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Preferred Bank Reports Final Fourth Quarter Results

Stocks in this article: PFBC

The Preferred Bank logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=11817

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the Bank's future financial and operating results, the Bank's plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of the Bank's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: changes in economic conditions; changes in the California real estate market; the loss of senior management and other employees; natural disasters or recurring energy shortage; changes in interest rates; competition from other financial services companies; ineffective underwriting practices; inadequate allowance for loan and lease losses to cover actual losses; risks inherent in construction lending; adverse economic conditions in Asia; downturn in international trade; inability to attract deposits; inability to raise additional capital when needed or on favorable terms; inability to manage growth; inadequate communications, information, operating and financial control systems, technology from fourth party service providers; the U.S. government's monetary policies; government regulation; environmental liability with respect to properties to which the bank takes title; and the threat of terrorism. Additional factors that could cause the Bank's results to differ materially from those described in the forward-looking statements can be found in the Bank's 2011 Annual Report on Form 10-K filed with the Federal Deposit Insurance Corporation which can be found on Preferred Bank's website. The forward-looking statements in this press release speak only as of the date of the press release, and the Bank assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those contained in the forward-looking statements. For additional information about Preferred Bank, please visit the Bank's website at www.preferredbank.com .

Financial Tables to Follow

 PREFERRED BANK 
 Condensed Consolidated Statements of Operations 
 (unaudited) 
 (in thousands, except for net income per share and shares) 
       
  For the Three Months Ended
  December 31, 2012 December 31, 2011 September 30, 2012
Interest income:       
Loans, including fees   $ 14,504  $ 11,997  $ 13,834
Investment securities   1,496  1,760  1,340
Fed funds sold   10  --  14
Total interest income   16,010  13,757  15,189
       
Interest expense:       
Interest-bearing demand   489  422  441
Savings   20  20  18
Time certificates   1,297  1,808  1,398
Senior debt   --  188  --
Total interest expense   1,806  2,438  1,857
       
Net interest income   14,204  11,319  13,332
       
Provision for loan losses   2,300  2,400  1,200
       
Net interest income after provision for loan losses   11,904  8,919  12,132
       
Noninterest income:       
Fees & service charges on deposit accounts   480  440  445
Trade finance income   87  57  56
BOLI income   83  84  82
Net gain (loss) on sale of investment securities   21  --  --
Other income   78  241  84
Total noninterest income   749  822  667
       
Noninterest expense:       
Salary and employee benefits   3,316  2,919  3,228
Net occupancy expense   753  739  743
Business development and promotion expense   104  123  73
Professional services   1,003  661  1,004
Office supplies and equipment expense   281  297  283
Total other-than-temporary impairment losses   --  --  8
Portion of loss recognized in other comprehensive income   --  --  --
Other real estate owned related expense   1,696  1,227  2,525
Other   1,001  1,407  1,278
Total noninterest expense   8,154  7,373  9,143
       
Income before provision for income taxes   4,498  2,368  3,655
       
Income tax expense (benefit)   (928)  (1,399)  833
Net income   $ 5,426  $ 3,767  $ 2,822
       
Income allocated to participating securities   (69)  (64)  (37)
Net income available to common shareholders   $ 5,357  $ 3,703  $ 2,785
       
Income per share available to common shareholders       
Basic   $ 0.41  $ 0.29  $ 0.21
Diluted   $ 0.40  $ 0.29  $ 0.21
       
 Weighted-average common shares outstanding       
Basic   13,065,227  13,000,092  13,062,146
Diluted   13,291,592  13,000,092  13,255,778
 
 PREFERRED BANK 
 Condensed Consolidated Statements of Operations 
 (unaudited) 
 (in thousands, except for net income per share and shares) 
       
  For the Twelve Months Ended  
  December 31, 2012 December 31, 2011 Change %
Interest income:       
Loans, including fees   $ 55,400  $ 46,464 19.2%
Investment securities   6,116  7,326 -16.5%
Fed funds sold   26  -- 100.0%
Total interest income   61,542  53,790 14.4%
       
Interest expense:       
Interest-bearing demand   1,746  1,295 34.8%
Savings   75  92 -18.3%
Time certificates   5,868  8,163 -28.1%
Senior debt   94  753 -87.5%
Total interest expense   7,783  10,303 -24.5%
       
Net interest income   53,759  43,487 23.6%
       
Provision for credit losses   19,800  5,700 247.4%
       
Net interest income after provision for loan losses   33,959  37,787 -10.1%
       
Noninterest income:       
Fees & service charges on deposit accounts   1,792  1,742 2.9%
Trade finance income   309  241 28.1%
BOLI income   329  333 -1.1%
Net gain on sale of investment securities   575  81 611.7%
Other income   503  393 27.8%
Total noninterest income   3,508  2,790 25.7%
       
Noninterest expense:       
Salary and employee benefits   12,523  11,155 12.3%
Net occupancy expense   2,990  3,060 -2.3%
Business development and promotion expense   294  335 -12.1%
Professional services   3,227  2,267 42.4%
Office supplies and equipment expense   1,154  1,061 8.7%
Total other-than-temporary impairment losses   24  32 -25.0%
Portion of loss recognized in other comprehensive income   --  -- 0.0%
Other real estate owned related expense   8,580  8,303 3.3%
Other   5,387  7,180 -25.0%
Total noninterest expense   34,179  33,393 2.4%
       
Income before provision for income taxes   3,288  7,185 -54.2%
       
Income tax benefit   (21,095)  (5,049) 317.8%
       
Net income   $ 24,383  $ 12,234 99.3%
       
Income allocated to participating securities   (330)  (195) 100.0%
Net income available to common shareholders   $ 24,053  $ 12,039 99.8%
       
Income per share available to common shareholders       
Basic   $ 1.84  $ 0.93 98.9%
Diluted   $ 1.82  $ 0.93 96.0%
       
Weighted-average common shares outstanding       
Basic   13,050,559  12,995,525 0.4%
Diluted   13,247,389  12,995,525 1.9%
 
 PREFERRED BANK 
 Condensed Consolidated Statements of Financial Condition 
 (unaudited) 
 (in thousands) 
     
  December 31, 2012 December 31, 2011
Assets     
     
Cash and due from banks   $ 151,995  $ 142,466
Cash and cash equivalents   151,995  142,466
     
Securities held to maturity, at amortized cost   979  3,021
Securities available-for-sale, at fair value   210,742  166,083
Loans and leases   1,119,553  949,631
Less allowance for loan and lease losses   (20,607)  (23,718)
Less net deferred loan fees   (2,019)  (1,037)
Net loans and leases   1,096,927  924,876
     
Loans held for sale, at lower of cost or fair value   12,150  3,996
     
Other real estate owned   28,280  37,577
Customers' liability on acceptances   1,961  427
Bank furniture and fixtures, net   4,383  4,789
Bank-owned life insurance   8,049  7,808
Accrued interest receivable   5,646  4,851
Federal Home Loan Bank stock   4,282  4,164
Deferred tax assets   26,971  6,979
Other asset   3,002  2,760
Total assets   $ 1,555,367  $ 1,309,797
     
     
Liabilities and Shareholders' Equity     
     
Liabilities:     
Deposits:     
Demand   $ 446,734  $ 239,987
Interest-bearing demand  325,018 233,349
Savings  21,844 22,385
Time certificates of $250,000 or more  208,005 185,001
Other time certificates  355,926 437,231
 Total deposits  $ 1,357,527  $ 1,117,953
Acceptances outstanding   1,961  427
Senior debt issuance   --  25,996
Accrued interest payable   968  1,292
Other liabilities   6,562  6,081
Total liabilities   1,367,018  1,151,749
     
Commitments and contingencies     
Shareholders' equity:     
Preferred stock. Authorized 25,000,000 shares; no issued and outstanding shares at December 31, 2012 and December 31, 2011  —  — 
Common stock, no par value. Authorized 20,000,000 shares; issued and outstanding 13,234,608 and 13,220,955 shares at December 31, 2012 and December 31, 2011, respectively   162,927  162,884
Treasury stock   (19,115)  (19,115)
Additional paid-in-capital   24,544  23,456
Accumulated income   17,992  (6,391)
Accumulated other comprehensive income (loss):     
Non-credit portion of loss recognized, net of tax of $133 and $367 at December 31, 2012 and December 31, 2011, respectively  (184)  (481)
Unrealized loss on securities, available-for-sale, net of tax of $1,131 and $1,554 at December 31, 2012 and December 31, 2011  2,185  (2,305)
Total shareholders' equity   188,349  158,048
Total liabilities and shareholders' equity   $ 1,555,367  $ 1,309,797
CONTACT: AT THE COMPANY:
         Edward J. Czajka
         Executive Vice President
         Chief Financial Officer
         (213) 891-1188
         
         AT FINANCIAL PROFILES:
         Kristen McNally
         General Information
         (310) 663-8007
         kmcnally@finprofiles.com

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