LOS ANGELES, April 22, 2014 (GLOBE NEWSWIRE) -- Preferred Bank (Nasdaq: PFBC ), an independent commercial bank focusing on the diversified California market, today reported results for the quarter ended March 31, 2014. Preferred Bank ("the Bank") reported net income of $5.2 million or $0.38 per diluted share for the first quarter of 2014. This compares to net income of $4.0 million or $0.30 per diluted share for the first quarter of 2013 and compares to net income of $5.9 million or $0.44 per diluted share for the fourth quarter of 2013. Net income for the fourth quarter of 2013 was aided by $2.6 million in gains on sales of OREO partially offset by $1.1 million in losses on sales of investment securities.
Highlights from the first quarter of 2014:
- Quarterly net income was $5.2 million
- Linked quarter loan growth was $46.5 million
- The net interest margin expanded slightly to 3.87% from 3.85% linked quarter
- ROA was 1.17%
- ROBE was 10.10%
- Efficiency ratio was 44.7%
Li Yu, Chairman and CEO commented, "Our Bank continues to grow in 2014. On a linked-quarter basis, total loans grew by 3.5% and deposits grew by 2.1%. The loan pipeline is stable at present.
There seems to be renewed pressure on the Bank's net interest margin. Several larger banks have recently refinanced out some of our loans with longer terms and fixed rates, which are also quite low. We have chosen not to compete not only because the risk adjusted returns are too thin, but also because this type of asset is not consistent with our interest rate risk management practices. We will however, remain alert and will be competitive whenever possible and we are also prepared to continue to expand our relationship staff to create more deal flow so that we can continue to grow while moderating any yield erosion.
Between mid 2013 and early 2014, our Bank has been building up our administrative, compliance and support staff . A number of highly trained professionals were recruited in areas such as BSA, Compliance, Operations, Credit Administration, Information Technology and Treasury. We are doing this in response to the increased compliance requirements and we are also preparing for our next stage of growth.
We are pleased with our first quarter efficiency ratio of 45%. Although there are a few areas whereby we can improve, expected improvements will be modest. We are dedicated however, as we always have been to maintaining a very efficient organization."
Operating Results
Net Interest Income and Net Interest Margin. Net interest income before provision for loan and lease losses was $16.5 million compared to $14.7 million recorded in the first quarter of 2013 and a slight increase from the $16.4 million recorded in the fourth quarter of 2013. The increase over the first quarter of 2013 and over the prior quarter is due primarily to loan growth. The Bank's taxable equivalent net interest margin was 3.87% for the first quarter of 2014, a 2 basis point increase from the 3.85% achieved in the fourth quarter of 2013 and a 16 basis point decrease from the 4.03% recorded in the first quarter of 2013. The decrease in the margin from the first quarter of 2013 was primarily due to average cash balances which were $79 million higher in the first quarter of 2014 versus the same quarter in 2013. These cash balances only earn 0.25% so the level of cash on the balance sheet has a significant impact on the calculated margin. In addition, the average balance of our investment securities portfolio was also lower by $57.4 million in the first quarter of 2014 than the same quarter last year which also negatively impacted the net interest margin. These items were partially offset by an increase in average total loans of $212.2 million compared to the same quarter of 2013.
Noninterest Income. For the first quarter of 2014, noninterest income was $1,028,000 compared with $858,000 for the same quarter last year and compared to $214,000 for the fourth quarter of 2013. Service charges on deposits were down compared to the same period last year but Trade Finance income was up as was other noninterest income. In comparing to the fourth quarter of 2013; service charges were down slightly but Trade Finance income was considerably higher and there were no losses on investment securities compared to the $1.1 million loss last quarter. In addition, other noninterest income was considerably lower than the $598,000 recorded in the fourth quarter of last year due to a gain on the sale of loans of $514,000 recorded in that period.
Noninterest Expense .Total noninterest expense was $7.8 million for the first quarter of 2014, comparing favorably to the $8.8 million recorded in the same quarter last year but up significantly over the $5.2 million recorded in the fourth quarter of 2013 (Fourth quarter 2014 noninterest expense was reduced by a $2.6 million gain on sale of OREO). Salaries and benefits expense totaled $4.7 million for the first quarter of 2014 compared to $4.3 million for the same period last year and compared to $4.0 million for the fourth quarter of 2013. The increase over both comparable periods was due to higher bonus expense as well as higher staffing levels. Occupancy expense was $801,000 compared to the $768,000 recorded in the same period in 2013 and $801,000 recorded in the fourth quarter of 2013. The increase over both periods was due primarily to the new San Francisco branch occupancy costs and normal cost increases. Professional services expense was $761,000 for the first quarter of 2014 compared to $889,000 for the same quarter of 2013 and $899,000 recorded in the fourth quarter of 2013. Other real estate owned ("OREO") related and loans held for sale ("LHFS") expenses totaled $(78,000) for the first quarter of 2014 compared to $1.4 million for the same period last year and compared to $(2.1 million) for the fourth quarter of 2013. Other expenses were $1.2 million in the first quarter of 2014, a slight increase of $47,000 over the same period in 2013 and down from the $1.3 million recorded in the fourth quarter of 2013.
Income Taxes
The Bank recorded a provision for income taxes of $3.3 million for the first quarter of 2014. This represents an effective tax rate ("ETR") of 39.0% for the quarter. This is up slightly from the ETR of 38.8% for the fourth quarter of 2013. This small increase is due to the Bank's higher overall levels of profitability in 2014 relative to tax exempt income and deductible items.
Balance Sheet Summary
Total gross loans and leases (including loans held for sale) at March 31, 2014 were $1.38 billion, an increase of $46.5 million or 3.5% over the total of $1.33 billion as of December 31, 2013. The tables below indicate loans by type as of March 31, 2014 as compared to the end of 2013:
Loans by Type – Year over Year (000's)
| Loan Type (000's) | March 31, 2014 | December 31, 2013 | $ Change | % Change |
| R/E – Residential/Multifamily | $220,193 | $228,490 | $ (8,297) | -3.6% |
| R/E – Land | 15,113 | 15,161 | (48) | -0.3% |
| R/E – Commercial | 653,146 | 627,888 | 25,258 | 4.0% |
| R/E – Construction | 81,317 | 73,285 | 8,032 | 11.0% |
| Commercial & Industrial | 400,419 | 378,607 | 21,812 | 5.8% |
| Loans Held for Sale | 5,977 | 6,207 | (230) | -3.7% |
| Total | $1,376,165 | $1,329,638 | $46,527 | 3.5% |
Total deposits as of March 31, 2014 were $1.56 billion, an increase of $32.7 million from the $1.53 billion at December 31, 2013. As of March 31, 2014 compared to December 31, 2013; noninterest-bearing demand deposits decreased by $11.5 million or 3.4%, interest-bearing demand and savings deposits increased by $8.8 million or 1.8% and time deposits increased by $35.4 million or 5.1%. Total assets were $1.81 billion, a $39.2 million or 2.2% increase from the total of $1.77 billion as of December 31, 2013.
Asset Quality
As of March 31, 2014 total nonaccrual loans (excluding loans held for sale) decreased to $5.5 million compared to $7.8 million as of December 31, 2013. Total net charge-offs (recoveries) for the first quarter of 2014 were $967,000 compared to net recoveries of $25,000 for the fourth quarter of 2013. The Bank recorded a provision for loan losses of $1.25 million for the first quarter of 2014. Although nonperforming loan and economic trends continue to be positive, management believes that due to growth and other factors, this provision is appropriate in order to maintain an allowance level deemed sufficient. This compares to no provision recorded in the same quarter last year and compares to $1.8 million provision recorded in the fourth quarter of 2013. The allowance for loan loss at March 31, 2014 was $19.8 million or 1.44% of total loans compared to $19.5 million or 1.47% of total loans at December 31, 2013.
NPA Migration
Non-Performing Assets Migration – Q1 2014
| Non Accrual Loans | OREO | |
| Balance, December 31, 2013 | $7,837 | $5,602 |
| Additions | 1,195 | 3,300 |
| Transfer to OREO | (3,300) | -- |
| Loans Cured | -- | -- |
| Sales/Payoffs | (206) | -- |
| Charge-off | -- | -- |
| Balance, March 31, 2014 | $5,526 | $8,902 |
The tables above exclude loans held for sale and TDR's that are on accrual status. Performing TDR's totaled $401,000 as of March 31, 2014. The $6.0 million in loans held for sale consist of one loan which is current, on nonaccrual status.
OREO
Total OREO increased to $8.9 million compared to $5.6 million as of December 31, 2013. This was due to the foreclosure of and taking possession of a property securing a loan which had been on nonaccrual status for some time.
Capitalization
As of March 31, 2014, the Bank's tier 1 leverage ratio was 11.97%, the tier 1 risk based capital ratio was 13.65% and the total risk-based capital ratio was 14.90%. This compares to 11.80%, 13.78% and 15.03% as of December 31, 2013, respectively.
Conference Call and Webcast
A conference call with simultaneous webcast to discuss Preferred Bank's first quarter 2014 financial results will be held tomorrow, April 23, 2014 at 2:00 p.m. Eastern / 11:00 a.m. Pacific. Interested participants and investors may access the conference call by dialing 877-941-6009 (domestic) or 480-629-9819 (international). The passcode for the call is 4679259. 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 CEO Li Yu, President and COO Wellington Chen, Chief Financial Officer Edward J. Czajka and Chief Credit Officer Louie Couto 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 800-406-7325 (domestic) or 303-590-3030 (international) through April 30, 2014; the passcode is 4679259.
About Preferred Bank
Preferred Bank is one of the larger independent commercial banks 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 Company conducts its banking business from its main office in Los Angeles, California, and through ten full-service branch banking offices in Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine, Diamond Bar, Anaheim, Pico Rivera and San Francisco, 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.
The Preferred Bank logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=11817
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 2013 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 .
Financial Tables to Follow
| PREFERRED BANK | |||
| Condensed Consolidated Statements of Operations | |||
| (unaudited) | |||
| (in thousands, except for net income per share and shares) | |||
| For the Three Months Ended | |||
| March 31, | December 31, | March 31, | |
| 2014 | 2013 | 2013 | |
| Interest income: | |||
| Loans, including fees | $ 17,342 | $ 17,111 | $ 14,939 |
| Investment securities | 1,389 | 1,380 | 1,550 |
| Fed funds sold | 19 | 22 | -- |
| Total interest income | 18,750 | 18,513 | 16,489 |
| Interest expense: | |||
| Interest-bearing demand | 646 | 618 | 531 |
| Savings | 19 | 24 | 21 |
| Time certificates | 1,550 | 1,436 | 1,278 |
| FHLB borrowings | 32 | 33 | -- |
| Total interest expense | 2,247 | 2,112 | 1,830 |
| Net interest income | 16,503 | 16,401 | 14,660 |
| Provision for loan losses | 1,250 | 1,800 | -- |
| Net interest income after provision for loan losses | 15,253 | 14,601 | 14,660 |
| Noninterest income: | |||
| Fees & service charges on deposit accounts | 456 | 507 | 548 |
| Trade finance income | 299 | 128 | 207 |
| BOLI income | 82 | 84 | 82 |
| Net gain (loss) on sale of investment securities | -- | (1,103) | -- |
| Other income | 191 | 598 | 21 |
| Total noninterest income | 1,028 | 214 | 858 |
| Noninterest expense: | |||
| Salary and employee benefits | 4,735 | 3,960 | 4,273 |
| Net occupancy expense | 801 | 801 | 768 |
| Business development and promotion expense | 87 | 99 | 96 |
| Professional services | 761 | 899 | 889 |
| Office supplies and equipment expense | 338 | 278 | 307 |
| Total other-than-temporary impairment losses | -- | -- | 4 |
| Portion of loss recognized in other comprehensive income | -- | -- | -- |
| Other real estate owned related expense (income) and valuation allowance on LHFS | (78) | (2,092) | 1,364 |
| Other | 1,188 | 1,279 | 1,141 |
| Total noninterest expense | 7,832 | 5,224 | 8,841 |
| Income before provision for income taxes | 8,449 | 9,591 | 6,676 |
| Income tax expense | 3,296 | 3,723 | 2,646 |
| Net income | $ 5,153 | $ 5,868 | $ 4,030 |
| Income allocated to participating securities | (48) | (34) | (51) |
| Net income available to common shareholders | $ 5,105 | $ 5,834 | $ 3,979 |
| Income per share available to common shareholders | |||
| Basic | $ 0.39 | $ 0.45 | $ 0.30 |
| Diluted | $ 0.38 | $ 0.44 | $ 0.30 |
| Weighted-average common shares outstanding | |||
| Basic | 13,365,166 | 13,196,071 | 13,071,223 |
| Diluted | 13,534,067 | 13,394,535 | 13,322,083 |
| PREFERRED BANK | ||
| Condensed Consolidated Statements of Financial Condition | ||
| (unaudited) | ||
| (in thousands) | ||
| March 31, | December 31, | |
| 2014 | 2013 | |
| Assets | ||
| Cash and due from banks | $ 184,430 | $ 226,615 |
| Fed funds sold | 30,000 | 20,000 |
| Cash and cash equivalents | 214,430 | 246,615 |
| Securities available-for-sale, at fair value | 169,845 | 142,670 |
| Loans and leases | 1,370,188 | 1,323,431 |
| Less allowance for loan and lease losses | (19,777) | (19,494) |
| Less net deferred loan fees | (2,014) | (2,562) |
| Net loans and leases | 1,348,397 | 1,301,375 |
| Loans held for sale, at lower of cost or fair value | 5,977 | 6,207 |
| Other real estate owned | 8,902 | 5,602 |
| Customers' liability on acceptances | 868 | 2,061 |
| Bank furniture and fixtures, net | 4,183 | 4,205 |
| Bank-owned life insurance | 8,348 | 8,290 |
| Accrued interest receivable | 5,690 | 5,378 |
| Investment in affordable housing | 8,964 | 6,411 |
| Federal Home Loan Bank stock | 5,296 | 5,296 |
| Deferred tax assets | 22,716 | 22,879 |
| Income tax receivable | -- | 2,236 |
| Other asset | 1,522 | 9,734 |
| Total assets | $ 1,805,138 | $ 1,768,959 |
| Liabilities and Shareholders' Equity | ||
| Liabilities: | ||
| Deposits: | ||
| Demand | $ 327,036 | $ 338,530 |
| Interest-bearing demand | 477,965 | 469,976 |
| Savings | 23,824 | 22,984 |
| Time certificates of $250,000 or more | 261,984 | 213,362 |
| Other time certificates | 471,250 | 484,462 |
| Total deposits | $ 1,562,059 | $ 1,529,314 |
| Acceptances outstanding | 868 | 2,061 |
| Advances from Federal Home Loan Bank | 20,000 | 20,000 |
| Accrued interest payable | 1,153 | 983 |
| Other liabilities | 6,514 | 9,685 |
| Total liabilities | 1,590,594 | 1,562,043 |
| Commitments and contingencies | ||
| Shareholders' equity: | ||
| Preferred stock. Authorized 25,000,000 shares; no issued and outstanding shares at March 31, 2014 and December 31, 2013 | -- | -- |
| Common stock, no par value. Authorized 20,000,000 shares; issued and outstanding 13,430,736 and 13,280,653 shares at March 31, 2014 and December 31, 2013, respectively | 163,408 | 163,237 |
| Treasury stock | (19,115) | (19,115) |
| Additional paid-in-capital | 27,429 | 25,974 |
| Accumulated income | 41,833 | 36,680 |
| Accumulated other comprehensive income: | -- | -- |
| Non-credit portion of loss recognized at March 31, 2014 and December 31, 2013 | -- | -- |
| Unrealized loss on securities, available-for-sale, net of tax of $717 and $102 at March 31, 2014 and December 31, 2013, respectively | 989 | 140 |
| Total shareholders' equity | 214,544 | 206,916 |
| Total liabilities and shareholders' equity | $ 1,805,138 | $ 1,768,959 |
| PREFERRED BANK | |||||
| Selected Consolidated Financial Information | |||||
| (unaudited) | |||||
| (in thousands, except for ratios) | |||||
| As of or for the Three Months Ended | |||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |
| 2014 | 2013 | 2013 | 2013 | 2013 | |
| Unaudited historical quarterly operations data: | |||||
| Interest income | $ 18,750 | $ 18,513 | $ 18,480 | $ 16,243 | $ 16,489 |
| Interest expense | 2,247 | 2,112 | 1,967 | 1,820 | 1,830 |
| Interest income before provision for credit losses | 16,503 | 16,401 | 16,513 | 14,423 | 14,659 |
| Provision for credit losses | 1,250 | 1,800 | 1,200 | 250 | -- |
| Noninterest income | 1,028 | 214 | 213 | 718 | 858 |
| Noninterest expense | 7,832 | 5,294 | 7,671 | 7,218 | 8,841 |
| Income tax expense | 3,296 | 3,653 | 2,587 | 3,404 | 2,646 |
| Net income | 5,153 | 5,868 | 5,032 | 4,269 | 4,030 |
| Earnings per share | |||||
| Basic | $ 0.39 | $ 0.45 | $ 0.38 | $ 0.32 | $ 0.30 |
| Diluted | $ 0.38 | $ 0.44 | $ 0.37 | $ 0.32 | $ 0.30 |
| Ratios for the period: | |||||
| Return on average assets | 1.17% | 1.33% | 1.20% | 1.09% | 1.06% |
| Return on beginning equity | 10.10% | 11.62% | 10.27% | 8.90% | 8.70% |
| Net interest margin (Fully-taxable equivalent) | 3.87% | 3.85% | 4.10% | 3.85% | 4.03% |
| Noninterest expense to average assets | 1.78% | 1.18% | 1.83% | 1.84% | 2.31% |
| Efficiency ratio | 44.68% | 31.44% | 45.87% | 47.67% | 56.98% |
| Net charge-offs (recoveries) to average loans (annualized) | 0.29% | 0.20% | 0.28% | 0.83% | 0.13% |
| Unaudited quarterly statement of financial position data: | |||||
| Assets: | |||||
| Cash and cash equivalents | 214,430 | $ 246,615 | $ 190,405 | $ 181,100 | $ 158,657 |
| Securities held-to-maturity, at amortized cost | -- | -- | -- | -- | 979 |
| Securities available-for-sale, at fair value | 169,845 | 142,670 | 166,821 | 183,690 | 204,529 |
| Loans and Leases: | |||||
| Real estate - Single and multi-family residential | $ 220,193 | $ 228,490 | $ 197,119 | $ 190,037 | $ 156,613 |
| Real estate - Land for housing | 13,574 | 13,611 | 9,149 | 23,079 | 23,091 |
| Real estate - Land for income properties | 1,539 | 1,550 | 1,560 | 1,571 | 1,581 |
| Real estate - Commercial | 653,146 | 627,888 | 610,764 | 549,907 | 502,589 |
| Real estate - For sale housing construction | 29,303 | 24,680 | 22,631 | 25,177 | 31,341 |
| Real estate - Other construction | 52,014 | 48,605 | 43,413 | 46,061 | 39,366 |
| Commercial and industrial | 353,017 | 338,681 | 346,261 | 328,676 | 349,615 |
| Trade finance and other | 47,402 | 39,926 | 48,067 | 49,917 | 52,924 |
| Gross loans | 1,370,188 | 1,323,431 | 1,278,964 | 1,214,425 | 1,157,120 |
| Allowance for loan and lease losses | (19,777) | (19,494) | (18,344) | (18,011) | (20,234) |
| Net deferred loan fees | (2,014) | (2,562) | (2,429) | (2,197) | (2,175) |
| Loans excluding loans held for sale | 1,348,397 | 1,301,375 | 1,258,191 | 1,194,217 | 1,134,711 |
| Loans held for sale | 5,977 | 6,207 | 11,329 | 14,685 | 15,670 |
| Total loans, net | $ 1,354,374 | $ 1,307,582 | $ 1,269,520 | $ 1,208,902 | $ 1,150,381 |
| Other real estate owned | $ 8,902 | 5,602 | 11,936 | 14,513 | 19,874 |
| Investment in affordable housing | 8,964 | 6,411 | 4,752 | 4,940 | -- |
| Federal Home Loan Bank stock | 5,296 | 5,296 | 5,296 | 5,296 | 4,282 |
| Other assets | 43,327 | 54,783 | 52,439 | 58,872 | 49,067 |
| Total assets | $ 1,805,138 | 1,768,959 | 1,701,169 | 1,657,313 | 1,587,769 |
| Liabilities: | |||||
| Deposits: | |||||
| Demand | $ 327,036 | $ 338,530 | $ 338,579 | $ 350,641 | $ 409,253 |
| Interest-bearing demand | 477,965 | 469,976 | 409,319 | 378,360 | 337,523 |
| Savings | 23,824 | 22,984 | 23,223 | 21,713 | 21,953 |
| Time certificates of $250,000 or more | 261,984 | 213,362 | 203,579 | 213,494 | 204,212 |
| Other time certificates | 471,250 | 484,462 | 495,437 | 468,035 | 411,058 |
| Total deposits | $ 1,562,059 | $ 1,529,314 | $ 1,470,137 | $ 1,432,243 | $ 1,383,999 |
| Advances from Federal Home Loan Bank | $ 20,000 | 20,000 | 20,000 | 20,000 | -- |
| Other liabilities | 8,536 | 12,729 | 10,743 | 10,630 | 11,461 |
| Total liabilities | $ 1,590,594 | 1,562,043 | 1,500,880 | 1,462,873 | 1,395,460 |
| Equity: | |||||
| Net common stock, no par value | $ 171,722 | $ 170,096 | $ 169,925 | $ 169,395 | $ 168,845 |
| Retained earnings | 41,833 | 36,680 | 30,812 | 25,780 | 21,511 |
| Accumulated other comprehensive income | 989 | 140 | (448) | (735) | 1,953 |
| Total shareholders' equity | $ 214,544 | 206,916 | 200,289 | 194,440 | 192,309 |
| Total liabilities and shareholders' equity | $ 1,805,138 | 1,768,959 | 1,701,169 | 1,657,313 | 1,587,769 |
| Ratios as of period end: | |||||
| Tier 1 leverage capital ratio | 11.97% | 11.80% | 11.84% | 12.18% | 12.01% |
| Tier 1 risk-based capital ratio | 13.65% | 13.78% | 13.34% | 13.51% | 13.61% |
| Total risk-based capital ratio | 14.90% | 15.03% | 14.58% | 14.76% | 14.86% |
| Allowances for credit losses to loans and leases at end of period ** | 1.44% | 1.47% | 1.43% | 1.48% | 1.75% |
| Allowance for credit losses to non-performing loans and leases | 171.94% | 138.80% | 103.47% | 71.79% | 74.13% |
| Average balances: | |||||
| Total loans and leases* | $ 1,351,555 | $ 1,283,583 | $ 1,245,753 | $ 1,198,818 | $ 1,139,317 |
| Earning assets | $ 1,739,768 | $ 1,695,758 | $ 1,608,366 | $ 1,520,024 | $ 1,487,826 |
| Total assets | $ 1,783,384 | $ 1,749,140 | $ 1,665,591 | $ 1,572,529 | $ 1,545,400 |
| Total deposits | $ 1,540,369 | $ 1,512,318 | $ 1,436,385 | $ 1,362,295 | $ 1,344,983 |
| * Loans held for sale are included | |||||
| ** Loans held for sale are excluded | |||||
| Preferred Bank | ||
| Loan and Credit Quality Information | ||
| Allowance For Credit Losses & Loss History | ||
| Three Months Ended | Year Ended | |
| March 31, 2014 | December 31, 2013 | |
| (Dollars in 000's) | ||
| Allowance For Credit Losses | ||
| Balance at Beginning of Period | $ 19,494 | $ 20,607 |
| Charge-Offs | ||
| Commercial & Industrial | 111 | 4,158 |
| Mini-perm Real Estate | 858 | 1,668 |
| Construction - Residential | -- | 2,438 |
| Construction - Commercial | -- | -- |
| Land - Residential | -- | -- |
| Land - Commercial | -- | -- |
| Others | -- | -- |
| Total Charge-Offs | 969 | 8,264 |
| Recoveries | ||
| Commercial & Industrial | 2 | 366 |
| Mini-perm Real Estate | -- | 1,379 |
| Construction - Residential | -- | 1,951 |
| Construction - Commercial | -- | 163 |
| Land - Residential | -- | 38 |
| Land - Commercial | -- | 4 |
| Total Recoveries | 2 | 3,901 |
| Net Loan Charge-Offs | 967 | 4,363 |
| Provision for Credit Losses | 1,250 | 3,250 |
| Balance at End of Period | $ 19,777 | $ 19,494 |
| Average Loans and Leases* | $ 1,351,555 | $ 1,217,383 |
| Loans and Leases at end of Period* | $ 1,376,165 | $ 1,329,638 |
| Net Charge-Offs to Average Loans and Leases | 0.29% | 0.36% |
| Allowances for credit losses to loans and leases at end of period ** | 1.44% | 1.47% |
| * Loans held for sale are included | ||
| ** Loans held for sale are excluded | ||
AT THE COMPANY: Edward J. Czajka Executive Vice President Chief Financial Officer (213) 891-1188 AT FINANCIAL PROFILES: Kristen Papke General Information (310) 663-8007
