×

Preferred Bank Reports Final Fourth Quarter Results

company logo

LOS ANGELES, Jan. 30, 2013 (GLOBE NEWSWIRE) -- Preferred Bank (Nasdaq:PFBC), an independent commercial bank focusing on the Chinese-American and diversified Southern California mainstream market, today reported final updated results for the quarter and year ended December 31, 2012. Preferred Bank ("the Bank") previously reported net income of $3.4 million or $0.25 per diluted share for the fourth quarter of 2012. As a result of the Bank's complete analysis of its income tax position, the Bank has recorded a tax benefit for the fourth quarter of $928,000. This compares to previously reported income tax expense for the fourth quarter of $1,125,000. The result of this change amends the Bank's results for the fourth quarter to net income of $5.4 million or $0.40 per diluted share and the Bank's full year results are amended to report net income of $24.4 million or $1.82 per diluted share.

This change increases the Bank's capital ratios and tangible book value to the following:

Tangible Common Equity Ratio: 12.11%
Tier 1 Leverage Ratio: 12.00%
Total Risk-Capital Ratio: 15.02%
Tangible Book Value per Share: $14.23

About Preferred Bank

Preferred Bank is one of the largest independent commercial banks in California focusing on the Chinese-American market. 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 nine full-service branch banking offices in Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine, Diamond Bar, Anaheim and Pico Rivera, 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. Preferred Bank continues to benefit from the significant migration to Southern California of ethnic Chinese from China and other areas of East Asia. While its business is not solely dependent on the Chinese-American market, it represents an important element of the bank's operating strategy, especially for its branch network and deposit products and services. Preferred Bank believes it is well positioned to compete effectively with the smaller Chinese-American community banks, the larger commercial banks and other major banks operating in Southern California by offering a high degree of personal service and responsiveness, experienced multi-lingual staff and substantial lending limits.

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 2011 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
December 31,
2012
December 31,
2011
September 30,
2012
Interest income:
Loans, including fees $ 14,504 $ 11,997 $ 13,834
Investment securities 1,496 1,760 1,340
Fed funds sold 10 -- 14
Total interest income 16,010 13,757 15,189
Interest expense:
Interest-bearing demand 489 422 441
Savings 20 20 18
Time certificates 1,297 1,808 1,398
Senior debt -- 188 --
Total interest expense 1,806 2,438 1,857
Net interest income 14,204 11,319 13,332
Provision for loan losses 2,300 2,400 1,200
Net interest income after provision for loan losses 11,904 8,919 12,132
Noninterest income:
Fees & service charges on deposit accounts 480 440 445
Trade finance income 87 57 56
BOLI income 83 84 82
Net gain (loss) on sale of investment securities 21 -- --
Other income 78 241 84
Total noninterest income 749 822 667
Noninterest expense:
Salary and employee benefits 3,316 2,919 3,228
Net occupancy expense 753 739 743
Business development and promotion expense 104 123 73
Professional services 1,003 661 1,004
Office supplies and equipment expense 281 297 283
Total other-than-temporary impairment losses -- -- 8
Portion of loss recognized in other comprehensive income -- -- --
Other real estate owned related expense 1,696 1,227 2,525
Other 1,001 1,407 1,278
Total noninterest expense 8,154 7,373 9,143
Income before provision for income taxes 4,498 2,368 3,655
Income tax expense (benefit) (928) (1,399) 833
Net income $ 5,426 $ 3,767 $ 2,822
Income allocated to participating securities (69) (64) (37)
Net income available to common shareholders $ 5,357 $ 3,703 $ 2,785
Income per share available to common shareholders
Basic $ 0.41 $ 0.29 $ 0.21
Diluted $ 0.40 $ 0.29 $ 0.21
Weighted-average common shares outstanding
Basic 13,065,227 13,000,092 13,062,146
Diluted 13,291,592 13,000,092 13,255,778
PREFERRED BANK
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except for net income per share and shares)
For the Twelve Months Ended
December 31,
2012
December 31,
2011
Change
%
Interest income:
Loans, including fees $ 55,400 $ 46,464 19.2%
Investment securities 6,116 7,326 -16.5%
Fed funds sold 26 -- 100.0%
Total interest income 61,542 53,790 14.4%
Interest expense:
Interest-bearing demand 1,746 1,295 34.8%
Savings 75 92 -18.3%
Time certificates 5,868 8,163 -28.1%
Senior debt 94 753 -87.5%
Total interest expense 7,783 10,303 -24.5%
Net interest income 53,759 43,487 23.6%
Provision for credit losses 19,800 5,700 247.4%
Net interest income after provision for loan losses 33,959 37,787 -10.1%
Noninterest income:
Fees & service charges on deposit accounts 1,792 1,742 2.9%
Trade finance income 309 241 28.1%
BOLI income 329 333 -1.1%
Net gain on sale of investment securities 575 81 611.7%
Other income 503 393 27.8%
Total noninterest income 3,508 2,790 25.7%
Noninterest expense:
Salary and employee benefits 12,523 11,155 12.3%
Net occupancy expense 2,990 3,060 -2.3%
Business development and promotion expense 294 335 -12.1%
Professional services 3,227 2,267 42.4%
Office supplies and equipment expense 1,154 1,061 8.7%
Total other-than-temporary impairment losses 24 32 -25.0%
Portion of loss recognized in other comprehensive income -- -- 0.0%
Other real estate owned related expense 8,580 8,303 3.3%
Other 5,387 7,180 -25.0%
Total noninterest expense 34,179 33,393 2.4%
Income before provision for income taxes 3,288 7,185 -54.2%
Income tax benefit (21,095) (5,049) 317.8%
Net income $ 24,383 $ 12,234 99.3%
Income allocated to participating securities (330) (195) 100.0%
Net income available to common shareholders $ 24,053 $ 12,039 99.8%
Income per share available to common shareholders
Basic $ 1.84 $ 0.93 98.9%
Diluted $ 1.82 $ 0.93 96.0%
Weighted-average common shares outstanding
Basic 13,050,559 12,995,525 0.4%
Diluted 13,247,389 12,995,525 1.9%
PREFERRED BANK
Condensed Consolidated Statements of Financial Condition
(unaudited)
(in thousands)
December 31,
2012
December 31,
2011
Assets
Cash and due from banks $ 151,995 $ 142,466
Cash and cash equivalents 151,995 142,466
Securities held to maturity, at amortized cost 979 3,021
Securities available-for-sale, at fair value 210,742 166,083
Loans and leases 1,119,553 949,631
Less allowance for loan and lease losses (20,607) (23,718)
Less net deferred loan fees (2,019) (1,037)
Net loans and leases 1,096,927 924,876
Loans held for sale, at lower of cost or fair value 12,150 3,996
Other real estate owned 28,280 37,577
Customers' liability on acceptances 1,961 427
Bank furniture and fixtures, net 4,383 4,789
Bank-owned life insurance 8,049 7,808
Accrued interest receivable 5,646 4,851
Federal Home Loan Bank stock 4,282 4,164
Deferred tax assets 26,971 6,979
Other asset 3,002 2,760
Total assets $ 1,555,367 $ 1,309,797
Liabilities and Shareholders' Equity
Liabilities:
Deposits:
Demand $ 446,734 $ 239,987
Interest-bearing demand 325,018 233,349
Savings 21,844 22,385
Time certificates of $250,000 or more 208,005 185,001
Other time certificates 355,926 437,231
Total deposits $ 1,357,527 $ 1,117,953
Acceptances outstanding 1,961 427
Senior debt issuance -- 25,996
Accrued interest payable 968 1,292
Other liabilities 6,562 6,081
Total liabilities 1,367,018 1,151,749
Commitments and contingencies
Shareholders' equity:
Preferred stock. Authorized 25,000,000 shares; no issued and outstanding shares at December 31, 2012 and December 31, 2011
Common stock, no par value. Authorized 20,000,000 shares; issued and outstanding 13,234,608 and 13,220,955 shares at December 31, 2012 and December 31, 2011, respectively 162,927 162,884
Treasury stock (19,115) (19,115)
Additional paid-in-capital 24,544 23,456
Accumulated income 17,992 (6,391)
Accumulated other comprehensive income (loss):
Non-credit portion of loss recognized, net of tax of $133 and $367 at December 31, 2012 and December 31, 2011, respectively (184) (481)
Unrealized loss on securities, available-for-sale, net of tax of $1,131 and $1,554 at December 31, 2012 and December 31, 2011 2,185 (2,305)
Total shareholders' equity 188,349 158,048
Total liabilities and shareholders' equity $ 1,555,367 $ 1,309,797

CONTACT: AT THE COMPANY: Edward J. Czajka Executive Vice President Chief Financial Officer (213) 891-1188 AT FINANCIAL PROFILES: Kristen McNally General Information (310) 663-8007 kmcnally@finprofiles.com

Source:Preferred Bank