Preferred Bank ( PFBC) Q3 2010 Earnings Call October 28, 2010 05:00 pm ET Executives Lasse Glassen - IR, Financial Relations Board Li Yu - Chairman, President & CEO Ed Czajka - CFO Louie Couto - EVP Analysts Joe Gladue - B. Riley Aaron Deer - Sandler O’Neill & Partners Joe Morford - RBC Capital Markets Julianna Balicka - KBW John Deysher - Pinnacle Presentation Operator
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» Preferred Bank Q3 2009 Earnings Call Transcript
For detailed descriptions of these risks and uncertainties, please refer to the documents that company files with the Federal Deposit Insurance Corporation, or FDIC. If any of these uncertainties materialized or any of these assumptions prove incorrect, Preferred Bank’s results could differ materially from its expectations as set forth in these statements. Preferred Bank assumes no obligation to update such forward-looking statements.At this time, I would now like to turn the call over to Mr. Li Yu. Mr. Yu? Li Yu Good afternoon. For the third quarter 2010, we reported a gigantic amount of losses. However of which $25.5 million really is not a loss by our own definition. It is related to the conversion of preferred stock into a common stock with the conversion rate is difference between conversion, price and the market value. The difference is treated as dividends to the preferred stock shareholders and therefore created a loss to the common shares. It did not change the total capital amount that we raised. It did not change the capital ratio, it did not change PCE and it is not operating loss nor it is a cash flow item, having said that the remaining amount is relating to operations. And I state in the press release in the third quarter we have received a Shared National Credit report and in that there are many items that we previously was identified as impaired loan and classified loan was further downgraded to non-accrual and also that required reserve was recommended to be increased and recommended to be written off. And we still do accordingly according to this recommendation of the report. Although that as I also said many of the loans are currently [still] current and in our humble opinion our visibility in this time that we probably collect all interest and principal at maturity, but having said that we are making this reserve. Now the third quarter has been a very, very disappointing quarter for me personally because I was really thinking about we have a whole lot of loans being resolved or being solved or being correct, okay and that are (inaudible) it has a number of different things as quarter for the negotiation table and resolved only a limited amount of improvement of the PMA even though its roughly 20 some remaining dollars we put to over 14% of the inferior amount.
We were thinking lot bigger amount. However, the 14% improvement also taking into consideration about $17 million that was recommended to be non-accrual for the quarter. But having said that our product ways is continuing and stay on target as we internally measuring it and also that we hope with every dollar of the improvement in non-performing assets will be corresponding improvement in net interest margin, and also the operating cost of the bank.So with that I am opening up for questions you may have. Question-and-Answer Session Operator Thank you, sir and ladies and gentlemen we will begin the question and answer session at this time. (Operator Instructions). Our first question comes from the line of Joe Gladue with B. Riley. Please go ahead. Joe Gladue - B. Riley Let me start with I guess non-performers, can you give us what the balance of TDRs were may be you break it out between both accruing and non-accruing? Ed Czajka One of the things, we will give you the number rather away but our TDRs are accruing. If it is non-accruing what have been the improvement of non-performing category. Lu Yi you want to answer the question. Lu Yi Yes. At this point we have about $29.8 million in TDRs that are accruing are non-accrual loans actually it’s about 50% or actually not 90 days past due of that actual non-accruals either because they either been restructured or because of the customer continues to pay under the original terms. Read the rest of this transcript for free on seekingalpha.com