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Preferred Bank Reports Quarterly Earnings

By GlobeNewswire,  July 17, 2019, 04:01:00 PM EDT


LOS ANGELES, July 17, 2019 (GLOBE NEWSWIRE) -- Preferred Bank (NASDAQ:PFBC), an independent commercial bank, today reported results for the quarter ended June 30, 2019. Preferred Bank ("the Bank") reported net income of $20.0 million or $1.31 per diluted share for the second quarter of 2019. This compares favorably to net income of $17.4 million or $1.14 per diluted share for the second quarter of 2018 and also favorably to net income of $18.7 million or $1.23 per diluted share for the first quarter of 2019.

Highlights from the second quarter of 2019:

    • Year-over-Year Earnings Growth         14.8%
    • Year-over-Year EPS Growth         15.0%
    • Return on Assets         1.89%
    • Return on Beginning Equity         18.54%
    • Efficiency Ratio         31.68%
    • Net Interest Margin         4.07%
    • Loan Growth - LQ, Non-annualized         5.31%

Li Yu, Chairman and CEO, commented, "This quarter's highlight was our loan production.  Sequentially, total loans increased $181 million or 5.3%.  Fluctuations in credit line usage and loan pay-off activity accounted for some of the increase, but organic loan originations was one of the best in recent periods.

"Conversely, our total deposits decreased $43 million or 1.2% sequentially.  One of the reasons for the decrease was higher drawdowns on bank accounts by our commercial customers, which is echoed by the higher credit line usage discussed above.  During the quarter, we pro-actively reduced interest rates on deposits ahead of much of our competition, which also may have also cost us some opportunities. 

"We are pleased with the quarterly net income of $20.0 or $1.31 per share.  This number compares well with the prior quarter and with the same quarter last year.  Our net interest margin came in at 4.07%, which met our expectations.  The Bank's efficiency ratio for the quarter was 31.7%, so costs remain well under control and credit quality remains stable. Our ROA and ROE (beginning) for the quarter were 1.89% and 18.54%, respectively.

"As has always been the case, we remain focused on managing the Bank's interest rate risk.  As of June 30, 2019, roughly two-thirds of our loan portfolio are floating rate loans (mostly Prime indexed) with a floor.  With new production at current market rates and pay-offs of old loans and their associated lower floor rates, the overall floors are being continuously updated. Also important for interest rate risk, third quarter CD maturities will now be renewing at approximately our current average cost.

"We recently announced the approval of a $30 million stock repurchase plan, which will allow us the opportunity to return more capital to our shareholders and manage our capital more effectively."

Income Statement Summary

Net Interest Income and Net Interest Margin. Net interest income before provision for loan and lease losses was $41.8 million for the second quarter of 2019. This is up 11.9% over the $37.4 million recorded in the second quarter of 2018 and up over the $40.9 million recorded in the first quarter of 2019. The increase over the same period last year is due primarily to loan and overall asset growth.  In comparing to the first quarter of 2019, strong loan growth mainly fueled the increase in net interest income. The Bank's taxable equivalent net interest margin was 4.07% for the second quarter of 2019, flat compared to the second quarter of 2018 and a 5 basis point decrease from the 4.12% posted in the first quarter of 2019. The decline in the margin was due to total deposit costs which rose by 12 basis points partially offset by an increase in earning asset yields of 4 basis points.

Noninterest Income. For the second quarter of 2019, noninterest income was $1,985,000 compared with $1,756,000 for the same quarter last year and compared to $1,861,000 for the first quarter of 2019. The increase over last year is primarily due to service charges on deposits and LC fee income which were both up fairly sharply, partially offset by a gain on the call of investment securities of $112,000 which occurred in the second quarter of 2018. The increase over the prior quarter is mainly due to service charges on deposits and other income which were both up over last quarter.

Noninterest Expense. Total noninterest expense was $13.9 million for the second quarter of 2019, an increase of around $80,000 over the same period last year but a sharp decrease from $15.7 million recorded in the first quarter of 2019. The primary reason for the linked quarter decrease was the $1.4 million loss on sale of the New York OREO properties in the first quarter of 2019. Salaries and benefits expense totaled $9.5 million for the second quarter of 2019, an increase of $672,000 over the $8.8 million recorded in the second quarter of 2018 and a decrease from the $9.8 million recorded in the first quarter of 2019. The increase over last year is due mainly to normal merit increases and additional relationship officers, while the decrease from the prior quarter is due mainly to payroll taxes, which spike in the first quarter as annual incentive awards are paid out. Occupancy expense totaled $1.3 million for the quarter and was essentially flat from the $1.3 million recorded in the second quarter of 2018 but was up by $122,000 over the prior quarter. In the first quarter of 2019, the Bank recorded a small benefit of $229,000 due to the implementation of the new Lease Accounting Standard, ASC 842. Professional services expense was $1.1 million for the second quarter of 2019 compared to $1.7 million for the same quarter of 2018 and $1.3 million recorded in the first quarter of 2019. The decrease from the prior year is due primarily to lower information technology costs as the Bank converted to a new core I.T. system last year. The decrease from the prior quarter is mainly due to a decrease in legal fees as the Bank's previously-owned OREO properties have all been divested, thus incurring no more fees. Other expenses were $1.4 million for the second quarter of 2019 compared to $1.3 million for both the second quarter of 2018 and the first quarter of 2019.

Balance Sheet Summary

Total gross loans and leases at June 30, 2019 were $3.59 billion, an increase of $252.3 million or 7.6% over the total of $3.33 billion as of December 31, 2018. On a linked-quarter basis, total loans grew by $180.7 million or 5.3%. Total deposits increased by $37.3 million or 1.0% over the $3.64 billion as of December 31, 2018. Total deposits for the second quarter declined by $42.8 million on a linked quarter basis. Total assets reached $4.29 billion as of June 30, 2019, an increase of $78.0 million or 1.9% over the total of $4.22 billion as of December 31, 2018.

Income Taxes

The Bank recorded a provision for income taxes of $8.4 million for the second quarter of 2019. This represents an effective tax rate ("ETR") of 29.5% and consistent with the ETR of 29.5% for the first quarter of 2019. This is up, however from the 28.0% ETR recorded in the second quarter of 2018. The Bank's ETR may fluctuate slightly from quarter to quarter within a fairly small range due to the timing of taxable events throughout the year.

Asset Quality

As of June 30, 2019, nonaccrual loans totaled $3.4 million, a decrease from the $3.6 million as of March 31, 2019 and down significantly from the total of $44.8 million as of December 31, 2018 due to the sale of the New York NPA's in the first quarter of 2019. As of June 30, 2019, total classified loans stood at $7.4 million compared to $46.2 million as of December 31, 2018.

Total net recoveries for the second quarter of 2019 were $315,000 compared to $330,000 in the first quarter of 2019 and compared to $2,000 for the second quarter of 2018. The Bank recorded a provision for loan loss of $1.6 million for the second quarter of 2019, compared to $1.2 million in the second quarter of 2018 and compared to $500,000 recorded in the first quarter of 2019. The allowance for loan loss at June 30, 2019 was $33.8 million or 0.94% of total loans compared to $31.1 million or 0.93% of total loans at December 31, 2018.

Capitalization

As of June 30, 2019, the Bank's leverage ratio was 10.50%, the common equity tier 1 capital ratio was 10.53% and the total capital ratio was 13.74%. As of December 31, 2018, the Bank's leverage ratio was 10.16%, the common equity tier 1 ratio was 10.43% and the total risk based capital ratio was 13.77%.

Conference Call and Webcast

A conference call with simultaneous webcast to discuss Preferred Bank's second quarter 2019 financial results will be held tomorrow, July 18, 2019 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 August 1, 2019; the passcode is 10130589.

About Preferred Bank

Preferred Bank is one of the larger independent commercial banks headquartered 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 Bank conducts its banking business from its main office in Los Angeles, California, and through eleven full-service branch banking offices in California (Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine, Diamond Bar, Pico Rivera, Tarzana and San Francisco (2)) and one branch 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 2018 Annual Report on Form 10-K filed with the Federal Deposit Insurance Corporation which can also 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,
    2019

  2019

  2018

Interest income:            
Loans, including fees   $ 52,844     $ 50,460     $ 42,970  
Investment securities     4,707       4,691       3,301  
Fed funds sold     271       306       477  
Total interest income     57,822       55,457       46,748  
             
Interest expense:            
Interest-bearing demand     4,819       4,743       3,343  
Savings     13       12       16  
Time certificates     9,612       8,248       4,432  
FHLB borrowings     7       12       20  
Subordinated debit     1,530       1,532       1,531  
Total interest expense     15,981       14,547       9,342  
Net interest income     41,841       40,910       37,406  
Provision for loan losses     1,600       500       1,200  
Net interest  income after provision for loan losses     40,241       40,410       36,206  
             
Noninterest income:            
Fees & service charges on deposit accounts     418       368       350  
Letters of credit fee income     1,071       1,070       889  
BOLI income     92       91       90  
Net gain on called and sale of investment securities     -       -       112  
Other income     404       332       315  
Total noninterest income     1,985       1,861       1,756  
             
Noninterest expense:            
Salary and employee benefits     9,479       9,781       8,807  
Net occupancy expense     1,270       1,148       1,296  
Business development and promotion expense     187       286       181  
Professional services     1,090       1,344       1,736  
Office supplies and equipment expense     497       425       367  
Net (gain) loss on sale of other real estate owned and expense     (45 )     1,391       107  
Other     1,407       1,319       1,311  
Total noninterest expense     13,885       15,694       13,805  
Income before provision for income taxes     28,341       26,577       24,157  
Income tax expense     8,362       7,834       6,752  
Net income   $ 19,979     $ 18,743     $ 17,405  
             
Dividend and earnings allocated to participating securities     (158 )     (158 )     (297 )
Net income available to common shareholders   $ 19,821     $ 18,585     $ 17,108  
             
Income per share available to common shareholders            
Basic   $ 1.31     $ 1.23     $ 1.14  
Diluted   $ 1.31     $ 1.23     $ 1.14  
             
Weighted-average common shares outstanding            
Basic     15,171,399       15,145,923       15,063,450  
Diluted     15,171,399       15,145,923       15,063,450  
             
Dividends per share   $ 0.30     $ 0.30     $ 0.25  
             

 

 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
    2019   2018   %
Interest income:            
Loans, including fees   $ 103,304     $ 83,263     24.1 %
Investment securities     9,398       6,251     50.3 %
Fed funds sold     577       886     -35.0 %
Total interest income     113,279       90,400     25.3 %
             
Interest expense:            
Interest-bearing demand     9,562       5,765     65.9 %
Savings     25       32     -21.7 %
Time certificates     17,860       7,952     124.6 %
FHLB borrowings     19       40     -51.3 %
Subordinated debit     3,062       3,062     100.0 %
Total interest expense     30,528       16,850     81.2 %
Net interest income     82,751       73,550     12.5 %
Provision for loan losses     2,100       2,700     -22.2 %
Net interest  income after provision for loan losses     80,651       70,850     13.8 %
             
Noninterest income:            
Fees & service charges on deposit accounts     786       670     17.3 %
Letters of credit fee income     2,141       1,880     13.9 %
BOLI income     183       179     2.5 %
Net gain on called and sale of investment securities     -       112     100.0 %
Other income     736       478     53.8 %
Total noninterest income     3,846       3,320     15.8 %
             
Noninterest expense:            
Salary and employee benefits     19,260       17,433     10.5 %
Net occupancy expense     2,418       2,634     -8.2 %
Business development and promotion expense     473       331     42.9 %
Professional services     2,434       3,167     -23.1 %
Office supplies and equipment expense     922       742     24.2 %
Net loss on sale of other real estate owned and expense     1,346       213     532.5 %
Other

    2,726       3,015     -9.6 %
Total noninterest expense     29,579       27,535     7.4 %
Income before provision for income taxes     54,918       46,635     17.8 %
Income tax expense     16,196       12,619     28.3 %
Net income   $ 38,722     $ 34,016     13.8 %
             
Dividend and earnings allocated to participating securities     (317 )     (550 )   -42.4 %
Net income available to common shareholders   $ 38,405     $ 33,466     14.8 %
             
Income per share available to common shareholders            
Basic   $ 2.53     $ 2.22     14.1 %
Diluted   $ 2.53     $ 2.22     14.1 %
             
Weighted-average common shares outstanding            
Basic     15,158,731       15,049,435     0.7 %
Diluted     15,158,731       15,053,885     0.7 %
             
Dividends per share   $ 0.60     $ 0.47     27.7 %
             

 

 PREFERRED BANK 
 Condensed Consolidated Statements of Financial Condition 
 (unaudited) 
 (in thousands) 
       
       
  June 30,   December 31,
  2019   2018
  (Unaudited)   (Audited)
 Assets       
       
Cash and due from banks $ 304,121     $ 526,759  
Fed funds sold   47,000       76,000  
Cash and cash equivalents   351,121       602,759  
       
Securities held to maturity, at amortized cost   7,702       8,007  
Securities available-for-sale, at fair value   238,589       182,413  
Loans and leases   3,585,686       3,333,377  
Less allowance for loan and lease losses   (33,811 )     (31,065 )
Less net deferred loan fees   (1,401 )     (2,323 )
Net loans and leases   3,550,474       3,299,989  
       
Customers' liability on acceptances   8,074       10,074  
Bank furniture and fixtures, net   12,757       7,497  
Bank-owned life insurance   9,443       9,317  
Accrued interest receivable   15,510       14,266  
Investment in affordable housing   41,136       43,848  
Federal Home Loan Bank stock   13,101       11,933  
Deferred tax assets   17,804       19,640  
Income tax receivable   3,585       -  
Operating lease right-of-use assets   17,616       -  
Other assets   7,513       6,692  
Total assets $ 4,294,425     $ 4,216,435  
       
       
 Liabilities and Shareholders' Equity       
       
Liabilities:      
Deposits:      
Demand $ 718,611     $ 730,096  
Interest-bearing demand   1,279,104       1,397,006  
Savings   20,927       20,369  
Time certificates of $250,000 or more   839,203       738,626  
Other time certificates   819,163       753,588  
Total deposits   3,677,008       3,639,685  
Acceptances outstanding   8,074       10,074  
Advances from Federal Home Loan Bank   -       1,307  
Subordinated debt issuance   99,149       99,087  
Commitments to fund investment in affordable housing partnership   15,186       19,530  
Operating lease liabilities   21,416       -  
Accrued interest payable   5,753       6,839  
Other liabilities   16,397       23,262  
Total liabilities   3,842,983       3,799,784  
       
Commitments and contingencies      
Shareholders' equity:      
Common stock, no par value. Authorized 100,000,000 shares; issued and outstanding 15,300,577 at June 30, 2019 and 15,308,688 at December 31, 2018, respectively.   210,882       210,882  
Treasury stock   (36,373 )     (34,529 )
Additional paid-in-capital   49,805       47,425  
Retained earnings   224,401       194,855  
Accumulated other comprehensive income (loss):      
Unrealized gain (loss) on securities, available-for-sale, net of tax of $1,110 and $(725) at June 30, 2019 and December 31, 2018, respectively   2,727       (1,982 )
Total shareholders' equity   451,442       416,651  
Total liabilities and shareholders' equity $ 4,294,425     $ 4,216,435  
           

 

 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,
  2019 2019 2018 2018 2018
Unaudited historical quarterly operations data:           
Interest income $ 57,822   $ 55,457   $ 54,373   $ 50,392   $ 46,748  
Interest expense   15,981     14,547     12,931     11,155     9,342  
Interest income before provision for credit losses   41,841     40,910     41,442     39,237     37,406  
Provision for credit losses   1,600     500     5,550     1,880     1,200  
Noninterest income   1,985     1,861     4,405     1,676     1,756  
Noninterest expense   13,885     15,694     13,683     13,584     13,805  
Income tax expense   8,362     7,834     7,960     7,126     6,752  
Net income $ 19,979   $ 18,743   $ 18,654   $ 18,323   $ 17,405  
           
Earnings per share          
Basic $ 1.31   $ 1.23   $ 1.22   $ 1.20   $ 1.14  
Diluted $ 1.31   $ 1.23   $ 1.22   $ 1.20   $ 1.14  
           
Ratios for the period:           
Return on average assets   1.89 %   1.83 %   1.82 %   1.84 %   1.83 %
Return on beginning equity   18.54 %   18.24 %   18.50 %   18.87 %   18.82 %
Net interest margin (Fully-taxable equivalent)   4.07 %   4.12 %   4.13 %   4.04 %   4.07 %
Noninterest expense to average assets   1.31 %   1.54 %   1.33 %   1.37 %   1.46 %
Efficiency ratio   31.68 %   36.69 %   29.84 %   33.20 %   35.25 %
Net charge-offs (recoveries) to average loans (annualized)   -0.04 %   -0.04 %   0.80 %   -0.04 %   0.00 %
           
Ratios as of period end:           
Tier 1 leverage capital ratio   10.50 %   10.32 %   10.16 %   10.07 %   10.04 %
Common equity tier 1 risk-based capital ratio   10.53 %   10.54 %   10.43 %   10.23 %   10.14 %
Tier 1 risk-based capital ratio   10.53 %   10.54 %   10.43 %   10.23 %   10.14 %
Total risk-based capital ratio   13.74 %   13.82 %   13.77 %   13.65 %   13.62 %
Allowances for credit losses to loans and leases at end of period   0.94 %   0.94 %   0.93 %   0.98 %   0.95 %
Allowance for credit losses to non-performing loans and leases   981.65 %   887.75 %   69.29 %   63.42 %   58.92 %
           
Average balances:           
Total securities $ 241,664   $ 189,684   $ 184,168   $ 184,283   $ 187,190  
Total loans and leases $ 3,450,583   $ 3,327,005   $ 3,217,850   $ 3,184,527   $ 3,092,571  
Total earning assets $ 4,134,320   $ 4,034,284   $ 3,988,970   $ 3,861,346   $ 3,696,854  
Total assets $ 4,235,612   $ 4,142,906   $ 4,068,592   $ 3,946,924   $ 3,804,557  
Total time certificate of deposits $ 1,627,953   $ 1,521,209   $ 1,446,661   $ 1,324,724   $ 1,251,176  
Total interest-bearing deposits $ 2,924,526   $ 2,874,045   $ 2,787,788   $ 2,697,807   $ 2,590,394  
Total deposits $ 3,625,021   $ 3,555,981   $ 3,498,226   $ 3,392,878   $ 3,268,490  
Total interest-bearing liabilities $ 3,024,452   $ 2,974,442   $ 2,888,171   $ 2,800,486   $ 2,695,759  
Total equity $ 445,101   $ 428,136   $ 411,249   $ 396,942   $ 381,815  
           

 

 PREFERRED BANK 
 Selected Consolidated Financial Information 
 (unaudited) 
 (in thousands, except for ratios) 
       
       
       
  For the Six Months Ended
  June 30,   June 30,
  2019   2018
Interest income $ 113,279     $ 90,400  
Interest expense   30,528       16,850  
Interest income before provision for credit losses   82,751       73,550  
Provision for credit losses   2,100       2,700  
Noninterest income   3,846       3,320  
Noninterest expense   29,579       27,535  
Income tax expense   16,196       12,619  
Net income $ 38,722     $ 34,016  
       
Earnings per share      
Basic $ 2.53     $ 2.22  
Diluted $ 2.53     $ 2.22  
       
Ratios for the period:      
Return on average assets   1.86 %     1.84 %
Return on beginning equity   18.74 %     19.32 %
Net interest margin (Fully-taxable equivalent)   4.10 %     4.10 %
Noninterest expense to average assets   1.42 %     1.49 %
Efficiency ratio   34.16 %     35.82 %
Net charge-offs (recoveries) to average loans   -0.04 %     0.19 %
       
Average balances:       
Total loans and leases $ 3,389,136     $ 3,025,759  
Earning assets $ 4,084,580     $ 3,623,961  
Total assets $ 4,189,515     $ 3,727,117  
Total deposits $ 3,590,692     $ 3,200,419  
       

 

 PREFERRED BANK 
 Selected Consolidated Financial Information 
(unaudited)
 (in thousands, except for ratios) 
                   
                   
                   
  As of
                   
  June 30,   March 31,   December 31,   September 30,   June 30,
  2019   2019   2018   2018   2018
Unaudited quarterly statement of financial position data:                   
Assets:                  
Cash and cash equivalents $ 351,121     $ 623,002     $ 602,759     $ 531,240     $ 493,521  
Securities held-to-maturity, at amortized cost   7,702       7,861       8,007       8,203       8,370  
Securities available-for-sale, at fair value   238,589       182,280       182,413       173,953       176,930  
Loans and Leases:                  
Real estate - Single and multi-family residential   646,830       625,416       587,562       559,050       508,470  
Real estate - Land   9,330       9,352       10,646       10,725       11,133  
Real estate - Commercial   1,419,224       1,395,074       1,358,821       1,337,794       1,319,664  
Real estate - For sale housing construction   171,584       152,418       138,815       122,225       112,236  
Real estate - Other construction   212,988       228,174       207,849       246,815       231,276  
Commercial and industrial, trade finance and other   1,125,730       994,571       1,029,684       998,781       955,663  
Gross loans   3,585,686       3,405,005       3,333,377       3,275,390       3,138,442  
Allowance for loan and lease losses   (33,811 )     (31,896 )     (31,065 )     (31,966 )     (29,772 )
Net deferred loan fees   (1,401 )     (1,501 )     (2,323 )     (2,571 )     (2,287 )
Net loans, excluding loans held for sale $ 3,550,474     $ 3,371,608     $ 3,299,989     $ 3,240,853     $ 3,106,383  
Loans held for sale $ -     $ -     $ -     $ -     $ 47,337  
Net loans and leases $ 3,550,474     $ 3,371,608     $ 3,299,989     $ 3,240,853     $ 3,153,720  
                   
Other real estate owned $ -     $ -     $ -     $ 4,112     $ 4,112  
Investment in affordable housing   41,136       42,492       43,849       45,555       47,201  
Federal Home Loan Bank stock   13,101       11,932       11,933       11,933       12,158  
Other assets   92,302       89,095       67,485       60,339       62,792  
Total assets $ 4,294,425     $ 4,328,270     $ 4,216,435     $ 4,076,188     $ 3,958,804  
                   
Liabilities:                  
Deposits:                  
Demand $ 718,611     $ 731,795     $ 730,096     $ 745,861     $ 713,492  
Interest-bearing demand   1,279,104       1,372,760       1,397,006       1,360,237       1,372,771  
Savings   20,927       20,550       20,369       21,490       21,918  
Time certificates of $250,000 or more   839,203       778,020       738,626       737,465       683,561  
Other time certificates   819,163       816,678       753,588       653,697       618,493  
Total deposits $ 3,677,008     $ 3,719,803     $ 3,639,685     $ 3,518,750     $ 3,410,235  
                   
Advances from Federal Home Loan Bank $ 8,074     $ 8,417     $ 10,074     $ 6,256     $ 8,313  
Subordinated debt issuance   99,149       99,118       99,087       99,056       99,025  
Commitments to fund investment in affordable housing partnership   15,186       17,340       19,530       21,514       29,116  
Other liabilities   43,566       51,460       31,408       30,643       26,889  
Total liabilities $ 3,842,983     $ 3,896,138     $ 3,799,784     $ 3,676,219     $ 3,573,578  
                   
Equity:                  
Net common stock, no par value $ 224,314     $ 222,782     $ 223,778     $ 221,518     $ 220,669  
Retained earnings   224,401       209,012       194,855       180,793       166,302  
Accumulated other comprehensive income   2,727       338       (1,982 )     (2,342 )     (1,745 )
Total shareholders' equity $ 451,442     $ 432,132     $ 416,651     $ 399,969     $ 385,226  
Total liabilities and shareholders' equity $ 4,294,425     $ 4,328,270     $ 4,216,435     $ 4,076,188     $ 3,958,804  
                                       

 

Preferred Bank
Loan and Credit Quality Information
         
Allowance For Credit Losses & Loss History
    Six Months Ended   Year ended
    June 30, 2019   December 31, 2018
     
    (Dollars in 000's)
Allowance For Credit Losses        
Balance at Beginning of Period   $ 31,065     $ 29,921  
Charge-Offs        
Commercial & Industrial     9       4,040  
Mini-perm Real Estate     101       5,742  
Total Charge-Offs     110       9,782  
         
Recoveries        
Commercial & Industrial     341       796  
Mini-perm Real Estate     415       -  
Total Recoveries     756       796  
         
Net Loan Charge-Offs     (646 )     8,986  
Provision for Credit Losses     2,100       10,130  
Balance at End of Period   $ 33,811     $ 31,065  
Average Loans and Leases   $ 3,389,136     $ 3,114,132  
Loans and Leases at end of Period   $ 3,585,686     $ 3,333,337  
Net Charge-Offs to Average Loans and Leases     -0.04 %     0.29 %
Allowances for credit losses to loans and leases at end of period     0.94 %     0.93 %
                 

AT THE COMPANY:

Edward J. Czajka

Executive Vice President

Chief Financial Officer

(213) 891-1188

AT FINANCIAL PROFILES:

Tony Rossi

General Information

(310) 622-8221

PFBC@finprofiles.com

Source: Preferred Bank

This article appears in: News Headlines

Referenced Stocks: PFBC










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