Preferred Bank Reports Record Third Quarter Results

LOS ANGELES, Oct. 20, 2025 (GLOBE NEWSWIRE) -- Preferred Bank (NASDAQ: PFBC), one of the larger independent California banks, today reported results for the quarter ended September 30, 2025. Preferred Bank (“the Bank”) reported net income of $35.9 million or $2.84 per diluted share for the third quarter of 2025. This represents an increase in net income of $3.1 million from the prior quarter and an increase of $2.6 million over the same quarter last year. The increase compared to both periods was primarily due to an increase in net interest income. The primary reason that net interest income increased over the same quarter last year was due to a large $5.0 million decrease in interest expense. In comparison to the prior quarter, gross interest income increased by $6.4 million due to an increase in loans and investment securities.

Highlights for the Quarter:

Return on average assets was 1.93%
Return on average equity was 18.64%
Total loans increased by $132.4 million or 2.3%, linked quarter
Total deposits increased by $151.3 million, or 2.5%, linked quarter
The efficiency ratio for the quarter was 28.7%

Li Yu, Chairman and CEO, commented, “We are pleased to report a quarterly record for diluted earnings per share of $2.84 for the third quarter of 2025. Net income for the quarter was $35.9 million.

“For the quarter, nonperforming loans decreased significantly from $52.3 million at June 30, 2025 to $17.6 million as of September 30, 2025. The primary reason for the decrease is the foreclosure of a loan with the balance transferred to OREO. We are happy to report that the OREO asset has already been sold as of this writing, and a large pre-tax gain was also recorded on the sale which will be reported in our fourth quarter results. Net charge-offs were $1.6 million on a year-to-date (“YTD”) basis.

“This quarter we have also recorded reasonable growth in both loans and deposits. Total loans increased by $132.4 million or 2.3% on a linked quarter basis. Deposits also increased by $151.3 million or 2.5% on a linked quarter basis. Our customers appear to be slightly more optimistic but still cautious as there are a lot of uncertainties remaining in our economy. Worth noting is that without the aforementioned loan transferred to OREO, loan growth would have been near $170 million for the quarter.

“Net interest income and the net interest margin both increased from the previous quarter while noninterest expense was relatively unchanged from previous quarters. In late June, regulators approved our stock repurchase program but for most of the time since then, the market price was above what we were willing to pay to buy it back. During the third quarter, we repurchased a total of 70,842 shares for total consideration of $6.3 million.”

Results of Operations

Net Interest Income and Net Interest Margin. Net interest income before provision for credit losses was $71.3 million for the third quarter of 2025. This represents a $4.4 million increase over the $66.9 million recorded in the prior quarter and a $2.5 million increase over the same quarter last year. The increase compared to the prior quarter was due to loan growth as well as an increase in the Bank’s investment securities. This was partially offset by an increase in interest expense which was due to deposit growth and an increase in borrowings. The increase over the same period last year was due to a $5.0 million decrease in interest expense partially offset by a smaller decrease in interest income. The Bank has made significant efforts to decrease rates on deposits and the results in this quarter are indicative of that effort. The Bank’s net interest margin expanded in the quarter to 3.92% from 3.85% last quarter but was lower than the net interest margin of 4.10% recorded in the third quarter of last year.

Noninterest Income. For the third quarter of 2025, noninterest income was $3.7 million compared with $3.5 million for the same quarter last year and compared to $3.8 million for the second quarter of 2025. The increase over the same quarter last year was due to letter of credit (LC) fee income which was up by $461,000. In comparison to the prior quarter, gains on sales of loans was down by $116,000.

Noninterest Expense. Total noninterest expense was $21.5 million for the third quarter of 2025 compared to $22.4 million for the second quarter of 2025 and compared to the $22.1 million recorded in the same period last year. The primary reason for the decrease from the prior quarter was mainly due to a $1.3 million write-down of the Bank’s OREO property which occurred in the second quarter of 2025 as compared to a $300,000 charge on OREO holdings this quarter. The decrease from the same quarter last year was due again to a $1.7 million write-down of the same property in the third quarter of 2024. Personnel expense was $14.2 million this quarter which was a $715,000 increase over the same period last year but was nearly flat compared to the second quarter of 2025. Occupancy expense was up by $414,000 over the same period last year due to the Bank’s branch expansions and the change in accounting for leases which was adopted in the fourth quarter of 2024. The Bank’s efficiency ratio came in at 28.7% for the quarter which compares to 31.8% last quarter and to 30.6% in the same quarter last year.

Income Taxes. The Bank recorded a provision for income taxes of $15.0 million for the third quarter of 2025. This represents an effective tax rate (“ETR”) of 29.5% which is up from the 29.0% ETR for the same quarter last year and the same as the 29.5% ETR recorded in the second quarter of 2025. The Bank’s ETR will fluctuate slightly from quarter to quarter within a fairly small range due to the timing of taxable events throughout the year.

Year-to-Date Results

Net income for the nine months ended September 30, 2025 was $98.8 million or $7.63 per diluted share compared to $100.4 million or $7.39 million last year. The reason that diluted earnings per share (“EPS”) increased over 2024 was due to the stock repurchases that occurred in late 2024 and early 2025 which decreased the outstanding share count, leading to increased diluted earnings per share. The primary reason for the decrease in net income was a decrease in net interest income of $2.6 million and a $5.5 million increase in noninterest expense partially offset by a $5.3 million decrease in the provision for credit losses.

Balance Sheet Summary

Total gross loans at September 30, 2025 were $5.87 billion, an increase of $231.4 million from the total of $5.64 billion as of December 31, 2024. Total deposits were $6.23 billion, an increase of $312.8 million from the $5.92 billion as of December 31, 2024. Total assets were $7.47 billion, an increase of $544.4 million over the total of $6.92 billion as of December 31, 2024.

Asset Quality

Non-accrual loans and loans 90 days or more past due and still accruing totaled $17.6 million as of September 30, 2025. This represents a decrease from the prior quarter of $52.3 million as the Bank foreclosed on one of its large nonaccrual loans reported as of June 30, 2025. The $37 million multifamily nonaccrual loan was foreclosed on in the third quarter however the Bank has sold this property subsequent to September 30, 2025 and recorded a pre-tax gain on sale. Total OREO as of September 30, 2025 was $52.6 million as of September 30, 2025 however, as of this writing, OREO totals $14.7 million due to the aforementioned OREO sale. Total net charge-offs (recoveries) for the quarter were $1.6 million compared to net charge-offs of $44,000 in the prior quarter and compared to $(3,000) in the same quarter last year.

Allowance for Credit Losses

The provision for credit losses for the third quarter of 2025 was $2.5 million compared to $1.6 million last quarter and compared to $3.2 million in the same quarter last year. The Bank’s allowance coverage ratio decreased to 1.27% of loans as compared to 1.29% in the prior quarter.

Capitalization

As of September 30, 2025, the Bank’s tangible capital ratio was 10.38%, the leverage ratio was 10.66%, the common equity tier 1 capital ratio was 11.34% and the total capital ratio stood at 14.56%. As of December 31, 2024, the Bank’s tangible capital ratio was 11.02%, the Bank’s leverage ratio was 11.33%, the common equity tier 1 ratio was 11.80% and the total capital ratio was 15.11%.

Conference Call and Webcast

A conference call with simultaneous webcast to discuss Preferred Bank’s third quarter 2025 financial results will be held tomorrow October 21, 2025 at 2:00 p.m. Eastern / 11:00 a.m. Pacific. Interested participants and investors may access the conference call by dialing 888-243-4451 (domestic) or 412-542-4135 (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.

Preferred Bank's Chairman and CEO Li Yu, President and Chief Operating Officer Wellington Chen, Chief Financial Officer Edward J. Czajka, Chief Credit Officer Nick Pi and Deputy Chief Operating Officer Johnny Hsu will discuss Preferred Bank's financial results, business highlights and outlook. After the live webcast, a replay will be available at 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 November 4, 2025; the passcode is 7582330.

About Preferred Bank

Preferred Bank is one of the larger independent commercial banks headquartered 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 Bank conducts its banking business from its main office in Los Angeles, California, and through twelve full-service branch banking offices in California (Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine (2), Diamond Bar, Pico Rivera, Tarzana and San Francisco (2)), two branches in New York (Manhattan and Flushing, Queens) and a branch office in the Houston, Texas suburb of Sugar Land. In addition, the Bank also operates a loan production office in Sunnyvale, 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.

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 2024 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.

AT THE COMPANY:	AT FINANCIAL PROFILES:
Edward J. Czajka	Jeffrey Haas
Executive Vice President	General Information
Chief Financial Officer	(310) 622-8240
(213) 891-1188	PFBC@finprofiles.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 Quarter Ended
			September 30,		June 30,		September 30,
			2025		2025		2024
Interest income:
	Loans, including fees		$	110,645	$	105,884	$	114,112
	Investment securities			15,977		14,326		15,032
	Fed funds sold			228		233		280
		Total interest income		126,850		120,443		129,424

Interest expense:
	Interest-bearing demand			17,562		16,171		23,211
	Savings			67		71		84
	Time certificates			34,792		34,932		35,956
	FHLB borrowings			1,794		1,070		-
	Subordinated debt			1,325		1,325		1,325
		Total interest expense		55,540		53,569		60,576
		Net interest income		71,310		66,874		68,848
Provision for credit losses				2,500		1,600		3,200
		Net interest income after provision for credit losses		68,810		65,274		65,648

Noninterest income:
	Fees & service charges on deposit accounts			625		635		747
	Letters of credit fee income			2,421		2,333		1,959
	BOLI income			105		104		108
	Net gain on sale of loans			56		172		91
	Other income			458		518		554
		Total noninterest income		3,665		3,762		3,459

Noninterest expense:
	Salary and employee benefits			14,240		14,247		13,525
	Net occupancy expense			2,297		2,271		1,883
	Business development and promotion expense			238		240		241
	Professional services			1,494		1,507		1,816
	Office supplies and equipment expense			361		419		435
	OREO valuation allowance and related expense			463		1,479		1,915
	Other			2,405		2,282		2,274
		Total noninterest expense		21,498		22,445		22,089
		Income before provision for income taxes		50,977		46,591		47,018
Income tax expense				15,038		13,744		13,635
		Net income	$	35,939	$	32,847	$	33,383

Income per share available to common shareholders
		Basic	$	2.90	$	2.61	$	2.50
		Diluted	$	2.84	$	2.57	$	2.46

Weighted-average common shares outstanding
		Basic		12,384,924		12,570,755		13,327,848
		Diluted		12,634,174		12,776,240		13,544,273

Cash dividends per common share			$	0.75	$	0.75	$	0.70

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
			2025		2024		%
Interest income:
	Loans, including fees		$	318,020		333,543	-4.7	%
	Investment securities			43,113		48,841	-11.7	%
	Fed funds sold			689		854	-19.3	%
		Total interest income		361,822		383,238	-5.6	%

Interest expense:
	Interest-bearing demand			50,323		69,706	-27.8	%
	Savings			207		238	-13.1	%
	Time certificates			103,611		105,864	-2.1	%
	FHLB borrowings			2,864		-	100.0	%
	Subordinated debt			3,975		3,975	0.0	%
		Total interest expense		160,980		179,783	-10.5	%
		Net interest income		200,842		203,455	-1.3	%
Provision for credit losses				4,800		10,100	-52.5	%
		Net interest income after provision for credit losses		196,042		193,355	1.4	%

Noninterest income:
	Fees & service charges on deposit accounts			1,976		2,411	-18.0	%
	Letters of credit fee income			6,998		5,211	34.3	%
	BOLI income			312		318	-1.8	%
	Net gain on sale of loans			503		547	-8.0	%
	Other income			1,636		1,441	13.5	%
		Total noninterest income		11,425		9,928	15.1	%

Noninterest expense:
	Salary and employee benefits			43,326		40,369	7.3	%
	Net occupancy expense			6,862		5,310	29.2	%
	Business development and promotion expense			940		910	3.3	%
	Professional services			4,652		5,105	-8.9	%
	Office supplies and equipment expense			1,166		1,385	-15.8	%
	OREO valuation allowance and related expense			3,473		2,079	67.1	%
	Other			6,893		6,656	3.6	%
		Total noninterest expense		67,312		61,814	8.9	%
		Income before provision for income taxes		140,155		141,469	-0.9	%
Income tax expense				41,345		41,028	0.8	%
		Net income	$	98,810	$	100,441	-1.6	%

Income per share available to common shareholders
		Basic	$	7.77	$	7.50	3.6	%
		Diluted	$	7.63	$	7.39	3.2	%

Weighted-average common shares outstanding
		Basic		12,723,788		13,399,487	-5.0	%
		Diluted		12,949,445		13,587,820	-4.7	%

Dividends per share			$	2.25	$	2.10	7.1	%

PREFERRED BANK
Condensed Consolidated Statements of Financial Condition
(unaudited)
(in thousands)


			September 30,			December 31,
				2025			2024
			(Unaudited)			(Audited)
Assets
Cash and due from banks			$	795,459		$	765,515
Fed funds sold				20,000			20,000
	Cash and cash equivalents			815,459			785,515

Securities held-to-maturity, at amortized cost				19,034			20,021
Securities available-for-sale, at fair value				569,115			348,706

Loans held for sale, at lower of cost or fair value				-			2,214

Loans				5,872,011			5,640,615
	Less allowance for credit losses			(74,692	)		(71,477	)
	Less amortized deferred loan fees, net			(9,956	)		(9,234	)
	Loans, net			5,787,363			5,559,904

Other real estate owned and repossessed assets				52,609			14,991
Bank furniture and fixtures, net				7,771			8,462
Bank-owned life insurance				10,641			10,433
Accrued interest receivable				36,449			33,561
Investment in affordable housing partnerships				73,874			58,346
Federal Home Loan Bank stock, at cost				15,000			15,000
Deferred tax assets				43,711			47,402
Income tax receivable				5,190			2,195
Operating lease right-of-use assets				27,063			13,182
Other assets				4,515			3,497
	Total assets		$	7,467,794		$	6,923,429

Liabilities and Shareholders' Equity
Deposits:
	Noninterest bearing demand deposits		$	654,302		$	704,859
	Interest bearing deposits:			2,205,865			2,026,965
		Savings		31,087			30,150
		Time certificates of $250,000 or more		1,699,757			1,477,931
		Other time certificates		1,638,662			1,676,943
		Total deposits		6,229,673			5,916,848

Advances from Federal Home Loan Bank				200,000			-
Subordinated debt issuance, net				148,647			148,469
Commitments to fund investment in affordable housing partnerships				24,874			21,623
Operating lease liabilities				31,073			16,990
Accrued interest payable				15,655			16,517
Other liabilities				42,230			39,830
	Total liabilities			6,692,152			6,160,277

Shareholders' equity				775,642			763,152
	Total liabilities and shareholders' equity		$	7,467,794		$	6,923,429

Book value per common share			$	62.81		$	57.86
Number of common shares outstanding				12,349,889			13,188,776

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)



			For the Quarter Ended

			September 30,			June 30,			March 31,			December 31,			September 30,
				2025			2025			2025			2024			2024
Unaudited historical quarterly operations data:
	Interest income		$	126,850		$	120,443		$	114,529		$	125,858		$	129,424
	Interest expense			55,540			53,569			51,871			56,685			60,576
		Interest income before provision for credit losses		71,310			66,874			62,658			69,173			68,848
	Provision for credit losses			2,500			1,600			700			2,000			3,200
	Noninterest income			3,665			3,762			3,998			3,637			3,459
	Noninterest expense			21,498			22,445			23,369			28,246			22,089
	Income tax expense			15,038			13,744			12,563			12,343			13,635
		Net income	$	35,939		$	32,847		$	30,024		$	30,221		$	33,383

	Earnings per share
		Basic	$	2.90		$	2.61		$	2.27		$	2.29		$	2.50
		Diluted	$	2.84		$	2.57		$	2.23		$	2.25		$	2.46

Ratios for the period:
	Return on average assets			1.93	%		1.85	%		1.76	%		1.74	%		1.95	%
	Return on average equity			18.64	%		17.55	%		15.62	%		15.81	%		17.77	%
	Net interest margin (Fully-taxable equivalent)			3.92	%		3.85	%		3.75	%		4.06	%		4.10	%
	Noninterest expense to average assets			1.16	%		1.26	%		1.37	%		1.62	%		1.29	%
	Efficiency ratio			28.67	%		31.78	%		35.06	%		38.79	%		30.55	%
	Net (recoveries) charge-offs to average loans (annualized)			0.11	%		0.00	%		-0.01	%		0.47	%		-0.00	%

Ratios as of period end:
	Tangible common equity ratio			10.38	%		10.26	%		10.96	%		11.02	%		10.92	%
	Tier 1 leverage capital ratio			10.66	%		10.73	%		11.52	%		11.33	%		11.28	%
	Common equity tier 1 risk-based capital ratio			11.34	%		11.18	%		11.86	%		11.80	%		11.66	%
	Tier 1 risk-based capital ratio			11.34	%		11.18	%		11.86	%		11.80	%		11.66	%
	Total risk-based capital ratio			14.56	%		14.43	%		15.15	%		15.11	%		15.06	%
	Allowances for credit losses to loans at end of period			1.27	%		1.29	%		1.28	%		1.27	%		1.36	%
	Allowance for credit losses to non-performing loans		4.24x			1.41x			0.91x			1.89x			3.92x

Average balances:
	Total securities		$	583,302		$	503,861		$	402,754		$	350,732		$	356,590
	Total loans			5,753,801			5,623,010			5,555,010			5,542,558			5,458,613
	Total earning assets			7,234,568			6,984,272			6,780,438			6,788,487			6,684,766
	Total assets			7,382,265			7,121,047			6,905,249			6,920,325			6,817,979
	Total time certificate of deposits			3,330,241			3,321,327			3,164,766			3,144,523			2,874,985
	Total interest bearing deposits			5,501,767			5,345,308			5,244,243			5,220,655			5,124,245
	Total deposits			6,169,728			6,005,486			5,886,163			5,905,127			5,828,227
	Total interest bearing liabilities			5,850,376			5,614,737			5,392,735			5,369,092			5,272,617
	Total equity			764,766			750,535			779,339			760,345			747,222

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)



			For the Nine Months Ended
			September 30,			September 30,
				2025			2024

	Interest income		$	361,822		$	383,238
	Interest expense			160,980			179,783
		Interest income before provision for credit losses		200,842			203,455
	Provision for credit losses			4,800			10,100
	Noninterest income			11,425			9,928
	Noninterest expense			67,312			61,814
	Income tax expense			41,345			41,028
		Net income	$	98,810		$	100,441

	Earnings per share
		Basic	$	7.77		$	7.50
		Diluted	$	7.63		$	7.39

Ratios for the period:
	Return on average assets			1.85	%		1.97	%
	Return on average equity			17.27	%		18.57	%
	Net interest margin (Fully-taxable equivalent)			3.84	%		4.08	%
	Noninterest expense to average assets			1.26	%		1.21	%
	Efficiency ratio			31.71	%		28.97	%
	Net charge-off to average loans			0.04	%		0.31	%

Average balances:
	Total securities		$	497,301		$	352,982
	Total loans			5,644,668			5,347,918
	Total earning assets			7,001,424			6,666,439
	Total assets			7,137,935			6,800,008
	Total time certificate of deposits			3,272,717			2,870,717
	Total interest bearing deposits			5,364,715			5,110,755
	Total deposits			6,021,497			5,830,555
	Total interest bearing liabilities			5,620,958			5,259,068
	Total equity			764,826			722,560

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)

				As of

				September 30,			June 30,			March 31,			December 31,			September 30,
					2025			2025			2025			2024			2024
Unaudited quarterly statement of financial position data:
Assets:
	Cash and cash equivalents			$	815,459		$	796,257		$	925,183		$	785,515		$	804,994
	Securities held-to-maturity, at amortized cost				19,034			19,456			19,745			20,021			20,311
	Securities available-for-sale, at fair value				569,115			577,040			390,096			348,706			337,363
	Loans:
		Real estate – Mortgage:
			Real estate—Residential	$	793,217		$	767,620		$	779,462		$	790,069		$	753,453
			Real estate—Commercial		2,890,990			2,868,308			2,897,956			2,840,771			2,882,506
			Total Real Estate – Mortgage		3,684,207			3,635,928			3,677,418			3,630,840			3,635,959
		Real estate – Construction:
			R/E Construction — Residential		285,623			291,343			306,283			296,580			274,214
			R/E Construction — Commercial		323,897			303,354			269,065			287,185			290,308
			Total real estate construction loans		609,520			594,697			575,348			583,765			564,522
		Commercial and industrial			1,570,423			1,501,188			1,374,379			1,418,930			1,365,550
		SBA			7,630			7,741			7,104			6,833			5,424
		Consumer and others			231			56			164			247			124
			Gross loans		5,872,011			5,739,610			5,634,413			5,640,615			5,571,579
	Allowance for credit losses on loans				(74,692	)		(73,830	)		(72,274	)		(71,477	)		(76,051	)
	Net deferred loan fees				(9,956	)		(11,940	)		(9,652	)		(9,234	)		(10,414	)
		Net loans, excluding loans held for sale		$	5,787,363		$	5,653,840		$	5,552,487		$	5,559,904		$	5,485,114
	Loans held for sale			$	-		$	-		$	-		$	2,214		$	225
		Net loans		$	5,787,363		$	5,653,840		$	5,552,487		$	5,562,118		$	5,485,339

	Other real estate owned and repossessed assets			$	52,609		$	13,755		$	13,650		$	14,991		$	15,082
	Investment in affordable housing partnerships				73,874			74,783			63,612			58,346			58,009
	Federal Home Loan Bank stock, at cost				15,000			15,000			15,000			15,000			15,000
	Other assets				135,340			128,629			120,319			118,732			136,246
		Total assets		$	7,467,794		$	7,278,760		$	7,100,092		$	6,923,429		$	6,872,344

Liabilities:
	Deposits:
		Demand		$	654,302		$	675,102		$	730,270		$	704,859		$	682,859
		Interest bearing demand			2,205,865			2,004,135			2,099,987			2,026,965			1,994,288
		Savings			31,087			34,333			32,631			30,150			29,793
		Time certificates of $250,000 or more			1,699,757			1,681,026			1,531,715			1,477,931			1,478,500
		Other time certificates			1,638,662			1,683,737			1,678,132			1,676,943			1,682,324
		Total deposits		$	6,229,673		$	6,078,333		$	6,072,735		$	5,916,848		$	5,867,764

	Advance from Federal Home Loan Bank				200,000			200,000			-			-			-
	Subordinated debt issuance, net				148,647			148,588			148,529			148,469			148,410
	Commitments to fund investment in affordable housing partnerships				24,874			30,645			20,956			21,623			23,617
	Other liabilities				88,958			73,534			79,268			73,337			82,436
		Total liabilities		$	6,692,152		$	6,531,100		$	6,321,488		$	6,160,277		$	6,122,227

Equity:
	Common stock, no par value			$	210,882		$	210,882		$	210,882		$	210,882		$	210,882
	Additional paid-in capital				103,235			101,088			99,603			95,791			93,631
	Treasury stock				(277,351	)		(271,005	)		(214,406	)		(201,172	)		(194,585	)
	Retained earnings				755,587			728,891			705,360			685,108			664,808
	Accumulated other comprehensive income				(16,711	)		(22,196	)		(22,835	)		(27,457	)		(24,619	)
		Total shareholders' equity		$	775,642		$	747,660		$	778,604		$	763,152		$	750,117
		Total liabilities and shareholders' equity		$	7,467,794		$	7,278,760		$	7,100,092		$	6,923,429		$	6,872,344

PREFERRED BANK
Quarter-to-Date Average Balances, Yield and Rates
(unaudited)


			Three months ended September 30,							Three months ended March 31,							Three months ended September 30,
				2025							2025							2024
						Interest		Average					Interest		Average					Interest		Average
			Average			Income or		Yield/		Average			Income or		Yield/		Average			Income or		Yield/
			Balance			Expense		Rate		Balance			Expense		Rate		Balance			Expense		Rate
ASSETS			(Dollars in thousands)
Interest earning assets:
	Loans^(1,2)		$	5,754,073		$	110,645	7.63	%	$	5,632,204		$	105,884	7.54	%	$	5,459,842		$	114,112	8.31	%
	Investment securities⁽³⁾			583,302			6,257	4.26	%		503,861			5,195	4.14	%		356,590			3,610	4.03	%
	Federal funds sold			20,000			228	4.52	%		20,511			233	4.56	%		20,164			280	5.52	%
	Other earning assets			877,193			9,811	4.44	%		827,696			9,230	4.47	%		848,170			11,521	5.40	%
		Total interest earning assets		7,234,568			126,941	6.96	%		6,984,272			120,542	6.92	%		6,684,766			129,523	7.71	%
	Deferred loan fees, net			(10,686	)						(10,005	)						(10,248	)
	Allowance for credit losses on loans			(72,784	)						(72,328	)						(72,899	)
Noninterest earning assets:
	Cash and due from banks			10,071							12,590							10,826
	Bank furniture and fixtures			7,945							8,215							9,419
	Right of use assets			19,153							19,917							22,496
	Other assets			193,998							178,386							173,619
		Total assets	$	7,382,265						$	7,121,047						$	6,817,979

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
	Deposits:
		Interest bearing demand and savings	$	2,171,526		$	17,629	3.22	%	$	2,023,981		$	16,242	3.22	%	$	2,249,260		$	23,295	4.12	%
		TCD $250K or more		1,686,710			17,406	4.09	%		1,644,322			17,092	4.17	%		1,412,073			17,866	5.03	%
		Other time certificates		1,643,531			17,386	4.20	%		1,677,005			17,840	4.27	%		1,462,912			18,090	4.92	%
		Total interest bearing deposits		5,501,767			52,421	3.78	%		5,345,308			51,174	3.84	%		5,124,245			59,251	4.60	%
Advance from Federal Home Loan Bank				200,000			1,794	3.56	%		120,879			1,070	3.55	%		-			-	0.00	%
Subordinated debt, net				148,609			1,325	3.54	%		148,550			1,325	3.58	%		148,372			1,325	3.55	%
		Total interest bearing liabilities		5,850,376			55,540	3.77	%		5,614,737			53,569	3.83	%		5,272,617			60,576	4.57	%
Noninterest bearing liabilities:
	Demand deposits			667,961							660,178							703,982
	Lease liability			22,908							23,657							18,882
	Other liabilities			76,255							71,940							75,276
		Total liabilities		6,617,500							6,370,512							6,070,757
Shareholders’ equity				764,766							750,535							747,222
		Total liabilities and shareholders’ equity	$	7,382,266						$	7,121,047						$	6,817,979
Net interest income						$	71,401						$	66,973						$	68,947
Net interest spread								3.19	%						3.10	%						3.14	%
Net interest margin								3.92	%						3.85	%						4.10	%

Cost of Deposits:
	Noninterest bearing demand deposits		$	667,961						$	660,178						$	703,982
	Interest bearing deposits			5,501,767			52,421	3.78	%		5,345,308			51,174	3.84	%		5,124,245			59,251	4.60	%
		Total Deposits	$	6,169,728		$	52,421	3.37	%	$	6,005,486		$	51,174	3.42	%	$	5,828,227		$	59,251	4.04	%

⁽¹⁾	Includes non-accrual loans and loans held for sale
⁽²⁾	Net loan fee income of $1.1 million, $1.7 million and $991,000 for the quarter ended September 30, 2025, June 30, 2025 and September 30, 2024, respectively, are included in the yield computations
⁽³⁾	Yields on securities have been adjusted to a tax-equivalent basis

PREFERRED BANK
Year-to-Date Average Balances, Yield and Rates
(unaudited)


			Nine Months ended September 30,
				2025							2024
						Interest		Average					Interest		Average
			Average			Income or		Yield/		Average			Income or		Yield/
			Balance			Expense		Rate		Balance			Expense		Rate
ASSETS			(Dollars in thousands)
Interest earning assets:
	Loans^(1,2)		$	5,648,323		$	318,020	7.53	%	$	5,350,465		$	333,543	8.33	%
	Investment securities⁽³⁾			497,301			15,546	4.18	%		352,982			10,691	4.05	%
	Federal funds sold			20,244			689	4.55	%		20,472			854	5.57	%
	Other earning assets			835,556			27,857	4.46	%		942,520			38,448	5.45	%
		Total interest earning assets		7,001,424			362,112	6.91	%		6,666,439			383,536	7.68	%
	Deferred loan fees, net			(9,965	)						(10,466	)
	Allowance for credit losses on loans			(72,225	)						(76,775	)
Noninterest earning assets:
	Cash and due from banks			11,178							10,693
	Bank furniture and fixtures			8,198							9,762
	Right of use assets			18,105							22,462
	Other assets			181,220							177,893
		Total assets	$	7,137,935						$	6,800,008

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
	Deposits:
		Interest bearing demand/ savings	$	2,091,998		$	50,530	3.23	%	$	2,240,038		$	69,944	4.17	%
		TCD $250K or more		1,605,201			50,138	4.18	%		1,377,621			51,662	5.01	%
		Other time certificates		1,667,516			53,473	4.29	%		1,493,096			54,202	4.85	%
		Total interest \bearing deposits		5,364,715			154,141	3.84	%		5,110,755			175,808	4.59	%
Advance from Federal Home Loan Bank				107,692			2,864	3.56	%		-			-	0.00	%
Subordinated debt, net				148,551			3,975	3.58	%		148,313			3,975	3.58	%
		Total interest bearing liabilities		5,620,958			160,980	3.83	%		5,259,068			179,783	4.57	%
Noninterest bearing liabilities:
	Demand deposits			656,782							719,800
	Lease liability			21,857							19,401
	Other liabilities			73,511							79,179
		Total liabilities		6,373,108							6,077,448
Shareholders’ equity				764,826							722,560
		Total liabilities and shareholders’ equity	$	7,137,934						$	6,800,008
Net interest income						$	201,132						$	203,753
Net interest spread								3.09	%						3.12	%
Net interest margin								3.84	%						4.08	%

Cost of Deposits:
	Noninterest bearing demand deposits		$	656,782						$	719,800
	Interest bearing deposits			5,364,715			154,141	3.84	%		5,110,755			175,808	4.59	%
		Total Deposits	$	6,021,497		$	154,141	3.42	%	$	5,830,555		$	175,808	4.03	%

⁽¹⁾	Includes non-accrual loans and loans held for sale
⁽²⁾	Net loan fee income of $3.6 million and $3.4 million for the nine months ended September 30, 2025 and 2024, respectively, are included in the yield computations
⁽³⁾	Yields on securities have been adjusted to a tax-equivalent basis

PREFERRED BANK
Loan and Credit Quality Information

Allowance For Credit Losses History
			Nine Months Ended			Year Ended
			September 30, 2025			December 31, 2024
			(Dollars in 000's)
Allowance For Credit Losses
Balance at Beginning of Period			$	71,477		$	78,355
	Charge-Offs
		Commercial & Industrial		8			19,028
		Mini-perm Real Estate		1,749			-
		Total Charge-Offs		1,757			19,028

	Recoveries
		Commercial & Industrial		172			50
		Total Recoveries		172			50

	Net (Recoveries) Charge-Offs			1,585			18,978
	Provision for Credit Losses:			4,800			12,100
Balance at End of Period			$	74,692		$	71,477

Average Loans Held for Investment			$	5,644,668		$	5,396,844
Loans Held for Investment at End of Period			$	5,872,011		$	5,640,615
Net (Recoveries) Charge-Offs to Average Loans				0.04	%		0.35	%
Allowances for Credit Losses to Loans at End of Period				1.27	%		1.27	%

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