Preferred Bank (NASDAQ: PFBC), an independent
commercial bank, today reported results for the quarter ended
September 30, 2020. Preferred Bank (“the Bank”) reported net income
of $17.1 million or $1.15 per diluted share for the third quarter
of 2020. This is down from net income of $20.0 million or $1.32 per
diluted share for the third quarter of 2019 but easily surpasses
net income of $15.3 million or $1.03 per diluted share for the
second quarter of 2020. The primary reason for the decrease
compared to the prior year is the provision for credit losses,
which totaled $9.0 million for the third quarter of 2020, as
compared to $900,000 in the third quarter of 2019. Compared to the
second quarter of 2020, however, the provision for credit losses
increased $1.5 million over the $7.5 million recorded in that
period, yet net income increased $1.9 million or $0.12 per diluted
share. This was due to an increase in net interest income, an
increase in noninterest income coupled with a decrease in
noninterest expense.
Li Yu, Chairman and CEO, commented, “We are pleased
to report third quarter net income of $17.1 million or $1.15 per
share. Our earnings compare favorably with the previous two
quarters. In fact, on a pre-tax, pre-provision (PTPP) basis, our
third quarter and YTD earnings reached a record high. The primary
reasons for the performance was significantly reduced interest cost
and effective overhead control. The Bank’s third quarter efficiency
ratio clocked in at 29.88%. Our net interest margin, however,
compressed slightly from the previous quarter due to a larger
balance sheet and much higher level of cash. Under the current
interest rate environment, excess cash reduces our
profitability.
Deposits continued to grow in the third quarter as
we saw a $64.2 million or 1.5% increase from June 30, 2020.
However, our loan balances came in $14 million below the previous
quarter. The prolonged shut down of our trade area has reduced the
opportunities for new loans. The uncertainties further make many
new opportunities proportionately less attractive.
Our main focus at present is credit management. We
elected to charge-off portions of the two loans which were placed
on nonaccrual status last quarter in addition to fully reserving
for any amounts which may not be collectible. In addition, due to
the ongoing economic disruption caused by the pandemic, our
provision for credit losses is again elevated this quarter. The
allowance for credit loss to total loans now stands at 1.58%
(excluding PPP loans).
A great deal of the credit management effort was
also spent on loans modified under the CARES Act. These loans
totaled $199.5 million at September 30, 2020 which represented a
$267.6 million or 57% reduction from the $467.1 million reported on
June 30, 2020. We have also been in contact with substantially all
of these borrowers inquiring about their plan of resumption of
scheduled payments. We are encouraged to learn that loans under
modification at December 31, 2020 could be a very modest
amount.
The pandemic has resulted in unprecedented
uncertainties for our citizens, our economy and the banking
industry. Preferred Bank’s outstanding operating metrics and
earnings power will provide an additional resource in meeting the
challenges ahead.”
Results of Operations
Net Interest Income and Net Interest
Margin. Net interest income before provision for credit
losses was $44.1 million for the third quarter of 2020. This is an
increase over the $41.5 million recorded in the third quarter of
2019 as well as the $42.2 million recorded in the second quarter of
2020. The increase over both periods is due to growth in average
total loans as well as declining deposit costs. The Bank’s taxable
equivalent net interest margin was 3.54% for the third quarter of
2020, a 30 basis point decrease from the 3.84% achieved in the
third quarter of 2019 and a 3 basis point decrease from the 3.57%
posted in the second quarter of 2020. During the third quarter,
compared to the second quarter, average interest-earning assets
increased by $207 million, of which $184 million was centered in
cash, most of which earns interest at 0.10% per annum. This brought
average asset yields down to 4.23% in the quarter from 4.41% the
previous quarter. Fortunately, the Bank continues to benefit from
lower deposit costs as the Bank’s total cost of deposits went from
0.81% in the second quarter down to 0.64% in the third quarter.
Total deposit interest expense is down by more than half, or 52%
from the same period last year.
Noninterest Income. For the third
quarter of 2020, noninterest income was $1,605,000 compared with
$1,737,000 for the same quarter last year and compared to
$1,430,000 for the second quarter of 2020. The decrease from the
third quarter of 2019 was due mainly to letter of credit fee income
which decreased by $183,000. In addition, the Bank incurred a loss
on sale of investment securities of $113,000 in the second quarter
of 2020 compared to a gain of $15,000 in the third quarter of
2020.
Noninterest
Expense. Total noninterest expense was
$13.7 million for the third quarter of 2020. This is down from the
$13.9 million recorded in the same quarter last year and is also
down from the $14.3 million posted in the second quarter of 2020.
Salaries and benefits expense totaled $9.1 million for the third
quarter of 2020, a decrease of $675,000 from the third quarter of
2019 and a decrease of $1.0 million from the second quarter of
2020. The decrease from the prior quarter is mostly to an increase
in capitalized loan origination costs related to higher overall
loan production in the third quarter versus the second quarter. The
decrease from the prior year is due mainly to reduced bonus expense
as the Bank’s profitability is lower than in the prior year, which
is the main driver of total incentive compensation. Occupancy
expense totaled $1.5 million for the quarter and this represented
an increase over the $1.3 million recorded in the third quarter of
2019 and the second quarter of 2020. Professional services expense
was $1.0 million for the third quarter of 2020 and was down
slightly from the $1.1 million recorded in the same quarter of 2019
and flat compared to the $1.0 million posted in the second quarter
of 2020. Other expenses were $1.6 million for the third quarter of
2020, an increase of $414,000 over the same period last year and up
by $207,000 over the second quarter of 2020. The increase over both
periods was mainly due to FDIC insurance premiums of which there
were none in the third quarter of 2019 and which were also lower in
the second quarter of 2020 compared to the third quarter. For the
quarter ended September 30, 2020, the Bank’s efficiency ratio was
29.9%.
Income Taxes. The Bank recorded a
provision for income taxes of $5.9 million for the third quarter of
2020. This represents an effective tax rate (“ETR”) of 27.5% and a
slight decrease from the ETR of 29.5% for the same quarter last
year and also down from the 29.7% recorded in the second quarter of
2020. 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.
Balance Sheet Summary
Total gross loans at September 30, 2020 were $3.95
billion, an increase of $224.8 million or 6.0% over the total of
$3.72 billion as of December 31, 2019. Total deposits increased to
$4.41 billion, an increase of $421.1 million or 10.8% over the
$3.98 billion as of December 31, 2019. Total assets ended the
quarter at $5.09 billion, an increase of $457.1 million or 9.9%
over the total of $4.63 billion as of December 31, 2019.
Below is a breakdown of the Bank’s loan portfolio
by segment as of September 30, 2020:
Category |
Loan Count |
Total Balance (000's) |
% of Loan Balance |
Average LTV |
Average DCR |
Cash Secured |
79 |
|
34,241 |
|
0.87% |
N/A |
N/A |
Commercial |
1,741 |
|
1,094,872 |
|
27.72% |
N/A |
N/A |
International |
62 |
|
15,006 |
|
0.38% |
N/A |
N/A |
Construction - 1-4 Residential |
54 |
|
170,773 |
|
4.32% |
48.8% |
N/A |
Construction - Commercial |
41 |
|
223,706 |
|
5.66% |
53.8% |
N/A |
Real Estate - 1-4 Residential |
165 |
|
248,371 |
|
6.29% |
55.5% |
1.32 |
Real Estate - Industrial |
99 |
|
243,130 |
|
6.16% |
53.9% |
1.71 |
Real Estate - Multifamily |
68 |
|
282,188 |
|
7.14% |
58.1% |
1.24 |
Real Estate - Office |
70 |
|
327,786 |
|
8.30% |
55.5% |
1.66 |
Real Estate - Retail |
116 |
|
411,508 |
|
10.42% |
59.0% |
1.55 |
Real Estate - Special Purpose |
75 |
|
542,561 |
|
13.74% |
51.5% |
1.51 |
Real Estate - Vacant Land |
4 |
|
7,787 |
|
0.20% |
49.4% |
N/A |
SBA |
227 |
|
74,551 |
|
1.89% |
N/A |
N/A |
HELOC |
6 |
|
1,545 |
|
0.04% |
42.4% |
N/A |
Residential Mortgage |
422 |
|
271,695 |
|
6.88% |
59.7% |
% (DTI) |
|
|
|
|
|
|
|
|
Total |
3,229 |
|
3,949,721 |
|
100.00% |
|
|
Asset Quality
As of September 30, 2020, nonaccrual loans totaled
$25.2 million, down slightly from the $26.4 million reported as of
June 30, 2020 and but an increase over the $2.1 million reported at
December 31, 2019. Total net charge-offs for the third quarter of
2020 were $3.5 million compared to net recoveries of $133,000 in
the second quarter of 2020 and compared to net charge-offs of
$430,000 for the third quarter of 2019.
COVID – 19 Relief
Modifications
Below is a breakdown of loans at September 30, 2020
that are in some form of payment deferment by segment as compared
to June 30, 2020:
Loan Type |
Prior Qtr Total in Deferral
30-Jun-20 |
Curr Qtr Total in Deferral
30-Sept-20 |
% of Total Portfolio |
Weighted Average LTV |
Quarterly Decrease |
$ |
% |
Commercial and Industrial |
$ |
39,518 |
$ |
5,865 |
0.6% |
N/A |
$ |
33,653 |
85.2% |
|
|
|
|
|
|
|
Office |
28,696 |
16,200 |
4.9% |
55.5% |
12,496 |
43.5% |
Industrial |
29,495 |
13,064 |
5.4% |
53.9% |
16,431 |
55.7% |
Retail |
88,319 |
64,169 |
15.6% |
59.0% |
24,150 |
27.3% |
Multi-Family |
17,593 |
17,200 |
6.1% |
58.1% |
393 |
2.2% |
1-4
Family (Inv) |
6,624 |
3,915 |
1.6% |
55.6% |
2,709 |
40.9% |
Restaurant |
6,149 |
4,212 |
19.2% |
47.2% |
1,937 |
31.5% |
Special
Purpose / Hotel |
172,531 |
47,305 |
13.8% |
54.9% |
125,226 |
72.6% |
Special
Purpose / Other |
51,232 |
12,720 |
6.4% |
45.7% |
38,512 |
75.2% |
Construction / AD |
- |
- |
0.0% |
|
- |
0.0% |
Residential Mortgage |
26,935 |
14,887 |
5.5% |
- |
12,048 |
44.7% |
Grand Total |
$ |
467,092 |
$ |
199,537 |
5.1% |
|
$ |
267,555 |
57.3% |
At September 30, 2020, total dollar amount of loans
in deferral were equal to 5.1% of the Bank’s loan portfolio. Of the
total modifications at present, 37% are for the deferral of
interest only and 57% are for principal and interest deferral. As
previously mentioned, based on communications with nearly all of
those in deferral, the outlook for deferrals at year end appears
modest.
Allowance for Credit Losses
Due primarily to the ongoing partial economic
shutdown and uncertainty regarding future economic activity, the
provision for credit losses continues to be elevated at $9.0
million for this quarter. This compares to the $7.5 million
provision recorded in the second quarter of 2020 and is well ahead
of the $900,000 recorded in the same quarter last year. In the
first quarter of 2020, the Bank implemented the CECL methodology
under Accounting Standards Codification ("ASC") 326, in which the
allowance for credit losses now reflects expected credit losses
over the life of loans and held-to-maturity debt securities, and
incorporates macroeconomic forecasts as well as historical loss
rates. Between the adoption of CECL in the first quarter, and the
heightened provisions for credit losses to-date this year, the
Bank’s allowance coverage ratio has increased from 0.94% of total
loans as of December 31, 2019 to a coverage ratio now totaling
1.58% of total non-PPP loans.
Capitalization
As of September 30, 2020, the Bank’s leverage ratio
was 9.75%, the common equity tier 1 capital ratio was 10.98% and
the total capital ratio was 14.47%. As of December 31, 2019, the
Bank’s leverage ratio was 10.32%, the common equity tier 1 ratio
was 10.57% and the total risk based capital ratio was 13.70%.
Conference Call and Webcast
A conference call with simultaneous webcast to
discuss Preferred Bank’s third quarter 2020 financial results will
be held tomorrow, October 20, 2020 at 2:00 p.m. Eastern / 11:00
a.m. Pacific. Interested participants and investors may access the
conference call by dialing 844-826-3037 (domestic) or 412-317-5182
(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 Chief Executive
Officer Li Yu, President and Chief Operating Officer Wellington
Chen, Chief Financial Officer Edward J. Czajka, and Deputy Chief
Operating Officer Johnny Hsu 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, 2020; the passcode is
10148872.
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 eleven
full-service branch banking offices in California (Alhambra,
Century City, City of Industry, Torrance, Arcadia, Irvine, Diamond
Bar, Pico Rivera, Tarzana and San Francisco (2)) and one branch in
Flushing, New York. 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 2019 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, |
|
|
|
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
Interest
income: |
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
50,417 |
|
|
$ |
49,813 |
|
|
$ |
52,862 |
|
Investment securities |
|
2,335 |
|
|
2,320 |
|
|
4,875 |
|
Fed funds sold |
|
30 |
|
|
31 |
|
|
222 |
|
|
Total interest
income |
|
52,782 |
|
|
52,164 |
|
|
57,959 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense: |
|
|
|
|
|
|
|
|
|
Interest-bearing demand |
|
1,432 |
|
|
1,462 |
|
|
4,904 |
|
Savings |
|
20 |
|
|
17 |
|
|
13 |
|
Time certificates |
|
5,681 |
|
|
6,973 |
|
|
10,034 |
|
Subordinated debit |
|
1,530 |
|
|
1,531 |
|
|
1,531 |
|
|
Total interest
expense |
|
8,663 |
|
|
9,983 |
|
|
16,482 |
|
|
Net interest
income |
|
44,119 |
|
|
42,181 |
|
|
41,477 |
|
Provision for
credit losses |
|
9,000 |
|
|
7,500 |
|
|
900 |
|
|
Net interest
income after provision for |
|
|
|
|
|
|
|
|
|
|
|
credit losses |
|
35,119 |
|
|
34,681 |
|
|
40,577 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
income: |
|
|
|
|
|
|
|
|
|
Fees & service charges on deposit accounts |
|
428 |
|
|
339 |
|
|
401 |
|
Letters of credit fee income |
|
690 |
|
|
742 |
|
|
874 |
|
BOLI income |
|
96 |
|
|
95 |
|
|
94 |
|
Net gain (loss) on called and sale of investment securities |
|
15 |
|
|
(113 |
) |
|
- |
|
Other income |
|
376 |
|
|
367 |
|
|
368 |
|
|
Total noninterest
income |
|
1,605 |
|
|
1,430 |
|
|
1,737 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense: |
|
|
|
|
|
|
|
|
|
Salary and employee benefits |
|
9,126 |
|
|
10,095 |
|
|
9,801 |
|
Net occupancy expense |
|
1,455 |
|
|
1,296 |
|
|
1,329 |
|
Business development and promotion expense |
|
95 |
|
|
114 |
|
|
109 |
|
Professional services |
|
974 |
|
|
1,006 |
|
|
1,149 |
|
Office supplies and equipment expense |
|
443 |
|
|
459 |
|
|
483 |
|
Net loss (gain) on sale of other real estate owned and expense |
|
3 |
|
|
2 |
|
|
(129) |
|
Other |
|
1,567 |
|
|
1,362 |
|
|
1,156 |
|
|
Total noninterest
expense |
|
13,663 |
|
|
14,334 |
|
|
13,898 |
|
|
Income before
provision for income taxes |
|
23,061 |
|
|
21,777 |
|
|
28,416 |
|
Income tax
expense |
|
5,936 |
|
|
6,468 |
|
|
8,383 |
|
|
Net income |
|
$ |
17,125 |
|
|
$ |
15,309 |
|
|
$ |
20,033 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend and
earnings allocated to participating securities |
|
(53 |
) |
|
(49 |
) |
|
(168 |
) |
Net income
available to common shareholders |
|
$ |
17,072 |
|
|
$ |
15,260 |
|
|
$ |
19,865 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per share
available to common shareholders |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.15 |
|
|
$ |
1.03 |
|
|
$ |
1.32 |
|
|
Diluted |
|
$ |
1.15 |
|
|
$ |
1.03 |
|
|
$ |
1.32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding |
|
|
|
|
|
|
|
|
|
|
Basic |
|
14,893,774 |
|
|
14,879,383 |
|
|
15,091,270 |
|
|
Diluted |
|
14,893,774 |
|
|
14,879,383 |
|
|
15,091,270 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per
common share |
|
$ |
0.30 |
|
|
$ |
0.30 |
|
|
$ |
0.30 |
|
PREFERRED
BANK |
Condensed Consolidated Statements of Financial
Condition |
(unaudited) |
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
September 30, |
|
|
2020 |
|
|
2019 |
|
|
2019 |
|
|
(Unaudited) |
|
|
(Audited) |
|
|
(Unaudited) |
|
Assets |
|
|
|
|
|
|
|
Cash and due from banks |
$ |
780,291 |
|
|
$ |
498,645 |
|
|
$ |
409,189 |
|
Fed funds sold |
27,500 |
|
|
37,000 |
|
|
56,000 |
|
Cash and cash equivalents |
807,791 |
|
|
535,645 |
|
|
465,189 |
|
|
|
|
|
|
|
|
|
|
Securities held to maturity,
at amortized cost |
6,727 |
|
|
7,310 |
|
|
7,545 |
|
Securities available-for-sale,
at fair value |
219,778 |
|
|
240,640 |
|
|
242,655 |
|
Loans |
3,949,721 |
|
|
3,724,922 |
|
|
3,671,450 |
|
Less allowance for credit losses |
(61,262 |
) |
|
(34,830 |
) |
|
(34,281 |
) |
Amortized deferred loan fees, net |
(4,411 |
) |
|
(3,028 |
) |
|
(2,518 |
) |
Loans, net |
3,884,048 |
|
|
3,687,064 |
|
|
3,634,651 |
|
|
|
|
|
|
|
|
|
|
Loans held for sale, at lower
of cost or fair value |
- |
|
|
- |
|
|
2,999 |
|
|
|
|
|
|
|
|
|
|
Customers' liability on
acceptances |
7,463 |
|
|
7,379 |
|
|
7,333 |
|
Bank furniture and fixtures,
net |
11,797 |
|
|
12,236 |
|
|
12,438 |
|
Bank-owned life insurance |
9,764 |
|
|
9,571 |
|
|
9,507 |
|
Accrued interest
receivable |
24,353 |
|
|
14,961 |
|
|
14,505 |
|
Investment in affordable
housing |
47,917 |
|
|
53,142 |
|
|
39,780 |
|
Federal Home Loan Bank
stock |
15,000 |
|
|
13,101 |
|
|
13,101 |
|
Deferred tax assets |
21,219 |
|
|
19,560 |
|
|
17,338 |
|
Income tax receivable |
9,090 |
|
|
3,368 |
|
|
3,849 |
|
Operating lease right-of-use
assets |
16,384 |
|
|
17,103 |
|
|
17,362 |
|
Other assets |
4,243 |
|
|
7,401 |
|
|
7,232 |
|
Total assets |
$ |
5,085,574 |
|
|
$ |
4,628,481 |
|
|
$ |
4,495,484 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity |
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
Non-interest bearing demand deposits |
$ |
926,166 |
|
|
$ |
835,790 |
|
|
$ |
774,869 |
|
Interest-bearing deposits: |
1,620,495 |
|
|
1,328,863 |
|
|
1,435,144 |
|
Savings |
32,830 |
|
|
23,784 |
|
|
21,985 |
|
Time certificates of $250,000 or more |
977,821 |
|
|
976,727 |
|
|
849,574 |
|
Other time certificates |
857,113 |
|
|
818,130 |
|
|
787,392 |
|
Total deposits |
4,414,425 |
|
|
3,983,294 |
|
|
3,868,964 |
|
|
|
|
|
|
|
|
|
|
Acceptances outstanding |
7,463 |
|
|
7,379 |
|
|
7,333 |
|
Subordinated debt
issuance |
99,304 |
|
|
99,211 |
|
|
99,180 |
|
Commitments to fund investment
in affordable housing partnership |
16,689 |
|
|
24,149 |
|
|
12,904 |
|
Operating lease
liabilities |
19,106 |
|
|
20,497 |
|
|
20,958 |
|
Accrued interest payable |
2,940 |
|
|
3,324 |
|
|
6,117 |
|
Other liabilities |
21,780 |
|
|
20,612 |
|
|
20,948 |
|
Total liabilities |
4,581,707 |
|
|
4,158,466 |
|
|
4,036,404 |
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
503,867 |
|
|
470,015 |
|
|
459,080 |
|
Total liabilities and shareholders' equity |
$ |
5,085,574 |
|
|
$ |
4,628,481 |
|
|
$ |
4,495,484 |
|
|
|
|
|
|
|
|
|
|
Book value per common
share |
$ |
33.74 |
|
|
$ |
31.47 |
|
|
$ |
30.42 |
|
Number of common shares
outstanding |
14,933,307 |
|
|
14,933,768 |
|
|
15,091,657 |
|
PREFERRED BANK |
Selected Consolidated Financial Information |
(unaudited) |
(in thousands, except for ratios) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended |
|
|
|
|
|
|
|
September 30, |
June 30, |
Mars 31, |
December 31, |
September 30, |
|
2020 |
2020 |
2020 |
2019 |
2019 |
Unaudited historical
quarterly operations data: |
|
|
|
|
|
Interest income |
$ |
52,782 |
$ |
52,164 |
$ |
55,667 |
$ |
55,483 |
$ |
57,959 |
Interest expense |
8,663 |
9,983 |
13,876 |
15,074 |
16,482 |
Interest income before provision for credit losses |
44,119 |
42,181 |
41,791 |
40,409 |
41,477 |
Provision for credit losses |
9,000 |
7,500 |
5,300 |
450 |
900 |
Noninterest income |
1,605 |
1,430 |
1,672 |
1,883 |
1,737 |
Noninterest expense |
13,663 |
14,334 |
15,184 |
13,770 |
13,898 |
Income tax expense |
5,936 |
6,468 |
6,825 |
8,456 |
8,383 |
Net income |
$ |
17,125 |
$ |
15,309 |
$ |
16,154 |
$ |
19,616 |
$ |
20,033 |
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
Basic |
$ |
1.15 |
$ |
1.03 |
$ |
1.08 |
$ |
1.31 |
$ |
1.32 |
Diluted |
$ |
1.15 |
$ |
1.03 |
$ |
1.08 |
$ |
1.31 |
$ |
1.32 |
|
|
|
|
|
|
Ratios for the
period: |
|
|
|
|
|
Return on average assets |
1.34% |
1.26% |
1.40% |
1.74% |
1.81% |
Return on beginning equity |
13.94% |
13.00% |
13.82% |
16.95% |
17.61% |
Net interest margin (Fully-taxable equivalent) |
3.54% |
3.57% |
3.70% |
3.67% |
3.84% |
Noninterest expense to average assets |
1.07% |
1.18% |
1.31% |
1.22% |
1.25% |
Efficiency ratio |
29.88% |
32.87% |
34.93% |
32.56% |
32.16% |
Net charge-offs (recoveries) to average loans (annualized) |
0.35% |
-0.01% |
0.00% |
-0.01% |
0.05% |
|
|
|
|
|
|
Ratios as of period
end: |
|
|
|
|
|
Tier 1 leverage capital ratio |
9.75% |
9.87% |
10.05% |
10.32% |
10.27% |
Common equity tier 1 risk-based capital ratio |
10.98% |
10.39% |
10.80% |
10.57% |
10.40% |
Tier 1 risk-based capital ratio |
10.98% |
10.39% |
10.80% |
10.57% |
10.40% |
Total risk-based capital ratio |
14.47% |
13.80% |
14.26% |
13.70% |
13.53% |
Allowances for credit losses to loans and leases at end of
period |
1.55% |
1.41% |
1.24% |
0.94% |
0.93% |
Allowance for credit losses to non-performing loans and leases |
243.56% |
211.08% |
2263.66% |
1631.42% |
895.30% |
|
|
|
|
|
|
Average
balances: |
|
|
|
|
|
Total securities |
$ |
237,801 |
$ |
250,134 |
$ |
247,689 |
$ |
248,904 |
$ |
249,060 |
Total loans |
$ |
3,956,145 |
$ |
3,919,674 |
$ |
3,717,175 |
$ |
3,613,400 |
3,534,194 |
Total earning assets |
$ |
4,975,005 |
$ |
4,768,537 |
$ |
4,548,512 |
$ |
4,381,206 |
$ |
4,298,523 |
Total assets |
$ |
5,073,650 |
$ |
4,868,356 |
$ |
4,651,956 |
$ |
4,482,210 |
$ |
4,395,357 |
Total time certificate of deposits |
$ |
1,841,901 |
$ |
1,757,531 |
$ |
1,765,816 |
$ |
1,756,480 |
$ |
1,650,965 |
Total interest bearing deposits |
$ |
3,501,275 |
$ |
3,399,924 |
$ |
3,244,711 |
$ |
3,050,318 |
$ |
3,051,007 |
Total deposits |
$ |
4,408,882 |
$ |
4,220,197 |
$ |
4,010,629 |
$ |
3,849,825 |
$ |
3,772,097 |
Total interest bearing liabilities |
$ |
3,600,560 |
$ |
3,499,178 |
$ |
3,343,933 |
$ |
3,149,511 |
$ |
3,150,167 |
Total equity |
$ |
503,515 |
$ |
486,931 |
$ |
475,409 |
$ |
463,849 |
$ |
460,451 |
PREFERRED BANK |
Selected Consolidated Financial Information |
(unaudited) |
(in thousands, except for ratios) |
|
|
|
|
|
As of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
June 30, |
|
|
Mars 31, |
|
|
December 31, |
|
|
September 30, |
|
|
|
|
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2019 |
|
Unaudited
quarterly statement of financial position data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
807,791 |
|
|
$ |
656,183 |
|
|
$ |
484,869 |
|
|
$ |
535,645 |
|
|
$ |
465,189 |
|
|
Securities
held-to-maturity, at amortized cost |
6,727 |
|
|
6,922 |
|
|
7,077 |
|
|
7,310 |
|
|
7,545 |
|
|
Securities
available-for-sale, at fair value |
219,778 |
|
|
270,667 |
|
|
235,097 |
|
|
240,640 |
|
|
242,655 |
|
|
Loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate –
Mortgage: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate—Residential |
$ |
528,371 |
|
|
$ |
511,354 |
|
|
$ |
493,226 |
|
|
$ |
468,321 |
|
|
$ |
432,605 |
|
|
|
|
Real estate—Commercial |
1,808,200 |
|
|
1,781,660 |
|
|
1,730,017 |
|
|
1,731,017 |
|
|
1,751,735 |
|
|
|
|
Total Real Estate – Mortgage |
2,336,571 |
|
|
2,293,014 |
|
|
2,223,243 |
|
|
2,199,338 |
|
|
2,184,340 |
|
|
|
Real estate –
Construction: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R/E Construction —
Residential |
170,773 |
|
|
187,083 |
|
|
177,364 |
|
|
173,951 |
|
|
179,651 |
|
|
|
|
R/E Construction —
Commercial |
223,706 |
|
|
217,729 |
|
|
223,385 |
|
|
218,562 |
|
|
216,812 |
|
|
|
|
Total real estate construction loans |
394,480 |
|
|
404,812 |
|
|
400,749 |
|
|
392,513 |
|
|
396,463 |
|
|
|
Commercial and
industrial |
1,144,051 |
|
|
1,192,056 |
|
|
1,269,242 |
|
|
1,132,629 |
|
|
1,090,230 |
|
|
|
PPP |
74,551 |
|
|
73,524 |
|
|
- |
|
|
- |
|
|
- |
|
|
|
Consumer and
others |
68 |
|
|
241 |
|
|
91 |
|
|
442 |
|
|
417 |
|
|
|
|
Gross loans |
3,949,721 |
|
|
3,963,647 |
|
|
3,893,325 |
|
|
3,724,922 |
|
|
3,671,450 |
|
|
Allowance for
credit losses on loans |
(61,262 |
) |
|
(55,762 |
) |
|
(48,130 |
) |
|
(34,830 |
) |
|
(34,281 |
) |
|
Net deferred loan
fees |
(4,411 |
) |
|
(5,097 |
) |
|
(3,084 |
) |
|
(3,028 |
) |
|
(2,518 |
) |
|
|
Net loans,
excluding loans held for sale |
$ |
3,884,048 |
|
|
$ |
3,902,788 |
|
|
$ |
3,842,111 |
|
|
$ |
3,687,064 |
|
|
$ |
3,634,651 |
|
|
Loans held for
sale |
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
2,999 |
|
|
|
Net loans |
$ |
3,884,048 |
|
|
$ |
3,902,788 |
|
|
$ |
3,842,111 |
|
|
$ |
3,687,064 |
|
|
$ |
3,637,650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in affordable housing |
47,917 |
|
|
49,658 |
|
|
51,400 |
|
|
53,142 |
|
|
39,780 |
|
|
Federal Home Loan Bank stock |
15,000 |
|
|
15,000 |
|
|
13,101 |
|
|
13,101 |
|
|
13,101 |
|
|
Other assets |
104,313 |
|
|
103,239 |
|
|
93,979 |
|
|
91,579 |
|
|
89,564 |
|
|
|
Total assets |
$ |
5,085,574 |
|
|
$ |
5,004,457 |
|
|
$ |
4,727,634 |
|
|
$ |
4,628,481 |
|
|
$ |
4,495,484 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand |
$ |
926,166 |
|
|
$ |
934,764 |
|
|
$ |
753,750 |
|
|
$ |
835,790 |
|
|
$ |
774,869 |
|
|
|
Interest-bearing
demand |
1,620,495 |
|
|
1,594,682 |
|
|
1,503,618 |
|
|
1,328,863 |
|
|
1,435,144 |
|
|
|
Savings |
32,830 |
|
|
27,737 |
|
|
23,035 |
|
|
23,784 |
|
|
21,985 |
|
|
|
Time certificates
of $250,000 or more |
977,821 |
|
|
970,649 |
|
|
1,030,282 |
|
|
976,727 |
|
|
849,574 |
|
|
|
Other time
certificates |
857,113 |
|
|
822,404 |
|
|
775,792 |
|
|
818,130 |
|
|
787,392 |
|
|
|
|
Total deposits |
$ |
4,414,425 |
|
|
$ |
4,350,236 |
|
|
$ |
4,086,477 |
|
|
$ |
3,983,294 |
|
|
$ |
3,868,964 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acceptances
outstanding |
$ |
7,463 |
|
|
$ |
6,112 |
|
|
$ |
6,507 |
|
|
$ |
7,379 |
|
|
$ |
7,333 |
|
|
Subordinated debt
issuance |
99,304 |
|
|
99,273 |
|
|
99,242 |
|
|
99,211 |
|
|
99,180 |
|
|
Commitments to
fund investment in affordable housing partnership |
16,689 |
|
|
17,536 |
|
|
21,195 |
|
|
24,149 |
|
|
12,904 |
|
|
Other
liabilities |
43,826 |
|
|
42,571 |
|
|
40,428 |
|
|
44,433 |
|
|
48,023 |
|
|
|
Total
liabilities |
$ |
4,581,707 |
|
|
$ |
4,515,728 |
|
|
$ |
4,253,849 |
|
|
$ |
4,158,466 |
|
|
$ |
4,036,404 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net common stock,
no par value |
$ |
213,519 |
|
|
$ |
212,187 |
|
|
$ |
210,091 |
|
|
$ |
210,998 |
|
|
$ |
215,123 |
|
|
Retained
earnings |
284,568 |
|
|
271,923 |
|
|
261,095 |
|
|
255,050 |
|
|
239,914 |
|
|
Accumulated other
comprehensive income |
5,780 |
|
|
4,619 |
|
|
2,599 |
|
|
3,967 |
|
|
4,043 |
|
|
|
Total
shareholders' equity |
$ |
503,867 |
|
|
$ |
488,729 |
|
|
$ |
473,785 |
|
|
$ |
470,015 |
|
|
$ |
459,080 |
|
|
|
Total liabilities
and shareholders' equity |
$ |
5,085,574 |
|
|
$ |
5,004,457 |
|
|
$ |
4,727,634 |
|
|
$ |
4,628,481 |
|
|
$ |
4,495,484 |
|
PREFERRED BANK |
QUARTER-TO-DATE AVERAGE BALANCES, YIELD AND
RATES |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
Three months ended June 30, |
|
Three months ended September 30, |
|
|
|
2020 |
|
2020 |
|
2019 |
|
|
|
|
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) |
$ |
3,956,145 |
$ |
50,417 |
5.07% |
|
$ |
3,921,694 |
$ |
49,813 |
5.11% |
|
$ |
3,534,283 |
$ |
52,862 |
5.93% |
|
Investment securities (3) |
237,801 |
1,967 |
3.29% |
|
250,134 |
2,098 |
3.37% |
|
249,060 |
2,253 |
3.59% |
|
Federal funds sold |
23,828 |
30 |
0.50% |
|
24,324 |
31 |
0.52% |
|
35,079 |
222 |
2.52% |
|
Other earning assets |
757,231 |
474 |
0.25% |
|
572,385 |
318 |
0.22% |
|
480,101 |
2,737 |
2.26% |
|
|
Total interest-earning assets |
4,975,005 |
52,888 |
4.23% |
|
4,768,537 |
52,260 |
4.41% |
|
4,298,523 |
58,074 |
5.36% |
|
Deferred loan fees, net |
(4,713) |
|
|
|
(3,182) |
|
|
|
(1,742) |
|
|
|
Allowance for credit losses on loans |
(55,724) |
|
|
|
(48,247) |
|
|
|
(33,717) |
|
|
Noninterest
earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
7,355 |
|
|
|
8,274 |
|
|
|
4,935 |
|
|
|
Bank furniture and fixtures |
11,856 |
|
|
|
11,993 |
|
|
|
12,656 |
|
|
|
Right of use assets |
16,550 |
|
|
|
16,768 |
|
|
|
17,525 |
|
|
|
Other assets |
123,321 |
|
|
|
114,213 |
|
|
|
97,177 |
|
|
|
|
Total assets |
$ |
5,073,650 |
|
|
|
$ |
4,868,356 |
|
|
|
$ |
4,395,357 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand and savings |
1,659,374 |
$ |
1,452 |
0.35% |
|
1,642,393 |
$ |
1,479 |
0.36% |
|
$ |
1,400,042 |
$ |
4,917 |
1.39% |
|
|
TCD $250K or more |
987,631 |
2,993 |
1.21% |
|
945,043 |
3,624 |
1.54% |
|
845,262 |
5,120 |
2.40% |
|
|
Other time certificates |
854,270 |
2,688 |
1.25% |
|
812,488 |
3,349 |
1.66% |
|
805,703 |
4,914 |
2.42% |
|
|
Total interest-bearing deposits |
3,501,275 |
7,133 |
0.81% |
|
3,399,924 |
8,452 |
1.00% |
|
3,051,007 |
14,951 |
1.94% |
Subordinated
debt |
99,285 |
1,530 |
6.13% |
|
99,254 |
1,531 |
6.20% |
|
99,160 |
1,531 |
6.13% |
|
|
Total interest-bearing liabilities |
3,600,560 |
8,663 |
0.96% |
|
3,499,178 |
9,983 |
1.15% |
|
3,150,167 |
16,482 |
2.08% |
Non-interest
bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
907,607 |
|
|
|
820,273 |
|
|
|
721,090 |
|
|
|
Lease Liability |
19,400 |
|
|
|
19,841 |
|
|
|
21,252 |
|
|
|
Other liabilities |
42,568 |
|
|
|
42,133 |
|
|
|
42,397 |
|
|
|
|
Total liabilities |
4,570,135 |
|
|
|
4,381,425 |
|
|
|
3,934,906 |
|
|
Shareholders’
equity |
503,515 |
|
|
|
486,931 |
|
|
|
460,451 |
|
|
|
|
Total liabilities and
shareholders’ equity |
$ |
5,073,650 |
|
|
|
$ |
4,868,356 |
|
|
|
$ |
4,395,357 |
|
|
Net interest
income |
|
$ |
44,225 |
|
|
|
$ |
42,277 |
|
|
|
$ |
41,592 |
|
Net interest
spread |
|
|
3.27% |
|
|
|
3.26% |
|
|
|
3.28% |
Net interest
margin |
|
|
3.54% |
|
|
|
3.57% |
|
|
|
3.84% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
bearing demand deposits |
$ |
907,607 |
|
|
|
$ |
820,273 |
|
|
|
$ |
721,090 |
|
|
|
Interest bearing
deposits |
3,501,275 |
7,133 |
0.81% |
|
3,399,924 |
8,452 |
1.00% |
|
3,051,007 |
14,951 |
1.94% |
|
|
Total Deposits |
$ |
4,408,882 |
$ |
7,133 |
0.64% |
|
$ |
4,220,197 |
$ |
8,452 |
0.81% |
|
$ |
3,772,097 |
$ |
14,951 |
1.57% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Includes
non-accrual loans and loans held for sale |
|
|
|
|
|
|
|
|
|
|
(2) |
Net loan fee
income of $683,000 and $640,000 for the quarter ended September 30,
2020 and 2019, 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, |
|
|
|
2020 |
2019 |
|
|
|
|
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) |
$ |
3,865,350 |
$ |
151,794 |
5.25% |
|
$ |
3,389,136 |
$ |
156,166 |
6.16% |
|
Investment securities (3) |
245,181 |
6,193 |
3.37% |
|
215,818 |
6,442 |
3.99% |
|
Federal funds sold |
26,093 |
185 |
0.95% |
|
42,720 |
799 |
2.50% |
|
Other earning assets |
628,165 |
2,736 |
0.58% |
|
436,906 |
8,143 |
7.41% |
|
|
Total interest-earning assets |
4,764,789 |
160,908 |
4.51% |
|
4,084,580 |
171,550 |
5.62% |
|
Deferred loan fees, net |
(3,662) |
|
|
|
(1,721) |
|
|
|
Allowance for credit losses on loans |
(48,949) |
|
|
|
(31,776) |
|
|
Noninterest
earning assets: |
|
|
|
|
|
|
|
|
Cash and due from banks |
7,321 |
|
|
|
5,923 |
|
|
|
Bank furniture and fixtures |
12,039 |
|
|
|
10,201 |
|
|
|
Right of use assets |
16,774 |
|
|
|
11,852 |
|
|
|
Other assets |
117,105 |
|
|
|
110,456 |
|
|
|
|
Total assets |
$ |
4,865,417 |
|
|
|
$ |
4,189,515 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
Interest-bearing demand/ savings |
1,593,793 |
$ |
6,313 |
0.53% |
|
1,324,550 |
$ |
14,504 |
1.46% |
|
|
TCD $250K or more |
967,413 |
11,469 |
1.58% |
|
787,522 |
13,992 |
2.38% |
|
|
Other time certificates |
821,199 |
10,148 |
1.65% |
|
787,354 |
13,902 |
2.36% |
|
|
Total interest-bearing deposits |
3,382,405 |
27,930 |
1.10% |
|
2,899,426 |
42,398 |
1.96% |
Subordinated
debt |
99,254 |
4,592 |
6.18% |
|
99,108 |
4,593 |
6.20% |
Long-term
debt |
- |
- |
0.00% |
|
1,052 |
19 |
2.46% |
|
|
Total interest-bearing liabilities |
3,481,659 |
32,522 |
1.25% |
|
2,999,586 |
47,010 |
2.10% |
Non-interest
bearing liabilities: |
|
|
|
|
|
|
|
|
Demand deposits |
831,545 |
|
|
|
691,266 |
|
|
|
Lease Liability |
19,850 |
|
|
|
14,546 |
|
|
|
Other liabilities |
43,690 |
|
|
|
47,452 |
|
|
|
|
Total liabilities |
4,376,744 |
|
|
|
3,752,850 |
|
|
Shareholders’
equity |
488,673 |
|
|
|
436,665 |
|
|
|
|
Total liabilities and
shareholders’ equity |
$ |
4,865,417 |
|
|
|
$ |
4,189,515 |
|
|
Net interest
income |
|
$ |
128,386 |
|
|
|
$ |
124,540 |
|
Net interest
spread |
|
|
3.26% |
|
|
|
3.52% |
Net interest
margin |
|
|
3.60% |
|
|
|
4.08% |
|
|
|
|
|
|
|
|
|
|
Cost of
Deposits: |
|
|
|
|
|
|
|
|
Noninterest
bearing demand deposits |
$ |
831,545 |
|
|
|
$ |
691,266 |
|
|
|
Interest bearing
deposits |
3,382,405 |
27,930 |
1.10% |
|
2,899,426 |
42,398 |
1.96% |
|
|
Total Deposits |
$ |
4,213,950 |
$ |
27,930 |
0.89% |
|
$ |
3,590,692 |
$ |
42,398 |
1.58% |
|
|
|
|
|
|
|
|
|
|
(1) |
Includes
non-accrual loans and loans held for sale |
|
|
|
|
|
|
|
(2) |
Net loan fee income of $1.9 million and $1.6 million for the nine
months ended September 30, 2020 and 2019, 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, 2020 |
|
December 31, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in 000's) |
Allowance
For Credit Losses |
|
|
|
|
|
|
Balance at
Beginning of Period |
|
$ |
34,830 |
|
|
$ |
31,065 |
|
|
Charge-Offs |
|
|
|
|
|
|
|
|
Commercial &
Industrial |
|
1,661 |
|
|
526 |
|
|
|
Mini-perm Real
Estate |
|
1,900 |
|
|
101 |
|
|
|
Total Charge-Offs |
|
3,561 |
|
|
627 |
|
|
|
|
|
|
|
|
|
|
|
|
Recoveries |
|
|
|
|
|
|
|
|
Commercial &
Industrial |
|
- |
|
|
527 |
|
|
|
Mini-perm Real
Estate |
|
- |
|
|
415 |
|
|
|
Construction -
Commercial |
|
193 |
|
|
- |
|
|
|
Total Recoveries |
|
193 |
|
|
942 |
|
|
|
|
|
|
|
|
|
|
|
|
Net Charge-Offs
(Recoveries) |
|
3,368 |
|
|
(315 |
) |
|
Provision for
Credit Losses: |
|
|
|
|
|
|
|
|
CECL Cumulative
Effect Adjustment |
|
8,000 |
|
|
- |
|
|
|
Current
Provision |
|
21,800 |
|
|
3,450 |
|
Balance at End of
Period |
|
$ |
61,262 |
|
|
$ |
34,830 |
|
Average Loans Held
for Investment |
|
$ |
3,864,667 |
|
|
$ |
3,482,218 |
|
Loans Held for
Investment at End of Period |
|
$ |
3,949,721 |
|
|
$ |
3,724,922 |
|
Net Charge-Offs
(Recoveries) to Average Loans |
|
0.12 |
% |
|
-0.01% |
|
Allowances for
Credit Losses to Loans at End of Period |
|
1.55 |
% |
|
0.94 |
% |
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