Preferred Bank Reports Quarterly Earnings.

LOS ANGELES: Preferred Bank (NASDAQ: PFBC), one of the larger independent California banks, today reported results for the quarter ended September 30, 2023. Preferred Bank ("the Bank") reported net income of $38.2 million or $2.71 per diluted share for the third quarter of 2023. This represents an increase in net income of $3.0 million or 8.5% over the same quarter last year and up slightly compared to the second quarter of 2023. The primary driver of the increase over the prior year quarter was net interest income which increased by $6.2 million or 9.2% over the same period last year partially offset by higher noninterest expense. When compared to the prior quarter, net interest income was down slightly, as was noninterest income and noninterest expense.

Overall, results were very strong and the Bank also provided for $3.5 million in provision for credit losses which has driven the allowance for credit losses to total loans up to 1.46%.

Highlights for the Quarter:

Return on average assets was 2.25%

Return on beginning equity of 22.66%

Net interest margin was 4.39%

Total deposits increased $94.3 million or 6.7% annually for the quarter

Efficiency ratio was 25.0%

Quarter-end cash and equivalents continues to be strong at $1.02 billion or 18.0% of total deposits

Li Yu, Chairman and CEO, commented, "We are pleased to report another quarter of record profit. Earnings per diluted share for the third quarter was $2.71.

"For the quarter, loans practically stayed even and deposits grew modestly, which is the reflection of the cautiousness of both the Bank and its clients under the current environment. The margin decreased moderately from 4.58% in Q2 to 4.39% for Q3, largely because interest cost increases have slowed down.

"Credit quality remained relatively stable in the quarter. As of September 30, 2023, loans 30-89 days past due were negligible and total criticized loans increased slightly from the previous quarter. For the quarter, we have made a provision for credit losses in the amount of $3.5 million. Allowance for credit losses at September 30, 2023 now increased to 1.46% of total loans. We have been diligently identifying any credit loss exposures and fully reserving any potential exposure so that loan resolutions will not negatively affect the future operating income.

"Our operating expenses remain under control and were within our expectations. The Bank's efficiency ratio for the quarter was 25.0% Since the second quarter of this year, we have been continuously buying back our own stock due to our strong tangible capital position and the market price of the stock. Through September 30, 2023, total shares repurchased were 730,044. Even with the buyback, our...