Preferred Bank Reports Record Third Quarter Results
20-Oct-2025 16:11:05 EDT
Preferred Bank Reports Record Third Quarter Results
GlobeNewswire October 20, 2025
LOS ANGELES, Oct. 20, 2025 (GLOBE NEWSWIRE) — Preferred Bank (NASDAQ: PFBC), one of the larger independent California banks, today reported results for the quarter ended September 30, 2025. Preferred Bank (“the Bank”) reported net income of $35.9 million or $2.84 per diluted share for the third quarter of 2025. This represents an increase in net income of $3.1 million from the prior quarter and an increase of $2.6 million over the same quarter last year. The increase compared to both periods was primarily due to an increase in net interest income. The primary reason that net interest income increased over the same quarter last year was due to a large $5.0 million decrease in interest expense. In comparison to the prior quarter, gross interest income increased by $6.4 million due to an increase in loans and investment securities.
Highlights for the Quarter:
Return on average assets was 1.93%
Return on average equity was 18.64%
Total loans increased by $132.4 million or 2.3%, linked quarter
Total deposits increased by $151.3 million, or 2.5%, linked quarter
The efficiency ratio for the quarter was 28.7%
Li Yu, Chairman and CEO, commented, “We are pleased to report a quarterly record for diluted earnings per share of $2.84 for the third quarter of 2025. Net income for the quarter was $35.9 million.
“For the quarter, nonperforming loans decreased significantly from $52.3 million at June 30, 2025 to $17.6 million as of September 30, 2025. The primary reason for the decrease is the foreclosure of a loan with the balance transferred to OREO. We are happy to report that the OREO asset has already been sold as of this writing, and a large pre-tax gain was also recorded on the sale which will be reported in our fourth quarter results. Net charge-offs were $1.6 million on a year-to-date (“YTD”) basis.
“This quarter we have also recorded reasonable growth in both loans and deposits. Total loans increased by $132.4 million or 2.3% on a linked quarter basis. Deposits also increased by $151.3 million or 2.5% on a linked quarter basis. Our customers appear to be slightly more optimistic but still cautious as there are a lot of uncertainties remaining in our economy. Worth noting is that without the aforementioned loan transferred to OREO, loan growth would have been near $170 million for the quarter.
“Net interest income and the net interest margin both increased from the previous quarter while noninterest expense was relatively unchanged from previous quarters. In late June, regulators approved our stock repurchase program but for most of the time since then, the market price was above what we were willing to pay to buy it back. During the third quarter, we repurchased a total of 70,842 shares for total consideration of $6.3 million.”
Results of Operations
Net Interest Income and Net Interest Margin. Net interest income before provision for credit losses was $71.3 million for the third quarter of 2025. This represents a $4.4 million increase over the $66.9 million recorded in the prior quarter and a $2.5 million increase over the same quarter last year. The increase compared to the prior quarter was due to loan growth as well as an increase in the Bank's investment securities. This was partially offset by an increase in interest expense which was due to deposit growth and an increase in borrowings. The increase over the same period last year was due to a $5.0 million decrease in interest expense partially offset by a smaller decrease in interest income. The Bank has made significant efforts to decrease rates on deposits and the results in this quarter are indicative of that effort. The Bank's net interest margin expanded in the quarter to 3.92% from 3.85% last quarter but was lower than the net interest margin of 4.10% recorded in the third quarter of last year.
Noninterest Income. For the third quarter of 2025, noninterest income was $3.7 million compared with $3.5 million for the same quarter last year and compared to $3.8 million for the second quarter of 2025. The increase over the same quarter last year was due to letter of credit (LC) fee income which was up by $461,000. In comparison to the prior quarter, gains on sales of loans was down by $116,000.
Noninterest Expense. Total noninterest expense was $21.5 million for the third quarter of 2025 compared to $22.4 million for the second quarter of 2025 and compared to the $22.1 million recorded in the same period last year. The primary reason for the decrease from the prior quarter was mainly due to a $1.3 million write-down of the Bank's OREO property which occurred in the second quarter of 2025 as compared to a $300,000 charge on OREO holdings this quarter. The decrease from the same quarter last year was due again to a $1.7 million write-down of the same property in the third quarter of 2024. Personnel expense was $14.2 million this quarter which was a $715,000 increase over the same period last year but was nearly flat compared to the second quarter of 2025. Occupancy expense was up by $414,000 over the same period last year due to the Bank's branch expansions and the change in accounting for leases which was adopted in the fourth quarter of 2024. The Bank's efficiency ratio came in at 28.7% for the quarter which compares to 31.8% last quarter and to 30.6% in the same quarter last year.
Income Taxes. The Bank recorded a provision for income taxes of $15.0 million for the third quarter of 2025. This represents an effective tax rate (“ETR”) of 29.5% which is up from the 29.0% ETR for the same quarter last year and the same as the 29.5% ETR recorded in the second quarter of 2025. The Bank's ETR will fluctuate slightly from quarter to quarter within a fairly small range due to the timing of taxable events throughout the year.
Year-to-Date Results
Net income for the nine months ended September 30, 2025 was $98.8 million or $7.63 per diluted share compared to $100.4 million or $7.39 million last year. The reason that diluted earnings per share (“EPS”) increased over 2024 was due to the stock repurchases that occurred in late 2024 and early 2025 which decreased the outstanding share count, leading to increased diluted earnings per share. The primary reason for the decrease in net income was a decrease in net interest income of $2.6 million and a $5.5 million increase in noninterest expense partially offset by a $5.3 million decrease in the provision for credit losses.
Balance Sheet Summary
Total gross loans at September 30, 2025 were $5.87 billion, an increase of $231.4 million from the total of $5.64 billion as of December 31, 2024. Total deposits were $6.23 billion, an increase of $312.8 million from the $5.92 billion as of December 31, 2024. Total assets were $7.47 billion, an increase of $544.4 million over the total of $6.92 billion as of December 31, 2024.
Asset Quality
Non-accrual loans and loans 90 days or more past due and still accruing totaled $17.6 million as of September 30, 2025. This represents a decrease from the prior quarter of $52.3 million as the Bank foreclosed on one of its large nonaccrual loans reported as of June 30, 2025. The $37 million multifamily nonaccrual loan was foreclosed on in the third quarter however the Bank has sold this property subsequent to September 30, 2025 and recorded a pre-tax gain on sale. Total OREO as of September 30, 2025 was $52.6 million as of September 30, 2025 however, as of this writing, OREO totals $14.7 million due to the aforementioned OREO sale. Total net charge-offs (recoveries) for the quarter were $1.6 million compared to net charge-offs of $44,000 in the prior quarter and compared to $(3,000) in the same quarter last year.
Allowance for Credit Losses
The provision for credit losses for the third quarter of 2025 was $2.5 million compared to $1.6 million last quarter and compared to $3.2 million in the same quarter last year. The Bank's allowance coverage ratio decreased to 1.27% of loans as compared to 1.29% in the prior quarter.
Capitalization
As of September 30, 2025, the Bank's tangible capital ratio was 10.38%, the leverage ratio was 10.66%, the common equity tier 1 capital ratio was 11.34% and the total capital ratio stood at 14.56%. As of December 31, 2024, the Bank's tangible capital ratio was 11.02%, the Bank's leverage ratio was 11.33%, the common equity tier 1 ratio was 11.80% and the total capital ratio was 15.11%.
Conference Call and Webcast
A conference call with simultaneous webcast to discuss Preferred Bank's third quarter 2025 financial results will be held tomorrow October 21, 2025 at 2:00 p.m. Eastern / 11:00 a.m. Pacific. Interested participants and investors may access the conference call by dialing 888-243-4451 (domestic) or 412-542-4135 (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.
Preferred Bank's Chairman and CEO Li Yu, President and Chief Operating Officer Wellington Chen, Chief Financial Officer Edward J. Czajka, Chief Credit Officer Nick Pi and Deputy Chief Operating Officer Johnny Hsu will discuss Preferred Bank's financial results, business highlights and outlook. After the live webcast, a replay will be available at 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 4, 2025; the passcode is 7582330.
About Preferred Bank
Preferred Bank is one of the larger independent commercial banks headquartered in California. The Bank is chartered by the State of California, and its deposits are insured by the Federal Deposit Insurance Corporation, or FDIC, to the maximum extent permitted by law. The Bank conducts its banking business from its main office in Los Angeles, California, and through twelve full-service branch banking offices in California (Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine (2), Diamond Bar, Pico Rivera, Tarzana and San Francisco (2)), two branches in New York (Manhattan and Flushing, Queens) and a branch office in the Houston, Texas suburb of Sugar Land. In addition, the Bank also operates a loan production office in Sunnyvale, 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 2024 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.
AT THE COMPANY:
AT FINANCIAL PROFILES:
Edward J. Czajka
Jeffrey Haas
Executive Vice President
General Information
Chief Financial Officer
(310) 622-8240
(213) 891-1188
PFBC@finprofiles.com
Financial Tables to Follow
PREFERRED BANK
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except for net income per share and shares)
For the Quarter Ended
September 30,
June 30,
September 30,
2025
2025
2024
Interest income:
Loans, including fees
$
110,645
$
105,884
$
114,112
Investment securities
15,977
14,326
15,032
Fed funds sold
228
233
280
Total interest income
126,850
120,443
129,424
Interest expense:
Interest-bearing demand
17,562
16,171
23,211
Savings
67
71
84
Time certificates
34,792
34,932
35,956
FHLB borrowings
1,794
1,070
–
Subordinated debt
1,325
1,325
1,325
Total interest expense
55,540
53,569
60,576
Net interest income
71,310
66,874
68,848
Provision for credit losses
2,500
1,600
3,200
Net interest income after provision for credit losses
68,810
65,274
65,648
Noninterest income:
Fees & service charges on deposit accounts
625
635
747
Letters of credit fee income
2,421
2,333
1,959
BOLI income
105
104
108
Net gain on sale of loans
56
172
91
Other income
458
518
554
Total noninterest income
3,665
3,762
3,459
Noninterest expense:
Salary and employee benefits
14,240
14,247
13,525
Net occupancy expense
2,297
2,271
1,883
Business development and promotion expense
238
240
241
Professional services
1,494
1,507
1,816
Office supplies and equipment expense
361
419
435
OREO valuation allowance and related expense
463
1,479
1,915
Other
2,405
2,282
2,274
Total noninterest expense
21,498
22,445
22,089
Income before provision for income taxes
50,977
46,591
47,018
Income tax expense
15,038
13,744
13,635
Net income
$
35,939
$
32,847
$
33,383
Income per share available to common shareholders
Basic
$
2.90
$
2.61
$
2.50
Diluted
$
2.84
$
2.57
$
2.46
Weighted-average common shares outstanding
Basic
12,384,924
12,570,755
13,327,848
Diluted
12,634,174
12,776,240
13,544,273
Cash dividends per common share
$
0.75
$
0.75
$
0.70
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
2025
2024
%
Interest income:
Loans, including fees
$
318,020
333,543
-4.7
%
Investment securities
43,113
48,841
-11.7
%
Fed funds sold
689
854
-19.3
%
Total interest income
361,822
383,238
-5.6
%
Interest expense:
Interest-bearing demand
50,323
69,706
-27.8
%
Savings
207
238
-13.1
%
Time certificates
103,611
105,864
-2.1
%
FHLB borrowings
2,864
–
100.0
%
Subordinated debt
3,975
3,975
0.0
%
Total interest expense
160,980
179,783
-10.5
%
Net interest income
200,842
203,455
-1.3
%
Provision for credit losses
4,800
10,100
-52.5
%
Net interest income after provision for credit losses
196,042
193,355
1.4
%
Noninterest income:
Fees & service charges on deposit accounts
1,976
2,411
-18.0
%
Letters of credit fee income
6,998
5,211
34.3
%
BOLI income
312
318
-1.8
%
Net gain on sale of loans
503
547
-8.0
%
Other income
1,636
1,441
13.5
%
Total noninterest income
11,425
9,928
15.1
%
Noninterest expense:
Salary and employee benefits
43,326
40,369
7.3
%
Net occupancy expense
6,862
5,310
29.2
%
Business development and promotion expense
940
910
3.3
%
Professional services
4,652
5,105
-8.9
%
Office supplies and equipment expense
1,166
1,385
-15.8
%
OREO valuation allowance and related expense
3,473
2,079
67.1
%
Other
6,893
6,656
3.6
%
Total noninterest expense
67,312
61,814
8.9
%
Income before provision for income taxes
140,155
141,469
-0.9
%
Income tax expense
41,345
41,028
0.8
%
Net income
$
98,810
$
100,441
-1.6
%
Income per share available to common shareholders
Basic
$
7.77
$
7.50
3.6
%
Diluted
$
7.63
$
7.39
3.2
%
Weighted-average common shares outstanding
Basic
12,723,788
13,399,487
-5.0
%
Diluted
12,949,445
13,587,820
-4.7
%
Dividends per share
$
2.25
$
2.10
7.1
%
PREFERRED BANK
Condensed Consolidated Statements of Financial Condition
(unaudited)
(in thousands)
September 30,
December 31,
2025
2024
(Unaudited)
(Audited)
Assets
Cash and due from banks
$
795,459
$
765,515
Fed funds sold
20,000
20,000
Cash and cash equivalents
815,459
785,515
Securities held-to-maturity, at amortized cost
19,034
20,021
Securities available-for-sale, at fair value
569,115
348,706
Loans held for sale, at lower of cost or fair value
–
2,214
Loans
5,872,011
5,640,615
Less allowance for credit losses
(74,692
)
(71,477
)
Less amortized deferred loan fees, net
(9,956
)
(9,234
)
Loans, net
5,787,363
5,559,904
Other real estate owned and repossessed assets
52,609
14,991
Bank furniture and fixtures, net
7,771
8,462
Bank-owned life insurance
10,641
10,433
Accrued interest receivable
36,449
33,561
Investment in affordable housing partnerships
73,874
58,346
Federal Home Loan Bank stock, at cost
15,000
15,000
Deferred tax assets
43,711
47,402
Income tax receivable
5,190
2,195
Operating lease right-of-use assets
27,063
13,182
Other assets
4,515
3,497
Total assets
$
7,467,794
$
6,923,429
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing demand deposits
$
654,302
$
704,859
Interest bearing deposits:
2,205,865
2,026,965
Savings
31,087
30,150
Time certificates of $250,000 or more
1,699,757
1,477,931
Other time certificates
1,638,662
1,676,943
Total deposits
6,229,673
5,916,848
Advances from Federal Home Loan Bank
200,000
–
Subordinated debt issuance, net
148,647
148,469
Commitments to fund investment in affordable housing partnerships
24,874
21,623
Operating lease liabilities
31,073
16,990
Accrued interest payable
15,655
16,517
Other liabilities
42,230
39,830
Total liabilities
6,692,152
6,160,277
Shareholders' equity
775,642
763,152
Total liabilities and shareholders' equity
$
7,467,794
$
6,923,429
Book value per common share
$
62.81
$
57.86
Number of common shares outstanding
12,349,889
13,188,776
PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)
For the Quarter Ended
September 30,
June 30,
March 31,
December 31,
September 30,
2025
2025
2025
2024
2024
Unaudited historical quarterly operations data:
Interest income
$
126,850
$
120,443
$
114,529
$
125,858
$
129,424
Interest expense
55,540
53,569
51,871
56,685
60,576
Interest income before provision for credit losses
71,310
66,874
62,658
69,173
68,848
Provision for credit losses
2,500
1,600
700
2,000
3,200
Noninterest income
3,665
3,762
3,998
3,637
3,459
Noninterest expense
21,498
22,445
23,369
28,246
22,089
Income tax expense
15,038
13,744
12,563
12,343
13,635
Net income
$
35,939
$
32,847
$
30,024
$
30,221
$
33,383
Earnings per share
Basic
$
2.90
$
2.61
$
2.27
$
2.29
$
2.50
Diluted
$
2.84
$
2.57
$
2.23
$
2.25
$
2.46
Ratios for the period:
Return on average assets
1.93
%
1.85
%
1.76
%
1.74
%
1.95
%
Return on average equity
18.64
%
17.55
%
15.62
%
15.81
%
17.77
%
Net interest margin (Fully-taxable equivalent)
3.92
%
3.85
%
3.75
%
4.06
%
4.10
%
Noninterest expense to average assets
1.16
%
1.26
%
1.37
%
1.62
%
1.29
%
Efficiency ratio
28.67
%
31.78
%
35.06
%
38.79
%
30.55
%
Net (recoveries) charge-offs to average loans (annualized)
0.11
%
0.00
%
-0.01
%
0.47
%
-0.00
%
Ratios as of period end:
Tangible common equity ratio
10.38
%
10.26
%
10.96
%
11.02
%
10.92
%
Tier 1 leverage capital ratio
10.66
%
10.73
%
11.52
%
11.33
%
11.28
%
Common equity tier 1 risk-based capital ratio
11.34
%
11.18
%
11.86
%
11.80
%
11.66
%
Tier 1 risk-based capital ratio
11.34
%
11.18
%
11.86
%
11.80
%
11.66
%
Total risk-based capital ratio
14.56
%
14.43
%
15.15
%
15.11
%
15.06
%
Allowances for credit losses to loans at end of period
1.27
%
1.29
%
1.28
%
1.27
%
1.36
%
Allowance for credit losses to non-performing loans
4.24x
1.41x
0.91x
1.89x
3.92x
Average balances:
Total securities
$
583,302
$
503,861
$
402,754
$
350,732
$
356,590
Total loans
5,753,801
5,623,010
5,555,010
5,542,558
5,458,613
Total earning assets
7,234,568
6,984,272
6,780,438
6,788,487
6,684,766
Total assets
7,382,265
7,121,047
6,905,249
6,920,325
6,817,979
Total time certificate of deposits
3,330,241
3,321,327
3,164,766
3,144,523
2,874,985
Total interest bearing deposits
5,501,767
5,345,308
5,244,243
5,220,655
5,124,245
Total deposits
6,169,728
6,005,486
5,886,163
5,905,127
5,828,227
Total interest bearing liabilities
5,850,376
5,614,737
5,392,735
5,369,092
5,272,617
Total equity
764,766
750,535
779,339
760,345
747,222
PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)
For the Nine Months Ended
September 30,
September 30,
2025
2024
Interest income
$
361,822
$
383,238
Interest expense
160,980
179,783
Interest income before provision for credit losses
200,842
203,455
Provision for credit losses
4,800
10,100
Noninterest income
11,425
9,928
Noninterest expense
67,312
61,814
Income tax expense
41,345
41,028
Net income
$
98,810
$
100,441
Earnings per share
Basic
$
7.77
$
7.50
Diluted
$
7.63
$
7.39
Ratios for the period:
Return on average assets
1.85
%
1.97
%
Return on average equity
17.27
%
18.57
%
Net interest margin (Fully-taxable equivalent)
3.84
%
4.08
%
Noninterest expense to average assets
1.26
%
1.21
%
Efficiency ratio
31.71
%
28.97
%
Net charge-off to average loans
0.04
%
0.31
%
Average balances:
Total securities
$
497,301
$
352,982
Total loans
5,644,668
5,347,918
Total earning assets
7,001,424
6,666,439
Total assets
7,137,935
6,800,008
Total time certificate of deposits
3,272,717
2,870,717
Total interest bearing deposits
5,364,715
5,110,755
Total deposits
6,021,497
5,830,555
Total interest bearing liabilities
5,620,958
5,259,068
Total equity
764,826
722,560
PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)
As of
September 30,
June 30,
March 31,
December 31,
September 30,
2025
2025
2025
2024
2024
Unaudited quarterly statement of financial position data:
Assets:
Cash and cash equivalents
$
815,459
$
796,257
$
925,183
$
785,515
$
804,994
Securities held-to-maturity, at amortized cost
19,034
19,456
19,745
20,021
20,311
Securities available-for-sale, at fair value
569,115
577,040
390,096
348,706
337,363
Loans:
Real estate – Mortgage:
Real estate–Residential
$
793,217
$
767,620
$
779,462
$
790,069
$
753,453
Real estate–Commercial
2,890,990
2,868,308
2,897,956
2,840,771
2,882,506
Total Real Estate – Mortgage
3,684,207
3,635,928
3,677,418
3,630,840
3,635,959
Real estate – Construction:
R/E Construction — Residential
285,623
291,343
306,283
296,580
274,214
R/E Construction — Commercial
323,897
303,354
269,065
287,185
290,308
Total real estate construction loans
609,520
594,697
575,348
583,765
564,522
Commercial and industrial
1,570,423
1,501,188
1,374,379
1,418,930
1,365,550
SBA
7,630
7,741
7,104
6,833
5,424
Consumer and others
231
56
164
247
124
Gross loans
5,872,011
5,739,610
5,634,413
5,640,615
5,571,579
Allowance for credit losses on loans
(74,692
)
(73,830
)
(72,274
)
(71,477
)
(76,051
)
Net deferred loan fees
(9,956
)
(11,940
)
(9,652
)
(9,234
)
(10,414
)
Net loans, excluding loans held for sale
$
5,787,363
$
5,653,840
$
5,552,487
$
5,559,904
$
5,485,114
Loans held for sale
$
–
$
–
$
–
$
2,214
$
225
Net loans
$
5,787,363
$
5,653,840
$
5,552,487
$
5,562,118
$
5,485,339
Other real estate owned and repossessed assets
$
52,609
$
13,755
$
13,650
$
14,991
$
15,082
Investment in affordable housing partnerships
73,874
74,783
63,612
58,346
58,009
Federal Home Loan Bank stock, at cost
15,000
15,000
15,000
15,000
15,000
Other assets
135,340
128,629
120,319
118,732
136,246
Total assets
$
7,467,794
$
7,278,760
$
7,100,092
$
6,923,429
$
6,872,344
Liabilities:
Deposits:
Demand
$
654,302
$
675,102
$
730,270
$
704,859
$
682,859
Interest bearing demand
2,205,865
2,004,135
2,099,987
2,026,965
1,994,288
Savings
31,087
34,333
32,631
30,150
29,793
Time certificates of $250,000 or more
1,699,757
1,681,026
1,531,715
1,477,931
1,478,500
Other time certificates
1,638,662
1,683,737
1,678,132
1,676,943
1,682,324
Total deposits
$
6,229,673
$
6,078,333
$
6,072,735
$
5,916,848
$
5,867,764
Advance from Federal Home Loan Bank
200,000
200,000
–
–
–
Subordinated debt issuance, net
148,647
148,588
148,529
148,469
148,410
Commitments to fund investment in affordable housing partnerships
24,874
30,645
20,956
21,623
23,617
Other liabilities
88,958
73,534
79,268
73,337
82,436
Total liabilities
$
6,692,152
$
6,531,100
$
6,321,488
$
6,160,277
$
6,122,227
Equity:
Common stock, no par value
$
210,882
$
210,882
$
210,882
$
210,882
$
210,882
Additional paid-in capital
103,235
101,088
99,603
95,791
93,631
Treasury stock
(277,351
)
(271,005
)
(214,406
)
(201,172
)
(194,585
)
Retained earnings
755,587
728,891
705,360
685,108
664,808
Accumulated other comprehensive income
(16,711
)
(22,196
)
(22,835
)
(27,457
)
(24,619
)
Total shareholders' equity
$
775,642
$
747,660
$
778,604
$
763,152
$
750,117
Total liabilities and shareholders' equity
$
7,467,794
$
7,278,760
$
7,100,092
$
6,923,429
$
6,872,344
PREFERRED BANK
Quarter-to-Date Average Balances, Yield and Rates
(unaudited)
Three months ended September 30,
Three months ended March 31,
Three months ended September 30,
2025
2025
2024
Interest
Average
Interest
Average
Interest
Average
Average
Income or
Yield/
Average
Income or
Yield/
Average
Income or
Yield/
Balance
Expense
Rate
Balance
Expense
Rate
Balance
Expense
Rate
ASSETS
(Dollars in thousands)
Interest earning assets:
Loans(1,2)
$
5,754,073
$
110,645
7.63
%
$
5,632,204
$
105,884
7.54
%
$
5,459,842
$
114,112
8.31
%
Investment securities(3)
583,302
6,257
4.26
%
503,861
5,195
4.14
%
356,590
3,610
4.03
%
Federal funds sold
20,000
228
4.52
%
20,511
233
4.56
%
20,164
280
5.52
%
Other earning assets
877,193
9,811
4.44
%
827,696
9,230
4.47
%
848,170
11,521
5.40
%
Total interest earning assets
7,234,568
126,941
6.96
%
6,984,272
120,542
6.92
%
6,684,766
129,523
7.71
%
Deferred loan fees, net
(10,686
)
(10,005
)
(10,248
)
Allowance for credit losses on loans
(72,784
)
(72,328
)
(72,899
)
Noninterest earning assets:
Cash and due from banks
10,071
12,590
10,826
Bank furniture and fixtures
7,945
8,215
9,419
Right of use assets
19,153
19,917
22,496
Other assets
193,998
178,386
173,619
Total assets
$
7,382,265
$
7,121,047
$
6,817,979
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Deposits:
Interest bearing demand and savings
$
2,171,526
$
17,629
3.22
%
$
2,023,981
$
16,242
3.22
%
$
2,249,260
$
23,295
4.12
%
TCD $250K or more
1,686,710
17,406
4.09
%
1,644,322
17,092
4.17
%
1,412,073
17,866
5.03
%
Other time certificates
1,643,531
17,386
4.20
%
1,677,005
17,840
4.27
%
1,462,912
18,090
4.92
%
Total interest bearing deposits
5,501,767
52,421
3.78
%
5,345,308
51,174
3.84
%
5,124,245
59,251
4.60
%
Advance from Federal Home Loan Bank
200,000
1,794
3.56
%
120,879
1,070
3.55
%
–
–
0.00
%
Subordinated debt, net
148,609
1,325
3.54
%
148,550
1,325
3.58
%
148,372
1,325
3.55
%
Total interest bearing liabilities
5,850,376
55,540
3.77
%
5,614,737
53,569
3.83
%
5,272,617
60,576
4.57
%
Noninterest bearing liabilities:
Demand deposits
667,961
660,178
703,982
Lease liability
22,908
23,657
18,882
Other liabilities
76,255
71,940
75,276
Total liabilities
6,617,500
6,370,512
6,070,757
Shareholders' equity
764,766
750,535
747,222
Total liabilities and shareholders' equity
$
7,382,266
$
7,121,047
$
6,817,979
Net interest income
$
71,401
$
66,973
$
68,947
Net interest spread
3.19
%
3.10
%
3.14
%
Net interest margin
3.92
%
3.85
%
4.10
%
Cost of Deposits:
Noninterest bearing demand deposits
$
667,961
$
660,178
$
703,982
Interest bearing deposits
5,501,767
52,421
3.78
%
5,345,308
51,174
3.84
%
5,124,245
59,251
4.60
%
Total Deposits
$
6,169,728
$
52,421
3.37
%
$
6,005,486
$
51,174
3.42
%
$
5,828,227
$
59,251
4.04
%
(1)
Includes non-accrual loans and loans held for sale
(2)
Net loan fee income of $1.1 million, $1.7 million and $991,000 for the quarter ended September 30, 2025, June 30, 2025 and September 30, 2024, respectively, are included in the yield computations
(3)
Yields on securities have been adjusted to a tax-equivalent basis
PREFERRED BANK
Year-to-Date Average Balances, Yield and Rates
(unaudited)
Nine Months ended September 30,
2025
2024
Interest
Average
Interest
Average
Average
Income or
Yield/
Average
Income or
Yield/
Balance
Expense
Rate
Balance
Expense
Rate
ASSETS
(Dollars in thousands)
Interest earning assets:
Loans(1,2)
$
5,648,323
$
318,020
7.53
%
$
5,350,465
$
333,543
8.33
%
Investment securities(3)
497,301
15,546
4.18
%
352,982
10,691
4.05
%
Federal funds sold
20,244
689
4.55
%
20,472
854
5.57
%
Other earning assets
835,556
27,857
4.46
%
942,520
38,448
5.45
%
Total interest earning assets
7,001,424
362,112
6.91
%
6,666,439
383,536
7.68
%
Deferred loan fees, net
(9,965
)
(10,466
)
Allowance for credit losses on loans
(72,225
)
(76,775
)
Noninterest earning assets:
Cash and due from banks
11,178
10,693
Bank furniture and fixtures
8,198
9,762
Right of use assets
18,105
22,462
Other assets
181,220
177,893
Total assets
$
7,137,935
$
6,800,008
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Deposits:
Interest bearing demand/ savings
$
2,091,998
$
50,530
3.23
%
$
2,240,038
$
69,944
4.17
%
TCD $250K or more
1,605,201
50,138
4.18
%
1,377,621
51,662
5.01
%
Other time certificates
1,667,516
53,473
4.29
%
1,493,096
54,202
4.85
%
Total interest \bearing deposits
5,364,715
154,141
3.84
%
5,110,755
175,808
4.59
%
Advance from Federal Home Loan Bank
107,692
2,864
3.56
%
–
–
0.00
%
Subordinated debt, net
148,551
3,975
3.58
%
148,313
3,975
3.58
%
Total interest bearing liabilities
5,620,958
160,980
3.83
%
5,259,068
179,783
4.57
%
Noninterest bearing liabilities:
Demand deposits
656,782
719,800
Lease liability
21,857
19,401
Other liabilities
73,511
79,179
Total liabilities
6,373,108
6,077,448
Shareholders' equity
764,826
722,560
Total liabilities and shareholders' equity
$
7,137,934
$
6,800,008
Net interest income
$
201,132
$
203,753
Net interest spread
3.09
%
3.12
%
Net interest margin
3.84
%
4.08
%
Cost of Deposits:
Noninterest bearing demand deposits
$
656,782
$
719,800
Interest bearing deposits
5,364,715
154,141
3.84
%
5,110,755
175,808
4.59
%
Total Deposits
$
6,021,497
$
154,141
3.42
%
$
5,830,555
$
175,808
4.03
%
(1)
Includes non-accrual loans and loans held for sale
(2)
Net loan fee income of $3.6 million and $3.4 million for the nine months ended September 30, 2025 and 2024, respectively, are included in the yield computations
(3)
Yields on securities have been adjusted to a tax-equivalent basis
PREFERRED BANK
Loan and Credit Quality Information
Allowance For Credit Losses History
Nine Months Ended
Year Ended
September 30, 2025
December 31, 2024
(Dollars in 000's)
Allowance For Credit Losses
Balance at Beginning of Period
$
71,477
$
78,355
Charge-Offs
Commercial & Industrial
8
19,028
Mini-perm Real Estate
1,749
–
Total Charge-Offs
1,757
19,028
Recoveries
Commercial & Industrial
172
50
Total Recoveries
172
50
Net (Recoveries) Charge-Offs
1,585
18,978
Provision for Credit Losses:
4,800
12,100
Balance at End of Period
$
74,692
$
71,477
Average Loans Held for Investment
$
5,644,668
$
5,396,844
Loans Held for Investment at End of Period
$
5,872,011
$
5,640,615
Net (Recoveries) Charge-Offs to Average Loans
0.04
%
0.35
%
Allowances for Credit Losses to Loans at End of Period
