LOS ANGELES, Jan. 30, 2013 (GLOBE NEWSWIRE) -- Preferred Bank (Nasdaq:PFBC), an independent commercial bank focusing on the Chinese-American and diversified Southern California mainstream market, today reported final updated results for the quarter and year ended December 31, 2012. Preferred Bank ("the Bank") previously reported net income of $3.4 million or $0.25 per diluted share for the fourth quarter of 2012. As a result of the Bank's complete analysis of its income tax position, the Bank has recorded a tax benefit for the fourth quarter of $928,000. This compares to previously reported income tax expense for the fourth quarter of $1,125,000. The result of this change amends the Bank's results for the fourth quarter to net income of $5.4 million or $0.40 per diluted share and the Bank's full year results are amended to report net income of $24.4 million or $1.82 per diluted share.
This change increases the Bank's capital ratios and tangible book value to the following:
| Tangible Common Equity Ratio: | 12.11% | |
| Tier 1 Leverage Ratio: | 12.00% | |
| Total Risk-Capital Ratio: | 15.02% | |
| Tangible Book Value per Share: | $14.23 | |
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 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 |