LOS ANGELES, Jan. 20, 2015 (GLOBE NEWSWIRE) -- Preferred Bank (Nasdaq:PFBC), an independent commercial bank focusing on the diversified California market, today reported results for the quarter ended December 31, 2014. Preferred Bank ("the Bank") reported net income of $6.9 million or $0.50 per diluted share for the fourth quarter of 2014. This represents an increase of $1.0 million over the $5.9 million or $0.43 per diluted share recorded for the same period last year. This also compares favorably to the $6.4 million or $0.46 per diluted share posted in the third quarter of 2014. Net income for the year ended December 31, 2014 totaled $24.6 million or $1.78 per diluted share compared to $19.2 million or $1.42 per diluted share for 2013, representing an increase of $5.4 million or 28.1% over 2013.
Highlights from the fourth quarter of 2014:
- Diluted EPS of $0.50 per diluted share, a 16.3% increase from prior year
- Strong linked quarter loan growth of $79 million and deposit growth of $55 million
- ROA was 1.37%
- ROBE was 11.92%
- Efficiency ratio was 40.3%
- Total assets now exceed $2 billion
Li Yu, Chairman and CEO commented, "Since 2011, we have dedicated ourselves to improving asset quality, loan and deposit growth, diversifying the loan portfolio, optimizing our deposit mix, increasing operating profit, controlling overhead, building up management talent for future growth and most importantly, positioning ourselves to take advantage of any upward movement in interest rates. As of December 31, 2014, we had substantially accomplished all these goals.
"Preferred Bank now has reached an all-time high in assets of $2.05 billion. During the year, we grew loans by $275 million or 20.7% and we grew deposits by $247 million or 16.2% while improving the deposit mix. Fully diluted net income per share grew from $1.42 to $1.78 for the year, a 25.4% improvement.
"We have also been able to effectively control overhead costs. Despite the asset and earnings growth, noninterest expense in 2014 increased only 5.3% from 2013 levels. Our efficiency ratio for the entire year was 40.8%.
"While growing the Bank, we are always mindful of potential interest rate changes. Although elusive to predict, we believe that the FOMC will raise short term rates sometime this year and we are well-positioned to take advantage of this probable event. At December 31, 2014, our loan portfolio is highly rate sensitive; 89% of the portfolio is in floating rate product, and nearly all of that is tied to Prime rate.
"Our fourth quarter 2014 operating results reflect the favorable trends we had for the whole year. Return on assets was 1.37% which compares favorably with our peer group. Net income reached a five-year high of $0.50 per diluted share. Loan growth was significant in the quarter. Total loans increased nearly $79 million or 5.2% while deposit growth came in at $55 million or 3.2% on linked-quarter basis.
"The Bank's net interest margin bounced back from the previous quarters, coming in at 3.98% for the fourth quarter. Our continued loan growth and slightly lower cash balances during the quarter both contributed to the expansion.
"Looking ahead, we believe the U.S. economy is quite strong. With sufficient capital and an asset sensitive balance sheet, Preferred Bank is well positioned to take advantage of the opportunities presented to us."
Quarterly Results
Net Interest Income and Net Interest Margin. Net interest income before provision for loan and lease losses increased to $19.4 million compared to $16.4 million recorded in the fourth quarter of 2013 and an increase from the $18.0 million recorded in the third quarter of 2014. The increase over the fourth quarter of 2013 and over the prior quarter is due primarily to growth in the loan portfolio. The Bank's taxable equivalent net interest margin was 3.98% for the fourth quarter of 2014, a 20 basis point increase from the 3.78% achieved in the third quarter of 2014 and a 13 basis point increase over the 3.85% recorded in the fourth quarter of 2013. The increase in the margin from the third quarter of 2014 was primarily due to an increase in total average loans which increased by $91.5 million. The Bank's cost of funds has continually declined, now standing at 0.56%, which has also aided net interest margin stability.
Noninterest Income. For the fourth quarter of 2014, noninterest income was $751,000 compared with $214,000 for the same quarter last year and compared to $928,000 for the third quarter of 2014. During the fourth quarter of 2013, the Bank recorded a loss on sale of investment securities of $1.1 million. Service charges on deposits were down by $172,000 compared to the same period last year. This was due to the loss of a few customers who were heavy cash management users. It should be noted that these customers also required a certain level of costs to service so the net earnings loss from these customers was negligible. Trade Finance income increased by $74,000 over last year due to an increase in letter of credit (LC) fees. Other income decreased from $598,000 in the fourth quarter of 2013 to $131,000 in the fourth quarter of 2014. This was due to the recording of $514,000 in gains on note sales in the fourth quarter of 2013.
Noninterest Expense.Total noninterest expense was $8.1 million for the fourth quarter of 2014, up from the $5.4 million recorded in the same quarter last year and up over the $7.8 million posted in the third quarter of 2014. Noninterest expense was very low in the fourth quarter of 2013 due to the recording of $2.1 million in net OREO gains. Salaries and benefits expense totaled $5.1 million for the fourth quarter of 2014 compared to $4.0 million for the same period last year and compared to $4.3 million for the third quarter of 2014. The increase over the third quarter of 2014 is due primarily to an increase in bonus expense as well as staffing increases. Occupancy expense was down slightly compared to last year as a significant amount of leasehold improvements reached the end of their depreciation. Professional services expense was $966,000 for the fourth quarter of 2014, compared to the $899,000 recorded in the same period last year and down from the $1.0 million recorded in the third quarter of 2014. Other expenses were $867,000 in the fourth quarter of 2014, down from the $1.3 million recorded in the same period in 2013 and down from the $1.2 million recorded in the third quarter of 2014. The decrease was primarily due to a decrease in FDIC insurance premiums which were due to the results of the Bank's regulatory examination which took place earlier in 2014.
Income Taxes. The Bank recorded a provision for income taxes of $4.6 million for the fourth quarter of 2014. This represents an effective tax rate ("ETR") of 40.3% for the quarter. This is relatively flat from the ETR of 40.1% for the third quarter of 2014. The difference between the Bank's statutory blended tax rate of 42.05% and the effective ETR is due to the Bank's investments in municipal bonds and low income housing tax credits.
Annual Results
Net Interest Income and Net Interest Margin. Net interest income before provision for loan and lease losses increased to $71.0 million compared to $62.0 million for 2013. This is primarily due to growth in the loan portfolio over the course of 2014. Although interest expense increased over 2013 levels as deposits grew, the growth in the loan portfolio helped to drive an increase in net interest income of 14.5%. The Bank's taxable equivalent net interest margin was 3.89% for 2014, a 6 basis point decrease from the 3.95% level achieved in 2013. Although the margin contracted slightly, it was against a backdrop of declining asset yields for the industry overall.
Noninterest Income. Noninterest income reached $3.6 million in 2014, a significant increase over the $2.0 million recorded in 2013. This was due to losses on sales of investment securities in 2013 of $2.0 million. The Bank's largest component of noninterest income, service charges, were down $569,000 from 2013 due to the loss of a few customers who were heavy cash management users. It should be noted that the Bank incurred a significant level of costs to service these customers so the net earnings loss from this group was negligible. Trade finance income was up sharply over 2013 levels due to an increase in LC activity for many of our import and export customers. Other income decreased from $916,000 in 2013 to $652,000 in 2014. This was mostly due to gains on note sales recorded in 2013.
Noninterest Expense.Total noninterest expense was $30.4 million in 2014, up slightly from the $28.9 million posted in 2013. Salaries and benefits expense totaled $17.9 million for 2014, up by 10.6% over the $16.2 million recorded in 2013. This was due to the hiring of business development and relationship officers as well as staffing increases in the administrative areas. Professional services expense totaled $4.1 million for 2014 compared to $3.6 million in 2013. This increase was mainly due to consulting fees associated with the remediation of the deficiencies in the Bank's BSA program. Other expenses were $4.6 million in 2014, down from the $4.7 million recorded in 2013. The decrease was primarily due to a decrease in FDIC insurance premiums which were due to the results of the Bank's regulatory examination which took place earlier in 2014.
Balance Sheet Summary
Total gross loans and leases (including loans held for sale) at December 31, 2014 were $1.6 billion, an increase of $274.5 million or 20.6% over the total of $1.33 billion as of December 31, 2013. The tables below indicate loans by type as of December 31, 2014 as compared to the end of 2013:
Loans by Type – Year over Year (ooo's)
Loan Type (000's) | December 31, 2014 | December 31, 2013 | $ Change | % Change |
R/E – Residential/Multifamily | $ 283,958 | $ 228,490 | $ 55,468 | 24.3 |
R/E – Land | 13,621 | 15,161 | (1,540) | -10.2% |
R/E – Commercial | 653,380 | 627,888 | 25,492 | 4.1% |
R/E – Construction | 126,485 | 73,285 | 53,200 | 72.6% |
Commercial & Industrial | 526,705 | 378,607 | 148,098 | 39.1% |
Loans Held for Sale | -- | 6,207 | (6,207) | -100.0% |
Total | $ 1,604,149 | $ 1,329,638 | $ 274,511 | 20.6% |
Total deposits as of December 31, 2014 were $1.78 billion, an increase of $246.9 million or 16.2% over the $1.53 billion at December 31, 2013. As of December 31, 2014 compared to December 31, 2013; noninterest-bearing demand deposits increased by $104.9 million or 31.0%, interest-bearing demand and savings deposits increased by $55.0 million or 11.2% and time deposits increased by $87.1 million or 12.5%. Total assets were $2.1 billion, a $285.2 million or 16.1% increase over the total of $1.77 billion as of December 31, 2013.
Asset Quality
As of December 31, 2014 nonaccrual loans totaled $8.1 million or 0.51% of total loans while performing TDR's totaled $397,000 as of December 31, 2014. Total net charge-offs (recoveries) for the fourth quarter of 2014 were 188,000 compared to ($4.3 million) for the third quarter of 2014. During the fourth quarter of 2014, the Bank recorded a provision for loan losses of $500,000. This compares to a provision of $1.8 million recorded in the same quarter last year and compares to a $500,000 provision recorded in the third quarter of 2014. The allowance for loan loss at December 31, 2014 was $23.0 million or 1.43% of total loans compared to $19.5 million or 1.47% of total loans at December 31, 2013.
Capitalization
As of December 31, 2014, the Bank's tier 1 leverage ratio was 11.73%, the tier 1 risk based capital ratio was 12.72% and the total risk-based capital ratio was 13.97%. This compares to 11.80%, 13.78% and 15.03% as of December 31, 2013, respectively.
Conference Call and Webcast
A conference call with simultaneous webcast to discuss Preferred Bank's fourth quarter 2014 financial results will be held tomorrow, January 21, 2015 at 2:00 p.m. Eastern / 11:00 a.m. Pacific. Interested participants and investors may access the conference call by dialing 866-652-5200 (domestic) or 412-317-6060 (international) and referencing "Preferred Bank." 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 877-344-7529 (domestic) or 412-317-0088 (international) through February 11, 2015; the passcode is 10058834.
About Preferred Bank
Preferred Bank is one of the larger independent commercial banks in California. 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 ten full-service branch banking offices in Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine, Diamond Bar, Anaheim, Pico Rivera and San Francisco, 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. Although originally founded as a Chinese-American Bank, Preferred Bank now derives most of its customers from the diversified mainstream market but does continue to benefit from the significant migration to California of ethnic Chinese from China and other areas of East Asia.
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 2013 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, 2014 |
September 30, 2014 |
December 31, 2013 |
|
Interest income: | |||
Loans, including fees | $ 20,265 | $ 18,792 | $ 17,111 |
Investment securities | 1,519 | 1,634 | 1,380 |
Fed funds sold | 37 | 36 | 22 |
Total interest income | 21,821 | 20,462 | 18,513 |
Interest expense: | |||
Interest-bearing demand | 763 | 737 | 618 |
Savings | 16 | 20 | 24 |
Time certificates | 1,627 | 1,636 | 1,437 |
FHLB borrowings | 32 | 33 | 33 |
Total interest expense | 2,438 | 2,426 | 2,112 |
Net interest income | 19,383 | 18,036 | 16,401 |
Provision for loan losses | 500 | 500 | 1,800 |
Net interest income after provision for loan losses | 18,883 | 17,536 | 14,601 |
Noninterest income: | |||
Fees & service charges on deposit accounts | 335 | 343 | 507 |
Trade finance income | 202 | 271 | 128 |
BOLI income | 83 | 84 | 84 |
Net gain (loss) on sale of investment securities | (0) | 2 | (1,103) |
Other income | 131 | 228 | 598 |
Total noninterest income | 751 | 928 | 214 |
Noninterest expense: | |||
Salary and employee benefits | 5,059 | 4,285 | 3,960 |
Net occupancy expense | 773 | 817 | 801 |
Business development and promotion expense | 77 | 134 | 99 |
Professional services | 966 | 1,019 | 899 |
Office supplies and equipment expense | 314 | 330 | 278 |
Other real estate owned related expense (income) and valuation allowance on LHFS | 65 | 43 | (2,092) |
Other | 867 | 1,208 | 1,279 |
Total noninterest expense | 8,121 | 7,836 | 5,224 |
Income before provision for income taxes | 11,513 | 10,628 | 9,591 |
Income tax expense | 4,645 | 4,266 | 3,723 |
Net income | $ 6,868 | $ 6,362 | $ 5,868 |
Income allocated to participating securities | (74) | (69) | (34) |
Dividends Allocated to Participating Securities | (15) | (15) | -- |
Net income available to common shareholders | $ 6,779 | $ 6,278 | $ 5,834 |
Income per share available to common shareholders | |||
Basic | $ 0.51 | $ 0.47 | $ 0.45 |
Diluted | $ 0.50 | $ 0.46 | $ 0.43 |
Weighted-average common shares outstanding | |||
Basic | 13,345,631 | 13,310,334 | 13,196,071 |
Diluted | 13,689,342 | 13,639,874 | 13,394,535 |
PREFERRED BANK | |||
Condensed Consolidated Statements of Operations | |||
(in thousands, except for net income per share and shares) | |||
For the Twelve Months Ended | |||
December 31, 2014 |
December 31, 2013 |
Change % |
|
(unaudited) | (audited) | ||
Interest income: | |||
Loans, including fees | $ 74,080 | $ 63,718 | 16.3% |
Investment securities | 6,107 | 5,953 | 2.6% |
Fed funds sold | 140 | 55 | 156.3% |
Total interest income | 80,327 | 69,726 | 15.2% |
Interest expense: | |||
Interest-bearing demand | 2,773 | 2,199 | 26.1% |
Savings | 72 | 89 | -19.1% |
Time certificates | 6,367 | 5,373 | 18.5% |
FHLB borrowings | 128 | 68 | 89.1% |
Total interest expense | 9,340 | 7,729 | 20.8% |
Net interest income | 70,987 | 61,997 | 14.5% |
Provision for credit losses | 3,350 | 3,250 | 3.1% |
Net interest income after provision for loan losses | 67,637 | 58,747 | 15.1% |
Noninterest income: | |||
Fees & service charges on deposit accounts | 1,532 | 2,101 | -27.1% |
Trade finance income | 1,104 | 612 | 80.4% |
BOLI income | 331 | 331 | 0.2% |
Net gain (loss) on sale of investment securities | 2 | (1,957) | -100.1% |
Other income | 652 | 916 | -28.9% |
Total noninterest income | 3,621 | 2,003 | 80.8% |
Noninterest expense: | |||
Salary and employee benefits | 17,945 | 16,226 | 10.6% |
Net occupancy expense | 3,195 | 3,206 | -0.4% |
Business development and promotion expense | 420 | 366 | 14.6% |
Professional services | 4,092 | 3,597 | 13.8% |
Office supplies and equipment expense | 1,267 | 1,186 | 6.8% |
Total other-than-temporary impairment losses | -- | 99 | -100.0% |
Portion of loss recognized in other comprehensive income | -- | (92) | -100.0% |
Other real estate owned related (income) expense and valuation allowance on LHFS | (1,120) | (449) | 149.4% |
Other | 4,612 | 4,746 | -2.8% |
Total noninterest expense | 30,411 | 28,885 | 5.3% |
Income before provision for income taxes | 40,847 | 31,865 | 28.2% |
Income tax expense | 16,255 | 12,666 | 28.3% |
Net income | $ 24,592 | $ 19,199 | 28.1% |
Income allocated to participating securities | (270) | (201) | 34.3% |
Dividends Allocated to Participating Securities | (30) | -- | -100.0% |
Net income available to common shareholders | $ 24,292 | $ 18,998 | 27.9% |
Income per share available to common shareholders | |||
Basic | $ 1.83 | $ 1.45 | 26.2% |
Diluted | $ 1.78 | $ 1.42 | 25.5% |
Weighted-average common shares outstanding | |||
Basic | 13,290,258 | 13,116,713 | 1.3% |
Diluted | 13,620,027 | 13,364,320 | 1.9% |
PREFERRED BANK | ||
Condensed Consolidated Statements of Financial Condition | ||
(in thousands) | ||
December 31, 2014 |
December 31, 2013 |
|
Assets | (unaudited) | (audited) |
Cash and due from banks | $ 215,194 | $ 226,615 |
Fed funds sold | 25,000 | 20,000 |
Cash and cash equivalents | 240,194 | 246,615 |
Securities held to maturity, at amortized cost | 7,815 | -- |
Securities available-for-sale, at fair value | 150,539 | 142,670 |
Loans and leases | 1,604,149 | 1,323,431 |
Less allowance for loan and lease losses | (22,974) | (19,494) |
Less net deferred loan fees | (2,100) | (2,562) |
Net loans and leases | 1,579,075 | 1,301,375 |
Loans held for sale, at lower of cost or fair value | -- | 6,207 |
Other real estate owned | 8,811 | 5,602 |
Customers' liability on acceptances | 156 | 2,061 |
Bank furniture and fixtures, net | 4,132 | 4,205 |
Bank-owned life insurance | 8,525 | 8,290 |
Accrued interest receivable | 6,497 | 5,378 |
Investment in affordable housing | 17,999 | 6,411 |
Federal Home Loan Bank stock | 6,155 | 5,296 |
Deferred tax assets | 21,357 | 23,331 |
Income tax receivable | -- | 1,784 |
Other asset | 2,899 | 9,734 |
Total assets | $ 2,054,154 | $ 1,768,959 |
Liabilities and Shareholders' Equity | ||
Liabilities: | ||
Deposits: | ||
Demand | $ 443,385 | $ 338,530 |
Interest-bearing demand | 525,781 | 469,976 |
Savings | 22,211 | 22,984 |
Time certificates of $250,000 or more | 276,197 | 213,362 |
Other time certificates | 508,685 | 484,462 |
Total deposits | $ 1,776,259 | $ 1,529,314 |
Acceptances outstanding | 156 | 2,061 |
Advances from Federal Home Loan Bank | 20,000 | 20,000 |
Commitments to fund investment in affordable housing partnership | 8,151 | -- |
Accrued interest payable | 1,419 | 983 |
Other liabilities | 13,142 | 9,685 |
Total liabilities | 1,819,127 | 1,562,043 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Preferred stock. Authorized 25,000,000 shares; no issued and outstanding shares at December 31, 2014 and December 31, 2013 | — | — |
Common stock, no par value. Authorized 20,000,000 shares; issued and outstanding 13,503,458 and 13,280,653 shares at December 31, 2014 and December 31, 2013, respectively | 164,023 | 163,237 |
Treasury stock | (19,115) | (19,115) |
Additional paid-in-capital | 29,631 | 25,974 |
Accumulated income | 58,553 | 36,680 |
Accumulated other comprehensive income: | ||
Unrealized gain on securities, available-for-sale, net of tax of $1,405 and $102 at December 31, 2014 and December 31, 2013, respectively | 1,935 | 140 |
Total shareholders' equity | 235,027 | 206,916 |
Total liabilities and shareholders' equity | $ 2,054,154 | $ 1,768,959 |
PREFERRED BANK | ||||||||||
Selected Consolidated Financial Information | ||||||||||
(unaudited) | ||||||||||
(in thousands, except for ratios) | ||||||||||
For the Three Months Ended | ||||||||||
December 31, 2014 |
September 30, 2014 |
June 30, 2014 |
March 31, 2014 |
December 31, 2013 |
||||||
Unaudited historical quarterly operations data: | ||||||||||
Interest income | $ 21,821 | $ 20,462 | $ 19,294 | $ 18,750 | $ 18,513 | |||||
Interest expense | 2,438 | 2,426 | 2,229 | 2,247 | 2,112 | |||||
Interest income before provision for credit losses | 19,383 | 18,036 | 17,065 | 16,503 | 16,401 | |||||
Provision for credit losses | 500 | 500 | 1,100 | 1,250 | 1,800 | |||||
Noninterest income | 751 | 928 | 914 | 1,028 | 214 | |||||
Noninterest expense | 8,121 | 7,836 | 6,623 | 7,832 | 5,224 | |||||
Income tax expense | 4,645 | 4,266 | 4,047 | 3,296 | 3,723 | |||||
Net income | 6,868 | 6,362 | 6,209 | 5,153 | 5,868 | |||||
Earnings per share | ||||||||||
Basic | $ 0.51 | $ 0.47 | $ 0.46 | $ 0.39 | $ 0.45 | |||||
Diluted | $ 0.50 | $ 0.46 | $ 0.45 | $ 0.38 | $ 0.43 | |||||
Ratios for the period: | ||||||||||
Return on average assets | 1.37% | 1.29% | 1.39% | 1.17% | 1.33% | |||||
Return on beginning equity | 11.92% | 11.34% | 11.61% | 10.10% | 11.62% | |||||
Net interest margin (Fully-taxable equivalent) | 3.98% | 3.78% | 3.93% | 3.87% | 3.85% | |||||
Noninterest expense to average assets | 1.62% | 1.59% | 1.48% | 1.78% | 1.18% | |||||
Efficiency ratio | 40.33% | 41.32% | 36.84% | 44.68% | 31.44% | |||||
Net charge-offs (recoveries) to average loans (annualized) | 0.05% | -1.16% | 0.87% | 0.29% | 0.20% | |||||
Ratios as of period end: | ||||||||||
Tier 1 leverage capital ratio | 11.73% | 11.62% | 12.31% | 11.97% | 11.80% | |||||
Tier 1 risk-based capital ratio | 12.72% | 12.75% | 13.16% | 13.65% | 13.78% | |||||
Total risk-based capital ratio | 13.97% | 14.00% | 14.28% | 14.90% | 15.03% | |||||
Allowances for credit losses to loans and leases at end of period ** | 1.43% | 1.49% | 1.24% | 1.44% | 1.47% | |||||
Allowance for credit losses to non-performing loans and leases | 268.19% | 210.40% | 97.68% | 171.94% | 138.80% | |||||
Average balances: | ||||||||||
Total loans and leases* | $ 1,555,868 | $ 1,464,336 | $ 1,378,444 | $ 1,351,555 | $ 1,283,583 | |||||
Earning assets | $ 1,943,034 | $ 1,908,411 | $ 1,752,032 | $ 1,739,768 | $ 1,695,758 | |||||
Total assets | $ 1,990,417 | $ 1,952,270 | $ 1,792,317 | $ 1,783,384 | $ 1,749,140 | |||||
Total deposits | $ 1,707,908 | $ 1,684,628 | $ 1,543,739 | $ 1,540,369 | $ 1,512,318 | |||||
* Loans held for sale are included | ||||||||||
** Loans held for sale are excluded |
PREFERRED BANK | ||||
Selected Consolidated Financial Information | ||||
(in thousands, except for ratios) | ||||
For the Year Ended | ||||
December 31, 2014 |
December 31, 2013 |
|||
(unaudited) | (audited) | |||
Interest income | $ 80,327 | $ 69,726 | ||
Interest expense | 9,340 | 7,729 | ||
Interest income before provision for credit losses | 70,987 | 61,997 | ||
Provision for credit losses | 3,350 | 3,250 | ||
Noninterest income | 3,621 | 2,003 | ||
Noninterest expense | 30,411 | 28,885 | ||
Income tax expense | 16,255 | 12,666 | ||
Net income | 24,592 | 19,199 | ||
Earnings per share | ||||
Basic | $ 1.83 | $ 1.45 | ||
Diluted | $ 1.78 | $ 1.42 | ||
Ratios for the period: | ||||
Return on average assets | 1.31% | 1.18% | ||
Return on beginning equity | 11.88% | 10.22% | ||
Net interest margin (Fully-taxable equivalent) | 3.89% | 3.93% | ||
Noninterest expense to average assets | 1.62% | 1.79% | ||
Efficiency ratio | 40.76% | 45.72% | ||
Net charge-offs (recoveries) to average loans | -0.01% | 0.36% | ||
Average balances: | ||||
Total loans and leases* | $ 1,438,122 | $ 1,217,383 | ||
Earning assets | $ 1,836,375 | $ 1,578,570 | ||
Total assets | $ 1,880,019 | $ 1,633,710 | ||
Total deposits | $ 1,620,709 | $ 1,414,420 | ||
* Loans held for sale are included |
PREFERRED BANK | |||||||||
Selected Consolidated Financial Information | |||||||||
(unaudited) | |||||||||
(in thousands, except for ratios) | |||||||||
As of | |||||||||
December 31, 2014 |
September 30, 2014 |
June 30, 2014 |
March 31, 2014 |
December 31, 2013 |
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Unaudited quarterly statement of financial position data: | |||||||||
Assets: | |||||||||
Cash and cash equivalents | 240,194 | 248,232 | 232,585 | 214,430 | $ 246,615 | ||||
Securities held-to-maturity, at amortized cost | 7,815 | 8,188 | 8,709 | -- | -- | ||||
Securities available-for-sale, at fair value | 150,539 | 164,247 | 176,579 | 169,845 | 142,670 | ||||
Loans and Leases: | |||||||||
Real estate - Single and multi-family residential | $ 283,958 | $ 229,353 | $ 208,080 | $ 220,193 | $ 228,490 | ||||
Real estate - Land for housing | 12,132 | 12,156 | 13,536 | 13,574 | 13,611 | ||||
Real estate - Land for income properties | 1,489 | 1,507 | 1,529 | 1,539 | 1,550 | ||||
Real estate - Commercial | 653,380 | 678,778 | 700,023 | 653,146 | 627,888 | ||||
Real estate - For sale housing construction | 48,892 | 44,614 | 36,069 | 29,303 | 24,680 | ||||
Real estate - Other construction | 77,593 | 80,411 | 63,708 | 52,014 | 48,605 | ||||
Commercial and industrial | 495,827 | 443,966 | 374,128 | 353,017 | 338,681 | ||||
Trade finance and other | 30,878 | 33,967 | 40,756 | 47,402 | 39,926 | ||||
Gross loans | 1,604,149 | 1,524,752 | 1,437,829 | 1,370,188 | 1,323,431 | ||||
Allowance for loan and lease losses | (22,974) | (22,662) | (17,897) | (19,777) | (19,494) | ||||
Net deferred loan fees | (2,100) | (2,368) | (2,159) | (2,014) | (2,562) | ||||
Loans excluding loans held for sale | 1,579,075 | 1,499,722 | 1,417,773 | 1,348,397 | 1,301,375 | ||||
Loans held for sale | -- | -- | 5,632 | 5,977 | 6,207 | ||||
Total loans, net | $ 1,579,075 | $ 1,499,722 | $ 1,423,405 | $ 1,354,374 | $ 1,307,582 | ||||
Other real estate owned | $ 8,811 | $ -- | $ 2,755 | $ 8,902 | $ 5,602 | ||||
Investment in affordable housing | 17,999 | 18,460 | 8,706 | 8,964 | 6,411 | ||||
Federal Home Loan Bank stock | 6,155 | 6,155 | 6,155 | 5,296 | 5,296 | ||||
Other assets | 43,566 | 51,146 | 45,124 | 43,327 | 54,783 | ||||
Total assets | $ 2,054,154 | $ 1,996,150 | $ 1,904,018 | $ 1,805,138 | $ 1,768,959 | ||||
Liabilities: | |||||||||
Deposits: | |||||||||
Demand | $ 443,385 | $ 403,881 | $ 388,497 | $ 327,036 | $ 338,530 | ||||
Interest-bearing demand | 525,781 | 554,769 | 489,313 | 477,965 | 469,976 | ||||
Savings | 22,211 | 22,552 | 24,712 | 23,824 | 22,984 | ||||
Time certificates of $250,000 or more | 276,197 | 250,087 | 250,276 | 261,984 | 213,362 | ||||
Other time certificates | 508,685 | 489,765 | 497,021 | 471,250 | 484,462 | ||||
Total deposits | $ 1,776,259 | $ 1,721,054 | $ 1,649,819 | $ 1,562,059 | $ 1,529,314 | ||||
Advances from Federal Home Loan Bank | $ 20,000 | $ 20,000 | $ 20,000 | $ 20,000 | $ 20,000 | ||||
Commitments to fund investment in affordable housing partnership | 8,151 | 9,481 | -- | -- | -- | ||||
Other liabilities | 14,717 | 16,963 | 11,542 | 8,535 | 12,729 | ||||
Total liabilities | $ 1,819,127 | $ 1,767,498 | $ 1,681,361 | $ 1,590,594 | $ 1,562,043 | ||||
Equity: | |||||||||
Net common stock, no par value | $ 174,539 | $ 173,581 | $ 172,642 | $ 171,722 | $ 170,096 | ||||
Retained earnings | 58,553 | 53,015 | 48,042 | 41,833 | 36,680 | ||||
Accumulated other comprehensive income | 1,935 | 2,056 | 1,973 | 989 | 140 | ||||
Total shareholders' equity | $ 235,027 | $ 228,652 | $ 222,657 | $ 214,544 | $ 206,916 | ||||
Total liabilities and shareholders' equity | $ 2,054,154 | $ 1,996,150 | $ 1,904,018 | $ 1,805,138 | $ 1,768,959 |
Preferred Bank | ||||
Loan and Credit Quality Information | ||||
Allowance For Credit Losses & Loss History | ||||
Year Ended December 31, 2014 |
Year Ended December 31, 2013 |
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(Dollars in 000's) | ||||
Allowance For Credit Losses | ||||
Balance at Beginning of Period | $ 19,494 | $ 20,607 | ||
Charge-Offs | ||||
Commercial & Industrial | 436 | 4,158 | ||
Mini-perm Real Estate | 4,243 | 1,668 | ||
Construction - Residential | -- | 2,438 | ||
Construction - Commercial | -- | -- | ||
Land - Residential | -- | -- | ||
Land - Commercial | -- | -- | ||
Others | -- | -- | ||
Total Charge-Offs | 4,679 | 8,264 | ||
Recoveries | ||||
Commercial & Industrial | 3 | 366 | ||
Mini-perm Real Estate | -- | 1,379 | ||
Construction - Residential | -- | 1,951 | ||
Construction - Commercial | 134 | 163 | ||
Land - Residential | -- | 38 | ||
Land - Commercial | 4,672 | 4 | ||
Total Recoveries | 4,809 | 3,901 | ||
Net Loan Charge-Offs | (130) | 4,363 | ||
Provision for Credit Losses | 3,350 | 3,250 | ||
Balance at End of Period | $ 22,974 | $ 19,494 | ||
Average Loans and Leases* | $ 1,438,122 | $ 1,217,383 | ||
Loans and Leases at end of Period* | $ 1,604,149 | $ 1,329,638 | ||
Net Charge-Offs to Average Loans and Leases | -0.01% | 0.36% | ||
Allowances for credit losses to loans and leases at end of period ** | 1.43% | 1.47% | ||
* Loans held for sale are included | ||||
** Loans held for sale are excluded |