LOS ANGELES, Jan. 22, 2026 (GLOBE NEWSWIRE) -- Preferred Bank (NASDAQ:PFBC), one of the larger independent California banks, today reported results for the quarter ended December 31, 2025. Preferred Bank ("the Bank") reported net income of $34.8 million or $2.79 per diluted share for the fourth quarter of 2025. This represents a decrease in net income of $1.1 million from the prior quarter and an increase of $4.6 million over the same quarter last year. The increase compared to last year was primarily due to an occupancy charge of $8.1 million recorded in the fourth quarter of 2024 related to a correction in the adoption of ASC 842, Lease Accounting. The decrease in net income from the prior quarter was due to an increase in the provision for credit losses of $1.8 million and a decrease in net interest income of $1.3 million. The primary reason for the decrease in net interest income was due to the decline in market interest rates. The Bank sold two large OREO properties during the quarter resulting in a gain of $3.6 million, recorded in noninterest income and total OREO expense was $3.5 million for the fourth quarter of 2025.
Highlights for the Quarter:
- Return on average assets was 1.82%
- Return on average equity was 17.59%
- Total loans increased by $182.3 million or 3.1%, linked quarter
- Total deposits increased by $115.8 million, or 1.9%, linked quarter
- The efficiency ratio for the quarter was 31.2%
Li Yu, Chairman and CEO, commented, "I am pleased to report fourth quarter net income of $34.8 million or $2.79 per share and for the full year 2025, net income of $133.6 million or $10.41 per share, which makes our profitability among the top echelon of the banking industry.
"The Bank's net interest margin for the fourth quarter was 3.74%, a decrease from third quarter, due mainly to the interest rate cuts implemented by the Federal Reserve in September and December. However, market rates on deposits have not kept pace with the rate cuts as competition for deposits remains elevated.
"Our loan growth for the quarter was $182.3 million or 12.4% on an annualized basis as we have seen an increase in loan demand. Deposit growth for the quarter was $115.8 million or 7.4% on an annualized basis. For the full year, loan and deposit growth was $413.6 million and $428.6 million, respectively.
"During the quarter, we sold two large OREO properties for a gain between the two. Therefore, total nonperforming assets decreased from the prior quarter. However, total criticized assets increased by $97.5 million due to the placing of a large relationship into classified status during the quarter. The provision for credit loss was $4.3 million for the quarter.
"It seems that most economists in the country have a positive economic outlook for 2026. We are also seeing our customers have an improved outlook. Barring any sudden and significant changes in government policy, we are hopeful to increase our growth rate in the new year."
Results of Operations
Net Interest Income and Net Interest Margin. Net interest income before provision for credit losses was $70.0 million for the fourth quarter of 2025. This represents a $1.3 million decrease from the $71.3 million recorded in the prior quarter and a $802,000 increase over the same quarter last year. The decrease compared to the prior quarter was due to a decrease in the loan and overnight fed funds rate from the Federal Reserve interest rate ease that occurred in September as this quarter saw the full effect of that rate ease. Since a majority of the Bank's loans are tied to the Prime rate, interest on loans was down from the prior quarter which was partially offset by a decrease in deposit rates. The increase in net interest income over the same quarter last year was due to a larger decrease in interest expense than the decrease in interest income. The Bank has made significant efforts to decrease rates on deposits and the results this quarter are indicative of that effort. The Bank's net interest margin contracted in the quarter to 3.74% from 3.92% last quarter and down from the 4.06% net interest margin recorded in the fourth quarter of 2024.
Noninterest Income. For the fourth quarter of 2025, noninterest income was $8.1 million compared with $3.6 million for the same quarter last year and compared to $3.7 million for the third quarter of 2025. The increase over the same quarter last year was mainly due to a $3.6 million gain on sale of OREOs and increase in letter of credit (LC) fee income of $431,000, an increase in other income of $517,000 partially offset by a decrease in service charges of $216,000. In comparison to the prior quarter, the gain on sale of OREOs drove the increase as did an increase in other income of $744,000.
Noninterest Expense. Total noninterest expense was $24.4 million for the fourth quarter of 2025 compared to $21.5 million for the third quarter of 2025 and compared to $28.2 million recorded in the same period last year. The primary reason for the increase over the prior quarter was mainly due to a $1.8 million write-down of the Bank's OREO property which was subsequently sold as well as other OREO expenses of $1.6 million. This was partially offset by a decrease in personnel expense of $1.1 million which was due to a decrease in incentive compensation. The decrease from the same quarter last year was due again to the $8.1 million charge to occupancy expense in the fourth quarter of last year which was previously mentioned. This was partially offset by an increase in OREO expense of $3.5 million. The Bank's efficiency ratio came in at 31.2% for the quarter which compares to 28.7% last quarter and to 38.8% in the same quarter last year.
Income Taxes. The Bank recorded a provision for income taxes of $14.5 million for the fourth 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 third 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 year ended December 31, 2025 was $133.6 million or $10.41 per diluted share compared to $130.7 million or $9.64 per diluted share last year. Net interest income declined from 2024 to 2025 however the provision for credit losses declined from $12.1 million in 2024 to $9.1 million in 2025. Additionally, noninterest income increased by $6.0 million over 2024 levels partially offset by noninterest expense which increased by $1.6 million in 2025. On a percentage basis, the increase in diluted earnings per share ("EPS") was higher than the increase in net income due to common stock repurchases which occurred in late 2024 and throughout 2025.
Balance Sheet Summary
Total gross loans at December 31, 2025 were $6.05 billion, an increase of $413.6 million from the total of $5.64 billion as of December 31, 2024. Total deposits were $6.35 billion, an increase of $428.6 million from the $5.92 billion as of December 31, 2024. Total assets were $7.60 billion, an increase of $677.7 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 $51.3 million, up from the $17.6 million as of September 30, 2025. This represents an increase from the prior quarter of $33.7 million. The main reason for the increase was due to placing a $19.5 million well-secured multi-family loan into nonaccrual status during the quarter. As previously mentioned, total criticized assets increased during the quarter from $151.0 million as of September 30, 2025 to $248.5 million at year-end. The increase is mainly due to a $123.1 million relationship consisting of nine loans; seven commercial real estate loans totaling $121.0 million and two unsecured credits totaling $2.0 million which were downgraded during the quarter. This was partially offset by the sale of $49.1 million of OREO during the quarter. Four of the loans which were downgraded are the subject of lawsuit which was previously disclosed by another financial institution. The weighted average LTV and DCR of the real estate loans that were downgraded was 65.7% and 1.14x respectively, so it is not expected that there will be any significant loss content in these loans. During the fourth quarter, the Bank disposed of one OREO property with a book value of $37.1 million at a price which yielded a net gain on sale of $3.6 million. (This sale was reported in the third quarter press release however it was recorded in the fourth quarter of 2025). In addition, the Bank also disposed of its long held OREO in Santa Barbara, however, it was sold at a small gain after a valuation charge of $1.8 million. Total net charge-offs (recoveries) on loans for the quarter were $0 compared to net charge-offs of $1.6 million in the prior quarter and compared to $6.6 million in the fourth quarter of 2024.
Allowance for Credit Losses
The provision for credit losses for the fourth quarter of 2025 was $4.3 million compared to $2.5 million last quarter and compared to $2.0 million in the same quarter last year. The Bank's allowance coverage ratio increased to 1.30% of loans as compared to 1.27% in the prior quarter and 1.27% at the end of 2024.
Capitalization
As of December 31, 2025, the Bank's tangible capital ratio was 10.38%, the leverage ratio was 10.54%, the common equity tier 1 capital ratio was 11.26% and the total capital ratio stood at 14.47%. 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 fourth quarter 2025 financial results will be held this afternoon, January 22, 2026 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.
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 855-669-9658 (domestic) or 412-317-0088 (international) through February 5, 2026; the passcode is 4064016.
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: Edward J. Czajka Executive Vice President Chief Financial Officer (213) 891-1188 | AT FINANCIAL PROFILES: Jeffrey Haas General Information (310) 622-8240 [email protected] |
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 | |||||||||||
| December 31, | September 30, | December 31, | |||||||||
| 2025 | 2025 | 2024 | |||||||||
| Interest income: | |||||||||||
| Loans, including fees | $ | 109,747 | $ | 110,645 | $ | 111,596 | |||||
| Investment securities | 14,677 | 15,977 | 14,013 | ||||||||
| Fed funds sold | 209 | 228 | 249 | ||||||||
| Total interest income | 124,633 | 126,850 | 125,858 | ||||||||
| Interest expense: | |||||||||||
| Interest-bearing demand | 16,952 | 17,562 | 18,245 | ||||||||
| Savings | 55 | 67 | 85 | ||||||||
| Time certificates | 34,543 | 34,792 | 37,030 | ||||||||
| FHLB borrowings | 1,783 | 1,794 | 0 | ||||||||
| Subordinated debt | 1,325 | 1,325 | 1,325 | ||||||||
| Total interest expense | 54,658 | 55,540 | 56,685 | ||||||||
| Net interest income | 69,975 | 71,310 | 69,173 | ||||||||
| Provision for credit losses | 4,300 | 2,500 | 2,000 | ||||||||
| Net interest income after provision for credit losses | 65,675 | 68,810 | 67,173 | ||||||||
| Noninterest income: | |||||||||||
| Fees & service charges on deposit accounts | 545 | 625 | 761 | ||||||||
| Letters of credit fee income | 2,408 | 2,421 | 1,977 | ||||||||
| BOLI income | 105 | 105 | 102 | ||||||||
| Net gain on sale of other real estate owned | 3,609 | - | - | ||||||||
| Net gain on called and sale of investment securities | 132 | - | - | ||||||||
| Net gain on sale of loans | 93 | 56 | 112 | ||||||||
| Other income | 1,202 | 458 | 685 | ||||||||
| Total noninterest income | 8,094 | 3,665 | 3,637 | ||||||||
| Noninterest expense: | |||||||||||
| Salary and employee benefits | 13,101 | 14,240 | 13,279 | ||||||||
| Net occupancy expense | 2,430 | 2,297 | 10,110 | ||||||||
| Business development and promotion expense | 163 | 238 | 340 | ||||||||
| Professional services | 2,091 | 1,494 | 1,606 | ||||||||
| Office supplies and equipment expense | 375 | 361 | 396 | ||||||||
| OREO valuation allowance and related expense | 3,465 | 463 | 155 | ||||||||
| Other | 2,752 | 2,405 | 2,360 | ||||||||
| Total noninterest expense | 24,377 | 21,498 | 28,246 | ||||||||
| Income before provision for income taxes | 49,392 | 50,977 | 42,564 | ||||||||
| Income tax expense | 14,570 | 15,038 | 12,343 | ||||||||
| Net income | $ | 34,822 | $ | 35,939 | $ | 30,221 | |||||
| Income per share available to common shareholders | |||||||||||
| Basic | $ | 2.85 | $ | 2.90 | $ | 2.29 | |||||
| Diluted | $ | 2.79 | $ | 2.84 | $ | 2.25 | |||||
| Weighted-average common shares outstanding | |||||||||||
| Basic | 12,210,077 | 12,384,924 | 13,190,696 | ||||||||
| Diluted | 12,479,124 | 12,634,174 | 13,442,294 | ||||||||
| Cash dividends per common share | $ | 0.80 | $ | 0.75 | $ | 0.75 | |||||
| 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, | December 31, | Change | |||||||||
| 2025 | 2024 | % | |||||||||
| Interest income: | |||||||||||
| Loans, including fees | $ | 427,767 | 445,139 | -3.9 | % | ||||||
| Investment securities | 57,790 | 62,854 | -8.1 | % | |||||||
| Fed funds sold | 898 | 1,103 | -18.6 | % | |||||||
| Total interest income | 486,455 | 509,096 | -4.4 | % | |||||||
| Interest expense: | |||||||||||
| Interest-bearing demand | 67,275 | 87,951 | -23.5 | % | |||||||
| Savings | 262 | 323 | -18.9 | % | |||||||
| Time certificates | 138,154 | 142,894 | -3.3 | % | |||||||
| FHLB borrowings | 4,647 | 0 | 100.0 | % | |||||||
| Subordinated debt | 5,300 | 5,300 | 0.0 | % | |||||||
| Total interest expense | 215,638 | 236,468 | -8.8 | % | |||||||
| Net interest income | 270,817 | 272,628 | -0.7 | % | |||||||
| Provision for credit losses | 9,100 | 12,100 | -24.8 | % | |||||||
| Net interest income after provision for credit losses | 261,717 | 260,528 | 0.5 | % | |||||||
| Noninterest income: | |||||||||||
| Fees & service charges on deposit accounts | 2,521 | 3,172 | -20.5 | % | |||||||
| Letters of credit fee income | 9,406 | 7,188 | 30.9 | % | |||||||
| BOLI income | 417 | 420 | -0.8 | % | |||||||
| Net gain on sale of other real estate owned | 3,609 | - | 100.0 | % | |||||||
| Net gain on called and sale of investment securities | 132 | - | 100.0 | % | |||||||
| Net gain on sale of loans | 596 | 659 | -9.5 | % | |||||||
| Other income | 2,838 | 2,126 | 33.5 | % | |||||||
| Total noninterest income | 19,519 | 13,565 | 43.9 | % | |||||||
| Noninterest expense: | |||||||||||
| Salary and employee benefits | 56,427 | 53,648 | 5.2 | % | |||||||
| Net occupancy expense | 9,292 | 15,420 | -39.7 | % | |||||||
| Business development and promotion expense | 1,103 | 1,250 | -11.8 | % | |||||||
| Professional services | 6,743 | 6,711 | 0.5 | % | |||||||
| Office supplies and equipment expense | 1,541 | 1,781 | -13.5 | % | |||||||
| OREO valuation allowance and related expense | 6,938 | 2,234 | 210.6 | % | |||||||
| Other | 9,645 | 9,016 | 7.0 | % | |||||||
| Total noninterest expense | 91,689 | 90,060 | 1.8 | % | |||||||
| Income before provision for income taxes | 189,547 | 184,033 | 3.0 | % | |||||||
| Income tax expense | 55,915 | 53,371 | 4.8 | % | |||||||
| Net income | $ | 133,632 | $ | 130,662 | 2.3 | % | |||||
| Income per share available to common shareholders | |||||||||||
| Basic | $ | 10.61 | $ | 9.79 | 8.4 | % | |||||
| Diluted | $ | 10.41 | $ | 9.64 | 8.0 | % | |||||
| Weighted-average common shares outstanding | |||||||||||
| Basic | 12,594,305 | 13,347,004 | -5.6 | % | |||||||
| Diluted | 12,837,442 | 13,554,266 | -5.3 | % | |||||||
| Dividends per share | $ | 3.05 | $ | 2.85 | 7.0 | % | |||||
| PREFERRED BANK | |||||||||
| Condensed Consolidated Statements of Financial Condition | |||||||||
| (unaudited) | |||||||||
| (in thousands) | |||||||||
| December 31, | December 31, | ||||||||
| 2025 | 2024 | ||||||||
| (Unaudited) | (Audited) | ||||||||
| Assets | |||||||||
| Cash and due from banks | $ | 807,098 | $ | 765,515 | |||||
| Fed funds sold | 20,000 | 20,000 | |||||||
| Cash and cash equivalents | 827,098 | 785,515 | |||||||
| Securities held-to-maturity, at amortized cost | 18,749 | 20,021 | |||||||
| Securities available-for-sale, at fair value | 566,186 | 348,706 | |||||||
| Loans held for sale, at lower of cost or fair value | - | 2,214 | |||||||
| Loans | 6,054,264 | 5,640,615 | |||||||
| Less allowance for credit losses | (78,992 | ) | (71,477 | ) | |||||
| Less amortized deferred loan fees, net | (9,030 | ) | (9,234 | ) | |||||
| Loans, net | 5,966,242 | 5,559,904 | |||||||
| Other real estate owned and repossessed assets | 3,510 | 14,991 | |||||||
| Bank furniture and fixtures, net | 8,064 | 8,462 | |||||||
| Bank-owned life insurance | 10,712 | 10,433 | |||||||
| Accrued interest receivable | 34,154 | 33,561 | |||||||
| Investment in affordable housing partnerships | 69,978 | 58,346 | |||||||
| Federal Home Loan Bank stock, at cost | 15,000 | 15,000 | |||||||
| Deferred tax assets | 42,464 | 47,402 | |||||||
| Income tax receivable | 3,396 | 2,195 | |||||||
| Operating lease right-of-use assets | 30,531 | 13,182 | |||||||
| Other assets | 5,081 | 3,497 | |||||||
| Total assets | $ | 7,601,165 | $ | 6,923,429 | |||||
| Liabilities and Shareholders' Equity | |||||||||
| Deposits: | |||||||||
| Noninterest bearing demand deposits | $ | 699,160 | $ | 704,859 | |||||
| Interest bearing deposits: | 2,205,914 | 2,026,965 | |||||||
| Savings | 30,376 | 30,150 | |||||||
| Time certificates of $250,000 or more | 1,754,273 | 1,477,931 | |||||||
| Other time certificates | 1,655,723 | 1,676,943 | |||||||
| Total deposits | 6,345,446 | 5,916,848 | |||||||
| Advances from Federal Home Loan Bank | 200,000 | - | |||||||
| Subordinated debt issuance, net | 148,706 | 148,469 | |||||||
| Commitments to fund investment in affordable housing partnerships | 23,327 | 21,623 | |||||||
| Operating lease liabilities | 35,107 | 16,990 | |||||||
| Accrued interest payable | 16,513 | 16,517 | |||||||
| Other liabilities | 42,589 | 39,830 | |||||||
| Total liabilities | 6,811,688 | 6,160,277 | |||||||
| Shareholders' equity | 789,477 | 763,152 | |||||||
| Total liabilities and shareholders' equity | $ | 7,601,165 | $ | 6,923,429 | |||||
| Book value per common share | $ | 64.83 | $ | 57.86 | |||||
| Number of common shares outstanding | 12,177,588 | 13,188,776 | |||||||
| PREFERRED BANK | |||||||||||||||||
| Selected Consolidated Financial Information | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| (in thousands, except for ratios) | |||||||||||||||||
| For the Quarter Ended | |||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||
| 2025 | 2025 | 2025 | 2025 | 2024 | |||||||||||||
| Unaudited historical quarterly operations data: | |||||||||||||||||
| Interest income | $ | 124,633 | $ | 126,850 | $ | 120,443 | $ | 114,529 | $ | 125,858 | |||||||
| Interest expense | 54,658 | 55,540 | 53,569 | 51,871 | 56,685 | ||||||||||||
| Interest income before provision for credit losses | 69,975 | 71,310 | 66,874 | 62,658 | 69,173 | ||||||||||||
| Provision for credit losses | 4,300 | 2,500 | 1,600 | 700 | 2,000 | ||||||||||||
| Noninterest income | 8,094 | 3,665 | 3,762 | 3,998 | 3,637 | ||||||||||||
| Noninterest expense | 24,377 | 21,498 | 22,445 | 23,369 | 28,246 | ||||||||||||
| Income tax expense | 14,570 | 15,038 | 13,744 | 12,563 | 12,343 | ||||||||||||
| Net income | $ | 34,822 | $ | 35,939 | $ | 32,847 | $ | 30,024 | $ | 30,221 | |||||||
| Earnings per share | |||||||||||||||||
| Basic | $ | 2.85 | $ | 2.90 | $ | 2.61 | $ | 2.27 | $ | 2.29 | |||||||
| Diluted | $ | 2.79 | $ | 2.84 | $ | 2.57 | $ | 2.23 | $ | 2.25 | |||||||
| Ratios for the period: | |||||||||||||||||
| Return on average assets | 1.82 | % | 1.93 | % | 1.85 | % | 1.76 | % | 1.74 | % | |||||||
| Return on average equity | 17.59 | % | 18.64 | % | 17.55 | % | 15.62 | % | 15.81 | % | |||||||
| Net interest margin (Fully-taxable equivalent) | 3.74 | % | 3.92 | % | 3.85 | % | 3.75 | % | 4.06 | % | |||||||
| Noninterest expense to average assets | 1.27 | % | 1.16 | % | 1.26 | % | 1.37 | % | 1.62 | % | |||||||
| Efficiency ratio | 31.22 | % | 28.67 | % | 31.78 | % | 35.06 | % | 38.79 | % | |||||||
| Net charge-offs (recoveries) to average loans (annualized) | 0.00 | % | 0.11 | % | 0.00 | % | -0.01 | % | 0.47 | % | |||||||
| Ratios as of period end: | |||||||||||||||||
| Tangible common equity ratio | 10.38 | % | 10.38 | % | 10.26 | % | 10.96 | % | 11.02 | % | |||||||
| Tier 1 leverage capital ratio | 10.54 | % | 10.66 | % | 10.73 | % | 11.52 | % | 11.33 | % | |||||||
| Common equity tier 1 risk-based capital ratio | 11.26 | % | 11.34 | % | 11.18 | % | 11.86 | % | 11.80 | % | |||||||
| Tier 1 risk-based capital ratio | 11.26 | % | 11.34 | % | 11.18 | % | 11.86 | % | 11.80 | % | |||||||
| Total risk-based capital ratio | 14.47 | % | 14.56 | % | 14.43 | % | 15.15 | % | 15.11 | % | |||||||
| Allowances for credit losses to loans at end of period | 1.30 | % | 1.27 | % | 1.29 | % | 1.28 | % | 1.27 | % | |||||||
| Allowance for credit losses to non-performing loans | 1.54x | 4.24x | 1.41x | 0.91x | 1.89x | ||||||||||||
| Average balances: | |||||||||||||||||
| Total securities | $ | 586,950 | $ | 583,302 | $ | 503,861 | $ | 402,754 | $ | 350,732 | |||||||
| Total loans | 5,947,814 | 5,753,801 | 5,623,010 | 5,555,010 | 5,542,558 | ||||||||||||
| Total earning assets | 7,439,767 | 7,234,568 | 6,984,272 | 6,780,438 | 6,788,487 | ||||||||||||
| Total assets | 7,585,940 | 7,382,265 | 7,121,047 | 6,905,249 | 6,920,325 | ||||||||||||
| Total time certificate of deposits | 3,402,304 | 3,330,241 | 3,321,327 | 3,164,766 | 3,144,523 | ||||||||||||
| Total interest bearing deposits | 5,651,369 | 5,501,767 | 5,345,308 | 5,244,243 | 5,220,655 | ||||||||||||
| Total deposits | 6,336,242 | 6,169,728 | 6,005,486 | 5,886,163 | 5,905,127 | ||||||||||||
| Total interest bearing liabilities | 6,000,042 | 5,850,376 | 5,614,737 | 5,392,735 | 5,369,092 | ||||||||||||
| Total equity | 785,581 | 764,766 | 750,535 | 779,339 | 760,345 | ||||||||||||
| PREFERRED BANK | |||||||||
| Selected Consolidated Financial Information | |||||||||
| (unaudited) | |||||||||
| (in thousands, except for ratios) | |||||||||
| For the Twelve Months Ended | |||||||||
| December 31, | December 31, | ||||||||
| 2025 | 2024 | ||||||||
| Interest income | $ | 486,455 | $ | 509,096 | |||||
| Interest expense | 215,638 | 236,468 | |||||||
| Interest income before provision for credit losses | 270,817 | 272,628 | |||||||
| Provision for credit losses | 9,100 | 12,100 | |||||||
| Noninterest income | 19,519 | 13,565 | |||||||
| Noninterest expense | 91,689 | 90,060 | |||||||
| Income tax expense | 55,915 | 53,371 | |||||||
| Net income | $ | 133,632 | $ | 130,662 | |||||
| Earnings per share | |||||||||
| Basic | $ | 10.61 | $ | 9.79 | |||||
| Diluted | $ | 10.41 | $ | 9.64 | |||||
| Ratios for the period: | |||||||||
| Return on average assets | 1.84 | % | 1.91 | % | |||||
| Return on average equity | 17.35 | % | 17.85 | % | |||||
| Net interest margin (Fully-taxable equivalent) | 3.81 | % | 4.08 | % | |||||
| Noninterest expense to average assets | 1.26 | % | 1.32 | % | |||||
| Efficiency ratio | 31.58 | % | 31.47 | % | |||||
| Net charge-off to average loans | 0.03 | % | 0.35 | % | |||||
| Average balances: | |||||||||
| Total securities | $ | 519,898 | $ | 352,416 | |||||
| Total loans | 5,721,077 | 5,396,844 | |||||||
| Total earning assets | 7,111,910 | 6,697,118 | |||||||
| Total assets | 7,250,857 | 6,830,252 | |||||||
| Total time certificate of deposits | 3,305,380 | 2,939,543 | |||||||
| Total interest bearing deposits | 5,436,967 | 5,138,380 | |||||||
| Total deposits | 6,100,829 | 5,849,300 | |||||||
| Total interest bearing liabilities | 5,716,508 | 5,286,725 | |||||||
| Total equity | 770,058 | 732,058 | |||||||
| PREFERRED BANK | ||||||||||||||||||||||
| Selected Consolidated Financial Information | ||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||
| (in thousands, except for ratios) | ||||||||||||||||||||||
| As of | ||||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||||
| 2025 | 2025 | 2025 | 2025 | 2024 | ||||||||||||||||||
| Unaudited quarterly statement of financial position data: | ||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||
| Cash and cash equivalents | $ | 827,098 | $ | 815,459 | $ | 796,257 | $ | 925,183 | $ | 785,515 | ||||||||||||
| Securities held-to-maturity, at amortized cost | 18,749 | 19,034 | 19,456 | 19,745 | 20,021 | |||||||||||||||||
| Securities available-for-sale, at fair value | 566,186 | 569,115 | 577,040 | 390,096 | 348,706 | |||||||||||||||||
| Loans: | ||||||||||||||||||||||
| Real estate – Mortgage: | ||||||||||||||||||||||
| Real estate—Residential | $ | 783,136 | $ | 793,217 | $ | 767,620 | $ | 779,462 | $ | 790,069 | ||||||||||||
| Real estate—Commercial | 3,028,762 | 2,890,990 | 2,868,308 | 2,897,956 | 2,840,771 | |||||||||||||||||
| Total Real Estate – Mortgage | 3,811,898 | 3,684,207 | 3,635,928 | 3,677,418 | 3,630,840 | |||||||||||||||||
| Real estate – Construction: | ||||||||||||||||||||||
| R/E Construction — Residential | 282,808 | 285,623 | 291,343 | 306,283 | 296,580 | |||||||||||||||||
| R/E Construction — Commercial | 387,759 | 323,897 | 303,354 | 269,065 | 287,185 | |||||||||||||||||
| Total real estate construction loans | 670,567 | 609,520 | 594,697 | 575,348 | 583,765 | |||||||||||||||||
| Commercial and industrial | 1,563,504 | 1,570,423 | 1,501,188 | 1,374,379 | 1,418,930 | |||||||||||||||||
| SBA | 8,053 | 7,630 | 7,741 | 7,104 | 6,833 | |||||||||||||||||
| Consumer and others | 242 | 231 | 56 | 164 | 247 | |||||||||||||||||
| Gross loans | 6,054,264 | 5,872,011 | 5,739,610 | 5,634,413 | 5,640,615 | |||||||||||||||||
| Allowance for credit losses on loans | (78,992 | ) | (74,692 | ) | (73,830 | ) | (72,274 | ) | (71,477 | ) | ||||||||||||
| Net deferred loan fees | (9,030 | ) | (9,956 | ) | (11,940 | ) | (9,652 | ) | (9,234 | ) | ||||||||||||
| Net loans, excluding loans held for sale | $ | 5,966,242 | $ | 5,787,363 | $ | 5,653,840 | $ | 5,552,487 | $ | 5,559,904 | ||||||||||||
| Loans held for sale | $ | - | $ | - | $ | - | $ | - | $ | 2,214 | ||||||||||||
| Net loans | $ | 5,966,242 | $ | 5,787,363 | $ | 5,653,840 | $ | 5,552,487 | $ | 5,562,118 | ||||||||||||
| Other real estate owned and repossessed assets | $ | 3,510 | $ | 52,609 | $ | 13,755 | $ | 13,650 | $ | 14,991 | ||||||||||||
| Investment in affordable housing partnerships | 69,978 | 73,874 | 74,783 | 63,612 | 58,346 | |||||||||||||||||
| Federal Home Loan Bank stock, at cost | 15,000 | 15,000 | 15,000 | 15,000 | 15,000 | |||||||||||||||||
| Other assets | 134,402 | 135,340 | 128,629 | 120,319 | 118,732 | |||||||||||||||||
| Total assets | $ | 7,601,165 | $ | 7,467,794 | $ | 7,278,760 | $ | 7,100,092 | $ | 6,923,429 | ||||||||||||
| Liabilities: | ||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||
| Demand | $ | 699,160 | $ | 654,302 | $ | 675,102 | $ | 730,270 | $ | 704,859 | ||||||||||||
| Interest bearing demand | 2,205,914 | 2,205,865 | 2,004,135 | 2,099,987 | 2,026,965 | |||||||||||||||||
| Savings | 30,376 | 31,087 | 34,333 | 32,631 | 30,150 | |||||||||||||||||
| Time certificates of $250,000 or more | 1,754,273 | 1,699,757 | 1,681,026 | 1,531,715 | 1,477,931 | |||||||||||||||||
| Other time certificates | 1,655,723 | 1,638,662 | 1,683,737 | 1,678,132 | 1,676,943 | |||||||||||||||||
| Total deposits | $ | 6,345,446 | $ | 6,229,673 | $ | 6,078,333 | $ | 6,072,735 | $ | 5,916,848 | ||||||||||||
| Advance from Federal Home Loan Bank | 200,000 | 200,000 | 200,000 | - | - | |||||||||||||||||
| Subordinated debt issuance, net | 148,706 | 148,647 | 148,588 | 148,529 | 148,469 | |||||||||||||||||
| Commitments to fund investment in affordable housing partnerships | 23,327 | 24,874 | 30,645 | 20,956 | 21,623 | |||||||||||||||||
| Other liabilities | 94,209 | 88,958 | 73,534 | 79,268 | 73,337 | |||||||||||||||||
| Total liabilities | $ | 6,811,688 | $ | 6,692,152 | $ | 6,531,100 | $ | 6,321,488 | $ | 6,160,277 | ||||||||||||
| Equity: | ||||||||||||||||||||||
| Common stock, no par value | $ | 210,882 | $ | 210,882 | $ | 210,882 | $ | 210,882 | $ | 210,882 | ||||||||||||
| Additional paid-in capital | 105,105 | 103,235 | 101,088 | 99,603 | 95,791 | |||||||||||||||||
| Treasury stock | (293,406 | ) | (277,351 | ) | (271,005 | ) | (214,406 | ) | (201,172 | ) | ||||||||||||
| Retained earnings | 780,637 | 755,587 | 728,891 | 705,360 | 685,108 | |||||||||||||||||
| Accumulated other comprehensive income | (13,741 | ) | (16,711 | ) | (22,196 | ) | (22,835 | ) | (27,457 | ) | ||||||||||||
| Total shareholders' equity | $ | 789,477 | $ | 775,642 | $ | 747,660 | $ | 778,604 | $ | 763,152 | ||||||||||||
| Total liabilities and shareholders' equity | $ | 7,601,165 | $ | 7,467,794 | $ | 7,278,760 | $ | 7,100,092 | $ | 6,923,429 | ||||||||||||
| PREFERRED BANK | |||||||||||||||||||||||||
| Quarter-to-Date Average Balances, Yield and Rates | |||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||
| Three months ended December 31, | Three months ended September 30, | Three months ended December 31, | |||||||||||||||||||||||
| 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) | $ | 5,947,986 | $ | 109,747 | 7.32 | % | $ | 5,754,073 | $ | 110,645 | 7.63 | % | $ | 5,543,215 | $ | 111,596 | 8.01 | % | |||||||
| Investment securities(3) | 586,950 | 5,883 | 3.98 | % | 583,302 | 6,257 | 4.26 | % | 350,732 | 3,566 | 4.04 | % | |||||||||||||
| Federal funds sold | 20,337 | 209 | 4.08 | % | 20,000 | 228 | 4.52 | % | 20,172 | 249 | 4.91 | % | |||||||||||||
| Other earning assets | 884,494 | 8,886 | 3.99 | % | 877,193 | 9,811 | 4.44 | % | 874,368 | 10,546 | 4.80 | % | |||||||||||||
| Total interest earning assets | 7,439,767 | 124,725 | 6.65 | % | 7,234,568 | 126,941 | 6.96 | % | 6,788,487 | 125,957 | 7.38 | % | |||||||||||||
| Deferred loan fees, net | (9,739 | ) | (10,686 | ) | (9,808 | ) | |||||||||||||||||||
| Allowance for credit losses on loans | (74,738 | ) | (72,784 | ) | (75,474 | ) | |||||||||||||||||||
| Noninterest earning assets: | |||||||||||||||||||||||||
| Cash and due from banks | 11,055 | 10,071 | 10,626 | ||||||||||||||||||||||
| Bank furniture and fixtures | 7,887 | 7,945 | 8,866 | ||||||||||||||||||||||
| Right of use assets | 28,344 | 19,153 | 28,570 | ||||||||||||||||||||||
| Other assets | 183,364 | 193,998 | 169,058 | ||||||||||||||||||||||
| Total assets | $ | 7,585,940 | $ | 7,382,265 | $ | 6,920,325 | |||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||||||||
| Interest bearing liabilities: | |||||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||
| Interest bearing demand and savings | $ | 2,249,065 | $ | 17,007 | 3.00 | % | $ | 2,171,526 | $ | 17,629 | 3.22 | % | $ | 2,076,132 | $ | 18,330 | 3.51 | % | |||||||
| TCD $250K or more | 1,725,674 | 17,220 | 3.96 | % | 1,686,710 | 17,406 | 4.09 | % | 1,481,219 | 17,514 | 4.70 | % | |||||||||||||
| Other time certificates | 1,676,630 | 17,323 | 4.10 | % | 1,643,531 | 17,386 | 4.20 | % | 1,663,304 | 19,516 | 4.67 | % | |||||||||||||
| Total interest bearing deposits | 5,651,369 | 51,551 | 3.62 | % | 5,501,767 | 52,421 | 3.78 | % | 5,220,655 | 55,360 | 4.22 | % | |||||||||||||
| Advance from Federal Home Loan Bank | 200,000 | 1,783 | 3.54 | % | 200,000 | 1,794 | 3.56 | % | - | 0 | 0.00 | % | |||||||||||||
| Subordinated debt, net | 148,673 | 1,325 | 3.54 | % | 148,609 | 1,325 | 3.54 | % | 148,434 | 1,325 | 3.55 | % | |||||||||||||
| Total interest bearing liabilities | 6,000,042 | 54,658 | 3.61 | % | 5,850,376 | 55,540 | 3.77 | % | 5,369,092 | 56,685 | 4.20 | % | |||||||||||||
| Noninterest bearing liabilities: | |||||||||||||||||||||||||
| Demand deposits | 684,873 | 667,961 | 684,472 | ||||||||||||||||||||||
| Lease liability | 32,626 | 22,908 | 25,486 | ||||||||||||||||||||||
| Other liabilities | 82,818 | 76,255 | 80,930 | ||||||||||||||||||||||
| Total liabilities | 6,800,359 | 6,617,500 | 6,159,980 | ||||||||||||||||||||||
| Shareholders' equity | 785,581 | 764,766 | 760,345 | ||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 7,585,940 | $ | 7,382,266 | $ | 6,920,325 | |||||||||||||||||||
| Net interest income | $ | 70,067 | $ | 71,401 | $ | 69,272 | |||||||||||||||||||
| Net interest spread | 3.04 | % | 3.19 | % | 3.18 | % | |||||||||||||||||||
| Net interest margin | 3.74 | % | 3.92 | % | 4.06 | % | |||||||||||||||||||
| Cost of Deposits: | |||||||||||||||||||||||||
| Noninterest bearing demand deposits | $ | 684,873 | $ | 667,961 | $ | 684,472 | |||||||||||||||||||
| Interest bearing deposits | 5,651,369 | 51,551 | 3.62 | % | 5,501,767 | 52,421 | 3.78 | % | 5,220,655 | 55,360 | 4.22 | % | |||||||||||||
| Total Deposits | $ | 6,336,242 | $ | 51,551 | 3.23 | % | $ | 6,169,728 | $ | 52,421 | 3.37 | % | $ | 5,905,127 | $ | 55,360 | 3.73 | % | |||||||
| (1) | Includes non-accrual loans and loans held for sale | ||||||||||||||||||||||||
| Net loan fee income of $1.4 million, $1.7 million and $1.2 million for the quarter ended December 31, 2025, September 30, 2025 and December 31, 2024, respectively, are included in the yield computations | |||||||||||||||||||||||||
| Yields on securities have been adjusted to a tax-equivalent basis | |||||||||||||||||||||||||
| PREFERRED BANK | |||||||||||||||||
| Year-to-Date Average Balances, Yield and Rates | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Twelve Months ended December 31, | |||||||||||||||||
| 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) | $ | 5,723,854 | $ | 427,767 | 7.47 | % | $ | 5,398,916 | $ | 445,139 | 8.24 | % | |||||
| Investment securities(3) | 519,898 | 21,429 | 4.12 | % | 352,416 | 14,257 | 4.05 | % | |||||||||
| Federal funds sold | 20,267 | 898 | 4.43 | % | 20,397 | 1,103 | 5.41 | % | |||||||||
| Other earning assets | 847,891 | 36,743 | 4.33 | % | 925,389 | 48,994 | 5.29 | % | |||||||||
| Total interest earning assets | 7,111,910 | 486,837 | 6.85 | % | 6,697,118 | 509,493 | 7.61 | % | |||||||||
| Deferred loan fees, net | (9,908 | ) | (10,301 | ) | |||||||||||||
| Allowance for credit losses on loans | (72,859 | ) | (76,448 | ) | |||||||||||||
| Noninterest earning assets: | |||||||||||||||||
| Cash and due from banks | 11,094 | 10,624 | |||||||||||||||
| Bank furniture and fixtures | 8,120 | 9,537 | |||||||||||||||
| Right of use assets | 20,686 | 23,997 | |||||||||||||||
| Other assets | 181,814 | 175,725 | |||||||||||||||
| Total assets | $ | 7,250,857 | $ | 6,830,252 | |||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||
| Interest bearing liabilities: | |||||||||||||||||
| Deposits: | |||||||||||||||||
| Interest bearing demand/ savings | $ | 2,131,587 | $ | 67,537 | 3.17 | % | $ | 2,198,837 | $ | 88,274 | 4.01 | % | |||||
| TCD $250K or more | 1,635,567 | 67,358 | 4.12 | % | 1,403,663 | 69,176 | 4.93 | % | |||||||||
| Other time certificates | 1,669,813 | 70,796 | 4.24 | % | 1,535,880 | 73,718 | 4.80 | % | |||||||||
| Total interest \bearing deposits | 5,436,967 | 205,691 | 3.78 | % | 5,138,380 | 231,168 | 4.50 | % | |||||||||
| Advance from Federal Home Loan Bank | 130,959 | 4,647 | 3.55 | % | - | 0 | 0.00 | % | |||||||||
| Subordinated debt, net | 148,582 | 5,300 | 3.57 | % | 148,344 | 5,300 | 3.57 | % | |||||||||
| Total interest bearing liabilities | 5,716,508 | 215,638 | 3.77 | % | 5,286,725 | 236,468 | 4.47 | % | |||||||||
| Noninterest bearing liabilities: | |||||||||||||||||
| Demand deposits | 663,862 | 710,920 | |||||||||||||||
| Lease liability | 24,572 | 20,931 | |||||||||||||||
| Other liabilities | 75,857 | 79,618 | |||||||||||||||
| Total liabilities | 6,480,799 | 6,098,194 | |||||||||||||||
| Shareholders' equity | 770,058 | 732,058 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 7,250,857 | $ | 6,830,252 | |||||||||||||
| Net interest income | $ | 271,199 | $ | 273,025 | |||||||||||||
| Net interest spread | 3.07 | % | 3.13 | % | |||||||||||||
| Net interest margin | 3.81 | % | 4.08 | % | |||||||||||||
| Cost of Deposits: | |||||||||||||||||
| Noninterest bearing demand deposits | $ | 663,862 | $ | 710,920 | |||||||||||||
| Interest bearing deposits | 5,436,967 | 205,691 | 3.78 | % | 5,138,380 | 231,168 | 4.50 | % | |||||||||
| Total Deposits | $ | 6,100,829 | $ | 205,691 | 3.37 | % | $ | 5,849,300 | $ | 231,168 | 3.95 | % | |||||
| (1) | Includes non-accrual loans and loans held for sale | ||||||||||||||||
| Net loan fee income of $5.0 million and $4.6 million for the twelve months ended December 31, 2025 and 2024, respectively, are included in the yield computations | |||||||||||||||||
| Yields on securities have been adjusted to a tax-equivalent basis | |||||||||||||||||
| Preferred Bank | ||||||||||
| Loan and Credit Quality Information | ||||||||||
| Allowance For Credit Losses History | ||||||||||
| Year Ended | ||||||||||
| December 31, 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 Charge-Offs | 1,585 | 18,978 | ||||||||
| Provision for Credit Losses: | 9,100 | 12,100 | ||||||||
| Balance at End of Period | $ | 78,992 | $ | 71,477 | ||||||
| Average Loans Held for Investment | $ | 5,721,077 | $ | 5,396,844 | ||||||
| Loans Held for Investment at End of Period | $ | 6,054,264 | $ | 5,640,615 | ||||||
| Net Charge-Offs to Average Loans | 0.03 | % | 0.35 | % | ||||||
| Allowances for Credit Losses to Loans at End of Period | 1.30 | % | 1.27 | % | ||||||
