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LOS ANGELES, July 17, 2013 (GLOBE NEWSWIRE) --
Preferred Bank (Nasdaq:PFBC), an independent commercial bank focusing on the Chinese-American and diversified California mainstream market, today reported results for the quarter ended June 30, 2013. Preferred Bank ("the Bank") reported net income of $4.3 million or $0.32 per diluted share for the second quarter of 2013. This compares to a net loss of $5.6 million or $0.43 per diluted share for the second quarter of 2012 and compares to net income of $4.0 million or $0.30 per diluted share for the first quarter of 2013. Net income on a year-to-date basis was $8.3 million or $0.61 per diluted share for 2013 compared to net income of $16.1 million or $1.20 per diluted share for the same period last year. Results for 2012 were aided by a $20.2 million reversal of the Bank's valuation allowance on its deferred tax asset.
Li Yu, Chairman and CEO commented, "Reported results as of June 30, 2013 include the placement of certain loans on nonaccrual status and the reversal of interest income based on verbal indications from our regulators of their pending recommendation to place certain loans on nonaccrual possibly as of December 31, 2012. Although we are not in receipt of the Report of Examination and thus have not been able to fully review the possible recommendations, the Board elected to fully reflect the possible financial implications of these items within the June 30, 2013 financial statements, pending the completion of a full review of the Report once received.
"Specifically, the reported June 30, 2013 nonaccrual loan totals include $3.8 million in loans which are paying as agreed but may be subject to a regulatory recommendation to be placed on nonaccrual as of December 31, 2012. During the quarter, the Bank resolved an additional $7.3 million in other loans which may also be subject to placement on nonaccrual status as of December 31, 2012. In addition, there are two loans totalling $5.0 million which were already placed on non-accrual status in the first quarter of 2013 and which may be required to be placed on non-accrual as of December 31, 2012. The June 30, 2013 quarterly reported results also reflect an interest income reversal of $745,000 which consists of a $275,000 interest reversal on the resolution of the $7.3 million in nonaccrual loans mentioned above and a $470,000 interest reversal that the examiners verbally indicated is the remaining interest income on the loans they may recommend for nonaccrual reporting as of December 31, 2012. That figure includes income previously reported in 2012 and to a lesser extent, 2011. Although the possible cumulative financial statement impacts are now fully captured in the June 30, 2013 results, the Bank may need to file an amended December 31, 2012 Call Report in order to report lower interest income for 2012. Should this action be taken, the Bank would also file an amended June 30, 2013 Call Report to reflect a corresponding increase in interest income.