Preferred Bank (NASDAQ:PFBC), an independent commercial bank, today reported results for the quarter ended March 31, 2017. Preferred Bank (“the Bank”) reported net income of $10.3 million or $0.71 per diluted share for the first quarter of 2017. This compares to net income of $7.8 million or $0.56 per diluted share for the first quarter of 2016 and compares to net income of $10.1 million or $0.71 per diluted share for the fourth quarter of 2016. Net income for this quarter was impacted by a number of items. First, the Bank recorded a $1.5 million legal reserve for the potential settlement of a lawsuit which, in the past two years, had been very costly to defend. Second, the quarter was also negatively impacted by employer-paid tax expense of $945,000 resulting from the termination and distribution of the Bank’s deferred compensation plan, the distribution of annual bonuses and the vesting of restricted stock awards. Third, the adoption of a new tax-related accounting standard resulted in a decrease of $768,000 from the normal tax expense given the Bank’s level of pre-tax income.

Highlights from the first quarter of 2017:

* Linked quarter loan growth   $144 million or 5.7%
* Linked quarter deposit growth   $188 million or 6.8%
* Return on average assets   1.29%  
* Return on beginning equity   13.99%  
* Efficiency ratio   43.2%  
* Net interest margin   3.67%  

Li Yu, Chairman and CEO commented, “We are delighted to report a very vibrant first quarter of 2017.  For the quarter, deposit growth was $188 million, a record in our corporate history.  Although large deposit growth such as this will negatively affect return on assets, capital ratios and the net interest margin, it is still the most important factor in building a banking franchise.  We are excited with these quarterly results.

“Likewise, first quarter loan growth was one of the strongest in our corporate history.  The increase was $144 million or 5.7% from year-end 2016.  Most of the new loan production took place in March, however, and thus the related incremental interest income was only a fraction of the incremental provision requirement.  This will of course have a positive effect on our overall profitability in the ensuing quarters.

“Net interest income improved from $28.1 million in the fourth quarter of 2016 to $28.4 million in the first quarter of 2017 despite there being two fewer days this quarter than last. The improvement was largely the result of the Federal Reserve interest rate increases that occurred last December and in March.  Overhead expense continues to be under control with the efficiency ratio at 43.2%.  We continue to improve our operating capability and infrastructure by adding staff in BSA, Compliance and digital banking along with opportunistic hiring of frontline personnel.

“For the first quarter of 2017, Preferred Bank’s net income was $10.3 million or $0.71 per diluted share. Our quarterly income was further enhanced by a tax adjustment of $768,000, or $0.05 per diluted share. However during the quarter, we also recorded a reserve of $1.5 million for the potential settlement of a lawsuit which also had a net earnings effect of $0.05 per diluted share. This legal reserve will reduce legal costs for the remainder of 2017 and into 2018.

“We have many reasons to feel optimistic for the remainder of 2017. The following are some of them:

  • Our customers seem to be mostly bullish on the nation’s business environment.  Although issues such as tax reform and a potential border tax remain unclear, investment and business activity seems to have accelerated.
  • Market consensus still points to another 2-3 FOMC rate hikes.  Preferred Bank, being one of the most asset sensitive banks in the nation, will benefit greatly.
  • Although the new administration is putting regulatory reform high on its priorities, we can neither forecast the timing nor whether its effect will be meaningful to our type of community bank.  However, a deceleration in the growth of compliance costs could be a possibility.
  • A corporate tax cut does not look like an illusion, although the timing and complexibility is hard to predict and seems to get pushed back further.  If and when it happens, Preferred Bank as a full rate payer, will certainly benefit.
  • Finally, our loan pipeline appears to be consistent and vibrant.  Second quarter loan production should be respectable.  On March 1, 2017, we rolled out our home mortgage product which should be a source of new loans.”

Net Interest Income and Net Interest Margin. Net interest income before provision for loan and lease losses was $28.4 million for the first quarter of 2017. This compares favorably to the $23.9 million recorded in the first quarter of 2016 and to the $28.1 million recorded in the fourth quarter of 2016. The increase over both comparable periods is due primarily to loan growth as well as increases in the fed funds and Prime rates. The Bank’s taxable equivalent net interest margin was 3.67% for the first quarter of 2017, a 12 basis point decrease from the 3.79% achieved in the first quarter of 2016 and flat compared to the 3.67% recorded in the fourth quarter of 2016. Based on internal interest rate risk modeling, the Bank’s net interest margin should, in theory have expanded after the fed rate increases of December and March. However due to the special FHLB dividend paid in the fourth quarter of 2016, and due to a small decrease in loan fees quarter-over-quarter, the margin remained flat. For the month of March however, the Bank did see an expansion in the margin compared to January and February.

Noninterest Income. For the first quarter of 2017, noninterest income was $2,090,000 compared with $1,163,000 for the same quarter last year and compared to $1,286,000 for the fourth quarter of 2016. Service charges on deposits increased by $59,000 this quarter when compared to the same quarter last year and by $95,000 when compared to the fourth quarter of 2016. Letter of Credit fee income was $795,000 for the first quarter of 2017, an increase of $378,000 compared to the same period last year and an increase of $196,000 compared to the fourth quarter of 2016 as LC activity has increased. Other income was $856,000, a significant increase over both comparable periods. This was primarily due to $345,000 in OREO income.

Noninterest Expense. Total noninterest expense was $13.2 million for the first quarter of 2017, an increase of $2.1 million over the same period last year and an increase of $2.0 million over the fourth quarter of 2016, and was mainly driven by the $1.5 million legal reserve recorded this quarter. Salaries and benefits expense totaled $7.5 million for the first quarter of 2017 compared to $7.0 million recorded for the same period last year and compared to the $6.7 million recorded in the fourth quarter of 2016. The increase over the same period last year was due primarily to staffing/merit increases and the increase over the prior quarter was mainly due to employer paid taxes on the deferred compensation plan distribution, the annual bonus payout and the vesting of restricted stock awards. Occupancy expense totaled $1.2 million for the first quarter of 2017 and was flat when compared to both the same quarter last year as well as the fourth quarter of 2016. Professional services expense was $1.4 million for the first quarter of 2017 compared to $962,000 for the same quarter of 2016 and $1.5 million recorded in the fourth quarter of 2016. The increase over the same period last year was due mainly to legal fees which increased by $465,000. The Bank incurred $109,000 in costs related to its one OREO property and this compares to OREO expense of $199,000 in the first quarter of 2016 and $187,000 in the fourth quarter of 2016. Other expenses were $2.6 million for the first quarter of 2017 and an increase of approximately $1.5 million over both comparable periods. This was due to the aforementioned legal settlement reserve. The Bank’s efficiency ratio came in at 43.2% for the quarter, driven higher by the legal reserve. Excluding that item, the efficiency ratio would have been 38.1%.

Income Taxes

The Bank recorded a provision for income taxes of $5.6 million for the first quarter of 2017. This represents an effective tax rate (“ETR”) of 35.2% for the quarter. This is down from the ETR of 40.6% for the first quarter of 2016 and down from the 38.0% ETR recorded in the fourth quarter of 2016. The decrease this quarter was due the adoption of Accounting Standards Update (ASU) 2016-09 which resulted in an excess tax benefit from share-based compensation and a $768,000 net tax benefit on the income statement. It is anticipated that the Bank’s ETR will revert back closer to its historical norm in the ensuing quarters.

Balance Sheet Summary

Total gross loans and leases at March 31, 2017 were $2.69 billion, an increase of $144.1 million or 5.7% over the total of $2.54 billion as of December 31, 2016. Total deposits as of March 31, 2017 were $2.95 billion, an increase of $187.8 million or 6.8% over the $2.76 billion at December 31, 2016. Total assets as of  March 31, 2017 were $3.41 billion, an increase of $188.9 million or 5.9% over the $3.22 billion as of December 31, 2016.

Asset QualityAs of March 31, 2017 nonaccrual loans totaled $7.8 million, up slightly from the $7.6 million total as of December 31, 2016. Total net charge-offs for the first quarter of 2017 were $121,000 compared to a net recovery of $22,000 the fourth quarter of 2016 and compared to a net recovery of $223,000 for the first quarter of 2016. The Bank recorded a provision for loan losses of $1.5 million for the first quarter of 2017. This is an increase from the $800,000 provision recorded in the same quarter last year but a decrease from the $1.9 million provision recorded in the fourth quarter of 2016. The allowance for loan loss at March 31, 2017 was $27.9 million or 1.04% of total loans compared to $26.5 million or 1.04% of total loans at December 31, 2016.

OREO

As of March 31, 2017 and December 31, 2016, the Bank held one OREO property, a $4.1 million multi-family property located outside of California.

CapitalizationAs of March 31, 2017, the Bank’s leverage ratio was 9.01%, the common equity tier 1 capital ratio was 9.16% and the total capital ratio was 13.22%. As of December 31, 2016, the Bank’s leverage ratio was 9.43%, the common equity tier 1 ratio was 9.83% and the total risk based capital ratio was 14.09%.

Conference Call and WebcastA conference call with simultaneous webcast to discuss Preferred Bank’s first quarter 2017 financial results will be held tomorrow, April 20th 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 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 May 4, 2017; the passcode is 10105309.

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 ten 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, 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 2016 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
          March 31,   December 31,   March 31,
            2017       2016       2016  
Interest income:                        
  Loans, including fees   $ 31,919     $ 31,248     $ 25,460  
  Investment securities     2,482       2,570       1,784  
  Fed funds sold     231       162       77  
    Total interest income     34,632       33,980       27,321  
                   
Interest expense:            
  Interest-bearing demand   $ 1,465       1,320       1,050  
  Savings     21       21       18  
  Time certificates     3,108       2,982       2,315  
  FHLB borrowings     65       67       59  
  Subordinated debit     1,531       1,526       -  
    Total interest expense     6,190       5,916       3,442  
    Net interest income     28,442       28,064       23,879  
Provision for loan losses     1,500       1,900       800  
    Net interest  income after provision for            
     loan losses     26,942       26,164       23,079  
                   
Noninterest income:            
  Fees & service charges on deposit accounts     353       258       294  
  LC fee income     795       599       417  
  BOLI income     86       87       85  
  Net gain on sale of investment securities     -       133       36  
  Other income     856       209       331  
    Total noninterest income     2,090       1,286       1,163  
                   
Noninterest expense:            
  Salary and employee benefits     7,509       6,660       7,021  
  Net occupancy expense     1,182       1,199       1,203  
  Business development and promotion expense     240       242       222  
  Professional services     1,162       1,492       962  
  Office supplies and equipment expense     353       350       351  
  Other real estate owned related expense and valuation allowance on LHFS     108       187       199  
  Other       2,624       1,093       1,080  
    Total noninterest expense     13,178       11,223       11,038  
    Income before provision for income taxes     15,854       16,227       13,204  
Income tax expense     5,573       6,166       5,361  
    Net income   $ 10,281     $ 10,061     $ 7,843  
                   
Dividend and earnings allocated to participating securities     (110 )     (131 )     (119 )
Net income available to common shareholders   $ 10,171     $ 9,930     $ 7,724  
                   
Income per share available to common shareholders            
    Basic   $ 0.71     $ 0.71     $ 0.56  
    Diluted   $ 0.71     $ 0.71     $ 0.56  
                   
Weighted-average common shares outstanding            
    Basic     14,314,624       13,984,346       13,796,892  
    Diluted     14,386,402       14,066,596       13,911,195  
                   
Dividends per share   $ 0.18     $ 0.18     $ 0.15  
                   

 

 PREFERRED BANK 
 Condensed Consolidated Statements of Financial Condition 
 (unaudited) 
 (in thousands) 
               
        March 31,   December 31,  
          2017       2016    
        (Unaudited)   (Audited)  
 Assets           
               
Cash and due from banks $ 329,855     $ 306,330    
Fed funds sold   120,500       97,500    
Cash and cash equivalents   450,355       403,830    
               
Securities held to maturity, at amortized cost   9,912       10,337    
Securities available-for-sale, at fair value   197,455       199,833    
Loans and leases   2,687,603       2,543,549    
Less allowance for loan and lease losses   (27,857 )     (26,478 )  
Less net deferred loan fees   (2,572 )     (1,682 )  
Net loans and leases   2,657,174       2,515,389    
               
Other real estate owned   4,112       4,112    
Customers' liability on acceptances   4,595       772    
Bank furniture and fixtures, net   5,250       5,313    
Bank-owned life insurance   8,883       8,825    
Accrued interest receivable   9,651       9,550    
Investment in affordable housing   22,904       23,670    
Federal Home Loan Bank stock   6,965       9,331    
Deferred tax assets   26,286       26,605    
Other asset   9,387       4,031    
Total assets $ 3,412,929     $ 3,221,598    
               
               
 Liabilities and Shareholders' Equity         
               
Liabilities:        
Deposits:          
Demand $ 576,060     $ 586,272    
Interest-bearing demand     1,137,145       1,019,058    
Savings     34,434       34,067    
Time certificates of $250,000 or more     495,177       427,172    
Other time certificates     707,830       697,155    
Total deposits   $ 2,950,646     $ 2,763,724    
Acceptances outstanding     4,595       772    
Advances from Federal Home Loan Bank     26,487       26,516    
Subordinated debt issuance     98,870       98,839    
Commitments to fund investment in affordable housing partnership         10,354       10,632    
Accrued interest payable     4,647       3,199    
Other liabilities     22,947       19,851    
Total liabilities       3,118,546       2,923,533    
               
Commitments and contingencies              
Shareholders' equity:              
Preferred stock. Authorized 25,000,000 shares; issued and no outstanding shares at March 31, 2017 and December 31, 2016              
Common stock, no par value. Authorized 20,000,000 shares; issued and outstanding 14,505,113 at March 31, 2017 and 14,232,907 at December 31, 2016, respectively.     173,332       169,861    
Treasury stock     (33,233 )     (19,115 )  
Additional paid-in-capital     38,785       39,929    
Accumulated income     115,931       108,261    
Accumulated other comprehensive income:              
Unrealized loss on securities, available-for-sale, net of tax of  $313 and $632 at March 31, 2017 and December 31, 2016       (432 )     (871 )  
Total shareholders' equity       294,383       298,065    
Total liabilities and shareholders' equity   $ 3,412,929     $ 3,221,598    
               
PREFERRED BANK
 Selected Consolidated Financial Information
 (unaudited)
 (in thousands, except for ratios)
                         
        For the Quarter Ended
                         
        March 31,   December 31, September 30,   June 30,   March 31,  
          2017       2016     2016       2016       2016    
 Unaudited historical quarterly operations data:                  
   Interest income $   34,632     $   33,980   $   31,889     $   29,723     $   27,321    
   Interest expense     6,190         5,916       5,394         3,982         3,442    
     Interest income before provision for credit losses     28,442         28,064       26,495         25,741         23,879    
   Provision for credit losses     1,500         1,900       1,400         2,300         800    
   Noninterest income     2,090         1,286       1,350         1,660         1,163    
   Noninterest expense     13,178         11,223       10,486         10,791         11,038    
   Income tax expense     5,573         6,166       6,080         5,724         5,361    
     Net income     10,281         10,061       9,879         8,586         7,843    
                         
   Earnings per share                  
     Basic $   0.71     $   0.71   $   0.70     $   0.61     $   0.56    
     Diluted $   0.71     $   0.71   $   0.69     $   0.61     $   0.56    
                         
 Ratios for the period:                  
   Return on average assets   1.29%       1.28%     1.31%       1.26%       1.21%    
   Return on beginning equity   13.99%       13.74%     13.92%       12.49%       11.94%    
   Net interest margin (Fully-taxable equivalent)   3.67%       3.67%     3.59%       3.87%       3.79%    
   Noninterest expense to average assets   1.66%       1.43%     1.39%       1.58%       1.70%    
   Efficiency ratio   43.16%       38.24%     37.66%       39.38%       44.08%    
   Net charge-offs (recoveries) to average loans (annualized)   0.02%       0.00%     0.14%       0.36%       -0.04%    
                         
 Ratios as of period end:                  
   Tier 1 leverage capital ratio   9.01%       9.43%     9.47%       10.05%       10.29%    
   Common equity tier 1 risk-based capital ratio   9.16%       9.83%     9.96%       10.41%       10.74%    
   Tier 1 risk-based capital ratio   9.16%       9.83%     9.96%       10.41%       10.74%    
   Total risk-based capital ratio     13.22%       14.09%     14.36%       13.65%       11.70%    
   Allowances for credit losses to loans and leases at end of period     1.04%       1.04%     1.01%       1.06%       1.10%    
   Allowance for credit losses to non-performing                     
     loans and leases   357.09%       346.22%     1460.49%       722.47%       2346.18%    
                         
 Average balances:                  
   Total loans and leases  $   2,563,473     $   2,465,492   $   2,344,102     $   2,248,652     $   2,067,047    
   Earning assets $   3,167,031     $   3,066,189   $   2,953,325     $   2,687,435     $   2,550,821    
   Total assets $   3,228,152     $   3,124,984   $   3,009,457     $   2,746,031     $   2,605,917    
   Total deposits $   2,775,840     $   2,666,878   $   2,590,702     $   2,400,756     $   2,291,764    
                         

 

 PREFERRED BANK 
 Selected Consolidated Financial Information 
 (unaudited) 
 (in thousands, except for ratios) 
                           
        As of
                           
        March 31,   December 31,   September 30,   June 30,   March 31,  
          2017       2016       2016       2016       2016    
 Unaudited quarterly statement of financial position data:                     
Assets:                      
  Cash and cash equivalents $ 450,355     $ 403,830     $ 405,522     $ 376,485     $ 293,547    
  Securities held-to-maturity, at amortized cost   9,912       10,337       4,812       5,143       5,550    
  Securities available-for-sale, at fair value   197,455       199,833       203,272       201,256       162,654    
  Loans and Leases:                    
  Real estate - Single and multi-family residential   $ 479,279     $ 490,683     $ 493,489     $ 393,076     $ 401,708    
  Real estate - Land for housing     14,754       14,774       14,796       14,817       14,838    
  Real estate - Land for income properties     1,792       1,801       1,809       6,316       1,816    
  Real estate - Commercial     1,160,077       1,047,321       1,037,687       995,213       924,913    
  Real estate - For sale housing construction     109,703       104,960       104,973       95,519       82,153    
  Real estate - Other construction     150,322       128,434       96,147       72,963       66,636    
  Commercial and industrial     741,339       733,709       659,306       659,701       626,599    
  Trade finance and other     30,337       21,867       24,460       34,625       39,323    
  Gross loans       2,687,603       2,543,549       2,432,667       2,272,230       2,157,986    
  Allowance for loan and lease losses   (27,857 )     (26,478 )     (24,556 )     (23,983 )     (23,681 )  
  Net deferred loan fees   (2,572 )     (1,682 )     (1,913 )     (3,682 )     (3,065 )  
  Total loans, net   $ 2,657,174     $ 2,515,389     $ 2,406,198     $ 2,244,565     $ 2,131,240    
                           
  Other real estate owned     $ 4,112     $ 4,112     $ 4,112     $ 4,112     $ 4,112    
  Investment in affordable housing       22,904       23,670       24,278       24,886       25,499    
  Federal Home Loan Bank stock       6,965       9,331       9,331       9,332       6,965    
  Other assets       64,052       55,096       52,899       49,862       53,783    
  Total assets     $ 3,412,929     $ 3,221,598     $ 3,110,424     $ 2,915,641     $ 2,683,350    
                           
Liabilities:                      
  Deposits:                    
  Demand   $ 576,060     $ 586,272     $ 575,388     $ 540,374     $ 528,126    
  Interest-bearing demand     1,137,145       1,019,058       945,358       855,661       803,374    
  Savings     34,434       34,067       31,344       29,031       30,002    
  Time certificates of $250,000 or more     495,177       427,172       416,807       398,736       339,971    
  Other time certificates     707,830       697,155       691,099       692,063       656,386    
  Total deposits   $ 2,950,646     $ 2,763,724     $ 2,659,996     $ 2,515,865     $ 2,357,859    
                           
  Advances from Federal Home Loan Bank     $ 26,487     $ 26,516     $ 26,544     $ 26,573     $ 26,601    
  Subordinated debt issuance   98,870       98,839       98,851       61,475       -    
  Commitments to fund investment in affordable housing partnership   10,354       10,632       11,015       11,454       11,454    
  Other liabilities       32,189       23,822       22,760       17,922       13,862    
  Total liabilities   $ 3,118,546     $ 2,923,533     $ 2,819,166     $ 2,633,289     $ 2,409,776    
                           
Equity:                        
  Net common stock, no par value $ 178,884     $ 190,675     $ 188,430     $ 187,212     $ 185,780    
  Retained earnings   115,931       108,261       100,804       93,119       86,716    
  Accumulated other comprehensive income   (432 )     (871 )     2,024       2,021       1,079    
  Total shareholders' equity   $ 294,383     $ 298,065     $ 291,258     $ 282,352     $ 273,574    
  Total liabilities and shareholders' equity   $ 3,412,929     $ 3,221,598     $ 3,110,424     $ 2,915,641     $ 2,683,350    
                                               

 

Preferred Bank    
Loan and Credit Quality Information    
                   
Allowance For Credit Losses & Loss History    
          Quarter Ended   Year Ended    
          March 31, 2017   December 31, 2016    
                           
          (Dollars in 000's)    
Allowance For Credit Losses            
Balance at Beginning of Period   $ 26,478     $ 22,658      
  Charge-Offs            
    Commercial & Industrial     161       4,323      
    Mini-perm Real Estate     -       -      
    Construction - Residential     -       -      
    Construction - Commercial     -       -      
    Land - Residential     -       -      
    Land - Commercial     -       -      
    Others     -       -      
    Total Charge-Offs     161       4,323      
                   
  Recoveries            
    Commercial & Industrial     2       985      
    Mini-perm Real Estate     -       -      
    Construction - Residential     -       -      
    Construction - Commercial     17       26      
    Land - Residential     -       -      
    Land - Commercial     22       732      
    Total Recoveries     40       1,743      
                   
  Net Loan Charge-Offs     121       2,580      
  Provision for Credit Losses     1,500       6,400      
Balance at End of Period   $ 27,857     $ 26,478      
Average Loans and Leases   $ 2,563,473     $ 2,282,074      
Loans and Leases at end of Period   $ 2,687,603     $ 2,687,603      
Net Charge-Offs to Average Loans and Leases     0.02%       0.11%      
Allowances for credit losses to loans and leases at end of period     1.04%       1.04%      
                   
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
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