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Preferred Bank Reports Third Quarter Results

LOS ANGELES, Oct. 16, 2014 (GLOBE NEWSWIRE) -- Preferred Bank (Nasdaq:PFBC), an independent commercial bank focusing on the diversified California market, today reported results for the quarter ended September 30, 2014. Preferred Bank ("the Bank") reported net income of $6.4 million or $0.46 per diluted share for the third quarter of 2014. This compares to net income of $5.0 million or $0.37 per diluted share for the third quarter of 2013 and compares to net income of $6.2 million or $0.45 per diluted share for the second quarter of 2014. Net income for the nine months ended September 30, 2014 totaled $17.7 million or $1.29 per diluted share compared to $13.3 million or $0.99 per diluted share for the same period last year. This represents an increase of $4.4 million or 33.0% over 2013 year to date earnings.

Highlights from the third quarter of 2014:

  • Total assets approaching $2 billion
  • Termination of the Bank's Memorandum of Understanding ("MOU")
  • Reinstatement of the Bank's quarterly cash dividend
  • Recovered $4.6 million on previously charged off loan
  • Diluted EPS of $0.46 per diluted share, a 24% increase from prior year
  • Strong linked quarter loan growth of $81 million and deposit growth of $71 million
  • ROA was 1.29%
  • ROBE was 11.3%
  • Efficiency ratio was 41.3%

Li Yu, Chairman and CEO commented, "The third quarter of 2014 was a quarter of good news for our Bank. In July, we had a significant loan recovery of $4.6 million and in September the MOU that we entered into in October of 2013 was terminated. In late September, our Board declared a cash dividend of $0.10 per share payable on October 20, 2014 and now we are reporting third quarter net income of $6.4 million or $0.46 per share as compared to $5.0 million or $0.37 per share for the same period last year, a vast improvement.

"During the quarter, Preferred Bank continued to grow. Total assets now stand at $1.996 billion or a shade away from the $2 billion mark. Loans grew $81 million or 5.7% and deposits grew $71 million, or 4.3% on a linked quarter basis. Furthermore, the deposit growth was mostly in core accounts.

"Non-performing assets continue to decline. This quarter, the net reduction was $4.0 million but more importantly, non-performing loans as of September 30, 2014 now total $10.8 million or 0.71% of total loans and we sold our remaining OREO property.

"For the nine months ended September 30, 2014, the Bank earned $17.7 million or $1.29 per share as compared to $13.3 million or $0.99 per share for the same period last year. This is a 33% year over year increase in net income.

"Our Bank continues to operate efficiently with a 41.3% efficiency ratio for the quarter and a 40.9% for the nine months of 2014. We are very pleased to make this report to our shareholders."

Operating Results

Net Interest Income and Net Interest Margin. Net interest income before provision for loan and lease losses increased to $18.0 million compared to $16.5 million recorded in the third quarter of 2013 and an increase from the $17.1 million recorded in the second quarter of 2014. The increase over the third quarter of 2013 and over the prior quarter is due primarily to loan growth. The Bank's taxable equivalent net interest margin was 3.78% for the third quarter of 2014, a 15 basis point decrease from the 3.93% achieved in the second quarter of 2014 and a 32 basis point decrease from the 4.10% recorded in the third quarter of 2013. The decrease in the margin from the third quarter of 2014 was primarily due to an increase in total average cash and fed funds of $78.7 million while total average loans increased by $85.9 million. Even though total average loans outpaced the growth in cash balances, the low rates received on the cash balances diluted overall asset yields.

Noninterest Income. For the third quarter of 2014, noninterest income was $928,000 compared with $213,000 for the same quarter last year and compared to $914,000 for the second quarter of 2014. During the third quarter of 2013, the Bank recorded a loss on sale of investment securities of $497,000. Service charges on deposits were down by $133,000 compared to the same period last year, but Trade Finance income increased by $139,000 over last year due to an increase in LC fees and other income increased by $211,000. Other income increased due to fee income generated on loan servicing activity. In comparing to the second quarter of 2014; service charges were down $55,000 and Trade Finance income was down by $60,000 while other income was up by $126,000.

Noninterest Expense.Total noninterest expense was $7.8 million for the third quarter of 2014, up slightly from the $7.6 million recorded in the same quarter last year and up over the $6.6 million posted in the second quarter of 2014. Salaries and benefits expense totaled $4.3 million for the third quarter of 2014 compared to $4.0 million for the same period last year and compared to $3.9 million for the second quarter of 2014. The increase over the second quarter of 2014 is due primarily to an increase in bonus expense. Occupancy expense was down slightly compared to last year as a significant amount of leasehold improvements reached the end of their depreciation. Professional services expense was $1.0 million for the third quarter of 2014, flat when compared to the $1.0 million recorded in the same period last year and down from the $1.3 million recorded in the second quarter of 2014. The linked quarter decrease was due to the abatement of the costs associated with the enhancement of the Bank's BSA and Compliance programs. OREO related expenses totaled $43,000 for the third quarter of 2014 compared to $73,000 for the same period last year and compared to a net gain of $1.2 million on OREO activity for the second quarter of 2014. Other expenses were $1.2 million in the third quarter of 2014, a slight decrease from the $1.3 million recorded in the same period in 2013 and a decrease from the $1.3 million recorded in the second quarter of 2014.

Income Taxes

The Bank recorded a provision for income taxes of $4.3 million for the third quarter of 2014. This represents an effective tax rate ("ETR") of 40.1% for the quarter. This is up slightly from the ETR of 39.5% for the second quarter of 2014. This small increase is due to the Bank's accelerating profitability during 2014 relative to tax exempt income and deductible items.

Balance Sheet Summary

Total gross loans and leases (including loans held for sale) at September 30, 2014 were $1.52 billion, an increase of $195.1 million or 14.7% over the total of $1.33 billion as of December 31, 2013. The tables below indicate loans by type as of September 30, 2014 as compared to the end of 2013:

Loans by Type – Year over Year (ooo's)

Loan Type (000's) September 30, 2014 December 31, 2013 $ Change % Change
R/E – Residential/Multifamily $ 229,353 $ 228,490 $ 863 -0.4%
R/E – Land 13,663 15,161 (1,498) -9.9%
R/E – Commercial 678,778 627,888 50,890 8.1%
R/E – Construction 125,025 73,285 51,740 70.6%
Commercial & Industrial 477,933 378,607 99,326 26.2%
Loans Held for Sale -- 6,207 (6,207) -100.0%
Total $ 1,524,752 $ 1,329,638 $ 195,114 14.7%

Total deposits as of September 30, 2014 were $1.72 billion, an increase of $191.7 million or 12.5% over the $1.53 billion at December 31, 2013. As of September 30, 2014 compared to December 31, 2013; noninterest-bearing demand deposits increased by $65.4 million or 19.3%, interest-bearing demand and savings deposits increased by $84.4 million or 17.1% and time deposits increased by $42.0 million or 6.0%. Total assets were $2.0 billion, a $227.2 million or 12.8% increase over the total of $1.77 billion as of December 31, 2013.

Asset Quality

As of September 30, 2014 nonaccrual loans totaled $10.8 million or 0.71% of total loans while performing TDR's totaled $398,000 as of September 30, 2014. Total net charge-offs (recoveries) for the third quarter of 2014 were ($4.3 million) compared to $2.3 million for the second quarter of 2014. During the third quarter, the Bank received a payoff of a long-time nonaccrual loan and with it, a recovery to the ALLL of $4.6 million. During the third quarter of 2014, the Bank recorded a provision for loan losses of $500,000. This compares to a provision of $1.2 million recorded in the same quarter last year and compares to a $1.1 million provision recorded in the second quarter of 2014. The allowance for loan loss at September 30, 2014 was $22.7 million or 1.49% of total loans compared to $19.5 million or 1.47% of total loans at December 31, 2013.

Capitalization

As of September 30, 2014, the Bank's tier 1 leverage ratio was 11.62%, the tier 1 risk based capital ratio was 12.73% and the total risk-based capital ratio was 13.98%. This compares to 11.80%, 13.78% and 15.03% as of December 31, 2013, respectively.

Conference Call and Webcast

A conference call with simultaneous webcast to discuss Preferred Bank's third quarter 2014 financial results will be held today, October 16, 2014 at 2:00 p.m. Eastern / 11:00 a.m. Pacific. Interested participants and investors may access the conference call by dialing 866-524-3160 (domestic) or 412-317-6760 (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 Louie Couto will be present to discuss Preferred Bank's financial results, business highlights and outlook. After the live webcast, a replay will remain available in the Investor Relations section of Preferred Bank's website. A replay of the call will also be available at 877-344-7529 (domestic) or 412-317-0088 (international) through November 7, 2014; the passcode is 10054279.

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 Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine, Diamond Bar, Anaheim, Pico Rivera and San Francisco, California. 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.

The Preferred Bank logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=11817

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 2013 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 Three Months Ended
September 30, June 30, September 30,
2014 2014 2013
Interest income:
Loans, including fees $ 18,792 $ 17,681 $ 16,982
Investment securities 1,634 1,565 1,471
Fed funds sold 36 48 27
Total interest income 20,462 19,294 18,480
Interest expense:
Interest-bearing demand 737 627 542
Savings 20 17 22
Time certificates 1,636 1,554 1,371
FHLB borrowings 33 31 32
Total interest expense 2,426 2,229 1,967
Net interest income 18,036 17,065 16,513
Provision for loan losses 500 1,100 1,200
Net interest income after provision for loan losses 17,536 15,965 15,313
Noninterest income:
Fees & service charges on deposit accounts 343 399 477
Trade finance income 271 331 133
BOLI income 84 82 83
Net income (loss) on sale of investment securities 2 -- (497)
Other income 228 102 17
Total noninterest income 928 914 213
Noninterest expense:
Salary and employee benefits 4,285 3,867 4,017
Net occupancy expense 817 804 833
Business development and promotion expense 134 122 89
Professional services 1,019 1,347 1,015
Office supplies and equipment expense 330 285 301
Other real estate owned related expense (income) and valuation allowance on LHFS 43 (1,150) 73
Other 1,208 1,348 1,273
Total noninterest expense 7,836 6,623 7,601
Income before provision for income taxes 10,628 10,256 7,925
Income tax expense 4,266 4,047 2,893
Net income $ 6,362 $ 6,209 $ 5,032
Income allocated to participating securities (69) (80) (55)
Dividends Allocated to Participating Securities (15) -- --
Net income available to common shareholders $ 6,278 $ 6,129 $ 4,977
Income per share available to common shareholders
Basic $ 0.47 $ 0.46 $ 0.38
Diluted $ 0.46 $ 0.45 $ 0.37
Weighted-average common shares outstanding
Basic 13,310,334 13,261,820 13,112,835
Diluted 13,639,874 13,612,772 13,370,223
PREFERRED BANK
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except for net income per share and shares)
For the Nine Months Ended
September 30, September 30, Change
2014 2013 %
Interest income:
Loans, including fees $ 53,815 $ 46,607 15.5%
Investment securities 4,588 4,573 0.3%
Fed funds sold 103 32 218.1%
Total interest income 58,506 51,212 14.2%
Interest expense:
Interest-bearing demand 2,010 1,581 27.1%
Savings 56 65 -13.8%
Time certificates 4,740 3,935 20.5%
FHLB borrowings 96 35 170.3%
Total interest expense 6,902 5,616 22.9%
Net interest income 51,604 45,596 13.2%
Provision for credit losses 2,850 1,450 96.6%
Net interest income after provision for loan losses 48,754 44,146 10.4%
Noninterest income:
Fees & service charges on deposit accounts 1,198 1,594 -24.8%
Trade finance income 901 484 86.2%
BOLI income 248 247 0.1%
Net income (loss) on sale of investment securities 2 (854) -100.2%
Other income 521 318 63.8%
Total noninterest income 2,870 1,789 60.4%
Noninterest expense:
Salary and employee benefits 12,887 12,265 5.1%
Net occupancy expense 2,422 2,406 0.7%
Business development and promotion expense 342 267 28.1%
Professional services 3,127 2,698 15.9%
Office supplies and equipment expense 953 909 4.9%
Total other-than-temporary impairment losses -- 7 -100.0%
Portion of loss recognized in other comprehensive income -- -- 0.0%
Other real estate owned related (income) expense and valuation allowance on LHFS (1,185) 1,643 -172.2%
Other 3,745 3,466 8.0%
Total noninterest expense 22,291 23,661 -5.8%
Income before provision for income taxes 29,333 22,274 31.7%
Income tax expense 11,609 8,943 29.8%
Net income $ 17,724 $ 13,331 33.0%
Income allocated to participating securities (196) (161) 21.6%
Dividends Allocated to Participating Securities (15) -- -100.0%
Net income available to common shareholders $ 17,513 $ 13,170 33.0%
Income per share available to common shareholders
Basic $ 1.32 $ 1.00 32.0%
Diluted $ 1.29 $ 0.99 30.6%
Weighted-average common shares outstanding
Basic 13,271,597 13,089,970 1.4%
Diluted 13,593,638 13,355,157 1.8%
PREFERRED BANK
Condensed Consolidated Statements of Financial Condition
(unaudited)
(in thousands)
September 30, December 31,
2014 2013
Assets
Cash and due from banks $ 238,232 $ 226,615
Fed funds sold 10,000 20,000
Cash and cash equivalents 248,232 246,615
Securities held to maturity, at amortized cost 8,188 --
Securities available-for-sale, at fair value 164,247 142,670
Loans and leases 1,524,752 1,323,431
Less allowance for loan and lease losses (22,662) (19,494)
Less net deferred loan fees (2,368) (2,562)
Net loans and leases 1,499,722 1,301,375
Loans held for sale, at lower of cost or fair value -- 6,207
Other real estate owned -- 5,602
Customers' liability on acceptances 1,020 2,061
Bank furniture and fixtures, net 4,007 4,205
Bank-owned life insurance 8,466 8,290
Accrued interest receivable 6,052 5,378
Investment in affordable housing 18,460 6,411
Federal Home Loan Bank stock 6,155 5,296
Deferred tax assets 21,941 23,331
Income tax receivable -- 1,783
Other asset 9,660 9,734
Total assets $ 1,996,150 $ 1,768,959
Liabilities and Shareholders' Equity
Liabilities:
Deposits:
Demand $ 403,881 $ 338,530
Interest-bearing demand 554,769 469,976
Savings 22,552 22,984
Time certificates of $250,000 or more 250,087 213,362
Other time certificates 489,766 484,462
Total deposits $ 1,721,054 $ 1,529,314
Acceptances outstanding 1,020 2,061
Advances from Federal Home Loan Bank 20,000 20,000
Commitments to fund investment in affordable housing partnership 9,481 --
Accrued interest payable 1,386 983
Other liabilities 14,557 9,685
Total liabilities 1,767,498 1,562,043
Commitments and contingencies
Shareholders' equity:
Preferred stock. Authorized 25,000,000 shares; no issued and outstanding
Common stock, no par value. Authorized 20,000,000 shares; issued and outstanding 13,474,766 and 13,280,653 shares at September 30, 2014 and December 31, 2013, respectively 163,781 163,237
Treasury stock (19,115) (19,115)
Additional paid-in-capital 28,873 25,974
Accumulated income 53,057 36,680
Accumulated other comprehensive income:
Unrealized loss on securities, available-for-sale, net of tax of $1,493 and $102 at September 30, 2014 and December 31, 2013, respectively 2,056 140
Total shareholders' equity 228,652 206,916
Total liabilities and shareholders' equity $ 1,996,150 $ 1,768,959
PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)
As of or for the Three Months Ended
September 30, June 30, March 31, December 31, September 30,
2014 2014 2014 2013 2013
Unaudited historical quarterly operations data:
Interest income $ 20,462 $ 19,294 $ 18,750 $ 18,513 $ 18,480
Interest expense 2,426 2,229 2,247 2,112 1,967
Interest income before provision for credit losses 18,036 17,065 16,503 16,401 16,513
Provision for credit losses 500 1,100 1,250 1,800 1,200
Noninterest income 928 914 1,028 214 213
Noninterest expense 7,836 6,623 7,832 5,224 7,601
Income tax expense 4,266 4,047 3,296 3,723 2,893
Net income 6,362 6,209 5,153 5,868 5,032
Earnings per share
Basic $ 0.47 $ 0.46 $ 0.39 $ 0.45 $ 0.38
Diluted $ 0.46 $ 0.45 $ 0.38 $ 0.43 $ 0.37
Ratios for the period:
Return on average assets 1.29% 1.39% 1.17% 1.33% 1.20%
Return on beginning equity 11.34% 11.61% 10.10% 11.62% 10.27%
Net interest margin (Fully-taxable equivalent) 3.78% 3.93% 3.87% 3.85% 4.10%
Noninterest expense to average assets 1.59% 1.48% 1.78% 1.18% 1.83%
Efficiency ratio 41.32% 36.84% 44.68% 31.44% 45.87%
Net charge-offs (recoveries) to average loans (annualized) -1.16% 0.87% 0.29% 0.20% 0.28%
Unaudited quarterly statement of financial position data:
Assets:
Cash and cash equivalents 248,232 232,585 214,430 $ 246,615 $ 190,405
Securities held-to-maturity, at amortized cost 8,188 8,709 -- -- --
Securities available-for-sale, at fair value 164,247 176,579 169,845 142,670 166,821
Loans and Leases:
Real estate - Single and multi-family residential $ 229,353 $ 208,080 $ 220,193 $ 228,490 $ 197,119
Real estate - Land for housing 12,156 13,536 13,574 13,611 9,149
Real estate - Land for income properties 1,507 1,529 1,539 1,550 1,560
Real estate - Commercial 678,778 700,023 653,146 627,888 610,764
Real estate - For sale housing construction 44,614 36,069 29,303 24,680 22,631
Real estate - Other construction 80,411 63,708 52,014 48,605 43,413
Commercial and industrial 443,966 374,128 353,017 338,681 346,261
Trade finance and other 33,967 40,756 47,402 39,926 48,067
Gross loans 1,524,752 1,437,829 1,370,188 1,323,431 1,278,964
Allowance for loan and lease losses (22,662) (17,897) (19,777) (19,494) (18,344)
Net deferred loan fees (2,368) (2,159) (2,014) (2,562) (2,429)
Loans excluding loans held for sale 1,499,722 1,417,773 1,348,397 1,301,375 1,258,191
Loans held for sale -- 5,632 5,977 6,207 11,329
Total loans, net $ 1,499,722 $ 1,423,405 $ 1,354,374 $ 1,307,582 $ 1,269,520
Other real estate owned $ -- $ 2,755 $ 8,902 5,602 11,936
Investment in affordable housing 18,460 8,706 8,964 6,411 4,752
Federal Home Loan Bank stock 6,155 6,155 5,296 5,296 5,296
Other assets 51,146 45,124 43,327 54,783 52,439
Total assets $ 1,996,150 $ 1,904,018 $ 1,805,138 1,768,959 1,701,169
Liabilities:
Deposits:
Demand $ 403,881 $ 388,497 $ 327,036 $ 338,530 $ 338,579
Interest-bearing demand 554,769 489,313 477,965 469,976 409,319
Savings 22,552 24,712 23,824 22,984 23,223
Time certificates of $250,000 or more 250,087 250,276 261,984 213,362 203,579
Other time certificates 489,766 497,021 471,250 484,462 495,437
Total deposits $ 1,721,054 $ 1,649,819 $ 1,562,059 $ 1,529,314 $ 1,470,137
Advances from Federal Home Loan Bank $ 20,000 $ 20,000 $ 20,000 20,000 20,000
Commitments to fund investment in affordable housing partnership 9,481 -- -- -- --
Other liabilities 16,963 11,542 8,536 12,729 10,743
Total liabilities $ 1,767,498 $ 1,681,361 $ 1,590,594 1,562,043 1,500,880
Equity:
Net common stock, no par value $ 173,539 $ 172,642 $ 171,722 $ 170,096 $ 169,925
Retained earnings 53,057 48,042 41,833 36,680 30,812
Accumulated other comprehensive income 2,056 1,973 989 140 (448)
Total shareholders' equity $ 228,652 $ 222,657 $ 214,544 206,916 200,289
Total liabilities and shareholders' equity $ 1,996,150 $ 1,904,018 $ 1,805,138 1,768,959 1,701,169
Ratios as of period end:
Tier 1 leverage capital ratio 11.62% 12.31% 11.97% 11.80% 11.84%
Tier 1 risk-based capital ratio 12.73% 13.16% 13.65% 13.78% 13.34%
Total risk-based capital ratio 13.98% 14.28% 14.90% 15.03% 14.58%
Allowances for credit losses to loans and leases at end of period ** 1.49% 1.24% 1.44% 1.47% 1.43%
Allowance for credit losses to non-performing loans and leases 210.40% 97.68% 171.94% 138.80% 103.47%
Average balances:
Total loans and leases* $ 1,464,336 $ 1,378,444 $ 1,351,555 $ 1,283,583 $ 1,245,753
Earning assets $ 1,908,411 $ 1,752,032 $ 1,739,768 $ 1,695,758 $ 1,608,366
Total assets $ 1,952,270 $ 1,792,317 $ 1,783,384 $ 1,749,140 $ 1,665,591
Total deposits $ 1,684,628 $ 1,543,739 $ 1,540,369 $ 1,512,318 $ 1,436,385
* Loans held for sale are included
** Loans held for sale are excluded
Preferred Bank
Loan and Credit Quality Information
Allowance For Credit Losses & Loss History
Nine Months Ended Year Ended
September 30, 2014 December 31, 2013
(Dollars in 000's)
Allowance For Credit Losses
Balance at Beginning of Period $ 19,494 $ 20,607
Charge-Offs
Commercial & Industrial 187 4,158
Mini-perm Real Estate 4,243 1,668
Construction - Residential -- 2,438
Construction - Commercial -- --
Land - Residential -- --
Land - Commercial -- --
Others -- --
Total Charge-Offs 4,430 8,264
Recoveries
Commercial & Industrial 3 366
Mini-perm Real Estate -- 1,379
Construction - Residential -- 1,951
Construction - Commercial 134 163
Land - Residential -- 38
Land - Commercial 4,611 4
Total Recoveries 4,748 3,901
Net Loan Charge-Offs (318) 4,363
Provision for Credit Losses 2,850 3,250
Balance at End of Period $ 22,662 $ 19,494
Average Loans and Leases* $ 1,398,430 $ 1,217,383
Loans and Leases at end of Period* $ 1,524,752 $ 1,329,638
Net Charge-Offs to Average Loans and Leases -0.03% 0.36%
Allowances for credit losses to loans and leases at end of period ** 1.49% 1.47%
* Loans held for sale are included
** Loans held for sale are excluded

CONTACT: 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

Source:Preferred Bank