PFBC

Preferred Bank's third quarter results fell short of Wall Street's revenue expectations, and the market responded with a negative reaction. Management identified heightened deposit competition and a modest decline in loan balances as key factors behind the softer performance. CEO Li Yu highlighted that "the deposit market is very competitive" and pointed out that many customers are moving funds to U.S. Treasuries, which offer more attractive yields, impacting both deposit growth and costs. The bank also continued to face delays in resolving nonaccrual loans, as court proceedings extended timelines for asset resolution, further pressuring results. Is now the time to buy PFBC? Find out in our full research report (it's free). - Revenue: $69.7 million vs analyst estimates of $73.09 million (7% year-on-year decline, 4.6% miss) - Adjusted EPS: $2.73 vs analyst estimates of $2.69 (1.6% beat) - Market Capitalization: $1.27 billion While we enjoy listening to the management's commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. - Matthew Clark (Piper Sandler) pressed CFO Edward Czajka on upcoming certificate of deposit (CD) maturities and repricing, with Czajka estimating rates to roll at 3.75%-4% and emphasizing a focus on cost control. - Matthew Clark (Piper Sandler) also questioned Chief Risk Officer Wellington Chen about the pace of resolving nonaccrual loans, with Chen explaining delays related to bankruptcy court proceedings but expressing optimism about eventual recoveries. - Andrew Liesch (StoneX Financial) inquired about the causes behind modest loan growth, and Deputy COO Johnny Hsu attributed it to unexpected payoffs and delayed loan fundings, but signaled a stronger pipeline for the next quarter. - Andrew Liesch (StoneX Financial) asked about expense trends, with Czajka citing lower legal fees and incentive accruals as temporary drivers, and guiding to more normalized expense levels in the next quarter. - Andrew Terrell (Stephens) questioned the quality and sustainability of deposit growth, with Czajka clarifying that end-of-period deposit balances are a "good launch point" and not transitory, and CEO Li Yu acknowledging the challenges posed by market dynamics and customer preferences. In the upcoming quarters, our analysts will be focused on (1) the pace and quality of loan growth as the pipeline converts to funded loans, (2) stabilization or improvement in deposit costs and retention as market competition persists, and (3) timely resolution of nonaccrual and classified loans through court and bankruptcy proceedings. The trajectory of non-interest income and ongoing cost management will also be important markers of operational effectiveness. Preferred Bank currently trades at $107.08, down from $108.62 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it's free for active Edge members). ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.

Commercial banking company Preferred Bank (NASDAQ:PFBC) fell short of the market's revenue expectations in Q3 2026, with sales falling 7% year on year to $69.7 million. Its non-GAAP profit of $2.73 per share was 1.6% above analysts' consensus estimates. Is now the time to buy PFBC? Find out in our full research report (it's free). - Revenue: $69.7 million vs analyst estimates of $73.09 million (7% year-on-year decline, 4.6% miss) - Adjusted EPS: $2.73 vs analyst estimates of $2.69 (1.6% beat) - Market Capitalization: $1.26 billion Preferred Bank's third quarter results fell short of Wall Street's revenue expectations, and the market responded with a negative reaction. Management identified heightened deposit competition and a modest decline in loan balances as key factors behind the softer performance. CEO Li Yu highlighted that "the deposit market is very competitive" and pointed out that many customers are moving funds to U.S. Treasuries, which offer more attractive yields, impacting both deposit growth and costs. The bank also continued to face delays in resolving nonaccrual loans, as court proceedings extended timelines for asset resolution, further pressuring results. Looking ahead, management's guidance is shaped by expectations of a stable interest rate environment and a stronger loan pipeline. CEO Li Yu said, "We are very hopeful that in the fourth quarter to have good, solid growth," citing a more robust loan production pipeline. Management indicated that, as an asset-sensitive bank, Preferred Bank could benefit if interest rates rise further, but ongoing competition for deposits and slow resolution of nonaccrual loans remain uncertainties. Cost control and gradual improvements in non-interest income are also expected to be focal points in the coming quarters. Management attributed the quarter's performance to slower loan growth, deposit market headwinds, and persistent credit resolution delays. Several strategic and operational themes emerged from the call. - Deposit competition intensifies: Management described a challenging environment for deposit gathering, with many customers moving funds to U.S. Treasuries for higher after-tax yields. This trend put pressure on both deposit growth and the cost of funds, as Preferred Bank aimed to balance rate discipline with customer retention. - Loan growth pipeline solidifying: Loan balances declined modestly this quarter, largely due to unexpected paydowns and subdued new loan production. However, management signaled that the current loan pipeline is "very solid," and they expect stronger new production in the next quarter as delayed fundings materialize. - Credit resolution lagging: The bank's efforts to resolve nonaccrual loans were hampered by court delays, particularly for credits in bankruptcy proceedings. Management explained that, while the pace of new problem loans has slowed, the resolution timeline for existing issues has been pushed into the next year. - Cost control measures effective: Overhead expenses remained well managed despite inflationary pressures. CFO Edward Czajka attributed the lower non-interest expense to reduced legal fees and lower incentive accruals, both linked to credit costs and profitability. - Non-interest income a work in progress: Management reiterated its goal of gradually improving non-interest income, but acknowledged that the core business remains reliant on net interest income amid a competitive landscape and limited near-term fee growth. Preferred Bank's outlook is shaped by its ability to navigate deposit competition, manage credit quality, and leverage an improving loan pipeline amid stable rates. - Deposit retention and pricing: Management expects continued competition from both banks and non-bank alternatives, as customers increasingly favor higher-yielding alternatives like Treasury securities. This will require balancing deposit growth with disciplined pricing, potentially impacting funding costs and net interest margin. - Loan production rebound: The bank anticipates that a stronger loan pipeline and delayed fundings will lead to improved loan growth in upcoming quarters. However, management cautioned that higher rates have made some customers more selective about new projects, introducing some uncertainty to the loan production outlook. - Credit resolution timing: The pace of resolving nonaccrual and classified loans will remain a key swing factor. While management is optimistic that court proceedings are moving in the right direction, actual timing of asset resolution is uncertain and could affect both earnings and asset quality metrics. In the upcoming quarters, our analysts will be focused on (1) the pace and quality of loan growth as the pipeline converts to funded loans, (2) stabilization or improvement in deposit costs and retention as market competition persists, and (3) timely resolution of nonaccrual and classified loans through court and bankruptcy proceedings. The trajectory of non-interest income and ongoing cost management will also be important markers of operational effectiveness. Preferred Bank currently trades at $107.08, down from $108.62 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it's free for active Edge members). ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

Preferred Bank stock eased 1.8% in the first session after its Q3 2026 update, a muted move for a lender that just reported another quarter of high profitability. Net income came in at US$32.9 million and basic earnings per share landed at US$2.78, even after a US$2.1 million reversal of interest income clipped reported net interest margin. The bigger story sits beyond today's price movement. A trailing profit margin near 47% and a P/E of 9.6x put Preferred Bank on a value heavy footing that long term investors are likely to weigh against credit trends and funding costs. Like Preferred Bank's profitability profile but uneasy about how funding costs and credit risk could reshape returns over time? Check out the list of solid balance sheet and fundamentals stocks (24 results). - Total Revenue (Q3 2026 vs Q3 2025): US$69.7 million vs. US$72.5 million (declined 3.8%) - Net Income (Excl. Extra Items, Q3 2026 vs Q3 2025): US$32.9 million vs. US$35.9 million (fell 8.3%) - Basic EPS (Q3 2026 vs Q3 2025): US$2.78 vs. US$2.90 (down 4.2%) - Net Interest Margin (NIM; Q3 2026 vs Q3 2025): 3.49% vs. 3.92% (compressed 0.43 percentage points) Management says Preferred Bank is set up to gain if rates rise. Ask Charlie which Preferred Bank rate move helps margins most. The bullish story says Preferred Bank can keep its earnings engine running through branch expansion, cleaner credit and tight expenses. "Ongoing clean up of problem credits, with non performing loans and criticized loans already reduced and only three non performing loans of $60 million remaining in bankruptcy processes, points to potential future relief in provision expense and steadier earnings." Q3 net income of US$32.9 million and a trailing profit margin near 47% show that credit clean up has not derailed profitability. Nonaccrual levels are described as stable, although management now indicates slower than hoped bankruptcy resolutions, so the earnings benefit looks delayed rather than disproven. The bear argument is that expensive deposits and thinner spreads eventually eat into Preferred Bank's earnings power. "Net interest margin has already compressed from 3.74% in Q4 2025 to around the mid 3.50% range on an underlying basis in 2026, and management expects further pressure as high cost deposits reprice only slightly lower or even slightly higher." Q3 reported NIM of 3.49%, or 3.60% excluding the US$2.1 million interest reversal, lines up with that compression narrative. Deposit costs at roughly 3.06% and a still competitive market confirm funding pressure is real. Yet modest deposit growth of US$77 million and a low efficiency ratio help offset the hit to net interest income so far. Not everyone reads the same price the same way. → See the higher figure this Narrative lands on, and how it gets there. Preferred Bank just showed how a profitable quarter can still leave investors debating funding pressure and credit risk. The real opportunity could be spotting stocks that look mispriced before the gap closes. - Company 1 - 21% below our estimate - expands electrical and communications projects tied to hyperscale data centers as backlog and working capital accelerate. - Company 2 - 25% below our estimate - sells weight loss and diabetes drugs that already generate significant sales while a new flagship treatment awaits approval. - Company 3 - 36% below our estimate - grows fee-based advisory work as expanded senior hiring focuses on converting a record deal pipeline into larger transactions. Those are three of them. See all 29 potentially undervalued companies → This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include PFBC. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Preferred Bank (PFBC) has just put fresh numbers on the table. Third quarter 2026 results showed net income of US$32.95 million and diluted earnings per share of US$2.73, with deposits continuing to build. Preferred Bank's latest earnings drop into a share price that has held up well, with the stock at US$106.72 after a small pullback of 1.8% on the day and a year to date share price return of 11.24% set against a 1 year total shareholder return of 18.38% and a very strong 3 year total shareholder return of 97.04%, which signals momentum built over several years rather than just this quarter's headline numbers. Scan how Preferred Bank's latest quarter compares with peers by reviewing a hand-picked 30 resilient stocks with low risk scores built around balance-sheet strength and consistent earnings profiles. Preferred Bank now trades about 7% below the average analyst target and at a much steeper discount to one intrinsic value estimate. That gap reflects either a potential opportunity or a warning label on earnings quality and credit risk. Preferred Bank is priced at $106.72 against a widely followed fair value marker of $114.40. This frames the current discount as modest but clear for anyone weighing the latest quarter against the longer term thesis. Management's focus on a lean, branch light model, reflected in the low efficiency ratio around 32%, gives Preferred Bank room to support loan growth without a large rise in operating costs. This can help protect pre provision earnings if margins soften. See why 1 investors see Preferred Bank as 7% undervalued. Result: Fair Value of $114.40 (UNDERVALUED) Still, the narrative around Preferred Bank depends heavily on deposit gathering remaining resilient and on net interest margin pressure not being harsher than expected. Find out about the key risks to this Preferred Bank narrative. Mixed signals in the Preferred Bank story so far. Act while the details are fresh and test the thesis against the data using our breakdown of 4 key rewards and 2 important warning signs Preferred Bank might fit your watchlist, but your portfolio deserves a broader bench. Use these filters to scan for fresh, data driven candidates today. - Target dependable cash generators by reviewing the list of solid balance sheet and fundamentals (24 results). This highlights companies with robust financial footing and fundamentals you can actually inspect. - Hunt for potential mispricings through the 29 high quality undervalued stocks. This focuses on quality businesses trading below their assessed worth on key metrics. - Stack income potential by scanning the 5 dividend fortresses. This singles out higher yielding stocks with payouts that can complement capital returns. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include PFBC. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. - Net Income: $32.9 million for Q3 2026. - Earnings Per Share: $2.73 per share. - Interest Income Reversal: $2.1 million reversal negatively affected the quarter. - Deposits: Grew $77 million, or 1.2%, on a linked-quarter basis. - Loans: Decreased $40 million after a large credit was placed in for-sale status. - Net Interest Margin: 3.49%; would have been 3.60% excluding the $2.1 million adjustment. - Nonaccrual Loans: Resolution continuing but slower than expected; level remains stubborn due to court proceedings. - Substandard Credits: Only $20 million of additional credits classified as substandard remain on accrual status. - Overhead/Expense Control: Consistent cost control of overhead maintained despite an inflationary period. - Warning! GuruFocus has detected 7 Warning Signs with PFBC. - Is PFBC fairly valued? Test your thesis with our free DCF calculator. Release Date: October 23, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Preferred Bank (NASDAQ:PFBC) reported net income of $32.9 million, or $2.73 per share, for Q3 2026. - Deposits grew $77 million, or 1.2%, on a linked-quarter basis despite a highly competitive deposit market. - Preferred Bank (NASDAQ:PFBC) maintained strong cost control, with noninterest expenses expected to be $23-$24 million in Q4 2026. - The loan pipeline for Q4 2026 appears solid, with management hopeful for good loan growth. - Preferred Bank (NASDAQ:PFBC) is asset-sensitive, so a potential rise in the Fed funds rate would benefit its net interest margin. - Net income was negatively affected by a $2.1 million reversal of interest income, reducing net interest margin to 3.49% from 3.60%. - Loans decreased $40 million in Q3 2026 due to a large credit placed in for-sale status and unexpected payoffs. - Nonaccrual loan resolution is slower than hoped, with several credits stuck in court proceedings delayed to Q3/Q4 2027. - The deposit market remains very competitive, with customers moving funds to Treasuries, and this condition is expected to persist into 2027. - Total classified loans were $177.6 million, including $11.5 million of OREO, indicating ongoing credit quality concerns. Q: Can you update us on the CDs maturing in the fourth quarter and the expected roll-off and roll-on rates? A: CFO Edward Czajka stated that just under $1.7 billion in CDs are maturing in the fourth quarter, which is a fairly heavy quarter. The weighted average yield on these is 3.81%, and they are likely to roll over at rates between 3.75% and 4%. Q: What is the outlook for deposit costs and the deposit beta on the way up, assuming potential rate hikes? A: CFO Edward Czajka noted that the total deposit cost was 3.06% for September, with a spot margin of 3.58%. He expects the deposit beta on the way up to be "definitely slower" than the 69% experienced on the way down, as management is focused on keeping costs under control, even if it means sacrificing some growth. Q: Can you provide an update on credit quality, including the criticized loan balance and the outlook for resolving nonaccrual loans? A: Chief Risk Officer Nick Pi reported that total classified loans were $177.6 million. Regarding resolutions, he noted that while some loans are tied up in bankruptcy court, proceedings are heading in the right direction. The bank hopes to dispose of a couple of large loans by Q4, but this depends on court decisions; otherwise, they may foreclose and dispose of the properties themselves. Q: What was the cause of the modest loan growth in the quarter, and what is the outlook? A: President and COO Wellington Chen explained that the modest growth was due to a combination of unexpected payoffs and less robust production compared to the second quarter, with some loans in the pipeline being delayed. However, he noted that the pipeline for the fourth quarter is stronger, and they are hopeful for solid growth. Q: Were there any unique items affecting the well-controlled expenses this quarter, and what is the expected run rate for Q4? A: CFO Edward Czajka attributed the decrease in expenses to lower professional services (primarily legal fees related to problem loans) and a lower incentive compensation accrual. For the fourth quarter, he guided to an expense range of $23 million to $24 million. Q: Is the end-of-period deposit balance a good launch point for the fourth quarter, or was some of the growth transitory? A: CFO Edward Czajka confirmed that the end-of-period deposit number is a good launch point for the next quarter. He explained that the discrepancy between the quarterly average and the quarter-end balance was due to a number of brokered deposits maturing and coming on late in the quarter. Q: What are your views on the overall deposit market and the ability to core-fund growth in this environment? A: CEO Li Yu described the deposit market as very competitive, with pricing "all over the place." He noted that customers are moving funds to Treasuries after CDs mature, as Treasuries are not taxable for California state income tax, making a 5% Treasury yield equivalent to a 5.65% effective yield. He stated the bank must do everything it can to retain customers while trying to grow. Q: Are you seeing any customers delay projects due to higher interest rates? A: President and COO Wellington Chen acknowledged that with higher rates, customers are more conscientious about projects. However, he also noted that in a higher-rate market, some customers are actively looking for better deals and opportunities. Q: What was the impact of the interest income reversal on the net interest margin (NIM) this quarter? A: CEO Li Yu reported that the NIM for the quarter was 3.49%. He clarified that without the $2.1 million reversal of interest income, the NIM would have been 3.60%. He also noted that as an asset-sensitive bank, Preferred Bank would benefit from any upward adjustment in the Fed funds rate. Q: Can you comment on the pace of loan migration and the level of nonaccrual loans? A: CEO Li Yu stated that the pace of migration seems to have slowed, with only $20 million of additional credits classified as substandard that remain on accrual status. He noted that the level of nonaccruals remains "stubborn" largely because several credits scheduled for resolution are stuck in court proceedings, pushing them back to the third and fourth quarters of next year. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Preferred Bank has delivered a strong multi‑year share price run, so the live question now is whether that US$106.72 tag is supported by the earnings power behind it. With fresh results expected soon and investor focus already on margins and credit quality, the stock's earnings profile is coming under closer scrutiny. - Over the past 3 years the stock has returned about 97.0%, which puts more pressure on today's valuation to be grounded in the bank's underlying profit stream. - Analysts expect earnings to reflect margin pressure and credit quality concerns, which can influence how durable the bank's current profit base looks against its share price. - The analysts covering Preferred Bank have run their own numbers. See what analysts think Preferred Bank's shares could be worth. The stock's next move may depend on whether Preferred Bank's current earnings justify the multiple investors are being asked to pay today. If you want other starting points for research beyond Preferred Bank, a focused screen like 30 resilient stocks with low risk scores can help you compare how different businesses stack up on risk. The P/E ratio works well for Preferred Bank because earnings are a key driver of how investors usually value regional lenders. At the current share price, the stock trades on about 9.6x earnings, which is below both the broader banks industry on roughly 11.6x and the peer group average near 18.6x. On this framework, the shares change hands at a discount to what investors are paying for many comparable institutions. The fair value model, which adjusts the P/E you might expect for Preferred Bank given factors like its margins, risk profile and size, points to a level slightly above the current multiple. On this lens, the market price appears broadly in line with that indication. Because analysts go into the Q3 2026 report expecting softer EPS from margin pressure and credit quality worries, the current P/E suggests investors are not extrapolating aggressive profit growth into the future and are instead pricing the business with some caution. Explore the numbers behind Preferred Bank's P/E valuation. Preferred Bank's valuation puzzle really comes into focus once you link it to Simply Wall St Narratives. These spell out what would need to happen to the bank's future earnings power, margins and profit base for the shares to be worth materially more or less than today's price on the Community page. Each idea is set up as a thesis that can be tracked over time rather than a single fair value snapshot, so you can watch how the reasoning holds up as new information arrives. One of the top community narratives on Preferred Bank: 7% undervalued "Management's focus on a lean, branch light model, reflected in the low efficiency ratio around 32%, gives Preferred Bank room to support loan growth without a large rise in operating costs…" Discover why this Narrative puts Preferred Bank at 7% undervalued. Before treating Preferred Bank as just a multiple on earnings, it helps to know that independent checks have raised specific issues that deserve a closer look beside the valuation case. Take a closer look at 2 warning signs before settling on a valuation. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include PFBC. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Net interest margin was pressured by a $2.1 million interest income reversal, which reduced the reported NIM from a normalized 3.60% to 3.49%. - Management maintains an asset-sensitive posture, indicating that any future Federal Reserve rate hikes would likely provide a further benefit to the net interest margin. - Deposit growth of 1.2% was achieved through disciplined pricing, though management acknowledged this discipline likely constrained overall growth in a highly competitive market. - The bank is facing unconventional competition from Treasuries, as customers leverage the tax-exempt status of Treasury yields to achieve higher effective returns than traditional bank products. - Loan balances saw a slight decrease due to a large credit being moved to for-sale status and unexpected payoffs, despite a solid underlying pipeline. - Nonaccrual loan levels remain 'stubborn' due to court-related delays in bankruptcy proceedings, pushing several expected resolutions into late 2027. - Operational efficiency remains a priority, with management successfully controlling overhead and reducing professional service fees despite inflationary pressures. - Management anticipates a solid rebound in loan growth for the fourth quarter of 2026, supported by a robust pipeline of delayed projects. - The competitive deposit environment is expected to persist well into 2027, driven by both non-bank institutions and the attractive yields of government securities. - Expense guidance for the fourth quarter is projected between $23 million and $24 million, reflecting normalized legal and incentive compensation costs. - The bank expects a strong 2027 economic environment and a relatively stable interest rate market to support long-term performance. - Strategic focus remains on the gradual improvement of non-interest income and the resolution of the remaining $177.6 million in classified loans. - A $2.1 million recovery of interest income reversal acted as a one-time headwind to third-quarter earnings and margin metrics. - Classified loans totaled $177.6 million at quarter-end, including $11.5 million in Other Real Estate Owned (OREO). - Legal and bankruptcy court proceedings are the primary bottleneck for credit resolution, with some timelines extending nearly a year beyond original expectations. - Management noted a migration slowdown in credit quality, with only $20 million in new credits classified as substandard while remaining on accrual status. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Management expects deposit beta to be significantly slower on the way up, noting they decreased total deposit costs by 3 basis points this quarter despite market pressure. - The bank is prioritizing cost control over aggressive growth, even if it results in more modest deposit inflows. - Resolution of large loans is currently subject to bankruptcy court decisions; if court-approved sales continue to stall, the bank intends to foreclose and dispose of the properties independently. - Management expressed confidence in full recovery for several credits due to favorable loan-to-value ratios on the underlying collateral. - The third-quarter slowdown was attributed to a combination of unexpected payoffs and customers being more conscientious about project viability at higher interest rates. - The fourth-quarter pipeline is described as stronger due to the carryover of delayed fundings from the previous period. - Management highlighted that a 5% Treasury yield effectively equals 5.65% for California residents due to state tax exemptions, creating a significant hurdle for bank CD retention. - The bank is seeing a trend of customers moving funds into Treasuries immediately following the maturity of their certificates of deposit.

- Interested in Preferred Bank? Here are five stocks we like better. - Preferred Bank reported third-quarter net income of $32.9 million, or $2.73 per share. Results were weighed down by a $2.1 million interest-income recovery adjustment, which reduced reported net interest margin to 3.49% versus an estimated 3.60% excluding the adjustment. - Deposits rose $77 million, or 1.2%, despite intense competition from banks, non-bank institutions and Treasury securities. Nearly $1.7 billion of certificates of deposit mature in the fourth quarter, with management expecting rollover rates of roughly 3.75% to 4%. - Loan balances declined modestly, while the pipeline improved entering the fourth quarter. Resolution of classified and nonaccrual loans remains delayed by court proceedings, although management expects potential property sales and loan dispositions in the fourth quarter. Preferred Bank (NASDAQ:PFBC) reported third-quarter 2026 net income of $32.9 million, or $2.73 per share, as deposit growth and continued expense control were partly offset by a reversal of interest income and ongoing delays in resolving nonaccrual loans. Chairman and CEO Li Yu said the quarter was negatively affected by a $2.1 million recovery of interest income, which reduced reported net interest income and net interest margin. The bank reported a net interest margin of 3.49% for the quarter; excluding the adjustment, Yu said the margin would have been 3.60%. → The AI Buildout Is Only 15% Complete—Here Is Where the Next Dollar Actually Goes Yu said Preferred Bank views the interest-rate environment as relatively stable going forward. He added that additional increases in the federal funds rate would benefit the company's margin because the bank is asset-sensitive. Deposits increased by $77 million, or 1.2% from the prior quarter. However, management emphasized that competition for deposits remains intense and could continue into 2027, with banks competing not only against other banks but also non-bank financial institutions and Treasury securities. → GM Beat and Added a $20 Billion Buyback—Why Did the Stock Fall? Yu said some customers have shifted excess funds into Treasuries. In response to an analyst question, he noted that the tax treatment of Treasuries in California can make their effective yields particularly attractive for certain customers. Chief Financial Officer Edward Czajka said the bank had just under $1.7 billion of certificates of deposit maturing in the fourth quarter, carrying a weighted-average yield of 3.81%. He said those deposits were expected to roll over at rates between 3.75% and 4%. → Tech Stocks Took a Hit—These 2 Pharma Stocks Are Near New Highs Total deposit cost was 3.06% during September, while the spot margin was 3.58%, Czajka said. He added that management expects deposit costs to rise more slowly if interest rates move higher, citing the bank's focus on pricing discipline. That approach helped reduce total deposit costs by 3 basis points during what he described as a difficult rate environment, though it may have limited deposit growth. Czajka also said the quarter-end deposit balance provides a reasonable starting point for the fourth quarter. The difference between average deposits and the period-end balance reflected brokered deposits that matured and were renewed later in the quarter. Loans decreased by $14 million during the quarter after the bank moved a large credit into held-for-sale status. Deputy Chief Operating Officer Johnny Hsu said the decline also reflected unexpected loan payoffs and production that was less robust than in the second quarter. Still, management said it sees a stronger setup entering the fourth quarter. Yu described the current loan pipeline as solid, and Hsu said loans that had experienced funding delays were carrying into the fourth quarter alongside new production. Hsu acknowledged that higher interest rates have caused some customers to evaluate projects more carefully. At the same time, he said some borrowers are looking for opportunities to pursue potentially better deals in the current market. Management said the resolution of nonaccrual loans continued during the quarter but at a slower pace than it had anticipated. Yu said several credits expected to be resolved during the quarter remained tied up in court proceedings, with some resolutions pushed into the third and fourth quarters of next year. President and Chief Operating Officer Wellington Chen said total classified loans were $177.6 million at the end of September, including $11.5 million of other real estate owned. He said this was about $17.7 million above the nonaccrual balance disclosed by the bank. Chen said several bankruptcy courts had approved property sales and that the bank hopes to dispose of several large loans during the fourth quarter. The timing, however, depends on court decisions. If delays continue, Chen said Preferred Bank could foreclose and dispose of collateral itself. Yu said the pace of credit migration had slowed or subsided. He said approximately $20 million of additional credits were classified as substandard but remained on accrual status, while the remainder of the classified exposure had been included in the nonaccrual balance. Preferred Bank said it continued to manage overhead costs despite inflationary conditions. Czajka attributed the quarter-over-quarter decline in expenses partly to lower professional-services costs, particularly legal fees associated with problem loans, as well as lower incentive-compensation accruals resulting from lower profitability. For the fourth quarter, Czajka said management expects noninterest expense to be between $23 million and $24 million. Yu said the bank is also seeking opportunities to gradually improve noninterest income. Looking ahead, he said management expects a strong economy in 2027 and a relatively stable interest-rate environment, while acknowledging the competitive conditions in deposit gathering and the need to complete credit resolutions. Preferred Bank (NASDAQ: PFBC) is a commercial bank headquartered in Los Angeles, California. Founded in 1991, the bank provides banking and financial services to businesses, professionals and individuals, with a particular focus on commercial banking and relationship-based service. The bank's principal offerings include commercial and industrial loans, commercial real estate financing, construction and residential real estate loans, and consumer lending. Preferred Bank also provides deposit accounts, cash-management services, online banking and other treasury-management solutions for business and personal customers. Preferred Bank operates a network of full-service branches in California and New York, serving customers in major metropolitan markets including the greater Los Angeles area, the San Francisco Bay Area and New York City. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Preferred Bank Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

Preferred Bank (PFBC) came out with quarterly earnings of $2.73 per share, beating the Zacks Consensus Estimate of $2.69 per share. This compares to earnings of $2.84 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +1.49%. A quarter ago, it was expected that this independent commercial bank would post earnings of $2.65 per share when it actually produced earnings of $2.78, delivering a surprise of +4.91%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Preferred Bank, which belongs to the Zacks Banks - West industry, posted revenues of $71.7 million for the quarter ended September 2026, missing the Zacks Consensus Estimate by 1.78%. This compares to year-ago revenues of $74.97 million. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Preferred Bank shares have added about 15% since the beginning of the year versus the S&P 500's gain of 12%. While Preferred Bank has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Preferred Bank was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.75 on $74.63 million in revenues for the coming quarter and $10.76 on $291.08 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - West is currently in the top 29% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Central Pacific Financial (CPF), another stock in the same industry, has yet to report results for the quarter ended September 2026. The results are expected to be released on October 28. This operator of Central Pacific Bank is expected to post quarterly earnings of $0.87 per share in its upcoming report, which represents a year-over-year change of +19.2%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Central Pacific Financial's revenues are expected to be $77.08 million, up 3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Preferred Bank (PFBC) : Free Stock Analysis Report CPB Inc. (CPF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

For the quarter ended September 2026, Preferred Bank (PFBC) reported revenue of $71.7 million, down 4.4% over the same period last year. EPS came in at $2.73, compared to $2.84 in the year-ago quarter. The reported revenue compares to the Zacks Consensus Estimate of $73.01 million, representing a surprise of -1.78%. The company delivered an EPS surprise of +1.49%, with the consensus EPS estimate being $2.69. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how Preferred Bank performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: - Efficiency Ratio: 30.9% compared to the 32.4% average estimate based on six analysts. - Net Interest Margin: 3.5% versus 3.6% estimated by six analysts on average. - Net charge-offs to average loans: 0% versus the five-analyst average estimate of 0.2%. - Average Interest - Earning Assets: $7.59 billion versus the three-analyst average estimate of $7.69 billion. - Tier 1 risk-based capital ratio: 11.3% versus the two-analyst average estimate of 11.2%. - Total risk-based capital ratio: 13.9% versus the two-analyst average estimate of 14%. - Tier 1 leverage capital ratio: 10.8% compared to the 10.7% average estimate based on two analysts. - Total noninterest income: $4.99 million compared to the $4.13 million average estimate based on six analysts. - Net interest income before provision for credit losses: $66.71 million versus $68.87 million estimated by six analysts on average. - Fees and service charges on deposit accounts: $0.56 million versus $0.58 million estimated by three analysts on average. - BOLI income: $0.11 million compared to the $0.11 million average estimate based on three analysts. - Letters of credit fee income: $3.17 million compared to the $2.74 million average estimate based on three analysts. View all Key Company Metrics for Preferred Bank here>>> Shares of Preferred Bank have remained unchanged over the past month versus the Zacks S&P 500 composite's -1.2% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Preferred Bank (PFBC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

LOS ANGELES, Oct. 23, 2026 (GLOBE NEWSWIRE) -- Preferred Bank (NASDAQ: PFBC), one of the larger independent California banks, today reported results for the quarter ended September 30, 2026. Preferred Bank ("the Bank") reported net income of $32.9 million or $2.73 per diluted share for the third quarter of 2026. This represents a decrease in net income of $3.0 million from the same quarter last year and a decrease of $592,000 from the previous quarter. The decrease compared to the prior year was due to a decrease in net interest income of $4.6 million partially offset by a $1.3 million increase in noninterest income and a small increase in noninterest expense of $661,000. The difference compared to the prior quarter was again due to net interest income which decreased by $3.3 million partially offset by an increase in noninterest income of $1.5 million and a decrease in noninterest expense of $1.6 million. During the quarter, the Bank placed a $56.7 million loan on nonaccrual status and four others totaling $13.5 million and the resulting reversal of interest income was $2.1 million which was the primary driver behind the decrease in net interest income. Highlights for the Quarter: - Return on average assets was 1.69% - Return on average equity was 16.18% - Total deposits increased by $77.7 million, or 1.2%, linked quarter - The efficiency ratio for the quarter was 30.9% Li Yu, Chairman and CEO, commented, "Net income for the third quarter ended September 30, 2026, was $32.9 million or $2.73 per diluted share. Both are lower than the second quarter due primarily to the interest recoveries last quarter and interest reversals this quarter. "Deposits increased by $77.7 million or 1.2% for the quarter. It is highly likely that the competition for deposits and market conditions will continue into 2027. "Loans (excluding loans held for sale) decreased $41.0 million after we placed a $56.7 million loan into held for sale status. Presently, we are seeing a stronger pipeline that hopefully will result in solid loan growth in the fourth quarter. "The net interest margin for the third quarter was 3.49% compared to 3.73% in the second quarter. The variance is largely caused by a $2.1 million interest income reversal in the third quarter and $2.9 million of interest income recoveries in the second quarter. The recent fed rate increase should bring beneficial results to our net interest margin as our balance sheet is asset sensitive. "Resolution of non-accrual loans is progressing although slower than we had hoped for. Several loans that were scheduled to be resolved in the quarter are now delayed to the fourth quarter or the first quarter 2027 because these assets are subject to bankruptcy courts' decisions. This quarter we have outperformed our own expectations in non-interest income and non-interest expense. Our cost control remains effective under this inflationary environment. We believe the country's economy will remain strong in 2027, and inflationary pressure will gradually subside. We are optimistic that Preferred Bank will continue to grow." Results of Operations Net Interest Income Compared to Prior Quarter. Net interest income before provision for credit losses was $66.7 million for the third quarter of 2026. This represents a $3.3 million decrease from the previous quarter. The decrease in net interest income from the prior quarter was due primarily to an interest recovery of $2.9 million recorded in the second quarter of 2026. Secondarily, the Bank reversed $2.1 million in the third quarter as a result of placing loans on nonaccrual status. Finally, interest expense also increased this quarter over the prior quarter driven by an increase in the interest rate on the Bank's subordinated debt. On June 16, 2026, the Bank's subordinated debt went from fixed rate to a floating rate of the 3 month SOFR rate plus 278 basis points resulting in an increase in the coupon rate from 3.375% to 6.44% for the third quarter of 2026. The Bank's net interest margin ("NIM") contracted in the quarter to 3.49% due to the interest reversals previously mentioned and to a lesser extent, the increase in the sub debt coupon. This compares to a NIM of 3.73% in the prior quarter which was aided by interest recoveries and to a NIM of 3.92% for the same quarter last year. Net Interest Income Compared to Prior Year Quarter. Net interest income before provision for credit losses was $66.7 million for the third quarter of 2026. This represents a $4.6 million decrease from the $71.3 million recorded in the same quarter last year. The decrease compared to the same quarter last year was due mainly to the $2.1 million in interest reversals previously mentioned as well as lower interest on overnight funds due to lower balances partially offset by a decrease in interest expense. Noninterest Income. For the third quarter of 2026, noninterest income was $5.0 million compared with $3.7 million for the same quarter last year and compared to $3.5 million for the second quarter of 2026. The increase from the same quarter last year was mainly due to a gain on the call of one of the Bank's investment securities of $431,000 as well as an increase in letters of credit fee income of $748,000. The increase over the prior quarter was due to a loss on the sale of a loan of $874,000 which occurred last quarter as well as an increase in letters of credit income and the gain on the call of an investment security this quarter. Noninterest Expense. Total noninterest expense was $22.2 million for the third quarter of 2026 compared to $21.5 million for the same period last year and compared to $23.7 million recorded in the prior quarter. The primary reason for the increase from the prior year was mainly due to an increase in FDIC assessments of $560,000 and an increase in other professional services of $289,000 due mainly to legal fees on problem loans. This was partially offset by a decrease in OREO expense of $388,000. The decrease from the prior quarter was due primarily to a decrease in personnel expense of $1.1 million, $366,000 in other professional expense and a $109,000 in OREO expense. The Bank's efficiency ratio came in at 30.9% for the quarter, which compares to 32.3% last quarter and to 28.7% in the same quarter last year. Income Taxes. The Bank recorded a provision for income taxes of $14.6 million for the third quarter of 2026. This represents an effective tax rate ("ETR") of 30.7% which is up from the 29.5% ETR for the same quarter last year and down slightly from 30.9% ETR recorded in the second quarter of 2026. 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 September 30, 2026 were $6.25 billion, essentially flat from the $6.25 billion reported as of June 30, 2026. And an increase of $200.6 million from the total of $6.05 billion as of December 31, 2025. Total deposits were $6.55 billion as of September 30, 2026, an increase of $77.7 million from the $6.47 billion as of June 30, 2026 and an increase of $204.4 million from December 31, 2025. Total assets were $7.82 billion, an increase of $214.9 million over the total of $7.60 billion as of December 31, 2025. Asset Quality Non-accrual loans and loans 90 days or more past due and still accruing totaled $109.4 million excluding loans held for sale compared to $98.9 million at June 30, 2026 as compared to $51.3 million as of December 31, 2025. During the quarter, the Bank placed a $56.7 million mixed use property onto nonaccrual status due to late payments. This loan is currently under contract to be sold at par with closing anticipated in late October 2026. The Bank is continuously reviewing all nonaccrual loans to ensure timely resolution. At present, there is no significant loss content identified and the average LTV for this commercial real estate cohort stands at 60.8%. Total net charge-offs (recoveries) on loans for the quarter were $(8,000) compared to $(41,000) in the second quarter of 2026 and compared to net charge-offs of $1.6 million in the third quarter of 2025. Allowance for Credit Losses The provision for credit losses for the third quarter of 2026 was 2.1 million compared to the $1.2 million recorded in the second quarter of 2026 and compared to $2.5 million in the same quarter last year. The Bank's allowance coverage ratio was 1.26% of total loans held for investment compared to 1.22% last quarter and compared to 1.30% as of December 31, 2025. Capitalization As of September 30, 2026, the Bank's tangible common equity ratio was 10.13%, the leverage ratio was 10.78%, the common equity tier 1 capital ratio was 11.26% and the total capital ratio stood at 13.93%. As of December 31, 2025, the Bank's tangible common equity ratio was 10.38%, the Bank's leverage ratio was 10.54%, the common equity tier 1 ratio was 11.26% and the total capital ratio was 14.47%. Conference Call and Webcast A conference call with simultaneous webcast to discuss Preferred Bank's third quarter 2026 financial results will be held this afternoon, October 23, 2026 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. Preferred Bank's Chairman and CEO Li Yu, President and Chief Operating Officer Wellington Chen, Chief Financial Officer Edward J. Czajka, Chief Risk Officer Nick Pi and Deputy Chief Operating Officer Johnny Hsu will discuss Preferred Bank's financial results, business highlights and outlook. After the live webcast, a replay will be available at the Investor Relations section of Preferred Bank's website. A replay of the call will also be available at 855-669-9658 (domestic) or 412-317-0088 (international) through November 6, 2026; the passcode is 9134266. 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 thirteen full-service branch banking offices in California (Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine (2), Diamond Bar, Pico Rivera, Tarzana, Cupertino and San Francisco (2)), two branches in New York (Manhattan and Flushing, Queens) and a branch 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 2025 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 Quarter Ended | | | | | September 30, | | June 30, | | September 30, | | | | | | 2026 | | | | 2026 | | | | 2025 | Interest income: | | | | | | | | | Loans, including fees | | $ | 106,517 | | | $ | 108,358 | | | $ | 110,645 | | Investment securities | | | 13,966 | | | | 13,883 | | | | 15,977 | | Fed funds sold | | | 199 | | | | 205 | | | | 228 | | | Total interest income | | | 120,682 | | | | 122,446 | | | | 126,850 | | | | | | | | | | | | Interest expense: | | | | | | | | | Interest-bearing demand | | | 16,003 | | | | 15,624 | | | | 17,562 | | Savings | | | 79 | | | | 75 | | | | 67 | | Time certificates | | | 33,441 | | | | 33,497 | | | | 34,792 | | FHLB borrowings | | | 1,877 | | | | 1,743 | | | | 1,794 | | Subordinated debt | | | 2,571 | | | | 1,517 | | | | 1,325 | | | Total interest expense | | | 53,971 | | | | 52,456 | | | | 55,540 | | | Net interest income | | | 66,711 | | | | 69,990 | | | | 71,310 | Provision for credit losses | | | 2,000 | | | | 1,200 | | | | 2,500 | | | Net interest income after provision for credit losses | | | 64,711 | | | | 68,790 | | | | 68,810 | | | | | | | | | | | | Noninterest income: | | | | | | | | | Fees & service charges on deposit accounts | | | 556 | | | | 570 | | | | 625 | | Letters of credit fee income | | | 3,169 | | | | 2,890 | | | | 2,421 | | BOLI income | | | 108 | | | | 107 | | | | 105 | | Net gain on called and sale of investment securities | | | 431 | | | | 35 | | | | - | | Net gain (loss) on sale of loans | | | 112 | | | | (874 | ) | | | 56 | | Other income | | | 616 | | | | 755 | | | | 458 | | | Total noninterest income | | | 4,992 | | | | 3,483 | | | | 3,665 | | | | | | | | | | | | Noninterest expense: | | | | | | | | | Salary and employee benefits | | | 14,205 | | | | 15,281 | | | | 14,240 | | Net occupancy expense | | | 2,360 | | | | 2,395 | | | | 2,297 | | Business development and promotion expense | | | 240 | | | | 322 | | | | 238 | | Professional services | | | 1,783 | | | | 2,149 | | | | 1,494 | | Office supplies and equipment expense | | | 385 | | | | 340 | | | | 361 | | OREO valuation allowance and related expense | | | 75 | | | | 184 | | | | 463 | | Other | | | | 3,111 | | | | 3,044 | | | | 2,405 | | | Total noninterest expense | | | 22,159 | | | | 23,715 | | | | 21,498 | | | Income before provision for income taxes | | | 47,544 | | | | 48,558 | | | | 50,977 | Income tax expense | | | 14,596 | | | | 15,018 | | | | 15,038 | | | Net income | | $ | 32,948 | | | $ | 33,540 | | | $ | 35,939 | | | | | | | | | | | | Income per share available to common shareholders | | | | | | | | | | Basic | | $ | 2.78 | | | $ | 2.83 | | | $ | 2.90 | | | Diluted | | $ | 2.73 | | | $ | 2.78 | | | $ | 2.84 | | | | | | | | | | | | Weighted-average common shares outstanding | | | | | | | | | | Basic | | | 11,853,279 | | | | 11,843,821 | | | | 12,384,924 | | | Diluted | | | 12,078,448 | | | | 12,049,162 | | | | 12,634,174 | | | | | | | | | | | | Cash dividends per common share | | $ | 0.80 | | | $ | 0.80 | | | $ | 0.75 | | | | | | | | | | | | PREFERRED BANK | Condensed Consolidated Statements of Operations | (unaudited) | (in thousands, except for net income per share and shares) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | For the Nine Months Ended | | | | | | | | | | September 30, | | September 30, | | | Change | | | | | | | 2026 | | | | 2025 | | | | % | Interest income: | | | | | | | | | | Loans, including fees | | $ | 318,257 | | | $ | 318,020 | | | | 0.1 | % | | Investment securities | | | 41,150 | | | | 43,113 | | | | -4.6 | % | | Fed funds sold | | | 596 | | | | 689 | | | | -13.5 | % | | | Total interest income | | | 360,003 | | | | 361,822 | | | | -0.5 | % | | | | | | | | | | | | | Interest expense: | | | | | | | | | | Interest-bearing demand | | | 46,747 | | | | 50,323 | | | | -7.1 | % | | Savings | | | 208 | | | | 207 | | | | 0.3 | % | | Time certificates | | | 100,311 | | | | 103,611 | | | | -3.2 | % | | FHLB borrowings | | | 5,310 | | | | 2,864 | | | | 85.4 | % | | Subordinated debt | | | 5,413 | | | | 3,975 | | | | 36.2 | % | | | Total interest expense | | | 157,989 | | | | 160,980 | | | | -1.9 | % | | | Net interest income | | | 202,014 | | | | 200,842 | | | | 0.6 | % | Provision for credit losses | | | 4,700 | | | | 4,800 | | | | -2.1 | % | | | Net interest income after provision for credit losses | | | 197,314 | | | | 196,042 | | | | 0.6 | % | | | | | | | | | | | | | Noninterest income: | | | | | | | | | | Fees & service charges on deposit accounts | | | 1,642 | | | | 1,976 | | | | -16.9 | % | | Letters of credit fee income | | | 8,796 | | | | 6,998 | | | | 25.7 | % | | BOLI income | | | 320 | | | | 312 | | | | 2.5 | % | | Net gain on called and sale of investment securities | | | 525 | | | | - | | | | 100.0 | % | | Net (loss) gain on sale of loans | | | (738 | ) | | | 503 | | | | -246.5 | % | | Other income | | | 2,240 | | | | 1,636 | | | | 36.9 | % | | | Total noninterest income | | | 12,785 | | | | 11,425 | | | | 11.9 | % | | | | | | | | | | | | | Noninterest expense: | | | | | | | | | | Salary and employee benefits | | | 44,946 | | | | 43,326 | | | | 3.7 | % | | Net occupancy expense | | | 7,181 | | | | 6,862 | | | | 4.6 | % | | Business development and promotion expense | | | 765 | | | | 940 | | | | -18.6 | % | | Professional services | | | 5,579 | | | | 4,652 | | | | 19.9 | % | | Office supplies and equipment expense | | | 1,083 | | | | 1,166 | | | | -7.1 | % | | OREO valuation allowance and related expense | | | 622 | | | | 3,473 | | | | -82.1 | % | | Other | | | | 9,237 | | | | 6,893 | | | | 34.0 | % | | | Total noninterest expense | | | 69,413 | | | | 67,312 | | | | 3.1 | % | | | Income before provision for income taxes | | | 140,686 | | | | 140,155 | | | | 0.4 | % | Income tax expense | | | 43,054 | | | | 41,345 | | | | 4.1 | % | | | Net income | | $ | 97,632 | | | $ | 98,810 | | | | -1.2 | % | | | | | | | | | | | | | Income per share available to common shareholders | | | | | | | | | | | Basic | | $ | 8.18 | | | $ | 7.77 | | | | 5.4 | % | | | Diluted | | $ | 8.03 | | | $ | 7.63 | | | | 5.3 | % | | | | | | | | | | | | | Weighted-average common shares outstanding | | | | | | | | | | | Basic | | | 11,933,229 | | | | 12,723,788 | | | | -6.2 | % | | | Diluted | | | 12,153,212 | | | | 12,949,445 | | | | -6.1 | % | | | | | | | | | | | | | Dividends per share | | $ | 2.40 | | | $ | 2.25 | | | | 6.7 | % | | | | | | | | | | | | | PREFERRED BANK Condensed Consolidated Statements of Financial Condition (unaudited) (in thousands) | | | | | | | | | | | | | | | | September 30, | | December 31, | | | | | 2026 | | | | 2025 | | | | | (Unaudited) | | (Audited) Assets | | | Cash and due from banks | $ | 681,029 | | | $ | 807,098 | Fed funds sold | | 20,000 | | | | 20,000 | | Cash and cash equivalents | | 701,029 | | | | 827,098 | | | | | | | Securities held-to-maturity, at amortized cost | | 17,834 | | | | 18,749 | Securities available-for-sale, at fair value | | 672,082 | | | | 566,186 | | | | | | | Loans held for sale, at lower of cost or fair value | | 56,557 | | | | - | | | | | | | Loans | | 6,198,293 | | | | 6,054,264 | | Less allowance for credit losses | | (78,284 | ) | | | (78,992 | ) | Less amortized deferred loan fees, net | | (7,611 | ) | | | (9,030 | ) | Loans, net | | 6,112,398 | | | | 5,966,242 | | | | | | | Other real estate owned and repossessed assets | | 11,534 | | | | 3,510 | Bank furniture and fixtures, net | | 10,888 | | | | 8,064 | Bank-owned life insurance | | 10,924 | | | | 10,712 | Accrued interest receivable | | 38,349 | | | | 34,233 | Investment in affordable housing partnerships | | 79,047 | | | | 69,978 | Federal Home Loan Bank stock, at cost | | 15,000 | | | | 15,000 | Deferred tax assets | | 55,015 | | | | 41,976 | Income tax receivable | | 3,513 | | | | 3,884 | Operating lease right-of-use assets | | 27,679 | | | | 30,531 | Other assets | | 4,172 | | | | 5,002 | | Total assets | $ | 7,816,021 | | | $ | 7,601,165 | | | | | | | Liabilities and shareholders' Equity | | | Deposits: | | | | Noninterest bearing demand deposits | $ | 745,763 | | | $ | 699,160 | | Interest bearing deposits: | | 2,321,924 | | | | 2,205,914 | | | Savings | | 29,840 | | | | 30,376 | | | Time certificates of $250,000 or more | | 1,830,163 | | | | 1,754,273 | | | Other time certificates | | 1,622,184 | | | | 1,655,723 | | | Total deposits | | 6,549,874 | | | | 6,345,446 | | | | | | | Advances from Federal Home Loan Bank | | 200,000 | | | | 200,000 | Subordinated debt issuance, net | | 148,884 | | | | 148,706 | Commitments to fund investment in affordable housing partnerships | | 32,040 | | | | 23,327 | Operating lease liabilities | | 32,184 | | | | 35,107 | Accrued interest payable | | 16,779 | | | | 16,513 | Other liabilities | | 43,827 | | | | 42,589 | | Total liabilities | | 7,023,588 | | | | 6,811,688 | | | | | | | Shareholders' equity | | 792,433 | | | | 789,477 | | Total liabilities and shareholders' equity | $ | 7,816,021 | | | $ | 7,601,165 | | | | | | | Book value per common share | $ | 66.85 | | | $ | 64.83 | Number of common shares outstanding | | 11,853,571 | | | | 12,177,588 | PREFERRED BANK Selected Consolidated Financial Information (unaudited) (in thousands, except for ratios) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | For the Quarter Ended | | | | | | | | | | | | | | | | September 30, | | June 30, | | March 31, | | December 31, | | September 30, | | | | | 2026 | | | | 2026 | | | | 2026 | | | | 2025 | | | | 2025 | Unaudited historical quarterly operations data: | | | | | | | | | | Interest income | $ | 120,682 | | | $ | 122,446 | | | $ | 116,875 | | | $ | 124,633 | | | $ | 126,850 | | Interest expense | | 53,971 | | | | 52,456 | | | | 51,562 | | | | 54,658 | | | | 55,540 | | | Interest income before provision for credit losses | | 66,711 | | | | 69,990 | | | | 65,313 | | | | 69,975 | | | | 71,310 | | Provision for credit losses | | 2,000 | | | | 1,200 | | | | 1,500 | | | | 4,300 | | | | 2,500 | | Noninterest income | | 4,992 | | | | 3,483 | | | | 4,310 | | | | 8,094 | | | | 3,665 | | Noninterest expense | | 22,159 | | | | 23,715 | | | | 23,539 | | | | 24,377 | | | | 21,498 | | Income tax expense | | 14,596 | | | | 15,018 | | | | 13,440 | | | | 14,570 | | | | 15,038 | | | Net income | $ | 32,948 | | | $ | 33,540 | | | $ | 31,144 | | | $ | 34,822 | | | $ | 35,939 | | | | | | | | | | | | | | Earnings per share | | | | | | | | | | | Basic | $ | 2.78 | | | $ | 2.83 | | | $ | 2.57 | | | $ | 2.85 | | | $ | 2.90 | | | Diluted | $ | 2.73 | | | $ | 2.78 | | | $ | 2.53 | | | $ | 2.79 | | | $ | 2.84 | | | | | | | | | | | | | Ratios for the period: | | | | | | | | | | Return on average assets | | 1.69 | % | | | 1.75 | % | | | 1.67 | % | | | 1.82 | % | | | 1.93 | % | Return on average equity | | 16.18 | % | | | 17.05 | % | | | 15.89 | % | | | 17.59 | % | | | 18.64 | % | Net interest margin (fully-taxable equivalent) | | 3.49 | % | | | 3.73 | % | | | 3.57 | % | | | 3.74 | % | | | 3.92 | % | Noninterest expense to average assets | | 1.14 | % | | | 1.24 | % | | | 1.26 | % | | | 1.27 | % | | | 1.16 | % | Efficiency ratio | | 30.90 | % | | | 32.28 | % | | | 33.81 | % | | | 31.22 | % | | | 28.67 | % | Net charge-offs (recoveries) to average loans (annualized) | | -0.00 | % | | | -0.00 | % | | | 0.37 | % | | | 0.00 | % | | | 0.11 | % | | | | | | | | | | | | Ratios as of period end: | | | | | | | | | | Tangible common equity ratio | | 10.13 | % | | | 10.26 | % | | | 10.05 | % | | | 10.38 | % | | | 10.38 | % | Tier 1 leverage capital ratio | | 10.78 | % | | | 10.55 | % | | | 10.37 | % | | | 10.54 | % | | | 10.66 | % | Common equity tier 1 risk-based capital ratio | | 11.26 | % | | | 11.06 | % | | | 10.87 | % | | | 11.26 | % | | | 11.34 | % | Tier 1 risk-based capital ratio | | 11.26 | % | | | 11.06 | % | | | 10.87 | % | | | 11.26 | % | | | 11.34 | % | Total risk-based capital ratio | | 13.93 | % | | | 13.74 | % | | | 13.98 | % | | | 14.47 | % | | | 14.56 | % | Allowances for credit losses to loans at end of period | | 1.26 | % | | | 1.22 | % | | | 1.24 | % | | | 1.30 | % | | | 1.27 | % | Allowance for credit losses to non-performing loans | | 0.75 | x | | | 0.84 | x | | | 0.8 | x | | | 1.54 | x | | | 4.24 | x | | | | | | | | | | | | Average balances: | | | | | | | | | | Total securities | $ | 610,837 | | | $ | 558,696 | | | $ | 580,248 | | | $ | 586,950 | | | $ | 583,302 | | Total loans held for investment | | 6,191,538 | | | | 6,021,420 | | | | 6,037,241 | | | | 5,947,814 | | | | 5,753,801 | | Total loans held for investment and held for sale | | 6,200,211 | | | | 6,038,330 | | | | 6,051,465 | | | | 5,947,986 | | | | 5,754,073 | | Total earning assets | | 7,587,420 | | | | 7,532,781 | | | | 7,437,232 | | | | 7,439,767 | | | | 7,234,568 | | Total assets | | 7,733,141 | | | | 7,668,719 | | | | 7,563,705 | | | | 7,585,940 | | | | 7,382,265 | | Total time certificate of deposits | | 3,468,041 | | | | 3,500,857 | | | | 3,451,924 | | | | 3,402,304 | | | | 3,330,241 | | Total interest bearing deposits | | 5,714,126 | | | | 5,712,097 | | | | 5,644,722 | | | | 5,651,369 | | | | 5,501,767 | | Total deposits | | 6,456,558 | | | | 6,420,198 | | | | 6,311,446 | | | | 6,336,242 | | | | 6,169,728 | | Total interest bearing liabilities | | 6,062,973 | | | | 6,060,886 | | | | 5,993,452 | | | | 6,000,042 | | | | 5,850,376 | | Total equity | | 807,742 | | | | 789,114 | | | | 794,931 | | | | 785,581 | | | | 764,766 | | | | | | | | | | | | | PREFERRED BANK Selected Consolidated Financial Information (unaudited) (in thousands, except for ratios) | | | | | | | | | | | | | | | | | | | | | | For the Nine Months Ended | | | | September 30 | | September 30 | | | | | 2026 | | | | 2025 | | | | | | | | Interest income | $ | 360,003 | | | $ | 361,822 | | Interest expense | | 157,989 | | | | 160,980 | | | Interest income before provision for credit losses | | | 202,014 | | | | 200,842 | | Provision for credit losses | | 4,700 | | | | 4,800 | | Noninterest income | | 12,785 | | | | 11,425 | | Noninterest expense | | 69,413 | | | | 67,312 | | Income tax expense | | 43,054 | | | | 41,345 | | | Net income | $ | 97,632 | | | $ | 98,810 | | | | | | | | Earnings per share | | | | | Basic | $ | 8.18 | | | $ | 7.77 | | | Diluted | $ | 8.03 | | | $ | 7.63 | | | | | | | Ratios for the period: | | | | Return on average assets | | 1.71 | % | | | 1.85 | % | Return on average equity | | 16.37 | % | | | 17.27 | % | Net interest margin (fully-taxable equivalent) | | 3.60 | % | | | 3.84 | % | Noninterest expense to average assets | | 1.21 | % | | | 1.26 | % | Efficiency ratio | | 32.32 | % | | | 31.71 | % | Net charge-off to average loans | | 0.12 | % | | | 0.04 | % | | | | | | Average balances: | | | | Total securities | $ | 583,373 | | | $ | 497,301 | | Total loans held for investment | | 6,083,964 | | | | 5,644,668 | | Total loans held for investment and held for sale | | 6,097,213 | | | | 5,648,323 | | Total earning assets | | 7,519,694 | | | | 7,001,424 | | Total assets | | 7,655,809 | | | | 7,137,935 | | Total time certificate of deposits | | 3,473,667 | | | | 3,272,717 | | Total interest bearing deposits | | 5,690,570 | | | | 5,364,715 | | Total deposits | | 6,396,600 | | | | 6,021,497 | | Total interest bearing liabilities | | 6,039,359 | | | | 5,620,958 | | Total equity | | 797,309 | | | | 764,826 | | | | | | | PREFERRED BANK Selected Consolidated Financial Information (unaudited) (in thousands, except for ratios) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of | | | | | | | | | | | | | | | | September 30, | | June 30, | | March 31, | | December 31, | | September 30, | | | | | 2026 | | | | 2026 | | | | 2026 | | | | 2025 | | | | 2025 | Unaudited quarterly statement of financial position data: | | | | | | | | | Assets: | | | | | | | | | | Cash and cash equivalents | $ | 701,029 | | | $ | 789,820 | | | $ | 825,161 | | | $ | 827,098 | | | $ | 815,459 | | Securities held-to-maturity, at amortized cost | | 17,834 | | | | 18,154 | | | | 18,458 | | | | 18,749 | | | | 19,034 | | Securities available-for-sale, at fair value | | 672,082 | | | | 525,956 | | | | 553,184 | | | | 566,186 | | | | 569,115 | | Loans: | | | | | | | | | | | Real estate – mortgage: | | | | | | | | | | | | Real estate—residential | $ | 745,775 | | | $ | 737,321 | | | $ | 738,508 | | | $ | 783,136 | | | $ | 793,217 | | | | Real estate—commercial | | 3,127,696 | | | | 3,169,037 | | | | 3,105,331 | | | | 3,028,762 | | | | 2,890,990 | | | | Total Real estate – mortgage | | 3,873,471 | | | | 3,906,358 | | | | 3,843,839 | | | | 3,811,898 | | | | 3,684,207 | | | Real estate – construction: | | | | | | | | | | | | R/E construction — residential | | 282,750 | | | | 284,219 | | | | 265,748 | | | | 282,808 | | | | 285,623 | | | | R/E construction — commercial | | 356,582 | | | | 364,807 | | | | 343,598 | | | | 387,759 | | | | 323,897 | | | | Total real estate construction loans | | 639,332 | | | | 649,026 | | | | 609,346 | | | | 670,567 | | | | 609,520 | | | Commercial and industrial | | 1,676,780 | | | | 1,675,300 | | | | 1,584,984 | | | | 1,563,504 | | | | 1,570,423 | | | SBA | | 8,598 | | | | 8,444 | | | | 8,087 | | | | 8,053 | | | | 7,630 | | | Consumer and others | | 112 | | | | 153 | | | | 288 | | | | 242 | | | | 231 | | | | Gross loans | | 6,198,293 | | | | 6,239,281 | | | | 6,046,544 | | | | 6,054,264 | | | | 5,872,011 | | Allowance for credit losses on loans | | (78,284 | ) | | | (76,276 | ) | | | (75,036 | ) | | | (78,992 | ) | | | (74,692 | ) | Net deferred loan fees | | (7,611 | ) | | | (8,288 | ) | | | (7,923 | ) | | | (9,030 | ) | | | (9,956 | ) | | Net loans, excluding loans held for sale | $ | 6,112,398 | | | $ | 6,154,717 | | | $ | 5,963,585 | | | $ | 5,966,242 | | | $ | 5,787,363 | | Loans held for sale | $ | 56,557 | | | $ | 8,348 | | | $ | 76,324 | | | $ | - | | | $ | - | | | Net loans | $ | 6,168,955 | | | $ | 6,163,065 | | | $ | 6,039,909 | | | $ | 5,966,242 | | | $ | 5,787,363 | | | | | | | | | | | | | | Other real estate owned and repossessed assets | $ | 11,534 | | | $ | 3,010 | | | $ | 3,010 | | | $ | 3,510 | | | $ | 52,609 | | Investment in affordable housing partnerships | | 79,047 | | | | 77,729 | | | | 66,394 | | | | 69,978 | | | | 73,874 | | Federal Home Loan Bank stock, at cost | | 15,000 | | | | 15,000 | | | | 15,000 | | | | 15,000 | | | | 15,000 | | Other assets | | 150,540 | | | | 137,887 | | | | 133,521 | | | | 134,402 | | | | 135,340 | | | Total assets | $ | 7,816,021 | | | $ | 7,730,621 | | | $ | 7,654,637 | | | $ | 7,601,165 | | | $ | 7,467,794 | | | | | | | | | | | | | Liabilities: | | | | | | | | | | Deposits: | | | | | | | | | | | Demand | $ | 745,763 | | | $ | 754,670 | | | $ | 716,777 | | | $ | 699,160 | | | $ | 654,302 | | | Interest bearing demand | | 2,321,924 | | | | 2,209,390 | | | | 2,200,374 | | | | 2,205,914 | | | | 2,205,865 | | | Savings | | 29,840 | | | | 31,617 | | | | 26,822 | | | | 30,376 | | | | 31,087 | | | Time certificates of $250,000 or more | | 1,830,163 | | | | 1,822,765 | | | | 1,795,883 | | | | 1,754,273 | | | | 1,699,757 | | | Other time certificates | | 1,622,184 | | | | 1,653,766 | | | | 1,680,291 | | | | 1,655,723 | | | | 1,638,662 | | | Total deposits | $ | 6,549,874 | | | $ | 6,472,208 | | | $ | 6,420,147 | | | $ | 6,345,446 | | | $ | 6,229,673 | | | | | | | | | | | | | | Advance from Federal Home Loan Bank | | 200,000 | | | | 200,000 | | | | 200,000 | | | | 200,000 | | | | 200,000 | | Subordinated debt issuance, net | | 148,884 | | | | 148,825 | | | | 148,766 | | | | 148,706 | | | | 148,647 | | Commitments to fund investment in affordable housing partnerships | | 32,040 | | | | 29,949 | | | | 18,873 | | | | 23,327 | | | | 24,874 | | Other liabilities | | 92,790 | | | | 86,112 | | | | 96,652 | | | | 94,209 | | | | 88,958 | | | Total liabilities | $ | 7,023,588 | | | $ | 6,937,094 | | | $ | 6,884,438 | | | $ | 6,811,688 | | | $ | 6,692,152 | | | | | | | | | | | | | Equity: | | | | | | | | | | | Common stock, no par value | $ | 210,882 | | | $ | 210,882 | | | $ | 210,882 | | | $ | 210,882 | | | $ | 210,882 | | Additional paid-in capital | | 113,018 | | | | 110,913 | | | | 108,853 | | | | 105,105 | | | | 103,235 | | Treasury stock | | (334,626 | ) | | | (334,591 | ) | | | (334,490 | ) | | | (293,406 | ) | | | (277,351 | ) | Retained earnings | | 849,830 | | | | 826,365 | | | | 802,308 | | | | 780,637 | | | | 755,587 | | Accumulated other comprehensive income | | (46,671 | ) | | | (20,042 | ) | | | (17,354 | ) | | | (13,741 | ) | | | (16,711 | ) | | Total shareholders' equity | $ | 792,433 | | | $ | 793,527 | | | $ | 770,199 | | | $ | 789,477 | | | $ | 775,642 | | | Total liabilities and shareholders' equity | $ | 7,816,021 | | | $ | 7,730,621 | | | $ | 7,654,637 | | | $ | 7,601,165 | | | $ | 7,467,794 | | | | | | | | | | | | | PREFERRED BANK Quarter-to-Date Average Balances, Yield and Rates (Unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended September 30, | | Three months ended June 30, | | Three months ended September 30, | | | | 2026 | | | | 2026 | | | | 2025 | | | | | | 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) | $ | 6,200,211 | | | $ | 106,517 | | | 6.82 | % | | $ | 6,038,330 | | | $ | 108,358 | | | 7.20 | % | | $ | 5,754,073 | | | $ | 110,645 | | | 7.63 | % | Investment securities(3) | | 610,837 | | | | 6,499 | | | 4.22 | % | | | 558,696 | | | | 5,611 | | | 4.03 | % | | | 583,302 | | | | 6,257 | | | 4.26 | % | Federal funds sold | | 20,648 | | | | 199 | | | 3.82 | % | | | 21,538 | | | | 205 | | | 3.82 | % | | | 20,000 | | | | 228 | | | 4.52 | % | Other earning assets | | 755,724 | | | | 7,561 | | | 3.97 | % | | | 914,217 | | | | 8,364 | | | 3.67 | % | | | 877,193 | | | | 9,811 | | | 4.44 | % | | Total interest earning assets | | 7,587,420 | | | | 120,776 | | | 6.32 | % | | | 7,532,781 | | | | 122,538 | | | 6.52 | % | | | 7,234,568 | | | | 126,941 | | | 6.96 | % | Deferred loan fees, net | | (8,072 | ) | | | | | | | | (8,139 | ) | | | | | | | | (10,686 | ) | | | | | | Allowance for credit losses on loans | | (76,309 | ) | | | | | | | | (75,675 | ) | | | | | | | | (72,784 | ) | | | | | Noninterest earning assets: | | | | | | | | | | | | | | | | | | | | | Cash and due from banks | | 11,412 | | | | | | | | | 11,141 | | | | | | | | | 10,071 | | | | | | | Bank furniture and fixtures | | 10,803 | | | | | | | | | 9,694 | | | | | | | | | 7,945 | | | | | | | Right of use assets | | 28,288 | | | | | | | | | 29,211 | | | | | | | | | 19,153 | | | | | | | Other assets | | 179,599 | | | | | | | | | 169,706 | | | | | | | | | 193,998 | | | | | | | | Total assets | $ | 7,733,141 | | | | | | | | $ | 7,668,719 | | | | | | | | $ | 7,382,265 | | | | | | | | | | | | | | | | | | | | | | | | | | | | Liabilities and shareholders' equity | | | | | | | | | | | | | | | | | | | | Interest bearing liabilities: | | | | | | | | | | | | | | | | | | | | | Deposits: | | | | | | | | | | | | | | | | | | | | | | Interest bearing demand and savings | $ | 2,246,085 | | | $ | 16,082 | | | 2.84 | % | | $ | 2,211,240 | | | $ | 15,699 | | | 2.85 | % | | $ | 2,171,526 | | | $ | 17,629 | | | 3.22 | % | | TCD $250K or more | | 1,817,686 | | | | 17,296 | | | 3.78 | % | | | 1,812,356 | | | | 17,065 | | | 3.78 | % | | | 1,686,710 | | | | 17,406 | | | 4.09 | % | | Other time certificates | | 1,650,355 | | | | 16,145 | | | 3.88 | % | | | 1,688,501 | | | | 16,432 | | | 3.90 | % | | | 1,643,531 | | | | 17,386 | | | 4.20 | % | | Total interest bearing deposits | | 5,714,126 | | | | 49,523 | | | 3.44 | % | | | 5,712,097 | | | | 49,196 | | | 3.45 | % | | | 5,501,767 | | | | 52,421 | | | 3.78 | % Advance from Federal Home Loan Bank | | 200,000 | | | | 1,877 | | | 3.72 | % | | | 200,000 | | | | 1,743 | | | 3.50 | % | | | 200,000 | | | | 1,794 | | | 3.56 | % Subordinated debt, net | | 148,847 | | | | 2,571 | | | 6.85 | % | | | 148,789 | | | | 1,517 | | | 4.09 | % | | | 148,609 | | | | 1,325 | | | 3.54 | % | | Total interest bearing liabilities | | 6,062,973 | | | | 53,971 | | | 3.53 | % | | | 6,060,886 | | | | 52,456 | | | 3.47 | % | | | 5,850,376 | | | | 55,540 | | | 3.77 | % Noninterest bearing liabilities: | | | | | | | | | | | | | | | | | | | | | Demand deposits | | 742,432 | | | | | | | | | 708,101 | | | | | | | | | 667,961 | | | | | | | Lease liability | | 32,888 | | | | | | | | | 33,946 | | | | | | | | | 22,908 | | | | | | | Other liabilities | | 87,106 | | | | | | | | | 76,672 | | | | | | | | | 76,254 | | | | | | | | Total liabilities | | 6,925,399 | | | | | | | | | 6,879,605 | | | | | | | | | 6,617,499 | | | | | | Shareholders' equity | | 807,742 | | | | | | | | | 789,114 | | | | | | | | | 764,766 | | | | | | | | Total liabilities and shareholders' equity | $ | 7,733,141 | | | | | | | | $ | 7,668,719 | | | | | | | | $ | 7,382,265 | | | | | | Net interest income | | | $ | 66,805 | | | | | | | $ | 70,082 | | | | | | | $ | 71,401 | | | Net interest spread | | | | | | 2.78 | % | | | | | | | 3.05 | % | | | | | | | 3.19 | % Net interest margin | | | | | | 3.49 | % | | | | | | | 3.73 | % | | | | | | | 3.92 | % | | | | | | | | | | | | | | | | | | | | | | Cost of Deposits: | | | | | | | | | | | | | | | | | | | | | Noninterest bearing demand deposits | $ | 742,432 | | | | | | | | $ | 708,101 | | | | | | | | $ | 667,961 | | | | | | | Interest bearing deposits | | 5,714,126 | | | | 49,523 | | | 3.44 | % | | | 5,712,097 | | | | 49,196 | | | 3.45 | % | | | 5,501,767 | | | | 52,421 | | | 3.78 | % | | Total Deposits | $ | 6,456,558 | | | $ | 49,523 | | | 3.04 | % | | $ | 6,420,198 | | | $ | 49,196 | | | 3.07 | % | | $ | 6,169,728 | | | $ | 52,421 | | | 3.37 | % | | | | | | | | | | | | | | | | | | | | | | (1) | Includes non-accrual loans and loans held for sale | | | | | | | | | | | | | | | | | | | (2) | Net loan fee income of $0.8 million, $1.2 million and $1.7 million for the quarter ended September 30, 2026, June 30, 2026 and September 30, 2025, respectively, are included in the yield computations (3) | Yields on securities have been adjusted to a tax-equivalent basis | | | | | | | | | | | | | | | | | PREFERRED BANK Year-to-Date Average Balances, Yield, and Rates (Unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nine Months ended September 30, | | | 2026 | | 2025 | | | | | Interest | | Average | | | | Interest | | Average | | | Average | | Income or | | Yield/ | | Average | | Income or | | Yield/ | | | Balance | | Expense | | Rate | | Balance | | Expense | | Rate Assets | (Dollars in thousands) Interest earning assets: | | | | | | | | | | | | Loans(1,2) | $ | 6,097,213 | | | $ | 318,257 | | 6.98 | % | | $ | 5,648,323 | | | $ | 318,020 | | 7.53 | % | Investment securities(3) | | 583,373 | | | | 17,822 | | 4.08 | % | | | 497,301 | | | | 15,546 | | 4.18 | % | Federal funds sold | | 20,898 | | | | 596 | | 3.81 | % | | | 20,244 | | | | 689 | | 4.55 | % | Other earning assets | | 818,210 | | | | 23,606 | | 3.86 | % | | | 835,556 | | | | 27,857 | | 4.46 | % | | Total interest earning assets | | 7,519,694 | | | | 360,281 | | 6.41 | % | | | 7,001,424 | | | | 362,112 | | 6.91 | % | Deferred loan fees, net | | (8,181 | ) | | | | | | | (9,965 | ) | | | | | Allowance for credit losses on loans | | (76,980 | ) | | | | | | | (72,225 | ) | | | | Noninterest earning assets: | | | | | | | | | | | | Cash and due from banks | | 10,872 | | | | | | | | 11,178 | | | | | | Bank furniture and fixtures | | 9,677 | | | | | | | | 8,198 | | | | | | Right of use assets | | 29,224 | | | | | | | | 18,105 | | | | | | Other assets | | 171,503 | | | | | | | | 181,220 | | | | | | | Total assets | $ | 7,655,809 | | | | | | | $ | 7,137,935 | | | | | | | | | | | | | | | | | | Liabilities and shareholders' equity | | | | | | | | | | | Interest bearing liabilities: | | | | | | | | | | | | Deposits: | | | | | | | | | | | | | Interest bearing demand/ savings | $ | 2,216,903 | | | $ | 46,955 | | 2.83 | % | | $ | 2,091,998 | | | $ | 50,530 | | 3.23 | % | | TCD $250K or more | | 1,801,206 | | | | 51,247 | | 3.80 | % | | | 1,605,201 | | | | 50,138 | | 4.18 | % | | Other time certificates | | 1,672,461 | | | | 49,064 | | 3.92 | % | | | 1,667,516 | | | | 53,473 | | 4.29 | % | | Total interest \bearing deposits | | 5,690,570 | | | | 147,266 | | 3.46 | % | | | 5,364,715 | | | | 154,141 | | 3.84 | % Short-term borrowings | | 1 | | | | 0 | | 2.77 | % | | | - | | | | - | | 0.00 | % Advance from Federal Home Loan Bank | | 200,000 | | | | 5,310 | | 3.55 | % | | | 107,692 | | | | 2,864 | | 3.56 | % Subordinated debt, net | | 148,788 | | | | 5,413 | | 4.86 | % | | | 148,551 | | | | 3,975 | | 3.58 | % | | Total interest bearing liabilities | | 6,039,359 | | | | 157,989 | | 3.50 | % | | | 5,620,958 | | | | 160,980 | | 3.83 | % Noninterest bearing liabilities: | | | | | | | | | | | | Demand deposits | | 706,030 | | | | | | | | 656,782 | | | | | | Lease liability | | 33,899 | | | | | | | | 21,857 | | | | | | Other liabilities | | 79,212 | | | | | | | | 73,512 | | | | | | | Total liabilities | | 6,858,500 | | | | | | | | 6,373,109 | | | | | Shareholders' equity | | 797,309 | | | | | | | | 764,826 | | | | | | | Total liabilities and shareholders' equity | $ | 7,655,809 | | | | | | | $ | 7,137,935 | | | | | Net interest income | | | $ | 202,292 | | | | | | $ | 201,132 | | Net interest spread | | | | | 2.91 | % | | | | | | 3.09 | % Net interest margin | | | | | 3.60 | % | | | | | | 3.84 | % | | | | | | | | | | | | | Cost of Deposits: | | | | | | | | | | | | Noninterest bearing demand deposits | $ | 706,030 | | | | | | | $ | 656,782 | | | | | | Interest bearing deposits | | 5,690,570 | | | | 147,266 | | 3.46 | % | | | 5,364,715 | | | | 154,141 | | 3.84 | % | | Total Deposits | $ | 6,396,600 | | | $ | 147,266 | | 3.08 | % | | $ | 6,021,497 | | | $ | 154,141 | | 3.42 | % | | | | | | | | | | | | | (1) | Includes non-accrual loans and loans held for sale | | | | | | | | | | | (2) | Net loan fee income of $3.2 million and $3.6 million for the nine months ended September 30, 2026 and 2025, 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 | | | | | Nine Months Ended | Year Ended | | | | | September 30, 2026 | | December 31, 2025 | | | | | (Dollars in 000's) Allowance for credit losses | | | | Balance at beginning of period | | $ | 78,992 | | | $ | 71,477 | | Charge-Offs | | | | | | Commercial & Industrial | | | 2,555 | | | | 8 | | | Mini-perm real estate | | | 3,833 | | | | 1,749 | | | Total charge-offs | | | 6,388 | | | | 1,757 | | | | | | | | | Recoveries | | | | | | Commercial & Industrial | | | 112 | | | | 172 | | | Mini-perm real estate | | | 868 | | | | - | | | Total recoveries | | | 980 | | | | 172 | | | | | | | | | Net charge-offs | | | 5,408 | | | | 1,585 | | Provision for dredit losses | | | 4,700 | | | | 9,100 | Balance at dnd of period | | $ | 78,284 | | | $ | 78,992 | | | | | | | | Average loans held for investment | | $ | 6,083,964 | | | $ | 5,721,077 | Loans held for investment at end of period | | $ | 6,198,293 | | | $ | 6,054,264 | Net charge-offs to average loans | | | 0.12 | % | | | 0.03 | % Allowances for credit losses to loans at end of period | | | 1.26 | % | | | 1.30 | % | | | | | | | 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 | [email protected]