PFBC Preferred Bank

Preferred Bank (NASDAQ:PFBC), an independent commercial bank, today reported results for the quarter ended June 30, 2016. Preferred Bank (“the Bank”) reported net income of $8.6 million or $0.61 per diluted share for the second quarter of 2016. This compares to net income of $7.6 million or $0.55 per diluted share for the second quarter of 2015 and compares to net income of $7.8 million or $0.56 per diluted share for the first quarter of 2016.

Highlights from the second quarter of 2016:

Total assets									$2.92 billion
Linked quarter loan growth									$114.2 million or 5.3%
Linked quarter deposit growth									$158.0 million or 6.7%
Return on average assets										1.26	%
Return on beginning equity										12.62	%
Efficiency ratio										39.4	%
Net interest margin										3.87	%

Li Yu, Chairman and CEO commented, “The Bank recently completed a $72.5 million private placement of subordinated debentures.  $62.5 million was received on June 13, 2016 and an additional $10 million was received on July 8, 2016.  This new capital has substantially improved our tier 2 capital ratio and significantly reduced our CRE concentration ratio which allows for the growth momentum to continue.  The interest expense on the debt was approximately $186,000 for the quarter and so in order to minimize the overall cost to the Bank going forward, we have deployed $34 million of these funds in early July to purchase a home mortgage portfolio.  Further purchases like this one are under consideration, as they allow for continued diversification of our loan portfolio. 

“Preferred Bank’s second quarter loan growth was strong at $114 million, or 5.3%.  We are very pleased with these results as market conditions are favorable and our staff’s effort has been consistent.

“Deposit growth was even more significant for the quarter.  Total deposits have increased $158 million or 6.7% on a linked quarter basis.  The large deposit growth is partly the result of public recognition of Preferred Bank’s performance.  Recently, S&P Global Market Intelligence ranked Preferred Bank 3rd  best in the nation among all banks with $1 to $10 billion in assets, with the top two being privately held.  Preferred Bank is therefore considered the top publicly-traded bank in the $1 to $10 billion asset group.  Our deposits were recently rated “A-” by Kroll Bond Rating Agency.

“Net income for the quarter was $8.6 million or $0.61 per diluted share, which compares favorably with the $7.8 million earned in the first quarter of this year.  An improved net interest margin and higher average outstanding loans were the main reasons.  During the quarter, our efficiency ratio of 39.4% was also an improvement from the 44.1% for the first quarter of 2016.  As in the past few years, we plan to continue increasing our compliance staff in order to meet new and more complex laws and regulations.  Meanwhile, we also continue to add front line staff on an opportunistic basis to sustain our growth.  Our Bank maintains a highly asset sensitive balance sheet which will benefit from an increase in short term rates when it occurs.

“Amid all of the positive results of the quarter, there was one setback.  A Syndicated National Credit (“SNiC”) loan was downgraded to non-accrual status during the quarter.  We have determined the event was an isolated case as we have underwritten the loan in accordance with our standards based upon the information provided.  A larger than normal provision for loan loss was made in addition to the loan loss recovery we received during the quarter.  The silver lining here is that it serves as a reminder that we need to be even more cautious going forward.”

Net Interest Income and Net Interest Margin. Net interest income before provision for loan and lease losses was $25.7 million for the second quarter of 2016. This compares favorably to the $20.6 million recorded in the second quarter of 2015 and to the $23.9 million recorded in the first quarter of 2016. The increase over both comparable periods is due primarily to growth in interest income on loans partially offset by an increase in interest expense on deposits and borrowings. The Bank’s taxable equivalent net interest margin was 3.87% for the second quarter of 2016, a 14 basis point decrease from the 4.01% achieved in the second quarter of 2015 but was an 8 basis point increase from the 3.79% recorded in the first quarter of 2016.

Noninterest Income. For the second quarter of 2016, noninterest income was $1,660,000 compared with $1,131,000 for the same quarter last year and compared to $1,163,000 for the first quarter of 2016. The increase over both periods is primarily due to trade finance income as letter of credit activity has increased. Service charges on deposits were primarily flat compared to the same period last year but were up by $44,000 over the first quarter of 2016. Trade finance income was $835,000 for the second quarter of 2016, an increase of $344,000 compared to the same period last year and an increase of $418,000 compared to the first quarter of 2016. Other income was $398,000, an increase of $178,000 over the second quarter of 2015 and an increase of $67,000 over the first quarter of 2016. The increase over both comparable periods was due to an increase in unutilized line fees on loans.

Noninterest Expense. Total noninterest expense was $10.8 million for the second quarter of 2016, an increase of $2.3 million over the same period last year and down from the $11.0 million recorded in the first quarter of 2016. Salaries and benefits expense totaled $6.1 million for the second quarter of 2016, an increase over the $5.5 million recorded for the same period last year and a decrease from the $7.0 million recorded in the first quarter of 2016. The increase over the same period last year was due primarily to staffing/merit increases, much of that due to the acquisition of United International Bank (“UIB”), and the decrease from the first quarter of 2016 was due to heightened payroll taxes in the first quarter of 2016 as well as a higher level of capitalized loan origination costs. Occupancy expense totaled $1.3 million compared to the $899,000 recorded in the same period in 2015 and the $1.2 million recorded in the first quarter of 2016. The increase over the prior year was due mainly to the addition of the New York office with the UIB acquisition as well as a new administrative office which the Bank opened in November 2015 in El Monte, California. Professional services expense was $1.4 million for the second quarter of 2016 compared to $1.2 million for the same quarter of 2015 and $962,000 recorded in the first quarter of 2016. The Bank incurred $243,000 in costs related to its one OREO property. This compares to a gain of $552,000 in the second quarter of 2015 and expense of $199,000 in the first quarter of 2016. Other expenses were $1.3 million for the second quarter of 2016 compared to $1.0 million for the same period last year and $1.1 million for the first quarter of 2016.

Income Taxes

The Bank recorded a provision for income taxes of $5.7 million for the second quarter of 2016. This represents an effective tax rate (“ETR”) of 40.0% for the quarter. This is down from the ETR of 40.4% for the second quarter of 2015 and down from the 40.6% ETR recorded in the first quarter of 2016. The difference between the statutory rate (Federal and State combined) of 42.05% and the ETR is due to tax deductible items as well as the Bank’s investments in various Low Income Housing Income Tax Credit (“LIHTC”) funds.

Balance Sheet Summary

Total gross loans and leases at June 30, 2016 were $2.27 billion, an increase of $212.8 million or 10.3% over the total of $2.06 billion as of December 31, 2015. Total deposits reached $2.52 billion, an increase of $229.3 million or 10.0% over the total of $2.29 billion as of December 31, 2015. Total assets reached $2.92 billion as of June 30, 2016, an increase of $316.8 million or 12.2% over the total of $2.60 billion as of December 31, 2015. 

Asset Quality

As of June 30, 2016 nonaccrual loans totaled $3.3 million, an increase of $1.3 million over the $2.0 million total as of December 31, 2015. Total net charge-offs for the second quarter of 2016 were $2.0 million compared to a net recovery of $223,000 in the first quarter of 2016 and compared to a net charge off of $130,000 for the second quarter of 2015. The Bank recorded a provision for loan loss of $2.3 million for the second quarter of 2016 which was impacted by the new nonaccrual loan which was deemed such in the second quarter. Although this is a new nonperforming loan, all trends and all other factors relative to the quality of the loan portfolio, as well as the economic conditions in the areas in which we operate, continue to remain strong and thrive. The $2.3 million provision is an increase from the $500,000 provision recorded in the same quarter last year and to the $800,000 provision recorded in the first quarter of 2016. The allowance for loan loss at June 30, 2016 was $24.0 million or 1.06% of total loans compared to $22.7 million or 1.10% of total loans at December 31, 2015.

OREO

As of June 30, 2016 and December 31, 2015, the Bank held one OREO property, a $4.1 million multi-family property located outside of California.

CapitalizationAs of June 30, 2016, the Bank’s leverage ratio was 10.05%, the common equity tier 1 capital ratio was 10.41% and the total capital ratio was 13.65%. As of December 31, 2015, the Bank’s leverage ratio was 10.46%, the common equity tier 1 ratio was 11.03% and the total risk based capital ratio was 12.00%.

Conference Call and WebcastA conference call with simultaneous webcast to discuss Preferred Bank’s second quarter 2016 financial results will be held tomorrow, July 21st at 2:00 p.m. Eastern / 11:00 a.m. Pacific. Interested participants and investors may access the conference call by dialing 866-652-5200 (domestic) or 412-317-6060 (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 CEO Li Yu,  President and COO 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 August 4, 2016; the passcode is 10089672.

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 eleven full-service branch banking offices in the California cities of Alhambra, Century City,  City of Industry, Torrance, Arcadia, Irvine, Diamond Bar, Anaheim, Pico Rivera, Tarzana and San Francisco, 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 StatementsThis 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 2015 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
					June 30,				March 31,				June 30,
						2016				2016				2015
Interest income:
	Loans, including fees				$	27,892			$	25,460			$	21,276
	Investment securities					1,722				1,784				1,731
	Fed funds sold					109				77				46
		Total interest income				29,723				27,321				23,053
Interest expense:
	Interest-bearing demand					1,051				1,050				709
	Savings					18				18				15
	Time certificates					2,660				2,315				1,727
	FHLB borrowings					67				59				35
	Subordinated debt issuance					186				-				-
		Total interest expense				3,982				3,442				2,486
		Net interest income				25,741				23,879				20,567
Provision for loan losses						2,300				800				500
		Net interest  income after provision for
			loan losses			23,441				23,079				20,067
Noninterest income:
	Fees & service charges on deposit accounts					338				294				336
	Trade finance income					835				417				491
	BOLI income					89				85				84
	Net gain on sale of investment securities					-				36				-
	Other income					398				331				220
		Total noninterest income				1,660				1,163				1,131
Noninterest expense:
	Salary and employee benefits					6,065				7,021				5,507
	Net occupancy expense					1,267				1,203				899
	Business development and promotion expense					152				222				124
	Professional services					1,409				962				1,175
	Office supplies and equipment expense					376				351				263
	Other real estate owned related (income) expense  and valuation allowance on LHFS					243				199				(552	)
	Other					1,279				1,080				1,046
		Total noninterest expense				10,791				11,038				8,462
		Income before provision for income taxes				14,310				13,204				12,736
Income tax expense						5,724				5,361				5,147
		Net income			$	8,586			$	7,843			$	7,589
Income per share available to common shareholders
		Basic			$	0.61			$	0.56			$	0.55
		Diluted			$	0.61			$	0.56			$	0.55
Weighted-average common shares outstanding
		Basic				13,851,081				13,796,892				13,480,609
		Diluted				13,957,117				13,911,195				13,659,167
Dividends per share					$	0.15			$	0.15			$	0.12

 

PREFERRED BANK
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except for net income per share and shares)
					For the Six Months Ended
					June 30,				June 30,				Change
						2016				2015			%
Interest income:
	Loans, including fees				$	53,352			$	41,631				28.2	%
	Investment securities					3,506				3,188				10.0	%
	Fed funds sold					186				80				131.9	%
		Total interest income				57,044				44,899				27.1	%
Interest expense:
	Interest-bearing demand					2,101				1,495				40.5	%
	Savings					36				30				19.9	%
	Time certificates					4,975				3,377				47.3	%
	FHLB borrowings					126				66				90.1	%
	Subordinated debt issuance					186				-				100.0	%
		Total interest expense				7,424				4,968				49.4	%
		Net interest income				49,620				39,931				24.3	%
Provision for credit losses						3,100				1,000				210.0	%
		Net interest  income after provision for
		loan losses				46,520				38,931				19.5	%
Noninterest income:
	Fees & service charges on deposit accounts					632				635				-0.5	%
	Trade finance income					1,252				797				57.0	%
	BOLI income					174				168				3.3	%
	Net gain on sale of investment securities					36				-				100.0	%
	Other income					729				399				82.8	%
		Total noninterest income				2,823				1,999				41.2	%
Noninterest expense:
	Salary and employee benefits					13,086				10,819				21.0	%
	Net occupancy expense					2,470				1,749				41.2	%
	Business development and promotion expense					374				233				60.3	%
	Professional services					2,371				2,259				5.0	%
	Office supplies and equipment expense					727				517				40.6	%
	Other real estate owned related expense (income) and valuation allowance on LHFS					442				(463	)			-195.5	%
	Other					2,359				1,966				20.0	%
		Total noninterest expense				21,829				17,080				27.8	%
		Income before provision for income taxes				27,514				23,850				15.4	%
Income tax expense						11,085				9,571				15.8	%
		Net income			$	16,429			$	14,279				15.1	%
Income per share available to common shareholders
		Basic			$	1.17			$	1.04				12.5	%
		Diluted			$	1.16			$	1.03				12.7	%
Weighted-average common shares outstanding
		Basic				13,823,986				13,290,258				4.0	%
		Diluted				13,933,721				13,620,027				2.3	%
Dividends per share					$	0.30			$	0.24				25.0	%

 

PREFERRED BANK
Condensed Consolidated Statements of Financial Condition
(unaudited)
(in thousands)
					June 30,				December 31,
						2016				2015
					(Unaudited)				(Audited)
Assets
Cash and due from banks					$	316,985			$	296,175
Fed funds sold						59,500				13,000
Cash and cash equivalents						376,485				309,175
Securities held to maturity, at amortized cost						5,143				5,830
Securities available-for-sale, at fair value						201,256				169,502
Loans and leases						2,272,230				2,059,392
Less allowance for loan and lease losses						(23,983	)			(22,658	)
Less net deferred loan fees						(3,682	)			(3,012	)
Net loans and leases						2,244,565				2,033,722
Other real estate owned						4,112				4,112
Customers' liability on acceptances						108				897
Bank furniture and fixtures, net						5,572				5,601
Bank-owned life insurance						8,709				8,763
Accrued interest receivable						8,220				8,128
Investment in affordable housing						24,886				16,052
Federal Home Loan Bank stock						9,332				7,162
Deferred tax assets						23,049				23,802
Income tax receivable						-				299
Other asset						4,204				5,801
Total assets					$	2,915,641			$	2,598,846
Liabilities and Shareholders' Equity
Liabilities:
Deposits:
Demand					$	540,374			$	558,906
Interest-bearing demand						855,661				748,918
Savings						29,031				30,703
Time certificates of $250,000 or more						398,736				321,537
Other time certificates						692,063				626,495
Total deposits					$	2,515,865			$	2,286,559
Acceptances outstanding						108				897
Advances from Federal Home Loan Bank						26,573				26,635
Subordinated debt issuance						61,475				-
Commitments to fund investment in affordable housing partnership						11,199				3,958
Accrued interest payable						2,562				1,919
Other liabilities						15,507				14,733
Total liabilities						2,633,289				2,334,701
Commitments and contingencies
Shareholders' equity:
Preferred stock. Authorized 25,000,000 shares; no issued and outstanding
shares at June 30, 2016 and December 31, 2015						-				-
Common stock, no par value. Authorized 100,000,000 shares; issued
and outstanding 14,116,474 and 13,884,942 shares at June 30, 2016  and December 31, 2015, respectively						167,892				166,560
Treasury stock						(19,115	)			(19,115	)
Additional paid-in-capital						38,435				34,672
Accumulated income						93,119				81,046
Accumulated other comprehensive income:
Unrealized gain on securities, available-for-sale, net of tax of $1,467 and $713 at June 30, 2016 and December 31, 2015, respectively						2,021				982
Total shareholders' equity						282,352				264,145
Total liabilities and shareholders' equity					$	2,915,641			$	2,598,846

 

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)
				For the Quarter Ended
				June 30,				March 31,				December 31,				September 30,				June 30,
					2016				2016				2015				2015				2015
Unaudited historical quarterly operations data:
	Interest income			$	29,723			$	27,321			$	25,423			$	24,380			$	23,053
	Interest expense				3,982				3,442				3,105				2,783				2,486
		Interest income before provision for credit losses			25,741				23,879				22,318				21,597				20,567
	Provision for credit losses				2,300				800				300				500				500
	Noninterest income				1,660				1,163				954				940				1,131
	Noninterest expense				10,791				11,038				9,890				8,740				8,462
	Income tax expense				5,724				5,361				5,518				5,396				5,147
		Net income			8,586				7,843				7,563				7,901				7,589
	Earnings per share
		Basic		$	0.61			$	0.56			$	0.55			$	0.57			$	0.55
		Diluted		$	0.61			$	0.56			$	0.54			$	0.57			$	0.55
Ratios for the period:
	Return on average assets				1.26	%			1.21	%			1.28	%			1.42	%			1.44	%
	Return on beginning equity				12.62	%			11.94	%			11.67	%			12.55	%			12.49	%
	Net interest margin (Fully-taxable equivalent)				3.87	%			3.79	%			3.88	%			4.00	%			4.01	%
	Noninterest expense to average assets				1.58	%			1.70	%			1.67	%			1.58	%			1.60	%
	Efficiency ratio				39.38	%			44.08	%			42.50	%			38.78	%			39.00	%
	Net charge-offs (recoveries) to average loans (annualized)				0.36	%			-0.04	%			0.36	%			0.05	%			0.03	%
Ratios as of period end:
	Tier 1 leverage capital ratio (1)				10.05	%			10.29	%			10.46	%			11.47	%			11.59	%
	Common equity tier 1 risk-based capital ratio (1)				10.41	%			10.74	%			11.03	%			11.80	%			11.91	%
	Tier 1 risk-based capital ratio (1)				10.41	%			10.74	%			11.03	%			11.80	%			11.91	%
	Total risk-based capital ratio (1)				13.65	%			11.70	%			12.00	%			12.93	%			13.07	%
	Allowances for credit losses to loans and leases at end of period				1.06	%			1.10	%			1.10	%			1.31	%			1.36	%
	Allowance for credit losses to non-performing
		loans and leases			722.47	%			2346.18	%			1140.29	%			303.27	%			299.06	%
Average balances:
	Total loans and leases			$	2,248,652			$	2,067,047			$	1,876,544			$	1,741,762			$	1,673,710
	Earning assets			$	2,687,435			$	2,550,821			$	2,297,154			$	2,160,075			$	2,070,542
	Total assets			$	2,746,031			$	2,605,907			$	2,345,319			$	2,201,060			$	2,117,610
	Total deposits			$	2,400,756			$	2,291,764			$	2,039,567			$	1,907,719			$	1,832,688
	(1) Risk-based capital ratios were calculated under BASEL III rules, which became effective on January 1, 2015.  Ratios for the prior periods were calculated under Basel I rules.

 

PREFERRED BANK
Selected Consolidated Financial Information
(in thousands, except for ratios)
				For the Six Months Ended
				June 30,				June 30,
					2016				2015
	Interest income			$	57,044			$	44,899
	Interest expense				7,424				4,968
		Interest income before provision for credit losses			49,620				39,931
	Provision for credit losses				3,100				1,000
	Noninterest income				2,823				1,999
	Noninterest expense				21,829				17,080
	Income tax expense				11,085				9,571
		Net income			16,429				14,279
	Earnings per share
		Basic		$	1.17			$	1.04
		Diluted		$	1.16			$	1.03
Ratios for the period:
	Return on average assets				1.23	%			1.31	%
	Return on beginning equity				12.51	%			11.88	%
	Net interest margin (Fully-taxable equivalent)				3.83	%			3.89	%
	Noninterest expense to average assets				1.64	%			1.62	%
	Efficiency ratio				41.62	%			40.76	%
	Net charge-offs (recoveries) to average loans				0.17	%			-0.01	%
Average balances:
	Total loans and leases			$	2,158,158			$	1,438,122
	Earning assets			$	2,619,287			$	1,836,375
	Total assets			$	2,676,158			$	1,880,019
	Total deposits			$	2,346,462			$	1,620,709

 

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)
				As of
				June 30,				March 31,				December 31,				September 30,				June 30,
					2016				2016				2015				2015				2015
Unaudited quarterly statement of financial position data:
Assets:
	Cash and cash equivalents			$	376,485			$	293,547			$	309,175			$	232,707			$	208,015
	Securities held-to-maturity, at amortized cost				5,143				5,550				5,830				6,307				6,806
	Securities available-for-sale, at fair value				201,256				162,654				169,502				164,378				161,775
	Loans and Leases:
		Real estate - Single and multi-family residential		$	393,076			$	401,708			$	415,003			$	328,124			$	290,186
		Real estate - Land for housing			14,817				14,838				14,408				14,429				13,102
		Real estate - Land for income properties			6,316				1,816				1,795				1,876				1,891
		Real estate - Commercial			995,213				924,913				861,317				770,494				712,383
		Real estate - For sale housing construction			95,519				82,153				73,858				79,406				71,945
		Real estate - Other construction			72,963				66,636				57,546				48,438				49,413
		Commercial and industrial			659,701				626,599				596,887				555,680				570,408
		Trade finance and other			34,625				39,323				38,578				38,602				40,403
			Gross loans		2,272,230				2,157,986				2,059,392				1,837,049				1,749,731
	Allowance for loan and lease losses				(23,983	)			(23,681	)			(22,658	)			(24,055	)			(23,758	)
	Net deferred loan fees				(3,682	)			(3,065	)			(3,012	)			(2,476	)			(2,179	)
		Total loans, net		$	2,244,565			$	2,131,240			$	2,033,722			$	1,810,518			$	1,723,794
	Other real estate owned			$	4,112			$	4,112			$	4,112			$	-			$	-
	Investment in affordable housing				24,886				25,499				16,052				16,589				17,059
	Federal Home Loan Bank stock				9,332				6,965				7,162				6,677				6,677
	Other assets				49,862				53,783				53,291				45,370				46,030
		Total assets		$	2,915,641			$	2,683,350			$	2,598,846			$	2,282,546			$	2,170,156
Liabilities:
	Deposits:
		Demand		$	540,374			$	528,126			$	558,906			$	477,523			$	519,501
		Interest-bearing demand			855,661				803,374				748,918				697,402				568,243
		Savings			29,031				30,002				30,703				21,159				23,855
		Time certificates of $250,000 or more			398,736				339,971				321,537				263,949				260,205
		Other time certificates			692,063				656,386				626,495				527,602				510,394
		Total deposits		$	2,515,865			$	2,357,859			$	2,286,559			$	1,987,635			$	1,882,198
	Advances from Federal Home Loan Bank			$	26,573			$	26,601			$	26,635			$	20,000			$	20,000
	Subordinated debt issuance				61,475				-				-				-				-
	Commitments to fund investment in affordable housing partnership				11,454				11,454				3,958				4,139				4,139
	Other liabilities				17,922				13,862				17,549				13,590				13,954
		Total liabilities		$	2,633,289			$	2,409,776			$	2,334,701			$	2,025,364			$	1,920,291
Equity:
	Net common stock, no par value			$	187,212			$	185,780			$	182,118			$	180,310			$	179,360
	Retained earnings				93,119				86,716				81,046				75,629				69,431
	Accumulated other comprehensive income				2,021				1,079				982				1,243				1,074
		Total shareholders' equity		$	282,352			$	273,574			$	264,145			$	257,182			$	249,865
		Total liabilities and shareholders' equity		$	2,915,641			$	2,683,350			$	2,598,846			$	2,282,546			$	2,170,156

 

Preferred Bank
Loan and Credit Quality Information
Allowance For Credit Losses & Loss History
					Six Months Ended				Year Ended
					June 30, 2016				December 31, 2015
					(Dollars in 000's)
Allowance For Credit Losses
Balance at Beginning of Period					$	22,658			$	22,974
	Charge-Offs
		Commercial & Industrial				2,663				1,475
		Mini-perm Real Estate				-				1,793
		Construction - Residential				-				-
		Construction - Commercial				-				-
		Land - Residential				-				-
		Land - Commercial				-				-
		Others				-				-
		Total Charge-Offs				2,663				3,268
	Recoveries
		Commercial & Industrial				198				131
		Mini-perm Real Estate				-				144
		Construction - Residential				-				-
		Construction - Commercial				-				20
		Land - Residential				-				100
		Land - Commercial				690				757
		Total Recoveries				888				1,152
	Net Loan Charge-Offs					1,775				2,116
	Provision for Credit Losses					3,100				1,800
Balance at End of Period					$	23,983			$	22,658
Average Loans and Leases					$	2,158,158			$	1,731,871
Loans and Leases at end of Period					$	2,272,230			$	2,059,392
Net Charge-Offs to Average Loans and Leases						0.17	%			0.12	%
Allowances for credit losses to loans and leases at end of period						1.06	%			1.10	%

 

 

 

 

AT THE COMPANY:
Edward J. Czajka        
Executive Vice President
Chief Financial Officer
(213) 891-1188  

AT FINANCIAL PROFILES:
Kristen Papke
General Information
(310) 663-8007
kpapke@finprofiles.com