars in 000's)
Allowance For Credit Losses
Balance at Beginning of Period					$	29,921			$	26,478
	Charge-Offs
		Commercial & Industrial				2,875				2,274
		Mini-perm Real Estate				-				-
		Construction - Residential				-				-
		Construction - Commercial				-				-
		Land - Residential				-				-
		Land - Commercial				-				-
		Others				-				-
			Total Charge-Offs			2,875				2,274
	Recoveries
		Commercial & Industrial				340				55
		Mini-perm Real Estate				-				-
		Construction - Residential				-				-
		Construction - Commercial				-				17
		Land - Residential				-				-
		Land - Commercial				-				145
			Total Recoveries			340				217
	Net Loan Charge-Offs					2,535				2,057
	Provision for Credit Losses					4,580				5,500
Balance at End of Period					$	31,966			$	29,921
Average Loans and Leases					$	3,723,961			$	3,431,985
Loans and Leases at end of Period					$	3,275,390				2,941,533
Net Charge-Offs to Average Loans and Leases						0.11	%			0.08	%
Allowances for credit losses to loans and leases at end of period						0.98	%			1.02	%

AT THE COMPANY:	AT FINANCIAL PROFILES:
Edward J. Czajka	Tony Rossi
Executive Vice President	General Information
Chief Financial Officer	(310) 622-8221
(213) 891-1188	PFBC@finprofiles.com

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