LOS ANGELES, July 25, 2012 (GLOBE NEWSWIRE) -- Preferred Bank (Nasdaq:PFBC), an independent commercial bank focusing on the Chinese-American and diversified Southern California mainstream market, today reported results for the quarter ended June 30, 2012. Preferred Bank ("the Bank") reported a net loss of $5.6 million or $0.43 per diluted share for the second quarter of 2012. This unexpected loss for the quarter was previously announced in a Press Release dated July 5, 2012. This quarterly loss compares to net income of $1.7 million or $0.13 per diluted share for the second quarter of 2011 and compares to net income of $21.7 million or $1.62 per diluted share for the first quarter of 2012. Net income for the first quarter of 2012 was aided by the $19.8 million reversal of the Bank's valuation allowance on its deferred tax asset ("DTA"). The loss for the second quarter of 2012 was mainly due to a provision for loan losses of $14.5 million which was the result of two loan relationships which were significantly written down in the quarter. All share and per share information has been adjusted to reflect the one-for-five reverse stock split which was effected on June 17, 2011.
- Highlights from the second quarter of 2012 include:
- Deposits increased $59.7 million during the quarter while deposit costs continue to decline
- Loans (including held for sale) increased $15.5 million during the quarter
- The Bank has no loans that are 30-89 days past due
- Even after the inclusion of the new nonaccrual loans, nonaccrual loans (excluding held for sale) decreased $4.9 million
Li Yu, Chairman, President and CEO commented, "During the quarter, we incurred two large credit charges which were previously reported in a press release on July 5, 2012, and are detailed once again later in this release. The results of these credit charges caused a loan loss provision of $14.5 million and a net loss for the quarter of $5.6 million. In addition, the charge-offs reduced total loans outstanding by nearly $16 million and lastly, the inclusion of the remaining balances of these loans as non accrual overshadowed what was otherwise a satisfactory effort in terms of NPA resolution of $11.5 million for the quarter.
"During the quarter, loan production was quite healthy given that we reported a net increase in loan totals despite the effects of the loan charge-offs noted above and the pay-off of a large loan relationship of $31 million on April 2, 2012, which we reported during the first quarter conference call. We expect third quarter loan production to be comparable to the second quarter of 2012. Notwithstanding the above, the Bank's deposit levels continued to improve both in terms of level and cost. However, the Bank's excess cash affected our net interest margin which was less than our own expectation. Continuous deployment of our excess cash in the third and forth quarters should improve our net interest margin.
"While we are disappointed with the loss reported this quarter, we are not discouraged as we believe these events are isolated in nature. While it will take longer to work out some of the non performing assets, the fundamentals of the Bank remain strong. Going forward, we expect continued profitability and hopefully continued improvement in profitability."
Operating Results
Net Interest Income and Net Interest Margin. Net interest income before provision for loan and lease losses increased to $13.2 million from the $10.3 million recorded in the second quarter of 2011 and an increase from $13.0 million for the first quarter of 2012. The Bank's taxable equivalent net interest margin was 3.99% for the second quarter of 2012, a 42 basis point increase over the 3.57% achieved in the second quarter of 2011 and a 7 basis point decrease from the 4.06% recorded in the first quarter of 2012. The slight decline in margin in the second quarter compared to the first quarter was due to a higher level of non-recurring interest items (interest recoveries on previously charged off loans less nonaccrual interest reversals) in the first quarter over the second quarter. Excluding these items, the net interest margin would have been 3.93% in the second quarter and 3.86% in the first quarter resulting in a sequential quarterly increase in the net interest margin of 7 basis points. The improvement is most noted in terms of interest expense reductions which declined to $1.9 million for the second quarter of 2012 from $2.5 million recorded in the second quarter of 2011 and the $2.2 million for the first quarter of 2012.
Noninterest Income. For the second quarter of 2012, noninterest income was $1.5 million compared with $628,000 for the same quarter last year and compared to $618,000 for the first quarter of 2012. The second quarter of 2012 included a gain on sale of investment securities of $488,000 and a gain on the sale of a nonperforming note of $336,000. Service charges on deposits and trade finance income remained relatively flat in the second quarter of 2012 compared to the same period last year and for the first quarter of 2012.
Noninterest Expense.Total noninterest expense was $8.0 million for the second quarter of 2012, compared to $7.5 million for the same period last year and $8.9 million for the first quarter of 2012. Salaries and benefits expense was flat compared to the second quarter of 2011 but declined by $946,000 compared to the first quarter of 2012 due to a reversal of bonus expense this quarter with the Bank's second quarter loss. Occupancy expense was relatively unchanged; coming in at $742,000 compared to the $778,000 recorded in the same period in 2011 and $752,000 recorded in the first quarter of 2012. Professional services expense was $630,000 for the second quarter of 2012 compared to $517,000 for the second quarter of 2011 and the $590,000 posted in the first quarter of 2012. OREO-related expenses totaled $2.3 million for the second quarter of 2012 (consisting of $542,000 valuation charges/loss on sale) and this represented an increase from the $2.0 million recorded in the first quarter of 2012. Other expenses were $1.4 million in the second quarter of 2012, a decrease of $338,000 from the same period in 2011 and a decrease of $304,000 over the first quarter of 2012. The decreases were due to reduced expenses in a number of categories including regulatory assessments.
Balance Sheet Summary
Total gross loans and leases (including loans held for sale) at June 30, 2012 were $1.01 billion, up from $953.6 million as of December 31, 2011 and up from the $992.8 million as of March 31, 2012. Comparing balances as of June 30, 2012 to December 31, 2011: Residential real estate loans increased from $120.0 million to $132.3 million; total land loans decreased from $39.2 million to $25.0 million; commercial real estate loans increased from $416.0 million to $452.8 million; for-sale housing construction loans increased from $41.0 million to $42.0 million; other construction loans decreased from $31.0 million to $24.1 million and total commercial loans increased from $302.5 million to $322.0 million.
Total deposits as of June 30, 2012 were $1.24 billion, an increase of $117.9 million from the $1.12 billion at December 31, 2011. As of June 30, 2012 compared to December 31, 2011; noninterest-bearing demand deposits increased by $125.3 million or 52.2%, interest-bearing demand and savings deposits increased by $34.5 million or 13.5% and time deposits decreased by $41.9 million or 6.7%. Total borrowings decreased by $26.0 million as the Bank paid off it's senior debt that matured in February. Total assets were $1.42 billion, a $109.9 million or 8.4% increase from the total of $1.31 billion as of December 31, 2011.
Asset Quality
As of June 30, 2012 total nonaccrual loans decreased to $23.6 million (excluding loans held for sale) compared to $43.5 million as of December 31, 2011 and compared to $28.4 million as of March 31, 2012. Total net charge-offs for the second quarter of 2012 were $15.6 million compared to net charge-offs of $2.6 million for the first quarter of 2012. The preponderance of the charge-offs in the second quarter were the two previously disclosed loan relationships. Based on a detailed analysis of all impaired and classified loans, as well as an analysis of other qualitative factors, the Bank recorded a provision for loan losses of $14.5 million for the second quarter of 2012 compared to $1.8 million in the same period last year and compared to $1.8 million recorded in the first quarter of 2012. The allowance for loan loss at June 30, 2012 was $21.8 million or 2.19% of total loans compared to $23.7 million or 2.50% of total loans at December 31, 2011.
NPA Migration
Non-Performing Assets Migration – Q2 2012
|
Non Accrual Loans |
OREO |
|
| Balance, March 31, 2012 | $ 28,414 | $ 36,233 |
| Additions | 9,330 | 3,702 |
| Transfer to OREO | (651) | -- |
| Loans Cured | (6,694) | -- |
| Sales/Payoffs/Trf to HFS | (5,801) | (304) |
| Charge-off | (1,043) | (319) |
| Balance, June 30, 2012 | $ 23,555 | $ 39,312 |
The table above excludes loans held for sale and includes TDR's that are on accrual status. Performing TDR's totaled $10.2 million as of June 30, 2012. The $10.3 million in loans held for sale consist of four nonaccrual loans.
Loans Past Due 30-89 Days
Loans 30-89 days past due at June 30, 2012 and March 31, 2012 were $0.
Real Estate Owned
Total OREO increased to $39.3 million compared to $36.2 million as of March 31, 2012. During the second quarter of 2012, the Bank sold one OREO property with a book value of $304,000 and took two properties totaling $3.7 million into OREO through foreclosure.
Asset Quality Table – June 30, 2012
| ($ in thousands) | 30-89 Days | Nonaccrual | OREO | |||
| # | $ | # | $ | # | $ | |
| Land-Residential | -- | $ -- | 2 | $ 751 | 12 | $ 22,121 |
| Land Commercial | -- | -- | -- | -- | 3 | 8,028 |
| Construction: | ||||||
| Residential | -- | -- | 1 | 5,963 | 1 | 3,051 |
| Commercial | -- | -- | -- | -- | -- | -- |
| RE-Housing for sale | -- | -- | -- | -- | 1 | 5,461 |
| CRE-Commercial | -- | -- | 1 | 597 | 1 | 651 |
| C&I/Trade Finance | -- | -- | 11 | 16,244 | -- | -- |
| Totals | -- | $ -- | 15 | $ 23,555 | 18 | $ 39,312 |
Asset Quality Table – March 31, 2012
| ($ in thousands) | 30-89 Days | Nonaccrual | OREO | |||
| # | $ | # | $ | # | $ | |
| Land-Residential | -- | $ -- | 2 | $ 883 | 12 | $ 22,456 |
| Land Commercial | -- | -- | 1 | 182 | 3 | 8,316 |
| Construction: | ||||||
| Residential | -- | -- | 1 | 5,350 | -- | -- |
| Commercial | -- | -- | -- | -- | -- | -- |
| RE-Housing for sale | -- | -- | -- | -- | 1 | 5,461 |
| CRE-Commercial | -- | -- | 4 | 11,642 | -- | -- |
| C&I/Trade Finance | -- | -- | 11 | 10,357 | -- | -- |
| Totals | -- | $ -- | 19 | $ 28,414 | 16 | $ 36,233 |
Excerpt from Press Release dated July 5, 2012
Two Significant Loan Charges
In the case of the first loan, the Bank recently received the results of the annual Shared National Credit (SNiC) Report this past week. The report requires the Bank to place a $13.9 million (Bank's portion) loan on nonaccrual status and further requires the Bank to write off 45% of the principal balance. This loan, which is administered by a very large national bank, is $219 million in total and is collateralized by real estate. This loan has been current to this date as to contractually due principal and interest payments; however, the loan matured as of April 30, 2012, and the borrower was not able to re margin the loan based on updated collateral values. However, as of July 2, 2012, the loan renewal and modification were signed requiring the borrower to pledge the cash flows from a separate, large and renowned commercial real estate property to support the principal and interest payments on this loan. Management believes that the ultimate collection of interest and all principal is likely based on information supplied by the lead bank regarding the global cash flow position of the borrower/guarantor group. In any event, management has placed the remaining portion of this loan in held-for-sale status. The Bank has 10 other loans that fall under the SNiC reporting and grading which total $54.1 million as of June 30, 2012. None of these other loans had any adverse rating.
In the case of the second loan relationship, management has discovered significant irregular borrower activity and default associated with a $16.9 million loan relationship. A complete investigation has commenced; however, initial estimates indicate the potential loan collateral shortfall could reach as high as $8 million. This lending relationship, which spanned seven years, was already classified as substandard and consists of four loans including a line of credit collateralized by accounts receivable and inventory as well as owner/user real estate financing. The Bank's internal review indicates that the lending relationship was monitored in complete accordance with the Bank's policies and procedures.
Capitalization
As of June 30, 2012, the Bank's tier 1 leverage ratio was 12.19% and total risk-based capital ratio was 15.63%. This compares to 12.51% and 15.77% as of December 31, 2011, respectively. Pursuant to the Memorandum of Understanding (MOU) entered into on May 25, 2012, the Bank is required to maintain the following capital ratio:
|
Ratio |
Preferred Bank at 6/30/12 |
MOU Requirement |
| Tier 1 Leverage Ratio | 12.19% | 10.0% |
Conference Call and Webcast
A conference call with simultaneous webcast to discuss Preferred Bank's second quarter 2012 financial results will be held tomorrow, July 26, at 2:00 p.m. Eastern / 11:00 a.m. Pacific. Interested participants and investors may access the conference call by dialing 877-561-1721 (domestic) or 480-629-9724 (international). The passcode for the call is 4552222. 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, Chief Financial Officer Edward J. Czajka, Chief Credit Officer Louie Couto and Chief Operating Officer Wellington Chen 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 August 2, 2012; the passcode is 4552222.
About Preferred Bank
Preferred Bank is one of the largest independent commercial banks in California focusing on the Chinese-American market. 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 nine full-service branch banking offices in Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine, Diamond Bar, Anaheim and Pico Rivera, 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. Preferred Bank continues to benefit from the significant migration to Southern California of ethnic Chinese from China and other areas of East Asia. While its business is not solely dependent on the Chinese-American market, it represents an important element of the bank's operating strategy, especially for its branch network and deposit products and services. Preferred Bank believes it is well positioned to compete effectively with the smaller Chinese-American community banks, the larger commercial banks and other major banks operating in Southern California by offering a high degree of personal service and responsiveness, experienced multi-lingual staff and substantial lending limits.
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 2011 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 (loss) per share and shares) | |||
| For the Three Months Ended | |||
| June 30, | June 30, | March 31, | |
| 2012 | 2011 | 2012 | |
| Interest income: | |||
| Loans, including fees | $ 13,560 | $ 10,964 | $ 13,507 |
| Investment securities | 1,585 | 1,926 | 1,684 |
| Fed funds sold | 2 | -- | -- |
| Total interest income | 15,147 | 12,890 | 15,191 |
| Interest expense: | |||
| Interest-bearing demand | 408 | 295 | 408 |
| Savings | 18 | 20 | 19 |
| Time certificates of $100,000 or more | 1,192 | 1,221 | 1,266 |
| Other time certificates | 304 | 823 | 410 |
| Senior debt | -- | 188 | 94 |
| Total interest expense | 1,922 | 2,547 | 2,197 |
| Net interest income | 13,225 | 10,343 | 12,994 |
| Provision for loan losses | 14,500 | 1,800 | 1,800 |
| Net interest income (loss) after provision for loan losses | (1,275) | 8,543 | 11,194 |
| Noninterest income: | |||
| Fees & service charges on deposit accounts | 433 | 438 | 434 |
| Trade finance income | 97 | 79 | 70 |
| BOLI income | 82 | 83 | 82 |
| Net gain on sale of investment securities | 488 | (13) | -- |
| Other income | 375 | 41 | 32 |
| Total noninterest income | 1,475 | 628 | 618 |
| Noninterest expense: | |||
| Salary and employee benefits | 2,516 | 2,510 | 3,462 |
| Net occupancy expense | 742 | 778 | 752 |
| Business development and promotion expense | 64 | 94 | 53 |
| Professional services | 630 | 517 | 590 |
| Office supplies and equipment expense | 326 | 261 | 263 |
| Total other-than-temporary impairment losses | -- | -- | 16 |
| Portion of loss recognized in other comprehensive income | -- | -- | -- |
| Other real estate owned related expense | 2,346 | 1,573 | 2,014 |
| Other | 1,402 | 1,740 | 1,706 |
| Total noninterest expense | 8,026 | 7,473 | 8,856 |
| Income (loss) before provision for income taxes | (7,826) | 1,698 | 2,956 |
| Income tax benefit | (2,217) | (43) | (18,783) |
| Net income (loss) | $ (5,609) | $ 1,741 | $ 21,739 |
| Income allocated to participating securities | -- | (26) | (327) |
| Net income (loss) available to common shareholders | $ (5,609) | $ 1,715 | $ 21,412 |
| Income (loss) per share available to common shareholders | |||
| Basic | $ (0.43) | $ 0.13 | $ 1.64 |
| Diluted | $ (0.43) | $ 0.13 | $ 1.62 |
| Weighted-average common shares outstanding | |||
| Basic | 13,050,582 | 12,997,205 | 13,024,068 |
| Diluted | 13,050,582 | 13,191,175 | 13,223,098 |
| 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 | |
| 2012 | 2011 | % | |
| Interest income: | |||
| Loans, including fees | $ 27,068 | $ 22,458 | 20.5% |
| Investment securities | 3,268 | 3,848 | -15.1% |
| Fed funds sold | 2 | -- | 100.0% |
| Total interest income | 30,338 | 26,306 | 15.3% |
| Interest expense: | |||
| Interest-bearing demand | 816 | 543 | 50.2% |
| Savings | 37 | 46 | -18.6% |
| Time certificates of $100,000 or more | 2,458 | 2,404 | 2.3% |
| Other time certificates | 714 | 1,988 | -64.1% |
| Senior debt | 94 | 377 | -75.1% |
| Total interest expense | 4,119 | 5,358 | -23.1% |
| Net interest income | 26,219 | 20,948 | 25.2% |
| Provision for credit losses | 16,300 | 1,800 | 805.6% |
| Net interest income after provision for loan losses | 9,919 | 19,148 | -48.2% |
| Noninterest income: | |||
| Fees & service charges on deposit accounts | 868 | 863 | 0.5% |
| Trade finance income | 166 | 132 | 25.7% |
| BOLI income | 164 | 166 | -1.0% |
| Net gain on sale of investment securities | 488 | 84 | 481.8% |
| Other income | 407 | 135 | 201.8% |
| Total noninterest income | 2,093 | 1,380 | 51.7% |
| Noninterest expense: | |||
| Salary and employee benefits | 5,978 | 5,444 | 9.8% |
| Net occupancy expense | 1,494 | 1,537 | -2.8% |
| Business development and promotion expense | 117 | 151 | -22.5% |
| Professional services | 1,220 | 961 | 27.0% |
| Office supplies and equipment expense | 590 | 519 | 13.6% |
| Total other-than-temporary impairment losses | 16 | 32 | -50.0% |
| Portion of loss recognized in other comprehensive income | -- | -- | 0.0% |
| Other real estate owned related expense | 4,360 | 5,447 | -20.0% |
| Other | 3,107 | 3,715 | -16.4% |
| Total noninterest expense | 16,882 | 17,806 | -5.2% |
| Income (loss) before provision for income taxes | (4,870) | 2,722 | -278.9% |
| Income tax (benefit) expense | (21,000) | 282 | -7546.7% |
| Net income | $ 16,130 | $ 2,440 | 561.1% |
| Income allocated to participating securities | (229) | (37) | 520.1% |
| Net income available to common shareholders | $ 15,901 | $ 2,403 | 561.7% |
| Income per share available to common shareholders | |||
| Basic | $ 1.22 | $ 0.18 | 559.3% |
| Diluted | $ 1.20 | $ 0.18 | 549.3% |
| Weighted-average common shares outstanding | |||
| Basic | 13,037,288 | 12,992,072 | 0.3% |
| Diluted | 13,236,707 | 13,189,642 | 0.4% |
| PREFERRED BANK | ||
| Condensed Consolidated Statements of Financial Condition | ||
| (unaudited) | ||
| (in thousands) | ||
| June 30, | December 31, | |
| 2012 | 2011 | |
| Assets | ||
| Cash and due from banks | $ 3,034 | $ 3,939 |
| Interest-bearing deposit at Federal Reserve Bank | 188,883 | 138,527 |
| Cash and cash equivalents | 191,917 | 142,466 |
| Term Fed funds sold | 10,000 | -- |
| Securities held to maturity, at amortized cost | 1,524 | 3,021 |
| Securities available-for-sale, at fair value | 141,777 | 166,083 |
| Loans and leases | 998,010 | 949,631 |
| Less allowance for loan and lease losses | (21,835) | (23,718) |
| Less net deferred loan fees | (1,583) | (1,037) |
| Net loans and leases | 974,592 | 924,876 |
| Loans held for sale, at lower of cost or fair value | 10,290 | 3,996 |
| Other real estate owned | 39,312 | 37,577 |
| Customers' liability on acceptances | 248 | 427 |
| Bank furniture and fixtures, net | 4,585 | 4,789 |
| Bank-owned life insurance | 7,927 | 7,808 |
| Accrued interest receivable | 4,764 | 4,851 |
| Federal Home Loan Bank stock | 4,282 | 4,164 |
| Deferred tax assets | 25,609 | 6,979 |
| Income tax receivable | 1,454 | -- |
| Other asset | 1,431 | 2,760 |
| Total assets | $ 1,419,712 | $ 1,309,797 |
| Liabilities and Shareholders' Equity | ||
| Liabilities: | ||
| Deposits: | ||
| Demand | $ 365,292 | $ 239,987 |
| Interest-bearing demand | 271,838 | 233,349 |
| Savings | 18,365 | 22,385 |
| Time certificates of $250,000 or more | 209,649 | 185,001 |
| Other time certificates | 370,738 | 437,231 |
| Total deposits | $ 1,235,882 | $ 1,117,953 |
| Acceptances outstanding | 248 | 427 |
| Senior debt issuance | -- | 25,996 |
| Accrued interest payable | 1,116 | 1,292 |
| Other liabilities | 5,496 | 6,081 |
| Total liabilities | 1,242,742 | 1,151,749 |
| Commitments and contingencies | ||
| Shareholders' equity: | ||
| Preferred stock. Authorized 25,000,000 shares; no issued and outstanding shares at June 30, 2012 and December 31, 2011 | — | — |
| Common stock, no par value. Authorized 20,000,000 shares; issued and outstanding 13,233,757 and 13,220,955 shares at June 30, 2012 and December 31, 2011, respectively | 162,917 | 162,884 |
| Treasury stock | (19,115) | (19,115) |
| Additional paid-in-capital | 23,998 | 23,456 |
| Accumulated income (deficit) | 9,739 | (6,391) |
| Accumulated other comprehensive loss: | ||
|
Non-credit portion of loss recognized, net of tax of $302 and $367 at June 30, 2012 and December 31, 2011, respectively |
(417) | (481) |
| Unrealized loss on securities, available-for-sale, net of tax of $110 and $1,554 at June 30, 2012 and December 31, 2011 | (152) | (2,305) |
| Total shareholders' equity | 176,970 | 158,048 |
| Total liabilities and shareholders' equity | $ 1,419,712 | $ 1,309,797 |
| PREFERRED BANK | ||||
| Selected Consolidated Financial Information | ||||
| (unaudited) | ||||
| (in thousands, except for ratios) | ||||
| For the Three Months Ended | ||||
| June 30, | March 31, | December 31, | June 30, | |
| 2012 | 2012 | 2011 | 2011 | |
| For the period: | ||||
| Return on average assets | -1.60% | 6.53% | 1.17% | 0.57% |
| Return on average equity | -12.22% | 53.66% | 8.97% | 4.58% |
| Net interest margin (Fully-taxable equivalent) | 3.99% | 4.06% | 3.69% | 3.57% |
| Noninterest expense to average assets | 2.30% | 2.66% | 2.28% | 2.46% |
| Efficiency ratio | 54.60% | 65.06% | 60.73% | 68.11% |
| Net charge-offs (recoveries) to average loans (annualized) | 6.33% | 1.07% | 1.18% | 1.91% |
| Period end: | ||||
| Tier 1 leverage capital ratio | 12.19% | 12.69% | 12.51% | 12.28% |
| Tier 1 risk-based capital ratio | 14.38% | 14.55% | 14.51% | 14.26% |
| Total risk-based capital ratio | 15.63% | 15.81% | 15.77% | 15.53% |
| Allowances for credit losses to loans and leases at end of period ** | 2.19% | 2.32% | 2.50% | 3.02% |
| Allowance for credit losses to non-performing loans and leases | 64.52% | 71.37% | 49.98% | 31.15% |
| Average balances: | ||||
| Total loans and leases* | $ 990,087 | $ 972,413 | $ 919,944 | $ 886,548 |
| Earning assets | $ 1,343,295 | $ 1,294,634 | $ 1,234,885 | $ 1,179,759 |
| Total assets | $ 1,406,508 | $ 1,339,737 | $ 1,280,354 | $ 1,218,616 |
| Total deposits | $ 1,213,553 | $ 1,156,164 | $ 1,081,254 | $ 1,032,540 |
| Period end: | ||||
| Loans and Leases: | ||||
| Real estate - Single and multi-family residential | $ 132,256 | $ 136,100 | $ 120,005 | $ 113,241 |
| Real estate - Land for housing | 23,180 | 23,327 | 23,339 | 28,313 |
| Real estate - Land for income properties | 1,786 | 15,771 | 15,830 | 20,563 |
| Real estate - Commercial | 452,750 | 440,826 | 415,998 | 392,656 |
| Real estate - For sale housing construction | 41,987 | 40,720 | 40,977 | 55,619 |
| Real estate - Other construction | 24,083 | 22,702 | 30,965 | 36,351 |
| Commercial and industrial | 275,679 | 255,733 | 252,161 | 184,490 |
| Trade finance and other | 46,289 | 53,914 | 50,356 | 43,070 |
| Gross loans | 998,010 | 989,093 | 949,631 | 874,303 |
| Allowance for loan and lease losses | (21,835) | (22,925) | (23,718) | (26,409) |
| Net deferred loan fees | (1,583) | (1,234) | (1,037) | (498) |
| Loans excluding loans held for sale | 974,592 | 964,934 | 924,876 | 847,396 |
| Loans held for sale | 10,290 | 3,707 | 3,996 | 20,503 |
| Total loans, net | $ 984,882 | $ 968,641 | $ 928,872 | $ 867,899 |
| Deposits: | ||||
| Noninterest-bearing demand | $ 365,292 | $ 327,141 | $ 239,987 | $ 244,013 |
| Interest-bearing demand and savings | 290,203 | 267,745 | 255,734 | 174,099 |
| Total core deposits | 655,495 | 594,886 | 495,721 | 418,112 |
| Time deposits | 580,387 | 581,294 | 622,232 | 631,619 |
| Total deposits | $ 1,235,882 | $ 1,176,180 | $ 1,117,953 | $ 1,049,731 |
| * 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, 2012 | December 31, 2011 | |
| (Dollars in 000's) | ||
| Allowance For Credit Losses | ||
| Balance at Beginning of Period | $ 23,718 | $ 32,898 |
| Charge-Offs | ||
| Commercial & Industrial | 9,116 | 5,126 |
| Mini-perm Real Estate | 949 | 7,102 |
| Construction - Residential | -- | 1,665 |
| Construction - Commercial | 2,185 | 664 |
| Land - Residential | 131 | 82 |
| Land - Commercial | 6,276 | 1,453 |
| Others | -- | 5 |
| Total Charge-Offs | 18,657 | 16,097 |
| Recoveries | ||
| Commercial & Industrial | 12 | 940 |
| Mini-perm Real Estate | 271 | 43 |
| Construction - Residential | 2 | 7 |
| Construction - Commercial | 145 | 166 |
| Land - Residential | 37 | 61 |
| Land - Commercial | 7 | -- |
| Total Recoveries | 474 | 1,217 |
| Net Loan Charge-Offs | 18,183 | 14,880 |
| Provision for Credit Losses | 16,300 | 5,700 |
| Balance at End of Period | $ 21,835 | $ 23,718 |
| Average Loans and Leases* | $ 990,087 | $ 919,944 |
| Loans and Leases at end of Period* | $ 998,010 | $ 949,631 |
| Net Charge-Offs to Average Loans and Leases | 6.33% | 1.18% |
| Allowances for credit losses to loans and leases at end of period ** | 2.19% | 2.50% |
| * Loans held for sale are included | ||
| ** Loans held for sale are excluded | ||