Preferred Bank Reports Third Quarter Results

LOS ANGELES, Oct. 17, 2012 (GLOBE NEWSWIRE) -- Preferred Bank (Nasdaq:PFBC), an independent commercial bank focusing on the Chinese-American and diversified Southern California mainstream market, today reported results for the quarter ended September 30, 2012. Preferred Bank ("the Bank") reported net income of $2.8 million or $0.21 per diluted share for the third quarter of 2012. This compares to net income of $6.0 million or $0.46 per diluted share for the third quarter of 2011 and compares to a net loss of $5.6 million or $0.43 per diluted share for the second quarter of 2012. Net income for the third quarter of 2011 was aided by the $4.5 million partial reversal of the Bank's valuation allowance on its deferred tax asset ("DTA"). The loss for the second quarter of 2012 was mainly due to a provision for loan losses of $14.5 million which was the result of two loan relationships which were significantly written down in that quarter.
  • Highlights from the third quarter of 2012 include:
  • Loan growth of $66.5 million or 6.6%
  • Deposits continue to grow; an increase of $56.0 million most of which was DDA
  • Continued decline in NPA's

Li Yu, Chairman and CEO commented, "we are very pleased to report third quarter net income of $2.8 million or $0.21 per diluted share. This quarter, we experienced exceptional loan growth. Total loans increased $66.5 million or 6.6% on a sequential quarter basis. This growth is the result of the staffing hires we have made over the past several quarters and the hard work of all our business development team. As of this release, the loan pipeline remains healthy however we do not expect the same level of growth in the fourth quarter as that achieved in the third quarter. This is primarily due to the holiday season as fewer transactions occur during that time."

"The growth of our deposits continues to match that of our loan growth as deposits grew by $56.0 million or 5.4%. We continue to hold a high level of excess liquidity which continues to negatively impact our net interest margin and to a lesser extent, our capital ratios. This high level of cash on the balance sheet was planned however, in light of the pending expiration of the Transaction Account Guarantee program ("TAG"). The TAG Program was originally created as part of the FDIC's Temporary Liquidity Guarantee Program in late 2008 as their response to the developing banking crisis and contains, among other things unlimited FDIC insurance on all DDA deposit accounts, regardless of account balance. The TAG Program was subsequently extended via the Dodd-Frank Legislation but is due to expire on December 31, 2012. If the program is not extended by Congress, industry analysts estimate that as much as $1.6 trillion of deposits could flow from community banks to money center banks. We certainly hope that Congress moves to extend this program in some form prior to the end of the year."

"Our net interest margin remains relatively unchanged from previous quarters. Again, this is due to the high levels of cash on the balance sheet (which count in the denominator of the NIM calculation) as well as the fact that a large portion of the third quarter loan growth occurred in September."

"This quarter, we achieved only a small reduction in nonperforming assets ("NPA's") of $5.0 million (Excluding a reduction in performing TDR's of $2.5 million). At present we have in escrow several OREO properties which are scheduled to close before the end of the year. If these closings occur, we will have a very meaningful NPA reduction in the fourth quarter. We are optimistic for further improvement in earnings and NPA trends in the ensuing quarters."

Operating Results

Net Interest Income and Net Interest Margin. Net interest income before provision for loan and lease losses increased to $13.3 million from the $11.2 million recorded in the third quarter of 2011 and an increase from $13.2 million for the second quarter of 2012. The Bank's taxable equivalent net interest margin was 3.88% for the third quarter of 2012, a 14 basis point increase over the 3.74% achieved in the third quarter of 2011 and an 11 basis point decrease from the 3.99% recorded in the second quarter of 2012. The slight decline in margin in the third quarter compared to the second quarter was due to a higher level of interest recoveries on previously charged off loans in the second quarter over the third quarter. Excluding these items, the net interest margin would have been 3.88% in the third quarter and 3.90% in the second quarter resulting in a sequential quarterly decrease in the net interest margin of only 2 basis points.

Noninterest Income. For the third quarter of 2012, noninterest income was $667,000 compared with $588,000 for the same quarter last year and compared to $1.5 million for the second quarter of 2012. The second quarter of 2012 included a gain on sale of investment securities of $488,000 and a gain on the sale of a nonperforming note of $336,000. Service charges on deposits and trade finance income both increased slightly in the third quarter of 2012 compared to the same period last year.

Noninterest Expense. Total noninterest expense was $9.1 million for the third quarter of 2012, compared to $8.2 million for the same period last year and $8.0 million for the second quarter of 2012. Salaries and benefits expense increased by $437,000 over the third quarter of 2011 and by $712,000 compared to the second quarter of 2012. The increase over last year and over last quarter was due to higher bonus expense and to a lesser extent a higher staffing level. Occupancy expense was $743,000 compared to the $784,000 recorded in the same period in 2011 and $742,000 recorded in the second quarter of 2012. Professional services expense was $1.0 million for the third quarter of 2012 compared to $645,000 for the third quarter of 2011 and the $630,000 posted in the second quarter of 2012. The increase was due primarily to an increase in legal fees over the other two comparable periods. OREO-related expenses totaled $2.5 million for the third quarter of 2012 (consisting of $1.5 million in valuation charges/loss on sale) and this represented an increase from the $2.3 million recorded in the second quarter of 2012. Other expenses were $1.3 million in the third quarter of 2012, a decrease of $780,000 from the same period in 2011 and a decrease of $124,000 over the second quarter of 2012. The variance compared to the same period of last year was primarily due to a net loss of $656,00 recognized from the loan sales.

Balance Sheet Summary

Total gross loans and leases (including loans held for sale) at September 30, 2012 were $1.07 billion, up from $953.6 million as of December 31, 2011 and up from the $1.01 billion as of June 30, 2012. Comparing balances as of September 30, 2012 to December 31, 2011: Residential real estate loans increased from $120.0 million to $147.6 million; total land loans decreased from $39.2 million to $31.7 million; commercial real estate loans increased from $416.0 million to $478.5 million; for-sale housing construction loans decreased from $43.5 million to $40.2 million; other construction loans decreased from $32.4 million to $25.5 million and total commercial loans increased from $302.5 million to $351.2 million.

Total deposits as of September 30, 2012 were $1.29 billion, an increase of $174.0 million from the $1.12 billion at December 31, 2011. As of September 30, 2012 compared to December 31, 2011; noninterest-bearing demand deposits increased by $166.8 million or 70.0%, interest-bearing demand and savings deposits increased by $54.8 million or 21.4% and time deposits decreased by $50.6 million or 8.1%. Total borrowings decreased by $26.0 million as the Bank paid off it's senior debt that matured in February. Total assets were $1.48 billion, a $174.4 million or 13.3% increase from the total of $1.31 billion as of December 31, 2011.

Asset Quality

As of September 30, 2012 total nonaccrual loans decreased to $22.9 million (excluding loans held for sale) compared to $43.5 million as of December 31, 2011 and compared to $23.6 million as of June 30, 2012. Total net charge-offs for the third quarter of 2012 were $1.4 million compared to net charge-offs of $15.6 million for the second quarter of 2012. Based on a detailed analysis of all impaired and classified loans, as well as an analysis of other qualitative factors, the Bank recorded a provision for loan losses of $1.2 million for the third quarter of 2012 compared to $1.5 million in the same period last year and compared to $14.5 million recorded in the second quarter of 2012. The allowance for loan loss at September 30, 2012 was $21.6 million or 2.03% of total loans compared to $23.7 million or 2.50% of total loans at December 31, 2011.

NPA Migration Non-Performing Assets Migration – Q3 2012
    Non Accrual Loans   OREO
Balance,  June 30, 2012 $ 23,555 $ 39,312
Additions 608 --
Transfer to OREO -- --
Loans Cured -- --
Sales/Payoffs/Trf to HFS (165) (2,918)
Charge-off (1,136) (1,434)
Balance,  September 30, 2012 $   22,862 $ 34,959

The table above excludes loans held for sale and includes TDR's that are on accrual status.  Performing TDR's totaled $8.4 million as of September 30, 2012.  The $9.6 million in loans held for sale consist of three nonaccrual loans.

Loans Past Due 30-89 Days

Loans 30-89 days past due at September 30, 2012 were $1.4 million compared to $0 as of June 30, 2012

Real Estate Owned

Total OREO decreased to $35.0 million compared to $39.3 million as of June 30, 2012.  During the third quarter of 2012, the Bank sold two OREO properties with a book value of $2.9 million.

Asset Quality Table – September 30, 2012
($ in thousands) 30-89 Days Nonaccrual OREO
  # $ # $ # $
Land-Residential -- $   -- 1 $    300 12 $ 20,843
Land Commercial -- -- -- -- 3 7,828
Construction:            
Residential -- -- 1 6,102 1 3,051
Commercial -- -- -- -- -- --
RE-Housing for sale -- -- -- -- 1 2,622
CRE-Commercial 2 1,446 2 836 1 615
C&I/Trade Finance -- -- 12 15,624 -- --
Totals -- $ 1,446 15 $  22,862 18 $ 34,959
             

Asset Quality Table – June 30, 2012
($ in thousands) 30-89 Days Nonaccrual OREO
  # $ # $ # $
Land-Residential -- $ -- 2 $   751 12 $ 22,121
Land Commercial -- -- -- -- 3 8,028
Construction:            
Residential -- -- 1 5,963 1 3,051
Commercial -- -- -- -- -- --
RE-Housing for sale -- -- -- -- 1 5,461
CRE-Commercial -- -- 1 597 1 651
C&I/Trade Finance -- -- 11 16,244 -- --
Totals -- $  -- 15 $  23,555 18 $ 39,312
             

Capitalization

As of September 30, 2012, the Bank's tier 1 leverage ratio was 12.19% and total risk-based capital ratio was 15.33%. This compares to 12.51% and 15.77% as of December 31, 2011, respectively.  Pursuant to the Memorandum of Understanding (MOU) entered into on May 25, 2012, the Bank is required to maintain the following capital ratio:
 
  Ratio   Preferred Bank at 9/30/12   MOU Requirement
Tier 1 Leverage  Ratio 12.19% 10.0%

Conference Call and Webcast

A conference call with simultaneous webcast to discuss Preferred Bank's third quarter 2012 financial results will be held tomorrow, October 18, at 2:00 p.m. Eastern / 11:00 a.m. Pacific. Interested participants and investors may access the conference call by dialing 877-941-9205 (domestic) or 480-629-9771 (international). The passcode for the call is 4569671. There will also be a live webcast of the call available at the Investor Relations section of Preferred Bank's website at www.preferredbank.com. Web participants are encouraged to go to the website at least 15 minutes prior to the start of the call to register, download and install any necessary audio software.

Preferred Bank's Chairman and CEO Li Yu,  President and COO Wellington Chen,  Chief Financial Officer Edward J. Czajka and Chief Credit Officer Louie Couto will be present to discuss Preferred Bank's financial results, business highlights and outlook. After the live webcast, a replay will remain available in the Investor Relations section of Preferred Bank's website. A replay of the call will also be available at 800-406-7325 (domestic) or 303-590-3030 (international) through October 25, 2012; the passcode is 4569671.

About Preferred Bank

Preferred Bank is one of the largest independent commercial banks in California focusing on the Chinese-American market. The bank is chartered by the State of California, and its deposits are insured by the Federal Deposit Insurance Corporation, or FDIC, to the maximum extent permitted by law. The Company conducts its banking business from its main office in Los Angeles, California, and through nine full-service branch banking offices in Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine, Diamond Bar, Anaheim and Pico Rivera, California. Preferred Bank offers a broad range of deposit and loan products and services to both commercial and consumer customers. The bank provides personalized deposit services as well as real estate finance, commercial loans and trade finance to small and mid-sized businesses, entrepreneurs, real estate developers, professionals and high net worth individuals. Preferred Bank continues to benefit from the significant migration to Southern California of ethnic Chinese from China and other areas of East Asia. While its business is not solely dependent on the Chinese-American market, it represents an important element of the bank's operating strategy, especially for its branch network and deposit products and services. Preferred Bank believes it is well positioned to compete effectively with the smaller Chinese-American community banks, the larger commercial banks and other major banks operating in Southern California by offering a high degree of personal service and responsiveness, experienced multi-lingual staff and substantial lending limits.

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

Forward-Looking Statements

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

Financial Tables to Follow
       
PREFERRED BANK 
Condensed Consolidated Statements of Operations 
(unaudited) 
(in thousands, except for net income (loss) per share and shares) 
       
  For the Three Months Ended
  September 30, September 30, June 30,
  2012 2011 2012
Interest income:       
Loans, including fees   $ 13,828  $ 12,009  $ 13,560
Investment securities   1,351  1,718  1,585
Fed funds sold   14  --  2
Total interest income   15,193  13,727  15,147
       
Interest expense:       
Interest-bearing demand   441  329  408
Savings   18  27  18
Time certificates of $100,000 or more   1,135  1,249  1,192
Other time certificates   263  714  304
Senior debt   --  188  --
Total interest expense   1,857  2,507  1,922
       
Net interest income   13,336  11,220  13,225
       
Provision for loan losses   1,200  1,500  14,500
       
Net interest income (loss) after provision for loan losses   12,136  9,720  (1,275)
       
Noninterest income:       
Fees & service charges on deposit accounts   445  439  433
Trade finance income   56  51  97
BOLI income   82  83  82
Net gain(loss) on sale of investment securities   --  (3)  550
Other income   84  18  313
Total noninterest income   667  588  1,475
       
Noninterest expense:       
Salary and employee benefits   3,228  2,791  2,516
Net occupancy expense   743  784  742
Business development and promotion expense   73  61  64
Professional services   1,004  645  630
Office supplies and equipment expense   283  245  326
Total other-than-temporary impairment losses   8  --  --
Portion of loss recognized in other comprehensive income   --  --  --
Other real estate owned related expense   2,525  1,629  2,346
Other   1,278  2,058  1,402
Total noninterest expense   9,143  8,213  8,026
       
Income (loss) before provision for income taxes   3,660  2,095  (7,826)
       
Income tax expense (benefit)   833  (3,932)  (2,217)
Net income (loss)   $ 2,827  $ 6,027  $ (5,609)
       
Income allocated to participating securities   (39)  (94)  -- 
Net income (loss) available to common shareholders   $ 2,788  $ 5,933  $ (5,609)
       
Income (loss) per share available to common shareholders       
Basic   $ 0.21  $ 0.46  $ (0.43)
Diluted   $ 0.21  $ 0.46  $ (0.43)
       
Weighted-average common shares outstanding       
Basic   13,052,207  13,015,551  13,050,582
Diluted   13,255,778  13,015,551  13,050,582
       
       
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 
  2012 2011 %
Interest income:       
Loans, including fees   $ 40,895  $ 34,467 18.6%
Investment securities   4,619  5,566 -17.0%
Fed funds sold   16  -- 100.0%
Total interest income   45,531  40,033 13.7%
       
Interest expense:       
Interest-bearing demand   1,257  873 44.0%
Savings   55  73 -23.8%
Time certificates of $100,000 or more   3,593  3,653 -1.6%
Other time certificates   977  2,702 -63.9%
Senior debt   94  565 -83.4%
Total interest expense   5,976  7,866 -24.0%
       
Net interest income   39,555  32,167 23.0%
       
Provision for credit losses   17,500  3,300 430.3%
       
Net interest income after provision for loan losses   22,055  28,867 -23.6%
       
Noninterest income:       
Fees & service charges on deposit accounts   1,312  1,302 0.8%
Trade finance income   222  184 21.0%
BOLI income   246  249 -1.1%
Net gain on sale of investment securities   554  81 585.4%
Other income   426  153 177.9%
Total noninterest income   2,760  1,969 40.2%
       
Noninterest expense:       
Salary and employee benefits   9,207  8,236 11.8%
Net occupancy expense   2,237  2,321 -3.6%
Business development and promotion expense   190  212 -10.4%
Professional services   2,224  1,606 38.5%
Office supplies and equipment expense   873  764 14.3%
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   6,885  7,076 -2.7%
Other   4,385  5,772 -24.0%
Total noninterest expense   26,025  26,019 0.0%
       
Income (loss) before provision for income taxes   (1,210)  4,817 -125.1%
       
Income tax benefit   (20,167)  (3,650) 452.5%
       
Net income   $ 18,957  $ 8,467 123.9%
       
Income allocated to participating securities   (266)  (144) 84.7%
Net income available to common shareholders   $ 18,691  $ 8,323 124.6%
       
Income per share available to common shareholders       
Basic   $ 1.43  $ 0.64 123.4%
Diluted   $ 1.41  $ 0.64 120.1%
       
Weighted-average common shares outstanding       
Basic   13,042,298  12,976,186 0.5%
Diluted   13,240,612  13,222,755 0.1%
       
     
PREFERRED BANK 
Condensed Consolidated Statements of Financial Condition 
(unaudited) 
(in thousands) 
     
  September 30, December 31,
  2012 2011
Assets 
     
Cash and due from banks   $ 175,616  $ 142,466
Cash and cash equivalents   175,616  142,466
     
Term Fed funds sold   10,000  -- 
Securities held to maturity, at amortized cost   1,524  3,021
Securities available-for-sale, at fair value   159,808  166,083
Loans and leases   1,065,208  949,631
Less allowance for loan and lease losses   (21,601)  (23,718)
Less net deferred loan fees   (1,695)  (1,037)
Net loans and leases   1,041,912  924,876
     
Loans held for sale, at lower of cost or fair value   9,573  3,996
     
Other real estate owned   34,959  37,577
Customers' liability on acceptances   2,288  427
Bank furniture and fixtures, net   4,475  4,789
Bank-owned life insurance   7,988  7,808
Accrued interest receivable   4,960  4,851
Federal Home Loan Bank stock   4,282  4,164
Deferred tax assets   24,200  6,979
Income tax receivable   857  --
Other asset   1,774  2,760
Total assets   $ 1,484,216  $ 1,309,797
     
Liabilities and Shareholders' Equity 
     
Liabilities:     
Deposits:     
Demand   $ 406,771  $ 239,987
Interest-bearing demand  290,541 233,349
Savings  20,009 22,385
Time certificates of $250,000 or more  225,259 185,001
Other time certificates  349,330 437,231
Total deposits   $ 1,291,910  $ 1,117,953
Acceptances outstanding   2,288  427
Senior debt issuance   --  25,996
Accrued interest payable   975  1,292
Other liabilities   7,029  6,081
Total liabilities   1,302,202  1,151,749
     
Commitments and contingencies     
Shareholders' equity:     
Preferred stock. Authorized 25,000,000 shares; no issued and outstanding shares at September 30, 2012 and December 31, 2011  —  — 
Common stock, no par value. Authorized 20,000,000 shares; issued and outstanding 13,233,757 and 13,220,955 shares at September 30, 2012 and December 31, 2011, respectively   162,917  162,917
Treasury stock   (19,115)  (19,115)
Additional paid-in-capital   24,273  23,456
Accumulated income (deficit)   12,566  (6,391)
Accumulated other comprehensive loss:   --  --
Non-credit portion of loss recognized, net of tax of $198 and $367 at September 30, 2012 and December 31, 2011, respectively   (274)  (481)
Unrealized loss on securities, available-for-sale, net of tax of $1,195 and $1,554 at September 30, 2012 and December 31, 2011  1,647  (2,305)
Total shareholders' equity   182,014  158,048
Total liabilities and shareholders' equity   $ 1,484,216  $ 1,309,797
     
         
PREFERRED BANK 
Selected Consolidated Financial Information 
(unaudited) 
(in thousands, except for ratios) 
         
  For the Three Months Ended
  September 30, June 30, March 31, September 30,
  2012 2012 2012 2011
For the period:         
Return on average assets  0.79% -1.60% 6.53% 1.91%
Return on average equity  6.31% -12.22% 53.66% 15.19%
Net interest margin (Fully-taxable equivalent)  3.88% 3.99% 4.06% 3.74%
Noninterest expense to average assets  2.55% 2.30% 2.66% 2.61%
Efficiency ratio  65.29% 54.60% 65.06% 69.56%
Net charge-offs (recoveries) to average loans (annualized)  0.57% 6.33% 1.07% 1.70%
         
         
Period end:         
Tier 1 leverage capital ratio  12.19% 12.19% 12.69% 12.49%
Tier 1 risk-based capital ratio  14.08% 14.38% 14.55% 14.66%
Total risk-based capital ratio  15.33% 15.63% 15.81% 15.92%
Allowances for credit losses to loans and leases at end of period **  2.03% 2.19% 2.32% 2.67%
Allowance for credit losses to non-performing loans and leases  66.60% 64.52% 71.37% 46.93%
         
Average balances:         
Total loans and leases*   $ 1,014,022  $ 990,087  $ 972,413  $ 897,961
Earning assets   $ 1,379,218  $ 1,343,295  $ 1,294,634  $ 1,207,239
Total assets   $ 1,443,942  $ 1,406,508  $ 1,339,737  $ 1,250,442
Total deposits   $ 1,255,464  $ 1,213,553  $ 1,156,164  $ 1,060,612
         
Period end:         
Loans and Leases:         
Real estate - Single and multi-family residential   $ 147,586  $ 132,256  $ 136,100  $ 124,656
Real estate - Land for housing   22,827  23,180  23,327  25,022
Real estate - Land for income properties   1,608  1,786  15,771  20,541
Real estate - Commercial   476,961  452,750  440,826  389,788
Real estate - For sale housing construction   40,245  41,987  40,720  48,154
Real estate - Other construction   25,547  24,083  22,702  35,548
Commercial and industrial   301,812  275,679  255,733  212,976
Trade finance and other   48,622  46,289  53,914  44,245
Gross loans   1,065,208  998,010  989,093  900,930
Allowance for loan and lease losses   (21,601)  (21,835)  (22,925)  (24,054)
Net deferred loan fees   (1,695)  (1,583)  (1,234)  (849)
Loans excluding loans held for sale   1,041,912  974,592  964,934  876,027
Loans held for sale   9,573  10,290  3,707  3,996
Total loans, net   $ 1,051,485  $ 984,882  $ 968,641  $ 880,023
         
Deposits:         
Noninterest-bearing demand   $ 406,771  $ 365,292  $ 327,141  $ 231,998
Interest-bearing demand and savings   310,550  290,203  267,745  235,063
Total core deposits   717,321  655,495  594,886  467,061
Time deposits   574,589  580,387  581,294  607,140
Total deposits   $ 1,291,910  $ 1,235,882  $ 1,176,180  $ 1,074,201
         
* Loans held for sale are included         
** Loans held for sale are excluded         
         
     
Preferred Bank
Loan and Credit Quality Information
     
Allowance For Credit Losses & Loss History
  Nine Months Ended Year Ended
  September 30, 2012 December 31, 2011
  (Dollars in 000's)
Allowance For Credit Losses    
Balance at Beginning of Period  $ 23,718  $ 32,898
Charge-Offs    
Commercial & Industrial  10,295  5,126
Mini-perm Real Estate  949  7,102
Construction - Residential  --   1,665
Construction - Commercial  2,185  664
Land - Residential  418  82
Land - Commercial  6,276  1,453
Others  --   5
Total Charge-Offs  20,123  16,097
     
Recoveries    
Commercial & Industrial  12  940
Mini-perm Real Estate  291  43
Construction - Residential  2  7
Construction - Commercial  145  166
Land - Residential  49  61
Land - Commercial  7  -- 
Total Recoveries  506  1,217
     
Net Loan Charge-Offs  19,617  14,880
Provision for Credit Losses  17,500  5,700
Balance at End of Period  $ 21,601  $ 23,718
Average Loans and Leases*  $ 1,014,022  $ 919,944
Loans and Leases at end of Period*  $ 1,065,208  $ 949,631
Net Charge-Offs to Average Loans and Leases 0.57% 1.18%
Allowances for credit losses to loans and leases at end of period ** 2.03% 2.50%
     
* Loans held for sale are included     
** Loans held for sale are excluded     
     
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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