Preferred Bank Reports 2019 Fourth Quarter and Annual Earnings

LOS ANGELES, Jan. 22, 2020 (GLOBE NEWSWIRE) -- Preferred Bank (NASDAQ: PFBC), an independent commercial bank, today reported results for the quarter and year ended December 31, 2019. Preferred Bank (“the Bank”) reported net income of $19.6 million or $1.31 per diluted share for the fourth quarter of 2019. This is down slightly from last quarter’s net income of $20.0 million or $1.32 per diluted share but compares quite favorably to net income of $18.7 million or $1.22 per diluted share posted in the fourth quarter of 2018. The decrease from the prior quarter is due to net interest income which decreased mainly due to the Federal Open Market Committee (“FOMC”) rate cuts in September and late October of 2019, which impacted the Bank’s loan yields.

For the year ended December 31, 2019, Preferred Bank posted net income of $78.4 million or $5.16 per diluted share. This compares strongly to the $71.0 million or the $4.64 per diluted share recorded for 2018 and represents an increase in earnings per share of 11.3%. As of December 31, 2019, the Bank’s total assets stood at $4.6 billion.

Highlights from the fourth quarter of 2019:
Linked-quarter Deposit Growth	2.96%
Linked-quarter Loan Growth	1.46%
Return on Assets	1.74%
Return on Beginning Equity	16.95%
Efficiency Ratio	32.56%
Highlights from Year:
Annual Deposit Growth	9.44%
Annual Loan Growth	11.75%
Return on Assets	1.82%
Return on Beginning Equity	18.81%
Efficiency Ratio	33.26%

Li Yu, Chairman and CEO, commented, “Net income for the fourth quarter of 2019 was $19.6 million or $1.31 per diluted share. Net income for all of 2019 was $78.4 million or $5.16 per diluted share. Our quarterly and annual earnings exceeded our internal goals when considering the three rate cuts imposed by the FOMC during the third and fourth quarters.

Fourth quarter loan growth of $53 million, or 1.45% on a linked quarter basis likely reflects sluggish loan activities during the holiday season.  For the year 2019, our total loan growth was $392 million or 11.75% increase from the end of 2018.

Fourth quarter deposit growth was $114 million or 3.0%. For the year, total deposit growth was $344 million or 9.4% over year end 2018 totals.

Negatively affected by the FOMC rate cuts in late September and October, our net interest margin for the quarter declined to 3.67%. For the year, the margin came in at 3.92%, a 16 basis point reduction from the 4.08% posted in 2018. Assuming no more rate cuts, we expect the margin to stabilize and gradually expand in early 2020.

Our cost control remains effective, the Bank’s efficiency ratio came in at 32.6% for the fourth quarter and 33.3% for the year, which is among the top in the industry.”

Income Statement Summary

Net Interest Income and Net Interest Margin. Net interest income before provision for loan and lease losses was $40.4 million for the fourth quarter of 2019. This is down from the $41.5 million recorded in the third quarter of 2019 and down from the $41.4 million posted in the fourth quarter of 2018. This is due to the three rate cuts imposed by the FOMC in early August, September and late October of 2019. As Preferred Bank’s balance sheet is asset-sensitive, this had the impact of lowering loan yields faster than deposit costs could be lowered. The Bank’s taxable equivalent net interest margin was 3.67%, down from the 3.84% recorded in the third quarter of 2019 and down from the 4.13% posted in the fourth quarter of 2018. The decline in the margin was due to the decline in loan yields mentioned above as well as higher deposit costs than in 2018, although total deposit costs declined in the third quarter and fourth quarter of 2019 and that trend continues.

Noninterest Income. For the fourth quarter of 2019, noninterest income was $1,883,000 compared with $4,405,000 for the same quarter last year and compared to $1,737,000 for the third quarter of 2019. The decline from last year is primarily due to last year’s gain on sale of OREO of $2.04 million and a legal recovery of $610,000 recorded in that period.  The increase from the prior quarter is mainly due to other income which was up by $224,000 over the prior quarter due to various credit-related fees.

Noninterest Expense. Total noninterest expense was $13.8 million for the fourth quarter of 2019, flat when compared to the same period last year and down slightly from the $13.9 million posted in the third quarter of 2019. In comparing this quarter to last year, salary expense was up by $1.1 million but that was offset by a decline in professional services of $651,000, a decline in OREO expenses of $178,000 and a decline in other expense of $289,000. Salary expense increased due to a higher bonus accrual as well as a higher head count over last year. The decrease in professional services was due to lower legal fees and I.T. costs and the decrease in other expense was due to no FDIC premium expense recorded for the quarter when normally that cost would have been approximately $450,000. (As mentioned in the press release in the prior quarter, the FDIC’s Deposit Insurance Fund ratio exceeded its target of 1.35% of insured deposits and so refunds were issued). The decrease in total noninterest expense from the prior quarter was primarily due to professional services which were down by $315.000.  

Balance Sheet Summary

Total gross loans and leases (including loans held for sale) at December 31, 2019 were $3.72 billion, an increase of $391.2 million or 11.7% over the total of $3.33 billion as of December 31, 2018. On a linked-quarter basis, total loans grew by $53.5 million or 1.5%. Total deposits increased by $343.6 million or 9.4% over the $3.64 billion as of December 31, 2018. Total deposits for the third quarter increased by $114.3 million or 3.0% on a linked quarter basis. Total assets reached $4.63 billion as of December 31, 2019, an increase of $411.7 million or 9.8% over the total of $4.22 billion as of December 31, 2018.

Income Taxes

The Bank recorded a provision for income taxes of $8.5 million for the fourth quarter of 2019. This represents an effective tax rate (“ETR”) of 30.1% and slightly higher than the 29.5% ETR recorded in the third quarter of 2019. The Bank’s ETR may fluctuate slightly from quarter to quarter within a limited range due to the timing of taxable events throughout the year.

Asset Quality

As of December 31, 2019, nonaccrual loans totaled $2.1 million, a decrease from the $3.8 million as of September 30, 2019 and down significantly from the total of $44.8 million as of December 31, 2018 due to the sale of two large non-performing assets in New York in the second quarter of 2019.

Total net recoveries were $99,000 for the fourth quarter of 2019 compared to net charge-offs of $430,000 for the third quarter of 2019 and compared to net charge-offs of $6.5 million for the fourth quarter of 2018.  The Bank recorded a provision for loan loss of $450,000 for the fourth quarter of 2019, which is somewhat reflective of the overall loan growth for the quarter. This compares to $900,000 recorded in the third quarter of 2019 and compared to $5.55 million recorded in the fourth quarter of 2018. The allowance for loan loss at December 31, 2019 was $34.8 million or 0.94% of total loans compared to $31.1million or 0.93% of total loans at December 31, 2018.

Capitalization

As of December 31, 2019, the Bank’s tier 1 leverage ratio was 10.25%, the common equity tier 1 capital ratio was 10.51% and the total capital ratio was 13.63%. 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 13.72%. Tangible book value per share was $31.28 per share as of December 31, 2019 compared to $27.22 as of December 31, 2018, a 15.0% increase.

Conference Call and Webcast

A conference call with simultaneous webcast to discuss Preferred Bank’s fourth quarter 2019 financial results will be held tomorrow, January 23, 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 February 6, 2020; the passcode is 10138207.

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 third 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
					December 31,				September 30,				December 31,
					2019				2019				2018
Interest income:
	Loans, including fees				$	51,052			$	52,862			$	49,027
	Investment securities					4,269				4,875				4,892
	Fed funds sold					162				222				454
		Total interest income				55,483				57,959				54,373
Interest expense:
	Interest-bearing demand					3,490				4,904				4,258
	Savings					16				13				13
	Time certificates					10,038				10,034				7,117
	FHLB borrowings					-				-				12
	Subordinated debit					1,530				1,531				1,531
		Total interest expense				15,074				16,482				12,931
		Net interest income				40,409				41,477				41,442
Provision for loan losses						450				900				5,550
		Net interest income after provision for
			loan losses			39,959				40,577				35,892
Noninterest income:
	Fees & service charges on deposit accounts					392				401				290
	Letters of credit fee income					806				874				956
	BOLI income					93				94				91
	Net gain on sale of other real estate owned					-				-				2,038
	Other income					592				368				1,030
		Total noninterest income				1,883				1,737				4,405
Noninterest expense:
	Salary and employee benefits					9,746				9,801				8,640
	Net occupancy expense					1,374				1,329				1,326
	Business development and promotion expense					258				109				282
	Professional services					834				1,149				1,485
	Office supplies and equipment expense					448				483				373
	Net (gain) loss on sale of other real estate owned and expense					3				(129	)			181
	Other					1,107				1,156				1,396
		Total noninterest expense				13,770				13,898				13,683
		Income before provision for income taxes				28,072				28,416				26,614
Income tax expense						8,456				8,383				7,960
		Net income			$	19,616			$	20,033			$	18,654
Dividend and earnings allocated to participating securities						(164	)			(168	)			(304	)
Net income available to common shareholders					$	19,452			$	19,865			$	18,350
Income per share available to common shareholders
		Basic			$	1.31			$	1.32			$	1.22
		Diluted			$	1.31			$	1.32			$	1.22
Weighted-average common shares outstanding
		Basic				14,836,374				15,091,270				15,064,875
		Diluted				14,836,374				15,091,270				15,064,875
Dividends per share					$	0.30			$	0.30			$	0.30

PREFERRED BANK
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except for net income per share and shares)
					For the Year Ended
					December 31,				December 31,				Change
					2019				2018				%
Interest income:
	Loans, including fees				$	207,218			$	178,420			16.1	%
	Investment securities					18,542				14,877			24.6	%
	Fed funds sold					961				1,868			-48.5	%
		Total interest income				226,721				195,165			16.2	%
Interest expense:
	Interest-bearing demand					17,956				13,934			28.9	%
	Savings					54				60			-10.7	%
	Time certificates					37,932				20,753			82.8	%
	FHLB borrowings					19				65			-70.3	%
	Subordinated debit					6,123				6,124			-0.0	%
		Total interest expense				62,084				40,936			51.7	%
		Net interest income				164,637				154,229			6.7	%
Provision for loan losses						3,450				10,130			-65.9	%
		Net interest income after provision for
			loan losses			161,187				144,099			11.9	%
Noninterest income:
	Fees & service charges on deposit accounts					1,579				1,201			31.5	%
	Letters of credit fee income					3,821				3,927			-2.7	%
	BOLI income					370				361			2.7	%
	Net gain on sale of other real estate owned					-				2,038			-100.0	%
	Net gain on called and sale of investment securities					-				112			-100.0	%
	Other income					1,696				1,762			-3.8	%
		Total noninterest income				7,466				9,401			-20.6	%
Noninterest expense:
	Salary and employee benefits					38,807				34,741			11.7	%
	Net occupancy expense					5,121				5,299			-3.4	%
	Business development and promotion expense					840				816			3.0	%
	Professional services					4,417				5,989			-26.2	%
	Office supplies and equipment expense					1,853				1,464			26.5	%
	Net loss on sale of other real estate owned and expense					1,220				615			98.4	%
	Other					4,989				5,879			-15.1	%
		Total noninterest expense				57,247				54,802			4.5	%
		Income before provision for income taxes				111,406				98,698			12.9	%
Income tax expense						33,035				27,705			19.2	%
		Net income			$	78,371			$	70,993			10.4	%
Dividend and earnings allocated to participating securities						(666	)			(1,166	)		-42.9	%
Net income available to common shareholders					$	77,705			$	69,827			11.3	%
Income per share available to common shareholders
		Basic			$	5.16			$	4.64			11.3	%
		Diluted			$	5.16			$	4.64			11.3	%
Weighted-average common shares outstanding
		Basic				15,060,476				15,056,919			0.0	%
		Diluted				15,060,476				15,059,845			0.0	%
Dividends per share					$	1.20			$	1.02			17.6	%

PREFERRED BANK
Condensed Consolidated Statements of Financial Condition
(unaudited)
(in thousands)
				December 31,				December 31,
				2019				2018
				(Unaudited)				(Audited)
Assets
Cash and due from banks				$	498,645			$	526,759
Fed funds sold					37,000				76,000
	Cash and cash equivalents				535,645				602,759
Securities held to maturity, at amortized cost					7,310				8,007
Securities available-for-sale, at fair value					240,640				182,413
Loans and leases					3,724,922				3,333,377
Less allowance for loan and lease losses					(34,830	)			(31,065	)
Less net deferred loan fees					(3,028	)			(2,323	)
	Net loans and leases				3,687,064				3,299,989
Customers' liability on acceptances					7,379				10,074
Bank furniture and fixtures, net					12,236				7,497
Bank-owned life insurance					9,571				9,317
Accrued interest receivable					14,961				14,266
Investment in affordable housing					53,142				43,848
Federal Home Loan Bank stock					13,101				11,933
Deferred tax assets					17,368				19,640
Income tax receivable					5,561				-
Operating lease right-of-use assets					17,103				-
Other assets					7,400				6,692
	Total assets			$	4,628,481			$	4,216,435
Liabilities and Shareholders' Equity
Liabilities:
Deposits:
	Demand			$	835,790			$	730,096
	Interest-bearing demand				1,328,863				1,397,006
	Savings				23,784				20,369
	Time certificates of $250,000 or more				976,727				738,626
	Other time certificates				818,130				753,588
	Total deposits				3,983,294				3,639,685
	Acceptances outstanding				7,379				10,074
	Advances from Federal Home Loan Bank				-				1,307
	Subordinated debt issuance				99,211				99,087
	Commitments to fund investment in affordable housing partnership				24,149				19,530
	Operating lease liabilities				20,497				-
	Accrued interest payable				3,324				6,839
	Other liabilities				23,432				23,262
		Total liabilities			4,161,286				3,799,784
Shareholders' equity:
	Common stock, no par value. Authorized 100,000,000 shares; issued and outstanding 14,933,768 at December 31, 2019 and 15,308,688 at December 31, 2018, respectively.				210,882				210,882
	Treasury stock				(55,054	)			(34,529	)
	Additional paid-in-capital				52,350				47,425
	Retained earnings				255,050				194,855
	Accumulated other comprehensive income (loss):
		Unrealized gain (loss) on securities, available-for-sale, net of tax of $1,546 and $(725) at December 31, 2019 and December 31, 2018, respectively			3,967				(1,982	)
		Total shareholders' equity			467,195				416,651
	Total liabilities and shareholders' equity			$	4,628,481			$	4,216,435

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)
				For the Quarter Ended
				December 31,			September 30,			June 30,			March 31,			December 31,
					2019			2019			2019			2019			2018
Unaudited historical quarterly operations data:
	Interest income			$	55,483		$	57,959		$	57,822		$	55,457		$	54,373
	Interest expense				15,074			16,482			15,981			14,547			12,931
		Interest income before provision for credit losses			40,409			41,477			41,841			40,910			41,442
	Provision for credit losses				450			900			1,600			500			5,550
	Noninterest income				1,883			1,737			1,985			1,861			4,405
	Noninterest expense				13,770			13,898			13,885			15,694			13,683
	Income tax expense				8,456			8,383			8,362			7,834			7,960
		Net income		$	19,616		$	20,033		$	19,979		$	18,743		$	18,654
	Earnings per share
		Basic		$	1.31		$	1.32		$	1.31		$	1.23		$	1.22
		Diluted		$	1.31		$	1.32		$	1.31		$	1.23		$	1.22
Ratios for the period:
	Return on average assets				1.74	%		1.81	%		1.89	%		1.83	%		1.82	%
	Return on beginning equity				16.95	%		17.61	%		18.54	%		18.24	%		18.50	%
	Net interest margin (Fully-taxable equivalent)				3.67	%		3.84	%		4.07	%		4.12	%		4.13	%
	Noninterest expense to average assets				1.22	%		1.25	%		1.31	%		1.54	%		1.33	%
	Efficiency ratio				32.56	%		32.16	%		31.68	%		36.69	%		29.84	%
	Net charge-offs (recoveries) to average loans (annualized)				-0.01	%		0.05	%		-0.04	%		-0.04	%		0.80	%
Ratios as of period end:
	Tier 1 leverage capital ratio				10.25	%		10.27	%		10.50	%		10.32	%		10.16	%
	Common equity tier 1 risk-based capital ratio				10.51	%		10.40	%		10.53	%		10.54	%		10.43	%
	Tier 1 risk-based capital ratio				10.51	%		10.40	%		10.53	%		10.54	%		10.43	%
	Total risk-based capital ratio				13.63	%		13.53	%		13.74	%		13.82	%		13.77	%
	Allowances for credit losses to loans and leases at end of period				0.94	%		0.93	%		0.94	%		0.94	%		0.93	%
	Allowance for credit losses to non-performing loans and leases				1631.42	%		895.30	%		981.65	%		887.75	%		69.29	%
Average balances:
	Total securities			$	248,904		$	249,060		$	241,664		$	189,684		$	184,168
	Total loans and leases *			$	3,614,621		$	3,534,283		$	3,450,583		$	3,327,005		$	3,217,850
	Total earning assets			$	4,381,206		$	4,298,523		$	4,134,320		$	4,034,284		$	3,988,970
	Total assets			$	4,482,210		$	4,395,357		$	4,235,612		$	4,142,906		$	4,068,592
	Total time certificate of deposits			$	1,756,480		$	1,650,965		$	1,627,953		$	1,521,209		$	1,446,661
	Total interest bearing deposits			$	3,050,318		$	3,051,007		$	2,924,526		$	2,874,045		$	2,787,788
	Total deposits			$	3,849,825		$	3,772,097		$	3,625,021		$	3,555,981		$	3,498,226
	Total interest bearing liabilities			$	3,149,511		$	3,150,167		$	3,024,452		$	2,974,442		$	2,888,171
	Total equity			$	463,849		$	460,452		$	445,101		$	428,136		$	411,249
*Incudes loans held for sale

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)
				For the Year Ended
				December 31,				December 31,
					2019				2018
	Interest income			$	226,721			$	195,165
	Interest expense				62,084				40,936
		Interest income before provision for credit losses			164,637				154,229
	Provision for credit losses				3,450				10,130
	Noninterest income				7,466				9,401
	Noninterest expense				57,247				54,802
	Income tax expense				33,035				27,705
		Net income		$	78,371			$	70,993
	Earnings per share
		Basic		$	5.16			$	4.64
		Diluted		$	5.16			$	4.64
Ratios for the period:
	Return on average assets				1.82	%			1.84	%
	Return on beginning equity				18.81	%			20.00	%
	Net interest margin (Fully-taxable equivalent)				3.92	%			4.08	%
	Noninterest expense to average assets				1.33	%			1.42	%
	Efficiency ratio				33.26	%			33.49	%
	Net charge-offs (recoveries) to average loans				-0.01	%			0.29	%
Average balances:
	Total loans and leases *			$	3,482,555			$	3,114,132
	Earning assets			$	4,213,271			$	3,790,757
	Total assets			$	4,315,174			$	3,868,579
	Total deposits			$	3,701,732			$	3,323,295
*Includes loans held for sale

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)
				As of
				December 31,				September 30,				June 30,				March 31,				December 31,
					2019				2019				2019				2019				2018
Unaudited quarterly statement of financial position data:
Assets:
	Cash and cash equivalents			$	535,645			$	465,189			$	351,121			$	623,002			$	602,759
	Securities held-to-maturity, at amortized cost				7,310				7,545				7,702				7,861				8,007
	Securities available-for-sale, at fair value				240,640				242,655				238,589				182,280				182,413
	Loans and Leases:
		Real estate - Single and multi-family residential			686,906				642,824				646,830				625,416				587,562
		Real estate - Land			7,838				7,950				9,330				9,352				10,646
		Real estate - Commercial			1,504,594				1,533,566				1,419,224				1,395,074				1,358,821
		Real estate - For sale housing construction			173,951				179,651				171,584				152,418				138,815
		Real estate - Other construction			218,562				216,812				212,988				228,174				207,849
		Commercial and industrial, trade finance and other			1,133,071				1,090,647				1,125,730				994,571				1,029,684
			Gross loans		3,724,922				3,671,450				3,585,686				3,405,005				3,333,377
	Allowance for loan and lease losses				(34,830	)			(34,281	)			(33,811	)			(31,896	)			(31,065	)
	Net deferred loan fees				(3,028	)			(2,518	)			(1,401	)			(1,501	)			(2,323	)
		Net loans, excluding loans held for sale		$	3,687,064			$	3,634,651			$	3,550,474			$	3,371,608			$	3,299,989
	Loans held for sale			$	-			$	2,999			$	-			$	-			$	-
		Net loans and leases		$	3,687,064			$	3,637,650			$	3,550,474			$	3,371,608			$	3,299,989
	Investment in affordable housing				53,142				39,780				41,136				42,492				43,849
	Federal Home Loan Bank stock				13,101				13,101				13,101				11,932				11,933
	Other assets				91,579				89,564				92,302				89,095				67,485
		Total assets		$	4,628,481			$	4,495,484			$	4,294,425			$	4,328,270			$	4,216,435
Liabilities:
	Deposits:
		Demand		$	835,790			$	774,869			$	718,611			$	731,795			$	730,096
		Interest-bearing demand			1,328,863				1,435,144				1,279,104				1,372,760				1,397,006
		Savings			23,784				21,985				20,927				20,550				20,369
		Time certificates of $250,000 or more			976,727				849,574				839,203				778,020				738,626
		Other time certificates			818,130				787,392				819,163				816,678				753,588
		Total deposits		$	3,983,294			$	3,868,964			$	3,677,008			$	3,719,803			$	3,639,685
	Advances Outstanding			$	7,379			$	7,333			$	8,074			$	8,417			$	10,074
	Subordinated debt issuance				99,211				99,180				99,149				99,118				99,087
	Commitments to fund investment in affordable housing partnership				24,149				12,904				15,186				17,340				19,530
	Other liabilities				47,253				48,023				43,566				51,460				31,408
		Total liabilities		$	4,161,286			$	4,036,404			$	3,842,983			$	3,896,138			$	3,799,784
Equity:
	Net common stock, no par value			$	208,178			$	215,123			$	224,314			$	222,782			$	223,778
	Retained earnings				255,050				239,914				224,401				209,012				194,855
	Accumulated other comprehensive income				3,967				4,043				2,727				338				(1,982	)
		Total shareholders' equity		$	467,195			$	459,080			$	451,442			$	432,132			$	416,651
		Total liabilities and shareholders' equity		$	4,628,481			$	4,495,484			$	4,294,425			$	4,328,270			$	4,216,435

Preferred Bank
Loan and Credit Quality Information
Allowance For Credit Losses & Loss History
					Year Ended				Year ended
					December 31, 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				525				4,040
		Mini-perm Real Estate				101				5,742
		Total Charge-Offs				626				9,782
	Recoveries
		Commercial & Industrial				427				796
		Mini-perm Real Estate				415				-
		Total Recoveries				842				796
	Net Loan Charge-Offs					(216	)			8,986
	Provision for Credit Losses					3,450				10,130
Balance at End of Period					$	34,731			$	31,065
Average Loans and Leases Held for Investment					$	3,482,218			$	3,102,428
Loans and Leases Held for Investment at end of Period					$	3,724,922			$	3,333,337
Net Charge-Offs to Average Loans and Leases						-0.01	%			0.29	%
Allowances for credit losses to loans and leases at end of period						0.94	%			0.93	%

 

AT THE COMPANY:	AT FINANCIAL PROFILES:
Edward J. Czajka	Tony Rossi
Executive Vice President	General Information
Chief Financial Officer	[phone]
[phone]	[e-mail]