LOS ANGELES, July 23, 2014 (GLOBE NEWSWIRE) -- Preferred Bank (Nasdaq:PFBC), an independent commercial bank focusing on the diversified California market, today reported results for the quarter ended June 30, 2014. Preferred Bank ("the Bank") reported net income of $5.9 million or $0.43 per diluted share for the second quarter of 2014. This compares to net income of $4.3 million or $0.32 per diluted share for the second quarter of 2013 and compares to net income of $5.2 million or $0.38 per diluted share for the first quarter of 2014. Net income for the second quarter of 2014 was aided by $768,000 in net gains on sales of other real estate owned ("OREO"). Net income for the six months ended June 30, 2014 totaled $11.1 million or $0.81 per diluted share compared to $8.3 million or $0.61 per diluted share for the same period last year. This represents an increase of $2.8 million or 33.7% over 2013 year to date earnings.
Highlights from the second quarter of 2014:
- Quarterly net income of $0.43 per diluted share, a 34% increase from prior year
- Strong linked quarter loan growth of $68 million and deposit growth of $88 million
- Net interest margin remained steady at 3.93%
- ROA was 1.33%
- ROBE was 11.1%
- Efficiency ratio was 39.3%
Li Yu, Chairman and CEO commented, "The second quarter of 2014 was one of growth for Preferred Bank. First, linked quarter loan growth was $68 million, or 4.9%. Loan growth was well balanced between commercial & industrial loans and real estate loans. This quarter we also saw linked quarter deposit growth of $88 million or 5.6%. The extent of this quarter's deposit growth was a pleasant surprise, especially considering 70% of that deposit growth was in DDA, which also contributed to a 6 basis point NIM expansion.
Substantially all of the loan growth this quarter occurred in the latter part of June, which resulted in a limited impact to the quarter's revenue growth. Meanwhile, we recorded what we believe is a full provision for loan losses to account for the growth.
We sold two OREO properties this quarter at a gain. As of June 30, 2014, there is only one OREO property left on our books and we are hopeful the property can be disposed of before the end of the year. Gains from OREO sales net of valuations were $768,000 this quarter.
During the first half of the year, we incurred a high level of consulting fees, primarily in the area of BSA and Compliance, but this also included I.T., Credit Administration, Treasury and other areas. Much of the work is complete and correspondingly we expect these costs to abate in the second half of the year. Despite the above, our efficiency ratio for the quarter, aided by the OREO gains, was 39.3%.
I am very pleased to report the Bank's second quarter earnings of $5.94 million or $0.43 per diluted share. This is 34% better than the $0.32 per diluted share that we earned in the same period last year."
Operating Results
Net Interest Income and Net Interest Margin. Net interest income before provision for loan and lease losses increased to $17.1 million compared to $14.4 million recorded in the second quarter of 2013 and an increase from the $16.5 million recorded in the first quarter of 2014. The increase over the second quarter of 2013 and over the prior quarter is due primarily to loan growth. The Bank's taxable equivalent net interest margin was 3.93% for the second quarter of 2014, a 6 basis point increase from the 3.87% achieved in the first quarter of 2014 and a 10 basis point increase over the 3.83% recorded in the second quarter of 2013. The increase in the margin from the first quarter of 2014 was primarily due to an increase in total average loans as well as an increase in investment securities as the Bank put some of its excess cash to work during the latter part of the first quarter and into the second quarter. This helped to move total asset yields up slightly as the Bank was able to maintain a flat cost of funds on a sequential quarter basis.
Noninterest Income. For the second quarter of 2014, noninterest income was $914,000 compared with $718,000 for the same quarter last year and compared to $1,028,000 for the first quarter of 2014. Service charges on deposits were down compared to the same period last year but Trade Finance income was up significantly from last year due to an increase in LC fees. In comparing to the first quarter of 2014; service charges were down $57,000 while Trade Finance income was up by $32,000 and other income was down $89,000.
Noninterest Expense.Total noninterest expense was $7.1 million for the second quarter of 2014, down slightly from the $7.2 million recorded in the same quarter last year and down when compared to the $7.8 million posted in the first quarter of 2014. Salaries and benefits expense totaled $3.9 million for the second quarter of 2014 compared to $4.0 million for the same period last year and compared to $4.7 million for the first quarter of 2014. Although relatively flat compared to this period last year, salaries & benefits expense was down compared to the first quarter due to a lower level of payroll tax expense which is associated with bonus payouts made in the first quarter of 2014. In addition, a higher level of loan origination/renewal activity in this quarter drove a larger credit to salary expense as those loan origination costs are capitalized. Occupancy expense was flat compared to both other periods; coming in at approximately $800,000 for all three periods presented. Professional services expense was $1,347,000 for the second quarter of 2014 compared to $794,000 for the same quarter of 2013 and $761,000 recorded in the first quarter of 2014. The increase was due primarily to consulting fees associated with the enhancement of the Bank's BSA and Compliance programs. OREO related and loans held for sale ("LHFS") expenses totaled $(715,000) for the second quarter of 2014 compared to $206,000 for the same period last year and compared to $(78,000) for the first quarter of 2014. The Bank recorded a gain on sale on one OREO property and wrote down the value of another property for a net gain of $768,000. Other expenses were $1.3 million in the second quarter of 2014, an increase over the same period in 2013 and an increase over the $1.2 million recorded in the first quarter of 2014. The increase over 2013 is due to the depreciation expense of the investment in the Bank's low income housing tax credits.
Income Taxes
The Bank recorded a provision for income taxes of $3.9 million for the second quarter of 2014. This represents an effective tax rate ("ETR") of 39.5% for the quarter. This is up slightly from the ETR of 39.0% for the first quarter of 2014. 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 June 30, 2014 were $1.44 billion, an increase of $114.5 million or 8.6% over the total of $1.33 billion as of December 31, 2013. The tables below indicate loans by type as of June 30, 2014 as compared to the end of 2013:
Loans by Type – Year over Year (ooo's)
| Loan Type (000's) | June 30, 2014 | December 31, 2013 | $ Change | % Change |
| R/E – Residential/Multifamily | $ 208,080 | $ 228,490 | $ (20,410) | -8.9% |
| R/E – Land | 15,065 | 15,161 | (96) | -0.6% |
| R/E – Commercial | 700,725 | 627,888 | 72,837 | 11.6% |
| R/E – Construction | 99,777 | 73,285 | 26,492 | 36.2% |
| Commercial & Industrial | 414,884 | 378,607 | 36,277 | 9.6% |
| Loans Held for Sale | 5,632 | 6,207 | (575) | -9.3% |
| Total | $ 1,444,163 | $ 1,329,638 | $ 114,525 | 8.6% |
Total deposits as of June 30, 2014 were $1.65 billion, an increase of $120.5 million from the $1.53 billion at December 31, 2013. As of June 30, 2014 compared to December 31, 2013; noninterest-bearing demand deposits increased by $50.0 million or 14.8%, interest-bearing demand and savings deposits increased by $21.1 million or 4.3% and time deposits increased by $49.5 million or 7.1%. Total assets were $1.9 billion, a $134.6 million or 7.6% increase from the total of $1.77 billion as of December 31, 2013.
Asset Quality
As of June 30, 2014 total nonaccrual loans (excluding loans held for sale) increased to $12.7 million compared to $7.8 million as of December 31, 2013. Total net charge-offs for the second quarter of 2014 were $2.3 million compared to $967,000 for the first quarter of 2014. The Bank recorded a provision for loan losses of $1.1 million for the second quarter of 2014. This compares to a provision of $250,000 recorded in the same quarter last year and compares to a $1.25 million provision recorded in the first quarter of 2014. Although nonperforming loans did tick up slightly during the quarter, the loan that was placed on nonaccrual status during the quarter is real estate secured and is now carried below the appraised value of the underlying property. Management believes that resolution will occur during the next two quarters at its current book value. During the second quarter, the Bank was advised by the lead bank for one of its nonaccrual loans (held for sale) that the borrower has proposed to make a large principal reduction. This payment is expected to be received in the third quarter of 2014 and will result in a notable recovery for Preferred Bank (due to a prior charge-off) and the full payoff of this held for sale nonaccrual loan. Due to the significance of this transaction the Bank expects to issue a press release upon the closing of the transaction. The allowance for loan loss at June 30, 2014 was $18.6 million or 1.29% of total loans compared to $19.5 million or 1.47% of total loans at December 31, 2013.
NPA Migration
Non-Performing Assets Migration – Q2 2014
|
Non-Accrual Loans |
OREO |
|
| Balance, March 31, 2014 | $ 5,526 | $ 8,902 |
| Additions | 9,479 | - |
| Transfer to OREO | - | - |
| Loans Cured | - | - |
| Sales/Payoffs | (1,206) | (5,602) |
| Charge-off | (1,108) | (980) |
| Balance, June 30, 2014 | $ 12,689 | $ 2,320 |
The tables above exclude loans held for sale and TDR's that are on accrual status. Performing TDR's totaled $400,000 as of June 30, 2014. The $5.6 million in loans held for sale consists of one loan which is current, on nonaccrual status.
OREO
Total OREO decreased to $2.3 million compared to $8.9 million as of March 31, 2014. This was primarily due to the sale of a $5.6 million property and the partial writedown of another property. In addition, the Bank sold a small OREO property which had been previously charged off.
Capitalization
As of June 30, 2014, the Bank's tier 1 leverage ratio was 12.31%, the tier 1 risk based capital ratio was 13.16% and the total risk-based capital ratio was 14.28%. 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 second quarter 2014 financial results will be held tomorrow, July 24, 2014 at 2:00 p.m. Eastern / 11:00 a.m. Pacific. Interested participants and investors may access the conference call by dialing 800-344-6698 (domestic) or 785-830-7979 (international). The passcode for the call is 9557103. 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 888-203-1112 (domestic) or 719-457-0820 (international) through July 31, 2014; the passcode is 9557103.
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 | |||
| June 30, | March 31, | June 30, | |
| 2014 | 2014 | 2013 | |
| Interest income: | |||
| Loans, including fees | $ 17,681 | $ 17,342 | $ 14,686 |
| Investment securities | 1,565 | 1,389 | 1,552 |
| Fed funds sold | 48 | 19 | 5 |
| Total interest income | 19,294 | 18,750 | 16,243 |
| Interest expense: | |||
| Interest-bearing demand | 627 | 646 | 508 |
| Savings | 17 | 19 | 22 |
| Time certificates | 1,554 | 1,550 | 1,288 |
| FHLB borrowings | 31 | 32 | 3 |
| Total interest expense | 2,229 | 2,247 | 1,820 |
| Net interest income | 17,065 | 16,503 | 14,423 |
| Provision for loan losses | 1,100 | 1,250 | 250 |
| Net interest income after provision for loan losses | 15,965 | 15,253 | 14,173 |
| Noninterest income: | |||
| Fees & service charges on deposit accounts | 399 | 456 | 570 |
| Trade finance income | 331 | 299 | 144 |
| BOLI income | 82 | 82 | 83 |
| Net loss on sale of investment securities | - | - | (358) |
| Other income | 102 | 191 | 279 |
| Total noninterest income | 914 | 1,028 | 718 |
| Noninterest expense: | |||
| Salary and employee benefits | 3,867 | 4,735 | 3,975 |
| Net occupancy expense | 804 | 801 | 805 |
| Business development and promotion expense | 122 | 87 | 83 |
| Professional services | 1,347 | 761 | 794 |
| Office supplies and equipment expense | 285 | 338 | 301 |
| Total other-than-temporary impairment losses | - | - | 95 |
| Portion of loss recognized in other comprehensive income | - | - | (92) |
| Other real estate owned related expense (income) and valuation allowance on LHFS | (715) | (78) | 206 |
| Other | 1,348 | 1,188 | 1,051 |
| Total noninterest expense | 7,058 | 7,832 | 7,218 |
| Income before provision for income taxes | 9,821 | 8,449 | 7,673 |
| Income tax expense | 3,881 | 3,296 | 3,404 |
| Net income | $ 5,940 | $ 5,153 | $ 4,269 |
| Income allocated to participating securities | (77) | (48) | (54) |
| Net income available to common shareholders | $ 5,863 | $ 5,105 | $ 4,215 |
| Income per share available to common shareholders | |||
| Basic | $ 0.44 | $ 0.39 | $ 0.32 |
| Diluted | $ 0.43 | $ 0.38 | $ 0.32 |
| Weighted-average common shares outstanding | |||
| Basic | 13,261,820 | 13,241,885 | 13,085,394 |
| Diluted | 13,612,772 | 13,534,067 | 13,355,059 |
| PREFERRED BANK | |||
| Condensed Consolidated Statements of Operations | |||
| (unaudited) | |||
| (in thousands, except for net income per share and shares) | |||
| For the Six Months Ended | |||
| June 30, | June 30, | Change | |
| 2014 | 2013 | % | |
| Interest income: | |||
| Loans, including fees | $ 35,023 | $ 29,625 | 18.2% |
| Investment securities | 2,954 | 3,102 | -4.8% |
| Fed funds sold | 67 | 5 | 1170.2% |
| Total interest income | 38,044 | 32,732 | 16.2% |
| Interest expense: | |||
| Interest-bearing demand | 1,273 | 1,039 | 22.6% |
| Savings | 36 | 43 | -15.9% |
| Time certificates | 3,104 | 2,565 | 21.0% |
| FHLB borrowings | 63 | 3 | 1911.1% |
| Total interest expense | 4,476 | 3,650 | 22.6% |
| Net interest income | 33,568 | 29,082 | 15.4% |
| Provision for credit losses | 2,350 | 250 | 840.0% |
| Net interest income after provision for loan losses | 31,218 | 28,832 | 8.3% |
| Noninterest income: | |||
| Fees & service charges on deposit accounts | 855 | 1,117 | -23.5% |
| Trade finance income | 630 | 351 | 79.2% |
| BOLI income | 164 | 164 | 0.0% |
| Net loss on sale of investment securities | - | (358) | -100.0% |
| Other income | 293 | 301 | -2.5% |
| Total noninterest income | 1,942 | 1,575 | 23.3% |
| Noninterest expense: | |||
| Salary and employee benefits | 8,602 | 8,248 | 4.3% |
| Net occupancy expense | 1,605 | 1,573 | 2.0% |
| Business development and promotion expense | 208 | 178 | 16.7% |
| Professional services | 2,108 | 1,683 | 25.2% |
| Office supplies and equipment expense | 623 | 608 | 2.5% |
| Total other-than-temporary impairment losses | - | 99 | -100.0% |
| Portion of loss recognized in other comprehensive income | - | (92) | -100.0% |
| Other real estate owned related expense (income) and valuation allowance on LHFS | (793) | 1,570 | -150.5% |
| Other | 2,537 | 2,193 | 15.7% |
| Total noninterest expense | 14,890 | 16,059 | -7.3% |
| Income before provision for income taxes | 18,270 | 14,348 | 27.3% |
| Income tax expense | 7,177 | 6,049 | 18.6% |
| Net income | $ 11,093 | $ 8,299 | 33.7% |
| Income allocated to participating securities | (123) | (105) | 17.3% |
| Net income available to common shareholders | $ 10,970 | $ 8,194 | 33.9% |
| Income per share available to common shareholders | |||
| Basic | $ 0.83 | $ 0.63 | 32.1% |
| Diluted | $ 0.81 | $ 0.61 | 31.7% |
| Weighted-average common shares outstanding | |||
| Basic | 13,251,908 | 13,078,347 | 1.3% |
| Diluted | 13,570,967 | 13,347,084 | 1.7% |
| PREFERRED BANK | ||
| Condensed Consolidated Statements of Financial Condition | ||
| (unaudited) | ||
| (in thousands) | ||
|
June 30, |
December 31, | |
| 2014 | 2013 | |
| Assets | ||
| Cash and due from banks | $ 207,585 | $ 226,615 |
| Fed funds sold | 25,000 | 20,000 |
| Cash and cash equivalents | 232,585 | 246,615 |
| Securities available-for-sale, at fair value | 185,288 | 142,670 |
| Loans and leases | 1,438,531 | 1,323,431 |
| Less allowance for loan and lease losses | (18,599) | (19,494) |
| Less net deferred loan fees | (2,159) | (2,562) |
| Net loans and leases | 1,417,773 | 1,301,375 |
| Loans held for sale, at lower of cost or fair value | 5,632 | 6,207 |
| Other real estate owned | 2,320 | 5,602 |
| Customers' liability on acceptances | 1,935 | 2,061 |
| Bank furniture and fixtures, net | 4,075 | 4,205 |
| Bank-owned life insurance | 8,407 | 8,290 |
| Accrued interest receivable | 5,733 | 5,378 |
| Investment in affordable housing | 8,706 | 6,411 |
| Federal Home Loan Bank stock | 6,155 | 5,296 |
| Deferred tax assets | 22,002 | 23,331 |
| Income tax receivable | - | 1,783 |
| Other asset | 2,972 | 9,734 |
| Total assets | $ 1,903,583 | $ 1,768,959 |
| Liabilities and Shareholders' Equity | ||
| Liabilities: | ||
| Deposits: | ||
| Demand | $ 388,497 | $ 338,530 |
| Interest-bearing demand | 489,313 | 469,976 |
| Savings | 24,712 | 22,984 |
| Time certificates of $250,000 or more | 250,276 | 213,362 |
| Other time certificates | 497,021 | 484,462 |
| Total deposits | $ 1,649,819 | $ 1,529,314 |
| Acceptances outstanding | 1,935 | 2,061 |
| Advances from Federal Home Loan Bank | 20,000 | 20,000 |
| Accrued interest payable | 1,319 | 983 |
| Other liabilities | 8,122 | 9,685 |
| Total liabilities | 1,681,195 | 1,562,043 |
| Commitments and contingencies | ||
| Shareholders' equity: | ||
| Preferred stock. Authorized 25,000,000 shares; no issued and outstanding shares at June 30, 2014 and December 31, 2013 | — | — |
| Common stock, no par value. Authorized 20,000,000 shares; issued and outstanding 13,441,488 and 13,280,653 shares at June 30, 2014 and December 31, 2013, respectively | 163,509 | 163,237 |
| Treasury stock | (19,115) | (19,115) |
| Additional paid-in-capital | 28,248 | 25,974 |
| Accumulated income | 47,773 | 36,680 |
| Accumulated other comprehensive income: | ||
| Unrealized loss on securities, available-for-sale, net of tax of $1,432 and $102 at June 30, 2014 and December 31, 2013, respectively | 1,973 | 140 |
| Total shareholders' equity | 222,388 | 206,916 |
| Total liabilities and shareholders' equity | $ 1,903,583 | $ 1,768,959 |
| PREFERRED BANK | |||||
| Selected Consolidated Financial Information | |||||
| (unaudited) | |||||
| (in thousands, except for ratios) | |||||
| As of or for the Three Months Ended | |||||
| June 30, | March 31, | December 31, | September 30, | June 30, | |
| 2014 | 2014 | 2013 | 2013 | 2013 | |
| Unaudited historical quarterly operations data: | |||||
| Interest income | $ 19,294 | $ 18,750 | $ 18,513 | $ 18,480 | $ 16,243 |
| Interest expense | 2,229 | 2,247 | 2,112 | 1,967 | 1,820 |
| Interest income before provision for credit losses | 17,065 | 16,503 | 16,401 | 16,513 | 14,423 |
| Provision for credit losses | 1,100 | 1,250 | 1,800 | 1,200 | 250 |
| Noninterest income | 914 | 1,028 | 214 | 213 | 718 |
| Noninterest expense | 7,058 | 7,832 | 5,412 | 7,789 | 7,218 |
| Income tax expense | 3,881 | 3,296 | 3,535 | 2,705 | 3,404 |
| Net income | 5,940 | 5,153 | 5,868 | 5,032 | 4,269 |
| Earnings per share | |||||
| Basic | $ 0.44 | $ 0.39 | $ 0.45 | $ 0.38 | $ 0.32 |
| Diluted | $ 0.43 | $ 0.38 | $ 0.43 | $ 0.37 | $ 0.32 |
| Ratios for the period: | |||||
| Return on average assets | 1.33% | 1.17% | 1.33% | 1.20% | 1.09% |
| Return on beginning equity | 11.11% | 10.10% | 11.62% | 10.27% | 8.90% |
| Net interest margin (Fully-taxable equivalent) | 3.93% | 3.87% | 3.85% | 4.10% | 3.83% |
| Noninterest expense to average assets | 1.58% | 1.78% | 1.18% | 1.83% | 1.84% |
| Efficiency ratio | 39.26% | 44.68% | 31.44% | 45.87% | 47.67% |
| Net charge-offs (recoveries) to average loans (annualized) | 0.66% | 0.29% | 0.20% | 0.28% | 0.83% |
| Unaudited quarterly statement of financial position data: | |||||
| Assets: | |||||
| Cash and cash equivalents | 232,585 | 214,430 | $ 246,615 | $ 190,405 | $ 181,100 |
| Securities available-for-sale, at fair value | 185,288 | 169,845 | 142,670 | 166,821 | 183,690 |
| Loans and Leases: | |||||
| Real estate - Single and multi-family residential | $ 208,080 | $ 220,193 | $ 228,490 | $ 197,119 | $ 190,037 |
| Real estate - Land for housing | 13,536 | 13,574 | 13,611 | 9,149 | 23,079 |
| Real estate - Land for income properties | 1,529 | 1,539 | 1,550 | 1,560 | 1,571 |
| Real estate - Commercial | 700,725 | 653,146 | 627,888 | 610,764 | 549,907 |
| Real estate - For sale housing construction | 36,069 | 29,303 | 24,680 | 22,631 | 25,177 |
| Real estate - Other construction | 63,708 | 52,014 | 48,605 | 43,413 | 46,061 |
| Commercial and industrial | 374,128 | 353,017 | 338,681 | 346,261 | 328,676 |
| Trade finance and other | 40,756 | 47,402 | 39,926 | 48,067 | 49,917 |
| Gross loans | 1,438,531 | 1,370,188 | 1,323,431 | 1,278,964 | 1,214,425 |
| Allowance for loan and lease losses | (18,599) | (19,777) | (19,494) | (18,344) | (18,011) |
| Net deferred loan fees | (2,159) | (2,014) | (2,562) | (2,429) | (2,197) |
| Loans excluding loans held for sale | 1,417,773 | 1,348,397 | 1,301,375 | 1,258,191 | 1,194,217 |
| Loans held for sale | 5,632 | 5,977 | 6,207 | 11,329 | 14,685 |
| Total loans, net | $ 1,423,405 | $ 1,354,374 | $ 1,307,582 | $ 1,269,520 | $ 1,208,902 |
| Other real estate owned | $ 2,320 | $ 8,902 | 5,602 | 11,936 | 14,513 |
| Investment in affordable housing | 8,706 | 8,964 | 6,411 | 4,752 | 4,940 |
| Federal Home Loan Bank stock | 6,155 | 5,296 | 5,296 | 5,296 | 5,296 |
| Other assets | 45,124 | 43,327 | 54,783 | 52,439 | 58,872 |
| Total assets | $ 1,903,583 | $ 1,805,138 | $ 1,768,959 | $ 1,701,169 | $ 1,657,313 |
| Liabilities: | |||||
| Deposits: | |||||
| Demand | $ 388,497 | $ 327,036 | $ 338,530 | $ 338,579 | $ 350,641 |
| Interest-bearing demand | 489,313 | 477,965 | 469,976 | 409,319 | 378,360 |
| Savings | 24,712 | 23,824 | 22,984 | 23,223 | 21,713 |
| Time certificates of $250,000 or more | 250,276 | 261,984 | 213,362 | 203,579 | 213,494 |
| Other time certificates | 497,021 | 471,250 | 484,462 | 495,437 | 468,035 |
| Total deposits | $ 1,649,819 | $ 1,562,059 | $ 1,529,314 | $ 1,470,137 | $ 1,432,243 |
| Advances from Federal Home Loan Bank | $ 20,000 | $ 20,000 | 20,000 | 20,000 | 20,000 |
| Other liabilities | 11,376 | 8,536 | 12,729 | 10,743 | 10,630 |
| Total liabilities | $ 1,681,195 | $ 1,590,594 | $ 1,562,043 | $ 1,500,880 | $ 1,462,873 |
| Equity: | |||||
| Net common stock, no par value | $ 172,642 | $ 171,722 | $ 170,096 | $ 169,925 | $ 169,395 |
| Retained earnings | 47,773 | 41,833 | 36,680 | 30,812 | 25,780 |
| Accumulated other comprehensive income | 1,973 | 989 | 140 | (448) | (735) |
| Total shareholders' equity | $ 222,388 | $ 214,544 | $ 206,916 | $ 200,289 | $ 194,440 |
| Total liabilities and shareholders' equity | $ 1,903,583 | $ 1,805,138 | $ 1,768,959 | $ 1,701,169 | $ 1,657,313 |
| Ratios as of period end: | |||||
| Tier 1 leverage capital ratio | 12.31% | 11.97% | 11.80% | 11.84% | 12.18% |
| Tier 1 risk-based capital ratio | 13.16% | 13.65% | 13.78% | 13.34% | 13.51% |
| Total risk-based capital ratio | 14.28% | 14.90% | 15.03% | 14.58% | 14.76% |
| Allowances for credit losses to loans and leases at end of period ** | 1.29% | 1.44% | 1.47% | 1.43% | 1.48% |
| Allowance for credit losses to non-performing loans and leases | 101.52% | 171.94% | 138.80% | 103.47% | 71.79% |
| Average balances: | |||||
| Total loans and leases* | $ 1,378,444 | $ 1,351,555 | $ 1,283,583 | $ 1,245,753 | $ 1,198,818 |
| Earning assets | $ 1,752,032 | $ 1,739,768 | $ 1,695,758 | $ 1,608,366 | $ 1,520,024 |
| Total assets | $ 1,792,317 | $ 1,783,384 | $ 1,749,140 | $ 1,665,591 | $ 1,572,529 |
| Total deposits | $ 1,543,739 | $ 1,540,369 | $ 1,512,318 | $ 1,436,385 | $ 1,362,295 |
| * 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 | ||
| Six Months Ended | Year Ended | |
| June 30, 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 | 3,136 | 1,668 |
| Construction - Residential | - | 2,438 |
| Construction - Commercial | - | - |
| Land - Residential | - | - |
| Land - Commercial | - | - |
| Others | - | - |
| Total Charge-Offs | 3,247 | 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 | 3,245 | 4,363 |
| Provision for Credit Losses | 2,350 | 3,250 |
| Balance at End of Period | $ 18,599 | $ 19,494 |
| Average Loans and Leases* | $ 1,358,911 | $ 1,217,383 |
| Loans and Leases at end of Period* | $ 1,444,163 | $ 1,329,638 |
| Net Charge-Offs to Average Loans and Leases | 0.48% | 0.36% |
| Allowances for credit losses to loans and leases at end of period ** | 1.29% | 1.47% |
| * Loans held for sale are included | ||
| ** Loans held for sale are excluded | ||