LOS ANGELES, April 19, 2022 (GLOBE NEWSWIRE) -- Preferred Bank (NASDAQ:PFBC), one of the larger independent California banks, today reported results for the quarter March 31, 2022. Preferred Bank ("the Bank") reported net income of $26.0 million or $1.74 per diluted share for the first quarter of 2022. This represents an increase of $4.8 million or 22.8% over the same quarter last year down slightly from the $26.4 million or $1.80 per share posted in the fourth quarter of 2021. The primary reasons for the increase compared to the prior year was an increase in net interest income of $4.7 million primarily driven by loan growth. The decrease from the fourth quarter of 2021 was due mainly to an increase in noninterest expense of $1.4 million which was the result of higher personnel costs.

First quarter 2022 highlights:

Linked quarter loan growth (Ex-PPP) of 4.0%
Return on average assets ("ROA") of 1.75%
Return on beginning equity ("ROBE") of 17.99%
Pre-provision, pre-tax ("PPPT") ROBE of 24.98% ¹
Efficiency ratio of 30.89%

Li Yu, Chairman and CEO, commented, "We had a strong first quarter to start 2022, compared to all the prior years. Net income was $26.0 or $1.74 per fully diluted share as compared to $21.2 and $1.42 per share respectively, for the first quarter 2021.

Loan growth for the first quarter, excluding PPP was $176 million, or 16.1% annualized and was the highlight of the quarter. The momentum of fourth quarter's origination activities has been carried over to this quarter and pay-off activities have moderately subsided. Looking forward, we are encouraged by the new applications received for lending opportunities in the following quarters.

Deposit growth was moderate, increasing by $84 million, or 6.44% annualized. As we are facing the Federal Reserve's tightening of liquidity, this growth rate is well within our expected range and allows us to deploy some of our excess liquidity into more profitable applications.

The Bank's net interest margin for the quarter was 3.42%, an increase of 14 basis points from the previous quarter partially reflecting the change in leverage on the balance sheet. Looking forward, we expect our margin to expand under the rate rising environment, which seems to be the unanimous consensus of all economists. Following is a breakdown of the Bank's assets, which will support our margin expansion conviction:

Total Adj/Floating Rate Loans	$	3,824,913

Loans with no Floor	$	688,006
Loans Above Floor or at Floor		753,071
Cash and Floating Rate Securities		1,215,162
Total Interest Earning Assets to Reprice Immediately	$	2,656,239

Floating Rate Loans which will Reprice When Rates are Increased by:
0 - 25 bps	$	196,213
26 - 50 bps		393,437
51 - 75 bps		492,037
76 - 100 bps		305,055
> 100 bps		997,094
Total	$	2,383,836

On the liability side, the Bank's time certificates of deposit portfolio of $1.86 billion has an average life of 7.3 months. This group of deposits will reprice slower than the interest-bearing transactional accounts.

We are also making progress on resolving our troubled assets. After months of court battles, two main non-accrual loans have finally advanced to the OREO and repossessed-asset stage and expect to be resolved shortly. Our total non-performing loans at March 31, 2022, is now just $2.2 million and total non-performing assets are $17.7 million. Charge-offs for this quarter are primarily related to these legacy loans and places us in a position to offload them.

Under the current inflationary environment, increases in operating expenses will be inevitable. As we have always been disciplined with our operating costs, we expect expense growth to stay at approximately the industry average and be more than fully absorbed by growth in net interest income."

Results of Operations

Net Interest Income and Net Interest Margin. Net interest income before provision for credit losses was $50.0 million for the first quarter of 2022. This was an increase from the $45.4 million recorded in the same quarter last year and also an increase over the $49.4 million posted in the fourth quarter of 2021. Loan growth was the primary driver of the increase in net interest income as was an increase in investment securities along with a decline in interest expense. The taxable equivalent margin was 3.42% for the first quarter of 2022, as compared to 3.28% in the fourth quarter of 2021 and versus 3.61% for the same period last year.

Noninterest Income. For the first quarter of 2022, noninterest income was $2,266,000 compared with $1,347,000 for the same quarter last year and compared to $1,966,000 for the fourth quarter of 2021. The increase compared to last year was due to a $379,000 loss on sale of loans recorded in the first quarter of last year in addition to service charges increasing this quarter by $245,000 over that period as well. The increase over the fourth quarter of 2021 was mainly due to an increase in letter of credit ("LC") fees which were up by $214,000 this quarter.

Noninterest Expense. Total noninterest expense was $16.2 million for the first quarter of 2022. This is up compared to the $15.7 million recorded in the same quarter last year and an increase over the $14.8 million posted in the fourth quarter of 2021. In comparing to the same quarter last year, personnel expense and other professional services contributed most to the overall increase. Personnel expense increased over the prior year primarily due to additional staffing and merit increases. The increase in noninterest expense over the prior quarter was due to personnel expense. This increase in personnel expense was due to an increase in payroll taxes of $612,000 which were Bank-incurred payroll taxes on incentive compensation payments, which are distributed each first quarter. Occupancy expense totaled $1.4 million for the quarter which was relatively flat compared to both the prior quarter and when compared to the same quarter last year. Professional services expense was $1.2 million for the first quarter of 2022, an increase of $262,000 over the same period last year and an increase of $168,000 over the fourth quarter of 2021. The increase over both periods was mainly due to legal fees as the Bank continues to wind down and liquidate the two aforementioned non-performing assets. Other expenses were $1.2 million for the first quarter of 2022, down from the $1.6 million recorded in the first quarter of 2021 and down slightly from the $1.3 million posted last quarter. Lower FDIC premiums were the primary reason for the decrease compared to the same period last year. For the quarter ended March 31, 2022, the Bank's efficiency ratio was 30.9%, up from the 28.8% posted last quarter and down from last year's 33.5%.

Income Taxes. The Bank recorded a provision for income taxes of $10.4 million for the first quarter of 2022. This represents an effective tax rate ("ETR") of 28.5% and slightly below the ETR of 29.5% in the prior quarter and flat compared to the ETR of 28.5% in the same period last year. 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 March 31, 2022 were $4.59 billion, an increase of $167 million or 3.8% over the total of $4.42 billion as of December 31, 2021. Total deposits increased to $5.31 billion, an increase of $84 million or 1.6% over the $5.23 billion as of December 31, 2021. Total assets ended the quarter at $6.14 billion, an increase of $96 million or 1.6% over the total of $6.05 billion as of December 31, 2021.

Asset Quality

As of March 31, 2022, nonaccrual loans totaled $2.2 million, down from $14.8 million as of the end of 2021. In addition, OREO and repossessed assets totaled $15.5 million as of March 31, 2022. Total net charge-offs for the first quarter of 2022 were $1.2 million as compared to $267,000 in the prior quarter and compared to a net recovery of $57,000 in the first quarter of 2021.

Allowance for Credit Losses

The (reversal of) provision for credit losses for the first quarter of 2022 was ($250,000) as compared to a reversal of ($900,000) in the prior quarter and compared to the $1.4 million provision for credit losses posted in the first quarter of 2021. A consistently improving economic outlook, among other factors such as credit quality led to a lower allowance requirement. The Bank's allowance coverage ratio now stands at 1.28% of total loans (excluding PPP loans).

Capitalization

As of March 31, 2022, the Bank's leverage ratio was 9.92%, the common equity tier 1 capital ratio was 11.20% and the total capital ratio stood at 15.12%. As of December 31, 2021, the Bank's leverage ratio was 9.54%, the common equity tier 1 ratio was 11.26% and the total risk-based capital ratio was 15.37%.

GAAP – Non-GAAP Reconciliation -First quarter 2022 PPPT ROBE
Net Income	$	26,027
Add: Reversal of provision for credit losses		(250	)
Add: Income tax expense		10,364
Pre-provision and pre-tax income	$	36,141

Total equity - 12/31/21	$	586,718
Pre-provision and pre-tax ROBE		24.98	%

Conference Call and Webcast

A conference call with simultaneous webcast to discuss Preferred Bank's first quarter 2022 financial results will be held tomorrow, April 20, 2022 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, Chief Credit Officer Nick Pi 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 May 4, 2022; the passcode is 2138387.

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. In addition, the Bank operates a Loan Production Office in the Houston, Texas suburb of Sugar Land. 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 2021 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

PREFERRED BANK
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except for net income per share and shares)

				For the Quarter Ended
				March 31,			December 31,			March 31,
					2022			2021			2021
Interest income:
	Loans, including fees			$	52,119		$	51,906		$	49,859
	Investment securities				2,886			2,867			2,277
	Fed funds sold				19			18			24
		Total interest income			55,024			54,791			52,160

Interest expense:
	Interest-bearing demand				1,431			1,511			1,437
	Savings				19			17			19
	Time certificates				2,217			2,521			3,827
	Subordinated debt				1,325			1,325			1,531
		Total interest expense			4,992			5,374			6,814
		Net interest income			50,032			49,417			45,346
(Reversal of) provision for credit losses					(250	)		(900	)		1,400
		Net interest income after (reversal of) provision for
			credit losses		50,282			50,317			43,946

Noninterest income:
	Fees & service charges on deposit accounts				671			581			426
	Letters of credit fee income				933			719			808
	BOLI income				99			99			96
	Net loss on sale of loans				-			-			(379	)
	Other income				563			567			396
		Total noninterest income			2,266			1,966			1,347

Noninterest expense:
	Salary and employee benefits				11,640			10,278			11,123
	Net occupancy expense				1,422			1,396			1,401
	Business development and promotion expense				101			280			73
	Professional services				1,243			1,075			981
	Office supplies and equipment expense				489			498			438
	Other real estate owned expense				16			-			-
	Other				1,246			1,279			1,636
		Total noninterest expense			16,157			14,806			15,652
		Income before provision for income taxes			36,391			37,477			29,641
Income tax expense					10,364			11,056			8,447
		Net income		$	26,027		$	26,421		$	21,194

Dividend and earnings allocated to participating securities					(1	)		(3	)		(3	)
Net income available to common shareholders				$	26,026		$	26,418		$	21,191

Income per share available to common shareholders
		Basic		$	1.76		$	1.80		$	1.42
		Diluted		$	1.74		$	1.80		$	1.42

Weighted-average common shares outstanding
		Basic			14,765,337			14,677,515			14,950,019
		Diluted			14,978,667			14,677,515			14,950,019

Cash dividends per common share				$	0.43		$	0.43		$	0.38

PREFERRED BANK
Condensed Consolidated Statements of Financial Condition
(unaudited)
(in thousands)

			March 31,			December 31,
				2022			2021
			(Unaudited)			(Audited)
Assets
Cash and due from banks			$	965,162		$	1,030,610
Fed funds sold				20,000			20,000
	Cash and cash equivalents			985,162			1,050,610

Securities held to maturity, at amortized cost				13,496			13,962
Securities available-for-sale, at fair value				430,280			451,911
Loans				4,591,567			4,424,992
	Less allowance for credit losses			(58,496	)		(59,969	)
	Less amortized deferred loan fees, net			(8,573	)		(6,316	)
	Loans, net			4,524,498			4,358,707

Other real estate owned and repossessed assets				15,547			-
Customers' liability on acceptances				8,222			10,188
Bank furniture and fixtures, net				10,189			10,533
Bank-owned life insurance				10,154			10,088
Accrued interest receivable				15,166			14,646
Investment in affordable housing partnerships				56,946			59,018
Federal Home Loan Bank stock, at cost				15,000			15,000
Deferred tax assets				31,086			26,674
Operating lease right-of-use assets				21,451			21,969
Other assets				5,159			2,997
	Total assets		$	6,142,356		$	6,046,303

Liabilities and Shareholders' Equity
Deposits:
	Non-interest bearing demand deposits		$	1,251,613		$	1,305,692
	Interest-bearing deposits:			2,159,178			2,032,819
		Savings		39,946			37,839
		Time certificates of $250,000 or more		924,317			934,444
		Other time certificates		934,615			914,717
		Total deposits		5,309,669			5,225,511

Acceptances outstanding				8,222			10,188
Subordinated debt issuance, net				147,818			147,758
Commitments to fund investment in affordable housing partnerships				22,606			22,606
Operating lease liabilities				21,901			22,861
Accrued interest payable				1,966			715
Other liabilities				34,889			29,946
	Total liabilities			5,547,071			5,459,585

Shareholders' equity				595,285			586,718
	Total liabilities and shareholders' equity		$	6,142,356		$	6,046,303

Book value per common share			$	40.19		$	39.97
Number of common shares outstanding				14,810,635			14,679,769

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)

			For the Quarter Ended

			March 31,			December 31,			September 30,			June 30,			March 31,
				2022			2021			2021			2021			2021
Unaudited historical quarterly operations data:
	Interest income		$	55,024		$	54,791		$	53,611		$	50,473		$	52,160
	Interest expense			4,992			5,374			5,858			7,112			6,814
		Interest income before provision for credit losses		50,032			49,417			47,753			43,361			45,346
	(Reversal of) provision for credit losses			(250	)		(900	)		(1,500	)		-			1,400
	Noninterest income			2,266			1,966			2,784			1,646			1,347
	Noninterest expense			16,157			14,806			15,370			14,964			15,652
	Income tax expense			10,364			11,056			10,522			8,563			8,447
		Net income	$	26,027		$	26,421		$	26,145		$	21,480		$	21,194

	Earnings per share
		Basic	$	1.76		$	1.80		$	1.76		$	1.44		$	1.42
		Diluted	$	1.74		$	1.80		$	1.76		$	1.44		$	1.42

Ratios for the period:
	Return on average assets			1.75	%		1.72	%		1.80	%		1.58	%		1.65	%
	Return on beginning equity			17.99	%		18.65	%		18.56	%		15.98	%		16.36	%
	Net interest margin (Fully-taxable equivalent)			3.42	%		3.28	%		3.36	%		3.25	%		3.61	%
	Noninterest expense to average assets			1.08	%		0.97	%		1.06	%		1.10	%		1.22	%
	Efficiency ratio			30.89	%		28.82	%		30.41	%		33.25	%		33.52	%
	Net charge-offs (recoveries) to average loans (annualized)			0.11	%		0.03	%		0.10	%		0.12	%		-0.01	%

Ratios as of period end:
	Tier 1 leverage capital ratio			9.92	%		9.54	%		9.64	%		10.07	%		10.26	%
	Common equity tier 1 risk-based capital ratio			11.20	%		11.26	%		11.19	%		11.28	%		11.34	%
	Tier 1 risk-based capital ratio			11.20	%		11.26	%		11.19	%		11.28	%		11.34	%
	Total risk-based capital ratio			15.12	%		15.37	%		15.47	%		15.61	%		14.73	%
	Allowances for credit losses to loans at end of period			1.27	%		1.36	%		1.41	%		1.49	%		1.56	%
	Allowance for credit losses to non-performing loans		27.15x			4.05x			2.93x			2.91x			2.95x

Average balances:
	Total securities		$	455,899		$	470,811		$	401,641		$	269,000		$	242,200
	Total loans			4,367,095			4,218,699			4,156,289			4,130,190			4,044,800
	Total earning assets			5,938,519			5,984,055			5,659,678			5,364,598			5,102,291
	Total assets			6,044,155			6,079,934			5,760,056			5,467,678			5,200,079
	Total time certificate of deposits			1,869,654			1,915,116			1,959,514			1,893,247			1,820,461
	Total interest bearing deposits			3,947,616			3,945,275			3,783,704			3,704,771			3,531,358
	Total deposits			5,215,810			5,277,507			4,971,607			4,724,104			4,486,399
	Total interest bearing liabilities			4,095,399			4,093,002			3,931,375			3,815,964			3,630,705
	Total equity			597,214			576,495			569,624			553,561			538,282

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)

				As of

				March 31,			December 31,			September 30,			June 30,			March 31,
					2022			2021			2021			2021			2021
Unaudited quarterly statement of financial position data:
Assets:
	Cash and cash equivalents			$	985,162		$	1,050,610		$	1,082,634		$	896,474		$	943,126
	Securities held-to-maturity, at amortized cost				13,496			13,962			15,294			15,749			6,039
	Securities available-for-sale, at fair value				430,280			451,911			461,356			278,460			228,635
	Loans:
		Real estate – Mortgage:
			Real estate—Residential	$	531,957		$	536,286		$	540,725		$	558,147		$	541,313
			Real estate—Commercial		2,375,519			2,267,063			2,093,692			2,019,995			1,925,554
			Total Real Estate – Mortgage		2,907,476			2,803,349			2,634,417			2,578,142			2,466,867
		Real estate – Construction:
			R/E Construction — Residential		141,218			130,842			122,382			120,363			123,302
			R/E Construction — Commercial		209,726			202,482			213,833			224,323			229,933
			Total real estate construction loans		350,944			333,324			336,215			344,686			353,235
		Commercial and industrial			1,300,478			1,245,734			1,286,995			1,259,668			1,248,550
		PPP			32,554			42,467			63,897			95,765			95,434
		Consumer and others			115			118			6			143			155
			Gross loans		4,591,567			4,424,992			4,321,529			4,278,403			4,164,241
	Allowance for credit losses on loans				(58,496	)		(59,969	)		(61,135	)		(63,635	)		(64,883	)
	Net deferred loan fees				(8,573	)		(6,316	)		(5,498	)		(5,329	)		(4,872	)
		Net loans		$	4,524,498		$	4,358,707		$	4,254,896		$	4,209,439		$	4,094,486

	Other real estate owned and repossessed assets			$	15,547		$	-		$	-		$	-		$	-
	Investment in affordable housing partnerships				56,946			59,018			53,399			55,452			59,824
	Federal Home Loan Bank stock, at cost				15,000			15,000			15,000			15,000			15,000
	Other assets				101,427			97,095			97,261			105,334			100,894
		Total assets		$	6,142,356		$	6,046,303		$	5,979,840		$	5,575,908		$	5,448,004

Liabilities:
	Deposits:
		Demand		$	1,251,613		$	1,305,692		$	1,349,114		$	1,063,472		$	1,026,260
		Interest-bearing demand			2,159,178			2,032,819			1,861,334			1,774,668			1,751,951
		Savings			39,946			37,839			33,417			32,560			37,551
		Time certificates of $250,000 or more			924,317			934,444			959,826			930,976			927,043
		Other time certificates			934,615			914,717			990,228			994,630			979,694
		Total deposits		$	5,309,669		$	5,225,511		$	5,193,919		$	4,796,306		$	4,722,499

	Acceptances outstanding			$	8,222		$	10,188		$	7,697		$	7,797		$	9,670
	Subordinated debt issuance, net				147,818			147,758			147,699			147,787			99,365
	Commitments to fund investment in affordable housing partnerships				22,606			22,606			17,900			19,197			27,918
	Other liabilities				58,756			53,522			50,604			45,852			49,283
		Total liabilities		$	5,547,071		$	5,459,585		$	5,417,819		$	5,016,939		$	4,908,735

Equity:
	Net common stock, no par value			$	209,065		$	208,840		$	203,844		$	219,958		$	218,593
	Retained earnings				392,610			372,952			352,843			332,276			316,481
	Accumulated other comprehensive income				(6,390	)		4,926			5,334			6,735			4,195
		Total shareholders' equity		$	595,285		$	586,718		$	562,021		$	558,969		$	539,269
		Total liabilities and shareholders' equity		$	6,142,356		$	6,046,303		$	5,979,840		$	5,575,908		$	5,448,004

PREFERRED BANK
Quarter-to-Date Average Balances, Yield And Rates
(Unaudited)


			Three months ended March 31,							Three months ended December 31,							Three months ended March 31,
				2022							2021							2021
						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)		$	4,367,095			52,119	4.84	%	$	4,218,699		$	51,906	4.88	%		4,044,823		$	49,859	5.00	%
	Investment securities ⁽³⁾			455,899			2,224	1.98	%		470,811			2,228	1.88	%		242,200			1,884	3.16	%
	Federal funds sold			20,122			19	0.38	%		20,380			18	0.36	%		21,474			24	0.45	%
	Other earning assets			1,095,403			770	0.29	%		1,274,165			752	0.23	%		793,794			493	0.25	%
		Total interest-earning assets		5,938,519			55,132	3.77	%		5,984,055			54,904	3.64	%		5,102,291			52,260	4.15	%
	Deferred loan fees, net			(6,322	)						(5,530	)						(4,344	)
	Allowance for credit losses on loans			(59,951	)						(61,123	)						(63,450	)
Noninterest earning assets:
	Cash and due from banks			11,589							11,933							9,923
	Bank furniture and fixtures			10,440							10,810							11,772
	Right of use assets			21,754							21,150							16,847
	Other assets			128,126							118,639							127,040
		Total assets	$	6,044,155						$	6,079,934						$	5,200,079

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
	Deposits:
		Interest-bearing demand and savings		2,077,962		$	1,450	0.28	%		2,030,159		$	1,528	0.30	%	$	1,710,897		$	1,456	0.35	%
		TCD $250K or more		929,170			1,027	0.45	%		942,201			1,151	0.48	%		919,155			1,918	0.85	%
		Other time certificates		940,484			1,190	0.51	%		972,915			1,370	0.56	%		901,306			1,909	0.86	%
		Total interest-bearing deposits		3,947,616			3,667	0.38	%		3,945,275			4,049	0.41	%		3,531,358			5,283	0.61	%
Short-term borrowings				-			-	0.00	%		3			0	0.22	%		-			-	0.00	%
Subordinated debt, net				147,783			1,325	3.64	%		147,724			1,325	3.56	%		99,347			1,531	6.25	%
		Total interest-bearing liabilities		4,095,399			4,992	0.49	%		4,093,002			5,374	0.52	%		3,630,705			6,814	0.76	%
Non-interest bearing liabilities:
	Demand deposits			1,268,194							1,332,232							955,041
	Lease Liability			22,463							22,298							19,289
	Other liabilities			60,885							55,907							56,762
		Total liabilities		5,446,941							5,503,439							4,661,797
Shareholders' equity				597,214							576,495							538,282
		Total liabilities and shareholders' equity	$	6,044,155						$	6,079,934						$	5,200,079
Net interest income						$	50,140						$	49,530						$	45,446
Net interest spread								3.27	%						3.12	%						3.39	%
Net interest margin								3.42	%						3.28	%						3.61	%

Cost of Deposits:
	Noninterest bearing demand deposits		$	1,268,194						$	1,332,232						$	955,041
	Interest bearing deposits			3,947,616			3,667	0.38	%		3,945,275			4,049	0.41	%		3,531,358			5,283	0.61	%
		Total Deposits	$	5,215,810		$	3,667	0.29	%	$	5,277,507		$	4,049	0.30	%	$	4,486,399		$	5,283	0.48	%

⁽¹⁾	Includes non-accrual loans and loans held for sale
⁽²⁾	Net loan fee income of $765,000, $1.1 million and $539,000 for the quarter ended March 31, 2022, December 31, 2021 and March 31, 2021, 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
			Quarter Ended			Year ended
			March 31, 2022			December 31, 2021
			(Dollars in 000's)
Allowance For Credit Losses
Balance at Beginning of Period			$	59,969		$	63,426
	Charge-Offs
		Commercial & Industrial		1,222			1,697
		Mini-perm Real Estate		1			817
		Total Charge-Offs		1,223			2,514

	Recoveries
		Commercial & Industrial		-			57
		Total Recoveries		-			57

	Net Charge-Offs			1,223			2,457
	Reversal of Provision for Credit Losses:			(250	)		(1,000	)
Balance at End of Period			$	58,496		$	59,969

Average Loans Held for Investment			$	4,367,095		$	4,138,023
Loans Held for Investment at End of Period			$	4,591,567		$	4,424,992
Net Charge-Offs (Recoveries) to Average Loans				0.11	%		0.06	%
Allowances for Credit Losses to Loans at End of Period				1.27	%		1.36	%

¹ This is a non-GAAP measure and linking to the reconciliation on page 5.

Preferred Bank Reports Quarterly Earnings