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Preferred Bank Reports Second Quarter Results

LOS ANGELES, July 20, 2015 (GLOBE NEWSWIRE) -- Preferred Bank (NASDAQ:PFBC), an independent commercial bank focusing on the diversified California market, today reported results for the quarter ended June 30, 2015. Preferred Bank ("the Bank") reported net income of $7.6 million or $0.55 per diluted share for the second quarter of 2015. This compares to net income of $6.2 million or $0.45 per diluted share for the second quarter of 2014 and compares to net income of $6.7 million or $0.48 per diluted share for the first quarter of 2015. Earnings for the second quarter were aided by a special FHLB stock dividend of $227,000 as well as a gain on sale of OREO of $325,000.

Highlights from the second quarter of 2015:

  • Linked quarter loan growth was $78.6 million
  • Net interest margin expanded to 4.01%
  • ROA was 1.44%
  • ROBE was 12.49%
  • Efficiency ratio was 39.0%

Li Yu, Chairman and CEO commented, "The quarter ended June 30, 2015 was a very successful one for the Bank. Net income was $7.6 million compared to $6.2 million in the same quarter of 2014. On a diluted per share basis, we earned $0.55; a 22% increase from the $0.45 one year ago. This quarter's earnings were aided by a $325,000 gain on sale of OREO and a special FHLB cash dividend of $227,000.

During the quarter, we sold the last piece of OREO at a gain as earlier discussed. Non-performing assets now total $7.9 million at June 30, 2015, which represents the lowest level of NPA's in the last seven years.

Loan growth is another highlight of the quarter. Despite the historically high payoffs in the quarter, our successful new loan origination efforts have resulted in total loan growth of $78.6 million, a 4.7% increase on a linked quarter basis.

Deposit growth during the second quarter lagged behind loan growth. In the quarter, deposit growth was $25.2 million or a 1.4% on a linked quarter basis. This variance in the pace of loan growth versus deposit growth as well as the special FHLB dividend, are the main reasons for the improved net interest margin for the quarter.

Our Bank has an incentive bonus program directly linking quarterly bonus accruals with the level of profitability of the Bank. With a successful second quarter operation, salaries and benefits expense also increased. However, the efficiency ratio was a stellar 39.0% as other noninterest expense remained under control.

We are pleased with the performance of the Bank in all aspects and we look forward to steady performance for the remainder of 2015."

Quarterly Results

Net Interest Income and Net Interest Margin. Net interest income before provision for loan and lease losses was $20.6 million for the second quarter of 2015. This compares favorably to the $17.1 million recorded in the second quarter of 2014 and to the $19.4 million recorded in the first quarter of 2015. The increase over both comparable periods is due primarily to loan growth. The Bank's taxable equivalent net interest margin was 4.01% for the second quarter of 2015, an 18 basis point increase over the 3.83% achieved in the first quarter of 2015 and an 8 basis point increase over the 3.93% recorded in the second quarter of 2014. The increase in the margin over the first quarter of 2015 was primarily due to lower average cash balances as well as a special FHLB cash dividend of $227,000 which was recorded in the second quarter of 2015. The variance over the second quarter of 2014 was due to loan growth as well as the special FHLB cash dividend. The special FHLB dividend contributed approximately 4 basis points to the net interest margin for the second quarter of 2015.

Noninterest Income. For the second quarter of 2015, noninterest income was $1,131,000 compared with $914,000 for the same quarter last year and compared to $868,000 for the first quarter of 2015. Service charges on deposits were down $63,000 compared to the same period last year but up $37,000 compared to the first quarter of 2015. Trade finance income was $491,000 for the second quarter of 2015, an increase of $160,000 compared to the same period last year and an increase of $184,000 over the first quarter of 2015. This was primarily due to higher deal volume. Other income was $220,000, an increase of $118,000 over the second quarter of 2014 and an increase of $41,000 over the first quarter of 2015.

Noninterest Expense. Total noninterest expense was $8.5 million for the second quarter of 2015, an increase of $1.8 million over the same period last year and down slightly from the $8.6 million recorded in the first quarter of 2015. Salaries and benefits expense totaled $5.5 million for the second quarter of 2015 compared to $3.9 million for the same period last year and compared to $5.3 million for the first quarter of 2015. The increase over the second quarter of 2014 was due mainly to staffing increases and a higher bonus accrual and the increase over the prior quarter was mainly due to a higher bonus accrual, which is commensurate with earnings. Occupancy expense was $899,000 compared to the $804,000 recorded in the same period in 2014 and the $851,000 recorded in the first quarter of 2015. The increase over both periods was due primarily to the new San Fernando Valley branch expenses and normal cost increases. Professional services expense was $1,175,000 for the second quarter of 2015 compared to $1,347,000 for the same quarter of 2014 and $1,083,000 recorded in the first quarter of 2015. The decrease from the prior year was due to consulting expense which ran high in 2014 due to BSA remediation efforts. Net gain on OREO and other credit items was $(552,000) for the quarter compared to $(1,150,000) in the same period last year and compared to $89,000 in the first quarter of 2015. During the second quarter of 2015, a gain on sale of OREO property was recorded for $325,000 and the Bank also received rental income on the same property of $211,000. Other expenses were $1,046,000 in the second quarter of 2015, down from the $1,348,000 recorded in the same period in 2014 but up slightly over the $920,000 recorded in the first quarter of 2015.

Income Taxes

The Bank recorded a provision for income taxes of $5.1 million for the second quarter of 2015. This represents an effective tax rate ("ETR") of 40.4% for the quarter. This is up slightly from the ETR of 39.8% for the first quarter of 2015. This small increase is due to the Bank's growing profitability in 2015 relative to tax exempt income and deductible items.

Balance Sheet Summary

Total gross loans and leases (including loans held for sale) at June 30, 2015 were $1.75 billion, an increase of $145.6 million or 9.1% over the total of $1.60 billion as of December 31, 2014. The tables below indicate loans by type as of June 30, 2015 as compared to the end of 2014:

Loans by Type – Year over Year (ooo's)
Loan Type (000's) June 30, 2015 December 31, 2014 $ Change % Change
R/E – Residential/Multifamily $ 290,186 $ 283,958 $ 6,228 2.2%
R/E – Land 14,993 13,621 1,372 10.1%
R/E – Commercial 712,383 653,380 59,003 9.0%
R/E – Construction 121,358 126,485 (5,127) -4.1%
Commercial & Industrial 610,811 526,705 84,106 16.0%
Total $ 1,749,731 $ 1,604,149 $ 145,582 9.1%

Total deposits as of June 30, 2015 were $1.88 billion, an increase of $105.9 million from the $1.78 billion at December 31, 2014. As of June 30, 2015 compared to December 31, 2014; noninterest-bearing demand deposits increased by $76.1 million or 17.2%, interest-bearing demand and savings deposits increased by $44.1 million or 8.0% and time deposits decreased by $14.3 million or 1.8%. Total assets were $2.17 billion, a $116.0 million or 5.6% increase from the total of $2.05 billion as of December 31, 2014.

Asset Quality

As of June 30, 2015 nonaccrual loans totaled $7.9 million, down slightly from the $8.1 million total as of December 31, 2014. Total net charge-offs for the second quarter of 2015 were $130,000 compared to $86,000 for the first quarter of 2015, and consisted mainly of a charge-off of $797,000 on a loan for which the reserve had been previously established, partially offset by a recovery of $655,000 on a loan for which there is an ongoing repayment plan. The Bank recorded a provision for loan losses of $500,000 for the second quarter of 2015. Although nonperforming loan and economic trends continue to be positive, management believes that due to growth and other factors, this provision is appropriate in order to maintain an allowance level deemed sufficient. This compares to a $1.1 million provision recorded in the same quarter last year and to the $500,000 provision recorded in the first quarter of 2015. The allowance for loan loss at June 30, 2015 was $23.8 million or 1.36% of total loans compared to $23.0 million or 1.43% of total loans at December 31, 2014.

OREO

As of June 30, 2015, the Bank holds no OREO properties. During the quarter, the Bank sold its remaining OREO property. Proceeds from the sale were approximately $9.1 million against the Bank's book value of $8.8 million which resulted in a gain of $325,000.

Capitalization

As of June 30, 2015, the Bank's tier 1 leverage ratio was 11.59%, the common equity tier 1 capital ratio was 11.91% and the total capital ratio was 13.07%. As of December 31, 2014, the Bank's tier 1 leverage ratio was 11.73%, the tier 1 risk based capital ratio was 12.72% and the total risk based capital ratio was 13.97%.

Conference Call and Webcast

A conference call with simultaneous webcast to discuss Preferred Bank's second quarter 2015 financial results will be held tomorrow, July 21, 2015 at 2:00 p.m. Eastern / 11:00 a.m. Pacific. Interested participants and investors may access the conference call by dialing 866-652-5200 (domestic) or 412-317-6060 (international) and referencing "Preferred Bank." There will also be a live webcast of the call available at the Investor Relations section of Preferred Bank's website at www.preferredbank.com. Web participants are encouraged to go to the website at least 15 minutes prior to the start of the call to register, download and install any necessary audio software.

Preferred Bank's Chairman and CEO Li Yu, President and COO Wellington Chen and Chief Financial Officer Edward J. Czajka 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 6, 2015; the passcode is 10069030.

About Preferred Bank

Preferred Bank is one of the larger independent commercial banks in California. The bank is chartered by the State of California, and its deposits are insured by the Federal Deposit Insurance Corporation, or FDIC, to the maximum extent permitted by law. The Company conducts its banking business from its main office in Los Angeles, California, and through eleven full-service branch banking offices in Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine, Diamond Bar, Anaheim, Pico Rivera, Tarzana 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 2014 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
June 30, March 31, June 30,
2015 2015 2014
Interest income:
Loans, including fees $ 21,276 $ 20,355 $ 17,681
Investment securities 1,731 1,457 1,565
Fed funds sold 46 34 48
Total interest income 23,053 21,847 19,294
Interest expense:
Interest-bearing demand 709 786 627
Savings 15 15 17
Time certificates 1,727 1,649 1,554
FHLB borrowings 35 32 31
Total interest expense 2,486 2,482 2,229
Net interest income 20,567 19,365 17,065
Provision for loan losses 500 500 1,100
Net interest income after provision for loan losses 20,067 18,865 15,965
Noninterest income:
Fees & service charges on deposit accounts 336 299 399
Trade finance income 491 307 331
BOLI income 84 83 82
Other income 220 178 102
Total noninterest income 1,131 868 914
Noninterest expense:
Salary and employee benefits 5,507 5,312 3,867
Net occupancy expense 899 851 804
Business development and promotion expense 124 109 122
Professional services 1,175 1,083 1,347
Office supplies and equipment expense 263 254 285
Other real estate owned related (income) expense and valuation allowance on LHFS (552) 89 (1,150)
Other 1,046 920 1,348
Total noninterest expense 8,462 8,618 6,623
Income before provision for income taxes 12,736 11,114 10,256
Income tax expense 5,147 4,424 4,047
Net income $ 7,589 $ 6,690 $ 6,209
Income and dividend allocated to participating securities (144) (128) (80)
Net income available to common shareholders $ 7,445 $ 6,562 $ 6,129
Income per share available to common shareholders
Basic $ 0.55 $ 0.49 $ 0.46
Diluted $ 0.55 $ 0.48 $ 0.45
Weighted-average common shares outstanding
Basic 13,480,609 13,397,081 13,261,820
Diluted 13,659,167 13,805,565 13,612,772
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
2015 2014 %
Interest income:
Loans, including fees $ 41,631 $ 35,023 18.9%
Investment securities 3,188 2,954 7.9%
Fed funds sold 80 67 19.6%
Total interest income 44,899 38,044 18.0%
Interest expense:
Interest-bearing demand 1,495 1,273 17.4%
Savings 30 36 -17.8%
Time certificates 3,377 3,104 8.8%
FHLB borrowings 66 63 4.2%
Total interest expense 4,968 4,476 11.0%
Net interest income 39,931 33,568 19.0%
Provision for credit losses 1,000 2,350 -57.4%
Net interest income after provision for loan losses 38,931 31,218 24.7%
Noninterest income:
Fees & service charges on deposit accounts 635 855 -25.7%
Trade finance income 797 630 26.7%
BOLI income 168 164 2.2%
Other income 399 293 36.0%
Total noninterest income 1,999 1,942 3.0%
Noninterest expense:
Salary and employee benefits 10,819 8,602 25.8%
Net occupancy expense 1,749 1,605 9.0%
Business development and promotion expense 233 208 12.1%
Professional services 2,259 2,108 7.2%
Office supplies and equipment expense 517 623 -16.9%
Other real estate owned related income and valuation allowance on LHFS (463) (1,228) -62.3%
Other 1,966 2,537 -22.5%
Total noninterest expense 17,080 14,455 18.2%
Income before provision for income taxes 23,850 18,705 27.5%
Income tax expense 9,571 7,343 30.3%
Net income $ 14,279 $ 11,362 25.7%
Income and dividend allocated to participating securities (245) (126) 94.6%
Net income available to common shareholders $ 14,034 $ 11,236 24.9%
Income per share available to common shareholders
Basic $ 1.04 $ 0.85 23.1%
Diluted $ 1.03 $ 0.83 24.4%
Weighted-average common shares outstanding
Basic 13,439,105 13,251,908 1.4%
Diluted 13,626,991 13,570,967 0.4%
PREFERRED BANK
Condensed Consolidated Statements of Financial Condition
(unaudited)
(in thousands)
June 30, December 31,
2015 2014
Assets
Cash and due from banks $ 163,015 $ 215,194
Fed funds sold 45,000 25,000
Cash and cash equivalents 208,015 240,194
Securities held to maturity, at amortized cost 6,806 7,815
Securities available-for-sale, at fair value 161,775 150,539
Loans and leases 1,749,731 1,604,149
Less allowance for loan and lease losses (23,758) (22,974)
Less net deferred loan fees (2,179) (2,100)
Net loans and leases 1,723,794 1,579,075
Loans held for sale, at lower of cost or fair value -- --
Other real estate owned -- 8,811
Customers' liability on acceptances 1,365 156
Bank furniture and fixtures, net 4,281 4,132
Bank-owned life insurance 8,643 8,525
Accrued interest receivable 6,860 6,497
Investment in affordable housing 17,059 17,999
Federal Home Loan Bank stock 6,677 6,155
Deferred tax assets 21,982 21,357
Income tax receivable 197 --
Other asset 2,702 2,899
Total assets $ 2,170,156 $ 2,054,154
Liabilities and Shareholders' Equity
Liabilities:
Deposits:
Demand $ 519,501 $ 443,385
Interest-bearing demand 568,243 525,781
Savings 23,855 22,211
Time certificates of $250,000 or more 260,205 276,197
Other time certificates 510,394 508,685
Total deposits $ 1,882,198 $ 1,776,259
Acceptances outstanding 1,365 156
Advances from Federal Home Loan Bank 20,000 20,000
Commitments to fund investment in affordable housing partnership 4,139 8,151
Accrued interest payable 1,426 1,419
Other liabilities 11,163 13,143
Total liabilities 1,920,291 1,819,128
Commitments and contingencies
Shareholders' equity:
Preferred stock. Authorized 25,000,000 shares; no issued and outstanding shares at June 30, 2015 and December 31, 2014 -- --
Common stock, no par value. Authorized 20,000,000 shares; issued and outstanding 13,759,939 and 13,503,458 shares at June 30, 2015 and December 31, 2014, respectively 165,383 164,023
Treasury stock (19,115) (19,115)
Additional paid-in-capital 33,092 29,631
Accumulated income 69,431 58,552
Accumulated other comprehensive income:
Unrealized gain on securities, available-for-sale, net of tax of $779 and $1,405 at June 30, 2015 and December 31, 2014 1,074 1,935
Total shareholders' equity 249,865 235,026
Total liabilities and shareholders' equity $ 2,170,156 $ 2,054,154
PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)
For the Three Months Ended
June 30, March 31, December 31, September 30, June 30,
2015 2015 2014 2014 2014
Unaudited historical quarterly operations data:
Interest income $ 23,053 $ 21,846 $ 21,821 $ 20,462 $ 19,294
Interest expense 2,486 2,482 2,438 2,426 2,229
Interest income before provision for credit losses 20,567 19,364 19,383 18,036 17,065
Provision for credit losses 500 500 500 500 1,100
Noninterest income 1,131 868 751 928 914
Noninterest expense 8,462 8,618 8,121 7,836 6,623
Income tax expense 5,147 4,424 4,645 4,266 4,047
Net income 7,589 6,690 6,868 6,362 6,209
Earnings per share
Basic $ 0.55 $ 0.49 $ 0.51 $ 0.47 $ 0.46
Diluted $ 0.55 $ 0.48 $ 0.50 $ 0.46 $ 0.45
Ratios for the period:
Return on average assets 1.44% 1.28% 1.37% 1.29% 1.39%
Return on beginning equity 12.49% 11.54% 11.92% 11.34% 11.61%
Net interest margin (Fully-taxable equivalent) 4.01% 3.83% 3.98% 3.78% 3.93%
Noninterest expense to average assets 1.60% 1.65% 1.62% 1.59% 1.48%
Efficiency ratio 39.00% 42.60% 40.33% 41.32% 36.84%
Net charge-offs (recoveries) to average loans (annualized) 0.03% 0.02% 0.05% -1.16% 0.87%
Ratios as of period end:
Tier 1 leverage capital ratio(1) 11.59% 11.26% 11.73% 11.62% 12.31%
Common equity tier 1 risk-based capital ratio(1) 11.91% 12.10% N/A N/A N/A
Tier 1 risk-based capital ratio(1) 11.91% 12.10% 12.72% 12.75% 13.16%
Total risk-based capital ratio(1) 13.07% 13.30% 13.97% 14.00% 14.28%
Allowances for credit losses to loans and leases at end of period(2) 1.36% 1.40% 1.43% 1.49% 1.24%
Allowance for credit losses to non-performing loans and leases 299.06% 288.16% 268.19% 210.40% 101.58%
Average balances:
Total loans and leases(3) $ 1,673,710 $ 1,612,556 $ 1,555,868 $ 1,464,336 $ 1,378,444
Earning assets $ 2,070,542 $ 2,064,435 $ 1,943,034 $ 1,908,411 $ 1,752,032
Total assets $ 2,117,610 $ 2,115,354 $ 1,990,417 $ 1,952,270 $ 1,792,317
Total deposits $ 1,832,688 $ 1,834,920 $ 1,707,908 $ 1,684,628 $ 1,543,739
(1) Risk-based capital ratios were calculated under BASEL III rules, which became effective on January 1, 2015. Ratios for the prior periods were calculated under Basel I rules.
(2) Loans held for sale are excluded
(3) Loans held for sale are included
PREFERRED BANK
Selected Consolidated Financial Information
(in thousands, except for ratios)
For the Six Months Ended
June 30, June 30,
2015 2014
Interest income $ 44,899 $ 38,044
Interest expense 4,968 4,476
Interest income before provision for credit losses 39,931 33,568
Provision for credit losses 1,000 2,350
Noninterest income 1,999 1,942
Noninterest expense 17,080 14,455
Income tax expense 9,571 7,343
Net income 14,279 11,362
Earnings per share
Basic $ 1.04 $ 0.85
Diluted $ 1.03 $ 0.83
Ratios for the period:
Return on average assets 1.36% 1.29%
Return on beginning equity 12.25% 11.07%
Net interest margin (Fully-taxable equivalent) 3.92% 3.89%
Noninterest expense to average assets 1.63% 1.64%
Efficiency ratio 40.73% 40.71%
Net charge-offs (recoveries) to average loans 0.03% 0.59%
Average balances:
Total loans and leases* $ 1,643,293 $ 1,358,911
Earning assets $ 2,067,503 $ 1,736,091
Total assets $ 2,116,464 $ 1,778,591
Total deposits $ 1,833,779 $ 1,534,290
* Loans held for sale are included
** Loans held for sale are excluded
PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)
As of
June 30, March 31, December 31, September 30, June 30,
2015 2015 2014 2014 2014
Unaudited quarterly statement of financial position data:
Assets:
Cash and cash equivalents $ 208,015 $ 242,053 $ 240,194 $ 248,232 $ 232,585
Securities held-to-maturity, at amortized cost 6,806 7,139 7,815 8,188 8,709
Securities available-for-sale, at fair value 161,775 165,330 150,539 164,247 176,579
Loans and Leases:
Real estate - Single and multi-family residential $ 290,186 $ 306,284 $ 283,958 $ 229,353 $ 208,080
Real estate - Land for housing 13,102 11,658 12,132 12,156 13,536
Real estate - Land for income properties 1,891 1,906 1,489 1,507 1,529
Real estate - Commercial 712,383 676,034 653,380 678,778 700,023
Real estate - For sale housing construction 71,945 50,458 48,892 44,614 36,069
Real estate - Other construction 49,413 84,065 77,593 80,411 63,708
Commercial and industrial 570,408 502,453 495,827 443,966 374,128
Trade finance and other 40,403 38,234 30,878 33,967 40,756
Gross loans 1,749,731 1,671,092 1,604,149 1,524,752 1,437,829
Allowance for loan and lease losses (23,758) (23,388) (22,974) (22,662) (17,897)
Net deferred loan fees (2,179) (2,216) (2,100) (2,368) (2,159)
Loans excluding loans held for sale 1,723,794 1,645,488 1,579,075 1,499,722 1,417,773
Loans held for sale -- -- -- -- 5,632
Total loans, net $ 1,723,794 $ 1,645,488 $ 1,579,075 $ 1,499,722 $ 1,423,405
Other real estate owned $ -- $ 8,811 $ 8,811 $ -- $ 2,755
Investment in affordable housing 17,059 17,529 17,999 18,460 8,706
Federal Home Loan Bank stock 6,677 6,155 6,155 6,155 6,155
Other assets 46,030 45,208 43,566 51,146 45,124
Total assets $ 2,170,156 $ 2,137,713 $ 2,054,154 $ 1,996,150 $ 1,904,018
Liabilities:
Deposits:
Demand $ 519,501 $ 493,440 $ 443,385 $ 403,881 $ 388,497
Interest-bearing demand 568,243 585,286 525,781 554,769 489,313
Savings 23,855 24,056 22,211 22,552 24,712
Time certificates of $250,000 or more 260,205 243,360 276,197 250,087 250,276
Other time certificates 510,394 510,809 508,685 489,765 497,021
Total deposits $ 1,882,198 $ 1,856,950 $ 1,776,259 $ 1,721,054 $ 1,649,819
Advances from Federal Home Loan Bank $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000
Commitments to fund investment in affordable housing partnership 4,139 7,726 8,151 9,481 --
Other liabilities 13,954 9,299 14,717 16,963 11,542
Total liabilities $ 1,920,291 $ 1,893,974 $ 1,819,127 $ 1,767,498 $ 1,681,361
Equity:
Net common stock, no par value $ 179,360 $ 177,978 $ 174,539 $ 173,581 $ 172,642
Retained earnings 69,431 63,545 58,553 53,015 48,042
Accumulated other comprehensive income 1,074 2,216 1,935 2,056 1,973
Total shareholders' equity $ 249,865 $ 243,739 $ 235,027 $ 228,652 $ 222,657
Total liabilities and shareholders' equity $ 2,170,156 $ 2,137,713 $ 2,054,154 $ 1,996,150 $ 1,904,018
Preferred Bank
Loan and Credit Quality Information
Allowance For Credit Losses & Loss History
Six Months Ended Year Ended
June 30, 2015 December 31, 2014
(Dollars in 000's)
Allowance For Credit Losses
Balance at Beginning of Period $ 22,974 $ 19,494
Charge-Offs
Commercial & Industrial 1,096 436
Mini-perm Real Estate -- 4,243
Construction - Residential -- --
Construction - Commercial -- --
Land - Residential -- --
Land - Commercial -- --
Others -- --
Total Charge-Offs 1,096 4,679
Recoveries
Commercial & Industrial 53 3
Mini-perm Real Estate 1 --
Construction - Residential -- --
Construction - Commercial 20 134
Land - Residential 100 --
Land - Commercial 706 4,672
Total Recoveries 880 4,809
Net Loan Charge-Offs 216 (130)
Provision for Credit Losses 1,000 3,350
Balance at End of Period $ 23,758 $ 22,974
Average Loans and Leases* $ 1,643,293 $ 1,438,122
Loans and Leases at end of Period* $ 1,749,731 $ 1,604,149
Net Charge-Offs to Average Loans and Leases 0.03% -0.01%
Allowances for credit losses to loans and leases at end of period ** 1.36% 1.43%
* 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