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Preferred Bank Reports Third Quarter Results

LOS ANGELES, Oct. 19, 2015 (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, 2015. Preferred Bank ("the Bank") reported net income of $7.9 million or $0.57 per diluted share for the third quarter of 2015. This compares to net income of $6.4 million or $0.46 per diluted share for the third quarter of 2014 and compares to net income of $7.6 million or $0.55 per diluted share for the second quarter of 2015.

Highlights from the third quarter of 2015:

  • Linked quarter loan growth was $87.3 million, or 5.0%
  • Linked quarter deposit growth was $105.4 million, or 5.6%
  • ROA was 1.42%
  • ROBE was 12.55%
  • Efficiency ratio was 38.8%

Li Yu, Chairman and CEO commented, "We continue to grow as planned. Both loans and deposits grew a little more than five percent on a linked quarter basis. For the third quarter, deposits increased $105.4 and loans increased $87.3 million.

Loan yields continued their downward trend industry-wide, and consequently net interest margin compressed by 1 bp to 4.00% for the quarter. Because of the growth we achieved, net interest income increased by $3.6 million or 19.7% compared to the prior year's third quarter. We are pleased with the results as this is a more important measure to our shareholders.

For this quarter, the bank earned $7.9 million or $0.57 per share as compared to $6.4 million and $0.46 for the same quarter of 2014. This is a 24.2% increase in net income and 23.9% increase in diluted earnings per share. Third quarter's results included $1.0 million in interest recovery and approximately $500,000 in merger expenses related to our proposed acquisition of United International Bank of New York.

Efficiency ratio was 38.8% for the third quarter. We remain conscientious in maintaining an asset sensitive loan portfolio; 90.2% of the loans were fully floating with a change in the prime rate or LIBOR.

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 $21.6 million for the third quarter of 2015. This compares favorably to the $18.0 million recorded in the third quarter of 2014 and to the $20.6 million recorded in the second quarter of 2015. The increase over both comparable periods is due primarily to loan growth, and was aided by a $1.0 million interest recovery during the third quarter of 2015. The Bank's taxable equivalent net interest margin was 4.00% for the third quarter of 2015, a 1 basis point decrease from the 4.01% achieved in the second quarter of 2015 and a 22 basis point increase over the 3.78% recorded in the third quarter of 2014. The margin for the second quarter of 2015 was aided by a special dividend from the FHLB of San Francisco and the margin in the third quarter was increased by a $1.0 million interest recovery. Normalized margins for quarters two and three were 3.97% and 3.81%, respectively. The decline in the normalized margin for the third quarter (16 bps) was primarily due to the growth of deposits during the quarter as well as an overall continued slow decline in loan yields.

Noninterest Income. For the third quarter of 2015, noninterest income was $940,000 compared with $928,000 for the same quarter last year and compared to $1,131,000 for the second quarter of 2015. Service charges on deposits were down $53,000 compared to the same period last year and down $46,000 compared to the second quarter of 2015. Trade finance income was $379,000 for the third quarter of 2015, an increase of $108,000 compared to the same period last year and an decrease of $112,000 compared to the second quarter of 2015. This was primarily due to higher deal volume. Other income was $186,000, a decrease of $42,000 over the third quarter of 2014 and a decrease of $34,000 over the second quarter of 2015.

Noninterest Expense. Total noninterest expense was $8.7 million for the third quarter of 2015, an increase of $904,000 over the same period last year and up slightly from the $8.5 million recorded in the second quarter of 2015. Salaries and benefits expense totaled $4.9 million for the third quarter of 2015 compared to $4.3 million for the same period last year and compared to $5.5 million for the second quarter of 2015. The increase over the third quarter of 2014 was due mainly to staffing increases and a higher bonus accrual, and the decrease from the prior quarter was mainly due to higher loan production volume, which capitalizes a greater level of salary expense. Occupancy expense was $908,000 compared to the $817,000 recorded in the same period in 2014 and the $899,000 recorded in the second quarter of 2015. The increase over the prior year was due primarily to the new San Fernando Valley branch expenses and normal cost increases. Professional services expense was $1,288,000 for the third quarter of 2015 compared to $1,019,000 for the same quarter of 2014 and $1,176,000 recorded in the second quarter of 2015. Net gain on OREO and other credit items was $(19,000) for the quarter compared to loss of $43,000 in the same period last year and compared to $(552,000) in the second quarter of 2015. There were no sales of OREO during the third quarter of 2015. Other expenses were $1,269,000 in the third quarter of 2015, up slightly from the $1,208,000 recorded in the same period in 2015 and increased from the $1,046,000 recorded in the second quarter of 2015. This was mainly due to merger-related expenses.

Income Taxes

The Bank recorded a provision for income taxes of $5.4 million for the third quarter of 2015. This represents an effective tax rate ("ETR") of 40.6% for the quarter. This is up slightly from the ETR of 40.4% for the second 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 September 30, 2015 were $1.84 billion, an increase of $232.9 million or 14.5% over the total of $1.60 billion as of December 31, 2014. The tables below indicate loans by type as of September 30, 2015 as compared to the end of 2014:

Loans by Type – Year over Year (000's)

Loan Type (000's) September 30, 2015 December 31, 2014 $ Change % Change
R/E – Residential/Multifamily $ 328,124 $ 283,958 $ 44,166 15.6%
R/E – Land 16,305 13,621 2,684 19.7%
R/E – Commercial 770,494 653,380 117,114 17.9%
R/E – Construction 127,844 126,485 1,359 1.1%
Commercial & Industrial 594,282 526,705 67,577 12.8%
Total $ 1,837,049 $ 1,604,149 $ 232,900 14.5%

Total deposits as of September 30, 2015 were $1.99 billion, an increase of $211.4 million from the $1.78 billion at December 31, 2014. As of September 30, 2015 compared to December 31, 2014; noninterest-bearing demand deposits increased by $34.1 million or 7.7%, interest-bearing demand and savings deposits increased by $170.6 million or 31.1% and time deposits increased by $6.7 million or 0.8%. Total assets were $2.28 billion, a $228.4 million or 11.1% increase from the total of $2.05 billion as of December 31, 2014.

Asset Quality

As of September 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 third quarter of 2015 were $203,000 compared to $130,000 for the second quarter of 2015, and consisted mainly of a charge-off of $350,000, partially offset by a recovery of $143,000 on a loan which was previously considered nonaccrual but was fully paid off in July 2015. The Bank recorded a provision for loan losses of $500,000 for the third 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 remains consistent with a $500,000 provision recorded in the same quarter last year and to the $500,000 provision recorded in the second quarter of 2015. The allowance for loan loss at September 30, 2015 was $24.1 million or 1.31% of total loans compared to $23.0 million or 1.43% of total loans at December 31, 2014.

OREO

As of September 30, 2015, the Bank holds no OREO properties, and there were no OREO sales during the quarter then ended.

Capitalization

As of September 30, 2015, the Bank's tier 1 leverage ratio was 11.47%, the common equity tier 1 capital ratio was 11.80% and the total capital ratio was 12.93%. 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 third quarter 2015 financial results will be held tomorrow, October 20, 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 November 3, 2015; the passcode is 10074259.

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.

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.

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

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,
2015 2015 2014
Interest income:
Loans, including fees $ 22,812 $ 21,276 $ 18,792
Investment securities 1,531 1,731 1,634
Fed funds sold 37 46 36
Total interest income 24,380 23,053 20,462
Interest expense:
Interest-bearing demand 794 709 737
Savings 14 15 20
Time certificates 1,930 1,727 1,636
FHLB borrowings 45 35 33
Total interest expense 2,783 2,486 2,426
Net interest income 21,597 20,567 18,036
Provision for loan losses 500 500 500
Net interest income after provision for loan losses 21,097 20,067 17,536
Noninterest income:
Fees & service charges on deposit accounts 290 336 343
Trade finance income 379 491 271
BOLI income 85 84 84
Other income 186 220 230
Total noninterest income 940 1,131 928
Noninterest expense:
Salary and employee benefits 4,893 5,507 4,285
Net occupancy expense 908 899 817
Business development and promotion expense 133 124 134
Professional services 1,289 1,175 1,019
Office supplies and equipment expense 267 263 330
Other real estate owned related (income)expense and valuation allowance on LHFS (19) (552) 43
Other 1,269 1,046 1,208
Total noninterest expense 8,740 8,462 7,836
Income before provision for income taxes 13,297 12,736 10,628
Income tax expense 5,396 5,147 4,266
Net income $ 7,901 $ 7,589 $ 6,362
Income per share available to common shareholders
Basic $ 0.57 $ 0.55 $ 0.47
Diluted $ 0.57 $ 0.55 $ 0.46
Weighted-average common shares outstanding
Basic 13,509,986 13,480,609 13,310,334
Diluted 13,690,190 13,659,167 13,639,874
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
2015 2014 %
Interest income:
Loans, including fees $ 64,443 $ 53,815 19.7%
Investment securities 4,719 4,588 2.9%
Fed funds sold 117 103 13.1%
Total interest income 69,279 58,506 18.4%
Interest expense:
Interest-bearing demand 2,289 2,010 13.9%
Savings 44 56 -21.0%
Time certificates 5,306 4,740 11.9%
FHLB borrowings 112 96 16.7%
Total interest expense 7,751 6,902 12.3%
Net interest income 61,528 51,604 19.2%
Provision for credit losses 1,500 2,850 -47.4%
Net interest income after provision for loan losses 60,028 48,754 23.1%
Noninterest income:
Fees & service charges on deposit accounts 925 1,198 -22.8%
Trade finance income 1,177 901 30.6%
BOLI income 253 248 2.1%
Net gain (loss) on sale of investment securities -- 2 -100.0%
Other income 584 521 12.2%
Total noninterest income 2,939 2,870 2.4%
Noninterest expense:
Salary and employee benefits 15,712 12,887 21.9%
Net occupancy expense 2,657 2,422 9.7%
Business development and promotion expense 366 342 7.0%
Professional services 3,547 3,127 13.4%
Office supplies and equipment expense 784 953 -17.7%
Other real estate owned related income and valuation allowance on LHFS (481) (1,185) -59.4%
Other 3,235 3,745 -13.6%
Total noninterest expense 25,820 22,291 15.8%
Income before provision for income taxes 37,147 29,333 26.6%
Income tax expense 14,967 11,609 28.9%
Net income $ 22,180 $ 17,724 25.1%
Income per share available to common shareholders
Basic $ 1.62 $ 1.32 22.6%
Diluted $ 1.60 $ 1.29 23.8%
Weighted-average common shares outstanding
Basic 13,462,247 13,271,597 1.4%
Diluted 13,648,232 13,593,638 0.4%
PREFERRED BANK
Condensed Consolidated Statements of Financial Condition
(unaudited)
(in thousands)
September 30, December 31,
2015 2014
Assets
Cash and due from banks $ 199,707 $ 215,194
Fed funds sold 33,000 25,000
Cash and cash equivalents 232,707 240,194
Securities held to maturity, at amortized cost 6,307 7,815
Securities available-for-sale, at fair value 164,378 150,539
Loans and leases 1,837,049 1,604,149
Less allowance for loan and lease losses (24,055) (22,974)
Less net deferred loan fees (2,476) (2,100)
Net loans and leases 1,810,518 1,579,075
Other real estate owned -- 8,811
Customers' liability on acceptances 131 156
Bank furniture and fixtures, net 4,206 4,132
Bank-owned life insurance 8,703 8,525
Accrued interest receivable 7,549 6,497
Investment in affordable housing 16,589 17,999
Federal Home Loan Bank stock 6,677 6,155
Deferred tax assets 21,865 21,357
Income tax receivable 94 --
Other asset 2,822 2,899
Total assets $ 2,282,546 $ 2,054,154
Liabilities and Shareholders' Equity
Liabilities:
Deposits:
Demand $ 477,524 $ 443,385
Interest-bearing demand 697,402 525,781
Savings 21,159 22,211
Time certificates of $250,000 or more 263,949 276,197
Other time certificates 527,601 508,685
Total deposits $ 1,987,635 $ 1,776,259
Acceptances outstanding 131 156
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 1,365 1,419
Other liabilities 12,094 13,143
Total liabilities 2,025,364 1,819,128
Commitments and contingencies
Shareholders' equity:
Preferred stock. Authorized 25,000,000 shares; no issued and outstanding shares at September 30, 2015 and December 31, 2014
Common stock, no par value. Authorized 100,000,000 shares; issued and outstanding 13,774,068 and 13,503,458 shares at September 30, 2015 and December 31, 2014, respectively 165,553 164,023
Treasury stock (19,115) (19,115)
Additional paid-in-capital 33,822 29,631
Accumulated income 75,679 58,552
Accumulated other comprehensive income:
Unrealized gain on securities, available-for-sale, net of tax of $896 and $1,405 at September 30, 2015 and December 31, 2014 1,243 1,935
Total shareholders' equity 257,182 235,026
Total liabilities and shareholders' equity $ 2,282,546 $ 2,054,154
PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)
For the Three Months Ended
September 30, June 30, March 31, December 31, September 30,
2015 2015 2015 2014 2014
Unaudited historical quarterly operations data:
Interest income $ 24,380 $ 23,053 $ 21,846 $ 21,821 $ 20,462
Interest expense 2,783 2,486 2,482 2,438 2,426
Interest income before provision for credit losses 21,597 20,567 19,364 19,383 18,036
Provision for credit losses 500 500 500 500 500
Noninterest income 940 1,131 868 751 928
Noninterest expense 8,740 8,462 8,618 8,121 7,836
Income tax expense 5,396 5,147 4,424 4,645 4,266
Net income 7,901 7,589 6,690 6,868 6,362
Earnings per share
Basic $ 0.57 $ 0.55 $ 0.49 $ 0.51 $ 0.47
Diluted $ 0.57 $ 0.55 $ 0.48 $ 0.50 $ 0.46
Ratios for the period:
Return on average assets 1.42% 1.44% 1.28% 1.37% 1.29%
Return on beginning equity 12.55% 12.49% 11.54% 11.92% 11.34%
Net interest margin (Fully-taxable equivalent) 4.00% 4.01% 3.83% 3.98% 3.78%
Noninterest expense to average assets 1.58% 1.60% 1.65% 1.62% 1.59%
Efficiency ratio 38.78% 39.00% 42.60% 40.33% 41.32%
Net charge-offs (recoveries) to average loans (annualized) 0.05% 0.03% 0.02% 0.05% -1.16%
Ratios as of period end:
Tier 1 leverage capital ratio (1) 11.47% 11.59% 11.26% 11.73% 11.62%
Common equity tier 1 risk-based capital ratio (1) 11.80% 11.91% 12.10% N/A N/A
Tier 1 risk-based capital ratio (1) 11.80% 11.91% 12.10% 12.72% 12.75%
Total risk-based capital ratio (1) 12.93% 13.07% 13.30% 13.97% 14.00%
Allowances for credit losses to loans and leases at end of period (2) 1.31% 1.36% 1.40% 1.43% 1.49%
Allowance for credit losses to non-performing loans and leases 303.27% 299.06% 288.16% 268.19% 210.40%
Average balances:
Total loans and leases (3) $ 1,741,762 $ 1,673,710 $ 1,612,556 $ 1,555,868 $ 1,464,336
Earning assets $ 2,160,075 $ 2,070,542 $ 2,064,435 $ 1,943,034 $ 1,908,411
Total assets $ 2,201,060 $ 2,117,610 $ 2,115,354 $ 1,990,417 $ 1,952,270
Total deposits $ 1,907,719 $ 1,832,688 $ 1,834,920 $ 1,707,908 $ 1,684,628
(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 Nine Months Ended
September 30, September 30,
2015 2014
Interest income $ 69,279 $ 58,506
Interest expense 7,751 6,902
Interest income before provision for credit losses 61,528 51,604
Provision for credit losses 1,500 2,850
Noninterest income 2,939 2,870
Noninterest expense 25,820 22,291
Income tax expense 14,967 11,609
Net income 22,180 17,724
Earnings per share
Basic $ 1.62 $ 1.32
Diluted $ 1.60 $ 1.29
Ratios for the period:
Return on average assets 1.38% 1.29%
Return on beginning equity 12.62% 11.45%
Net interest margin (Fully-taxable equivalent) 3.95% 3.86%
Noninterest expense to average assets 1.61% 1.60%
Efficiency ratio 40.05% 40.92%
Net charge-offs (recoveries) to average loans 0.03% -0.03%
Average balances:
Total loans and leases* $ 1,676,320 $ 1,398,430
Earning assets $ 2,098,549 $ 1,800,384
Total assets $ 2,144,830 $ 1,842,694
Total deposits $ 1,858,592 $ 1,589,899
* 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
September 30, June 30, March 31, December 31, September 30,
2015 2015 2015 2014 2014
Unaudited quarterly statement of financial position data:
Assets:
Cash and cash equivalents $ 232,707 $ 208,015 $ 242,053 $ 240,194 $ 248,232
Securities held-to-maturity, at amortized cost 6,307 6,806 7,139 7,815 8,188
Securities available-for-sale, at fair value 164,378 161,775 165,330 150,539 164,247
Loans and Leases:
Real estate - Single and multi-family residential $ 328,124 $ 290,186 $ 306,284 $ 283,958 $ 229,353
Real estate - Land for housing 14,429 13,102 11,658 12,132 12,156
Real estate - Land for income properties 1,876 1,891 1,906 1,489 1,507
Real estate - Commercial 770,494 712,383 676,034 653,380 678,778
Real estate - For sale housing construction 79,406 71,945 50,458 48,892 44,614
Real estate - Other construction 48,438 49,413 84,065 77,593 80,411
Commercial and industrial 555,680 570,408 502,453 495,827 443,966
Trade finance and other 38,602 40,403 38,234 30,878 33,967
Gross loans 1,837,049 1,749,731 1,671,092 1,604,149 1,524,752
Allowance for loan and lease losses (24,055) (23,758) (23,388) (22,974) (22,662)
Net deferred loan fees (2,476) (2,179) (2,216) (2,100) (2,368)
Total loans, net $ 1,810,518 $ 1,723,794 $ 1,645,488 $ 1,579,075 $ 1,499,722
Other real estate owned $ -- $ -- $ 8,811 $ 8,811 $ --
Investment in affordable housing 16,589 17,059 17,529 17,999 18,460
Federal Home Loan Bank stock 6,677 6,677 6,155 6,155 6,155
Other assets 45,370 46,030 45,208 43,566 51,146
Total assets $ 2,282,546 $ 2,170,156 $ 2,137,713 $ 2,054,154 $ 1,996,150
Liabilities:
Deposits:
Demand $ 477,524 $ 519,501 $ 493,440 $ 443,385 $ 403,881
Interest-bearing demand 697,402 568,243 585,286 525,781 554,769
Savings 21,159 23,855 24,056 22,211 22,552
Time certificates of $250,000 or more 263,949 260,205 243,360 276,197 250,087
Other time certificates 527,601 510,394 510,809 508,685 489,765
Total deposits $ 1,987,635 $ 1,882,198 $ 1,856,950 $ 1,776,259 $ 1,721,054
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 4,139 7,726 8,151 9,481
Other liabilities 13,590 13,954 9,299 14,717 16,963
Total liabilities $ 2,025,364 $ 1,920,291 $ 1,893,974 $ 1,819,127 $ 1,767,498
Equity:
Net common stock, no par value $ 180,260 $ 179,360 $ 177,978 $ 174,539 $ 173,581
Retained earnings 75,679 69,431 63,545 58,553 53,015
Accumulated other comprehensive income 1,243 1,074 2,216 1,935 2,056
Total shareholders' equity $ 257,182 $ 249,865 $ 243,739 $ 235,027 $ 228,652
Total liabilities and shareholders' equity $ 2,282,546 $ 2,170,156 $ 2,137,713 $ 2,054,154 $ 1,996,150
Preferred Bank
Loan and Credit Quality Information
Allowance For Credit Losses & Loss History
Nine Months Ended Year Ended
September 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 1,475 436
Mini-perm Real Estate -- 4,243
Construction - Residential -- --
Construction - Commercial -- --
Land - Residential -- --
Land - Commercial -- --
Others -- --
Total Charge-Offs 1,475 4,679
Recoveries
Commercial & Industrial 61 3
Mini-perm Real Estate 144 --
Construction - Residential -- --
Construction - Commercial 20 134
Land - Residential 100 --
Land - Commercial 731 4,672
Total Recoveries 1,056 4,809
Net Loan Charge-Offs 419 (130)
Provision for Credit Losses 1,500 3,350
Balance at End of Period $ 24,055 $ 22,974
Average Loans and Leases* $ 1,676,320 $ 1,438,122
Loans and Leases at end of Period* $ 1,837,049 $ 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 ** 1.31% 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