Preferred Bank Reports Third Quarter Results

Friday, October 23, 2026 · 8:00 AM ET GlobeNewswire

LOS ANGELES, Oct. 23, 2026 (GLOBE NEWSWIRE) -- Preferred Bank (NASDAQ: PFBC), one of the larger independent California banks, today reported results for the quarter ended September 30, 2026. Preferred Bank (“the Bank”) reported net income of $32.9 million or $2.73 per diluted share for the third quarter of 2026. This represents a decrease in net income of $3.0 million from the same quarter last year and a decrease of $592,000 from the previous quarter. The decrease compared to the prior year was due to a decrease in net interest income of $4.6 million partially offset by a $1.3 million increase in noninterest income and a small increase in noninterest expense of $661,000. The difference compared to the prior quarter was again due to net interest income which decreased by $3.3 million partially offset by an increase in noninterest income of $1.5 million and a decrease in noninterest expense of $1.6 million. During the quarter, the Bank placed a $56.7 million loan on nonaccrual status and four others totaling $13.5 million and the resulting reversal of interest income was $2.1 million which was the primary driver behind the decrease in net interest income.

Highlights for the Quarter:

Return on average assets was 1.69%
Return on average equity was 16.18%
Total deposits increased by $77.7 million, or 1.2%, linked quarter
The efficiency ratio for the quarter was 30.9%

Li Yu, Chairman and CEO, commented, “Net income for the third quarter ended September 30, 2026, was $32.9 million or $2.73 per diluted share. Both are lower than the second quarter due primarily to the interest recoveries last quarter and interest reversals this quarter.

“Deposits increased by $77.7 million or 1.2% for the quarter. It is highly likely that the competition for deposits and market conditions will continue into 2027.

“Loans (excluding loans held for sale) decreased $41.0 million after we placed a $56.7 million loan into held for sale status. Presently, we are seeing a stronger pipeline that hopefully will result in solid loan growth in the fourth quarter.

“The net interest margin for the third quarter was 3.49% compared to 3.73% in the second quarter. The variance is largely caused by a $2.1 million interest income reversal in the third quarter and $2.9 million of interest income recoveries in the second quarter. The recent fed rate increase should bring beneficial results to our net interest margin as our balance sheet is asset sensitive.

“Resolution of non-accrual loans is progressing although slower than we had hoped for. Several loans that were scheduled to be resolved in the quarter are now delayed to the fourth quarter or the first quarter 2027 because these assets are subject to bankruptcy courts’ decisions.

This quarter we have outperformed our own expectations in non-interest income and non-interest expense. Our cost control remains effective under this inflationary environment.

We believe the country’s economy will remain strong in 2027, and inflationary pressure will gradually subside. We are optimistic that Preferred Bank will continue to grow.”

Results of Operations

Net Interest Income Compared to Prior Quarter. Net interest income before provision for credit losses was $66.7 million for the third quarter of 2026. This represents a $3.3 million decrease from the previous quarter. The decrease in net interest income from the prior quarter was due primarily to an interest recovery of $2.9 million recorded in the second quarter of 2026. Secondarily, the Bank reversed $2.1 million in the third quarter as a result of placing loans on nonaccrual status. Finally, interest expense also increased this quarter over the prior quarter driven by an increase in the interest rate on the Bank’s subordinated debt. On June 16, 2026, the Bank’s subordinated debt went from fixed rate to a floating rate of the 3 month SOFR rate plus 278 basis points resulting in an increase in the coupon rate from 3.375% to 6.44% for the third quarter of 2026. The Bank’s net interest margin (“NIM”) contracted in the quarter to 3.49% due to the interest reversals previously mentioned and to a lesser extent, the increase in the sub debt coupon. This compares to a NIM of 3.73% in the prior quarter which was aided by interest recoveries and to a NIM of 3.92% for the same quarter last year.

Net Interest Income Compared to Prior Year Quarter. Net interest income before provision for credit losses was $66.7 million for the third quarter of 2026. This represents a $4.6 million decrease from the $71.3 million recorded in the same quarter last year. The decrease compared to the same quarter last year was due mainly to the $2.1 million in interest reversals previously mentioned as well as lower interest on overnight funds due to lower balances partially offset by a decrease in interest expense.

Noninterest Income. For the third quarter of 2026, noninterest income was $5.0 million compared with $3.7 million for the same quarter last year and compared to $3.5 million for the second quarter of 2026. The increase from the same quarter last year was mainly due to a gain on the call of one of the Bank’s investment securities of $431,000 as well as an increase in letters of credit fee income of $748,000. The increase over the prior quarter was due to a loss on the sale of a loan of $874,000 which occurred last quarter as well as an increase in letters of credit income and the gain on the call of an investment security this quarter.

Noninterest Expense. Total noninterest expense was $22.2 million for the third quarter of 2026 compared to $21.5 million for the same period last year and compared to $23.7 million recorded in the prior quarter. The primary reason for the increase from the prior year was mainly due to an increase in FDIC assessments of $560,000 and an increase in other professional services of $289,000 due mainly to legal fees on problem loans. This was partially offset by a decrease in OREO expense of $388,000. The decrease from the prior quarter was due primarily to a decrease in personnel expense of $1.1 million, $366,000 in other professional expense and a $109,000 in OREO expense. The Bank’s efficiency ratio came in at 30.9% for the quarter, which compares to 32.3% last quarter and to 28.7% in the same quarter last year.

Income Taxes. The Bank recorded a provision for income taxes of $14.6 million for the third quarter of 2026. This represents an effective tax rate (“ETR”) of 30.7% which is up from the 29.5% ETR for the same quarter last year and down slightly from 30.9% ETR recorded in the second quarter of 2026. 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.

Balance Sheet Summary

Total gross loans at September 30, 2026 were $6.25 billion, essentially flat from the $6.25 billion reported as of June 30, 2026. And an increase of $200.6 million from the total of $6.05 billion as of December 31, 2025. Total deposits were $6.55 billion as of September 30, 2026, an increase of $77.7 million from the $6.47 billion as of June 30, 2026 and an increase of $204.4 million from December 31, 2025. Total assets were $7.82 billion, an increase of $214.9 million over the total of $7.60 billion as of December 31, 2025.

Asset Quality

Non-accrual loans and loans 90 days or more past due and still accruing totaled $109.4 million excluding loans held for sale compared to $98.9 million at June 30, 2026 as compared to $51.3 million as of December 31, 2025. During the quarter, the Bank placed a $56.7 million mixed use property onto nonaccrual status due to late payments. This loan is currently under contract to be sold at par with closing anticipated in late October 2026. The Bank is continuously reviewing all nonaccrual loans to ensure timely resolution. At present, there is no significant loss content identified and the average LTV for this commercial real estate cohort stands at 60.8%. Total net charge-offs (recoveries) on loans for the quarter were $(8,000) compared to $(41,000) in the second quarter of 2026 and compared to net charge-offs of $1.6 million in the third quarter of 2025.

Allowance for Credit Losses

The provision for credit losses for the third quarter of 2026 was 2.1 million compared to the $1.2 million recorded in the second quarter of 2026 and compared to $2.5 million in the same quarter last year. The Bank’s allowance coverage ratio was 1.26% of total loans held for investment compared to 1.22% last quarter and compared to 1.30% as of December 31, 2025.

Capitalization

As of September 30, 2026, the Bank’s tangible common equity ratio was 10.13%, the leverage ratio was 10.78%, the common equity tier 1 capital ratio was 11.26% and the total capital ratio stood at 13.93%. As of December 31, 2025, the Bank’s tangible common equity ratio was 10.38%, the Bank’s leverage ratio was 10.54%, the common equity tier 1 ratio was 11.26% and the total capital ratio was 14.47%.

Conference Call and Webcast

A conference call with simultaneous webcast to discuss Preferred Bank’s third quarter 2026 financial results will be held this afternoon, October 23, 2026 at 2:00 p.m. Eastern / 11:00 a.m. Pacific. Interested participants and investors may access the conference call by dialing 844-826-3037 (domestic) or 412-317-5182 (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 Risk 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 855-669-9658 (domestic) or 412-317-0088 (international) through November 6, 2026; the passcode is 9134266.

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 thirteen full-service branch banking offices in California (Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine (2), Diamond Bar, Pico Rivera, Tarzana, Cupertino 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. 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 2025 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 Quarter Ended
			September 30,		June 30,			September 30,
				2026		2026			2025
Interest income:
	Loans, including fees		$	106,517	$	108,358		$	110,645
	Investment securities			13,966		13,883			15,977
	Fed funds sold			199		205			228
		Total interest income		120,682		122,446			126,850

Interest expense:
	Interest-bearing demand			16,003		15,624			17,562
	Savings			79		75			67
	Time certificates			33,441		33,497			34,792
	FHLB borrowings			1,877		1,743			1,794
	Subordinated debt			2,571		1,517			1,325
		Total interest expense		53,971		52,456			55,540
		Net interest income		66,711		69,990			71,310
Provision for credit losses				2,000		1,200			2,500
		Net interest income after provision for credit losses		64,711		68,790			68,810

Noninterest income:
	Fees & service charges on deposit accounts			556		570			625
	Letters of credit fee income			3,169		2,890			2,421
	BOLI income			108		107			105
	Net gain on called and sale of investment securities			431		35			-
	Net gain (loss) on sale of loans			112		(874	)		56
	Other income			616		755			458
		Total noninterest income		4,992		3,483			3,665

Noninterest expense:
	Salary and employee benefits			14,205		15,281			14,240
	Net occupancy expense			2,360		2,395			2,297
	Business development and promotion expense			240		322			238
	Professional services			1,783		2,149			1,494
	Office supplies and equipment expense			385		340			361
	OREO valuation allowance and related expense			75		184			463
	Other			3,111		3,044			2,405
		Total noninterest expense		22,159		23,715			21,498
		Income before provision for income taxes		47,544		48,558			50,977
Income tax expense				14,596		15,018			15,038
		Net income	$	32,948	$	33,540		$	35,939

Income per share available to common shareholders
		Basic	$	2.78	$	2.83		$	2.90
		Diluted	$	2.73	$	2.78		$	2.84

Weighted-average common shares outstanding
		Basic		11,853,279		11,843,821			12,384,924
		Diluted		12,078,448		12,049,162			12,634,174

Cash dividends per common share			$	0.80	$	0.80		$	0.75

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
				2026			2025	%
Interest income:
	Loans, including fees		$	318,257		$	318,020	0.1	%
	Investment securities			41,150			43,113	-4.6	%
	Fed funds sold			596			689	-13.5	%
		Total interest income		360,003			361,822	-0.5	%

Interest expense:
	Interest-bearing demand			46,747			50,323	-7.1	%
	Savings			208			207	0.3	%
	Time certificates			100,311			103,611	-3.2	%
	FHLB borrowings			5,310			2,864	85.4	%
	Subordinated debt			5,413			3,975	36.2	%
		Total interest expense		157,989			160,980	-1.9	%
		Net interest income		202,014			200,842	0.6	%
Provision for credit losses				4,700			4,800	-2.1	%
		Net interest income after provision for credit losses		197,314			196,042	0.6	%

Noninterest income:
	Fees & service charges on deposit accounts			1,642			1,976	-16.9	%
	Letters of credit fee income			8,796			6,998	25.7	%
	BOLI income			320			312	2.5	%
	Net gain on called and sale of investment securities			525			-	100.0	%
	Net (loss) gain on sale of loans			(738	)		503	-246.5	%
	Other income			2,240			1,636	36.9	%
		Total noninterest income		12,785			11,425	11.9	%

Noninterest expense:
	Salary and employee benefits			44,946			43,326	3.7	%
	Net occupancy expense			7,181			6,862	4.6	%
	Business development and promotion expense			765			940	-18.6	%
	Professional services			5,579			4,652	19.9	%
	Office supplies and equipment expense			1,083			1,166	-7.1	%
	OREO valuation allowance and related expense			622			3,473	-82.1	%
	Other			9,237			6,893	34.0	%
		Total noninterest expense		69,413			67,312	3.1	%
		Income before provision for income taxes		140,686			140,155	0.4	%
Income tax expense				43,054			41,345	4.1	%
		Net income	$	97,632		$	98,810	-1.2	%

Income per share available to common shareholders
		Basic	$	8.18		$	7.77	5.4	%
		Diluted	$	8.03		$	7.63	5.3	%

Weighted-average common shares outstanding
		Basic		11,933,229			12,723,788	-6.2	%
		Diluted		12,153,212			12,949,445	-6.1	%

Dividends per share			$	2.40		$	2.25	6.7	%

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


			September 30,			December 31,
				2026			2025
			(Unaudited)			(Audited)
Assets
Cash and due from banks			$	681,029		$	807,098
Fed funds sold				20,000			20,000
	Cash and cash equivalents			701,029			827,098

Securities held-to-maturity, at amortized cost				17,834			18,749
Securities available-for-sale, at fair value				672,082			566,186

Loans held for sale, at lower of cost or fair value				56,557			-

Loans				6,198,293			6,054,264
	Less allowance for credit losses			(78,284	)		(78,992	)
	Less amortized deferred loan fees, net			(7,611	)		(9,030	)
	Loans, net			6,112,398			5,966,242

Other real estate owned and repossessed assets				11,534			3,510
Bank furniture and fixtures, net				10,888			8,064
Bank-owned life insurance				10,924			10,712
Accrued interest receivable				38,349			34,233
Investment in affordable housing partnerships				79,047			69,978
Federal Home Loan Bank stock, at cost				15,000			15,000
Deferred tax assets				55,015			41,976
Income tax receivable				3,513			3,884
Operating lease right-of-use assets				27,679			30,531
Other assets				4,172			5,002
	Total assets		$	7,816,021		$	7,601,165

Liabilities and shareholders' Equity
Deposits:
	Noninterest bearing demand deposits		$	745,763		$	699,160
	Interest bearing deposits:			2,321,924			2,205,914
		Savings		29,840			30,376
		Time certificates of $250,000 or more		1,830,163			1,754,273
		Other time certificates		1,622,184			1,655,723
		Total deposits		6,549,874			6,345,446

Advances from Federal Home Loan Bank				200,000			200,000
Subordinated debt issuance, net				148,884			148,706
Commitments to fund investment in affordable housing partnerships				32,040			23,327
Operating lease liabilities				32,184			35,107
Accrued interest payable				16,779			16,513
Other liabilities				43,827			42,589
	Total liabilities			7,023,588			6,811,688

Shareholders' equity				792,433			789,477
	Total liabilities and shareholders' equity		$	7,816,021		$	7,601,165

Book value per common share			$	66.85		$	64.83
Number of common shares outstanding				11,853,571			12,177,588

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,
				2026			2026			2026			2025			2025
Unaudited historical quarterly operations data:
	Interest income		$	120,682		$	122,446		$	116,875		$	124,633		$	126,850
	Interest expense			53,971			52,456			51,562			54,658			55,540
		Interest income before provision for credit losses		66,711			69,990			65,313			69,975			71,310
	Provision for credit losses			2,000			1,200			1,500			4,300			2,500
	Noninterest income			4,992			3,483			4,310			8,094			3,665
	Noninterest expense			22,159			23,715			23,539			24,377			21,498
	Income tax expense			14,596			15,018			13,440			14,570			15,038
		Net income	$	32,948		$	33,540		$	31,144		$	34,822		$	35,939

	Earnings per share
		Basic	$	2.78		$	2.83		$	2.57		$	2.85		$	2.90
		Diluted	$	2.73		$	2.78		$	2.53		$	2.79		$	2.84

Ratios for the period:
	Return on average assets			1.69	%		1.75	%		1.67	%		1.82	%		1.93	%
	Return on average equity			16.18	%		17.05	%		15.89	%		17.59	%		18.64	%
	Net interest margin (fully-taxable equivalent)			3.49	%		3.73	%		3.57	%		3.74	%		3.92	%
	Noninterest expense to average assets			1.14	%		1.24	%		1.26	%		1.27	%		1.16	%
	Efficiency ratio			30.90	%		32.28	%		33.81	%		31.22	%		28.67	%
	Net charge-offs (recoveries) to average loans (annualized)			-0.00	%		-0.00	%		0.37	%		0.00	%		0.11	%

Ratios as of period end:
	Tangible common equity ratio			10.13	%		10.26	%		10.05	%		10.38	%		10.38	%
	Tier 1 leverage capital ratio			10.78	%		10.55	%		10.37	%		10.54	%		10.66	%
	Common equity tier 1 risk-based capital ratio			11.26	%		11.06	%		10.87	%		11.26	%		11.34	%
	Tier 1 risk-based capital ratio			11.26	%		11.06	%		10.87	%		11.26	%		11.34	%
	Total risk-based capital ratio			13.93	%		13.74	%		13.98	%		14.47	%		14.56	%
	Allowances for credit losses to loans at end of period			1.26	%		1.22	%		1.24	%		1.30	%		1.27	%
	Allowance for credit losses to non-performing loans			0.75	x		0.84	x		0.8	x		1.54	x		4.24	x

Average balances:
	Total securities		$	610,837		$	558,696		$	580,248		$	586,950		$	583,302
	Total loans held for investment			6,191,538			6,021,420			6,037,241			5,947,814			5,753,801
	Total loans held for investment and held for sale			6,200,211			6,038,330			6,051,465			5,947,986			5,754,073
	Total earning assets			7,587,420			7,532,781			7,437,232			7,439,767			7,234,568
	Total assets			7,733,141			7,668,719			7,563,705			7,585,940			7,382,265
	Total time certificate of deposits			3,468,041			3,500,857			3,451,924			3,402,304			3,330,241
	Total interest bearing deposits			5,714,126			5,712,097			5,644,722			5,651,369			5,501,767
	Total deposits			6,456,558			6,420,198			6,311,446			6,336,242			6,169,728
	Total interest bearing liabilities			6,062,973			6,060,886			5,993,452			6,000,042			5,850,376
	Total equity			807,742			789,114			794,931			785,581			764,766

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



			For the Nine Months Ended
			September 30			September 30
				2026			2025

	Interest income		$	360,003		$	361,822
	Interest expense			157,989			160,980
		Interest income before provision for credit losses		202,014			200,842
	Provision for credit losses			4,700			4,800
	Noninterest income			12,785			11,425
	Noninterest expense			69,413			67,312
	Income tax expense			43,054			41,345
		Net income	$	97,632		$	98,810

	Earnings per share
		Basic	$	8.18		$	7.77
		Diluted	$	8.03		$	7.63

Ratios for the period:
	Return on average assets			1.71	%		1.85	%
	Return on average equity			16.37	%		17.27	%
	Net interest margin (fully-taxable equivalent)			3.60	%		3.84	%
	Noninterest expense to average assets			1.21	%		1.26	%
	Efficiency ratio			32.32	%		31.71	%
	Net charge-off to average loans			0.12	%		0.04	%

Average balances:
	Total securities		$	583,373		$	497,301
	Total loans held for investment			6,083,964			5,644,668
	Total loans held for investment and held for sale			6,097,213			5,648,323
	Total earning assets			7,519,694			7,001,424
	Total assets			7,655,809			7,137,935
	Total time certificate of deposits			3,473,667			3,272,717
	Total interest bearing deposits			5,690,570			5,364,715
	Total deposits			6,396,600			6,021,497
	Total interest bearing liabilities			6,039,359			5,620,958
	Total equity			797,309			764,826

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



				As of

				September 30,			June 30,			March 31,			December 31,			September 30,
					2026			2026			2026			2025			2025
Unaudited quarterly statement of financial position data:
Assets:
	Cash and cash equivalents			$	701,029		$	789,820		$	825,161		$	827,098		$	815,459
	Securities held-to-maturity, at amortized cost				17,834			18,154			18,458			18,749			19,034
	Securities available-for-sale, at fair value				672,082			525,956			553,184			566,186			569,115
	Loans:
		Real estate – mortgage:
			Real estate—residential	$	745,775		$	737,321		$	738,508		$	783,136		$	793,217
			Real estate—commercial		3,127,696			3,169,037			3,105,331			3,028,762			2,890,990
			Total Real estate – mortgage		3,873,471			3,906,358			3,843,839			3,811,898			3,684,207
		Real estate – construction:
			R/E construction — residential		282,750			284,219			265,748			282,808			285,623
			R/E construction — commercial		356,582			364,807			343,598			387,759			323,897
			Total real estate construction loans		639,332			649,026			609,346			670,567			609,520
		Commercial and industrial			1,676,780			1,675,300			1,584,984			1,563,504			1,570,423
		SBA			8,598			8,444			8,087			8,053			7,630
		Consumer and others			112			153			288			242			231
			Gross loans		6,198,293			6,239,281			6,046,544			6,054,264			5,872,011
	Allowance for credit losses on loans				(78,284	)		(76,276	)		(75,036	)		(78,992	)		(74,692	)
	Net deferred loan fees				(7,611	)		(8,288	)		(7,923	)		(9,030	)		(9,956	)
		Net loans, excluding loans held for sale		$	6,112,398		$	6,154,717		$	5,963,585		$	5,966,242		$	5,787,363
	Loans held for sale			$	56,557		$	8,348		$	76,324		$	-		$	-
		Net loans		$	6,168,955		$	6,163,065		$	6,039,909		$	5,966,242		$	5,787,363

	Other real estate owned and repossessed assets			$	11,534		$	3,010		$	3,010		$	3,510		$	52,609
	Investment in affordable housing partnerships				79,047			77,729			66,394			69,978			73,874
	Federal Home Loan Bank stock, at cost				15,000			15,000			15,000			15,000			15,000
	Other assets				150,540			137,887			133,521			134,402			135,340
		Total assets		$	7,816,021		$	7,730,621		$	7,654,637		$	7,601,165		$	7,467,794

Liabilities:
	Deposits:
		Demand		$	745,763		$	754,670		$	716,777		$	699,160		$	654,302
		Interest bearing demand			2,321,924			2,209,390			2,200,374			2,205,914			2,205,865
		Savings			29,840			31,617			26,822			30,376			31,087
		Time certificates of $250,000 or more			1,830,163			1,822,765			1,795,883			1,754,273			1,699,757
		Other time certificates			1,622,184			1,653,766			1,680,291			1,655,723			1,638,662
		Total deposits		$	6,549,874		$	6,472,208		$	6,420,147		$	6,345,446		$	6,229,673

	Advance from Federal Home Loan Bank				200,000			200,000			200,000			200,000			200,000
	Subordinated debt issuance, net				148,884			148,825			148,766			148,706			148,647
	Commitments to fund investment in affordable housing partnerships				32,040			29,949			18,873			23,327			24,874
	Other liabilities				92,790			86,112			96,652			94,209			88,958
		Total liabilities		$	7,023,588		$	6,937,094		$	6,884,438		$	6,811,688		$	6,692,152

Equity:
	Common stock, no par value			$	210,882		$	210,882		$	210,882		$	210,882		$	210,882
	Additional paid-in capital				113,018			110,913			108,853			105,105			103,235
	Treasury stock				(334,626	)		(334,591	)		(334,490	)		(293,406	)		(277,351	)
	Retained earnings				849,830			826,365			802,308			780,637			755,587
	Accumulated other comprehensive income				(46,671	)		(20,042	)		(17,354	)		(13,741	)		(16,711	)
		Total shareholders' equity		$	792,433		$	793,527		$	770,199		$	789,477		$	775,642
		Total liabilities and shareholders' equity		$	7,816,021		$	7,730,621		$	7,654,637		$	7,601,165		$	7,467,794

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


			Three months ended September 30,							Three months ended June 30,							Three months ended September 30,
				2026							2026							2025
						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)		$	6,200,211		$	106,517	6.82	%	$	6,038,330		$	108,358	7.20	%	$	5,754,073		$	110,645	7.63	%
	Investment securities⁽³⁾			610,837			6,499	4.22	%		558,696			5,611	4.03	%		583,302			6,257	4.26	%
	Federal funds sold			20,648			199	3.82	%		21,538			205	3.82	%		20,000			228	4.52	%
	Other earning assets			755,724			7,561	3.97	%		914,217			8,364	3.67	%		877,193			9,811	4.44	%
		Total interest earning assets		7,587,420			120,776	6.32	%		7,532,781			122,538	6.52	%		7,234,568			126,941	6.96	%
	Deferred loan fees, net			(8,072	)						(8,139	)						(10,686	)
	Allowance for credit losses on loans			(76,309	)						(75,675	)						(72,784	)
Noninterest earning assets:
	Cash and due from banks			11,412							11,141							10,071
	Bank furniture and fixtures			10,803							9,694							7,945
	Right of use assets			28,288							29,211							19,153
	Other assets			179,599							169,706							193,998
		Total assets	$	7,733,141						$	7,668,719						$	7,382,265

Liabilities and shareholders' equity
Interest bearing liabilities:
	Deposits:
		Interest bearing demand and savings	$	2,246,085		$	16,082	2.84	%	$	2,211,240		$	15,699	2.85	%	$	2,171,526		$	17,629	3.22	%
		TCD $250K or more		1,817,686			17,296	3.78	%		1,812,356			17,065	3.78	%		1,686,710			17,406	4.09	%
		Other time certificates		1,650,355			16,145	3.88	%		1,688,501			16,432	3.90	%		1,643,531			17,386	4.20	%
		Total interest bearing deposits		5,714,126			49,523	3.44	%		5,712,097			49,196	3.45	%		5,501,767			52,421	3.78	%
Advance from Federal Home Loan Bank				200,000			1,877	3.72	%		200,000			1,743	3.50	%		200,000			1,794	3.56	%
Subordinated debt, net				148,847			2,571	6.85	%		148,789			1,517	4.09	%		148,609			1,325	3.54	%
		Total interest bearing liabilities		6,062,973			53,971	3.53	%		6,060,886			52,456	3.47	%		5,850,376			55,540	3.77	%
Noninterest bearing liabilities:
	Demand deposits			742,432							708,101							667,961
	Lease liability			32,888							33,946							22,908
	Other liabilities			87,106							76,672							76,254
		Total liabilities		6,925,399							6,879,605							6,617,499
Shareholders’ equity				807,742							789,114							764,766
		Total liabilities and shareholders’ equity	$	7,733,141						$	7,668,719						$	7,382,265
Net interest income						$	66,805						$	70,082						$	71,401
Net interest spread								2.78	%						3.05	%						3.19	%
Net interest margin								3.49	%						3.73	%						3.92	%

Cost of Deposits:
	Noninterest bearing demand deposits		$	742,432						$	708,101						$	667,961
	Interest bearing deposits			5,714,126			49,523	3.44	%		5,712,097			49,196	3.45	%		5,501,767			52,421	3.78	%
		Total Deposits	$	6,456,558		$	49,523	3.04	%	$	6,420,198		$	49,196	3.07	%	$	6,169,728		$	52,421	3.37	%

⁽¹⁾	Includes non-accrual loans and loans held for sale
⁽²⁾	Net loan fee income of $0.8 million, $1.2 million and $1.7 million for the quarter ended September 30, 2026, June 30, 2026 and September 30, 2025, 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,
			2026							2025
						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)		$	6,097,213		$	318,257	6.98	%	$	5,648,323		$	318,020	7.53	%
	Investment securities⁽³⁾			583,373			17,822	4.08	%		497,301			15,546	4.18	%
	Federal funds sold			20,898			596	3.81	%		20,244			689	4.55	%
	Other earning assets			818,210			23,606	3.86	%		835,556			27,857	4.46	%
		Total interest earning assets		7,519,694			360,281	6.41	%		7,001,424			362,112	6.91	%
	Deferred loan fees, net			(8,181	)						(9,965	)
	Allowance for credit losses on loans			(76,980	)						(72,225	)
Noninterest earning assets:
	Cash and due from banks			10,872							11,178
	Bank furniture and fixtures			9,677							8,198
	Right of use assets			29,224							18,105
	Other assets			171,503							181,220
		Total assets	$	7,655,809						$	7,137,935

Liabilities and shareholders' equity
Interest bearing liabilities:
	Deposits:
		Interest bearing demand/ savings	$	2,216,903		$	46,955	2.83	%	$	2,091,998		$	50,530	3.23	%
		TCD $250K or more		1,801,206			51,247	3.80	%		1,605,201			50,138	4.18	%
		Other time certificates		1,672,461			49,064	3.92	%		1,667,516			53,473	4.29	%
		Total interest \bearing deposits		5,690,570			147,266	3.46	%		5,364,715			154,141	3.84	%
Short-term borrowings				1			0	2.77	%		-			-	0.00	%
Advance from Federal Home Loan Bank				200,000			5,310	3.55	%		107,692			2,864	3.56	%
Subordinated debt, net				148,788			5,413	4.86	%		148,551			3,975	3.58	%
		Total interest bearing liabilities		6,039,359			157,989	3.50	%		5,620,958			160,980	3.83	%
Noninterest bearing liabilities:
	Demand deposits			706,030							656,782
	Lease liability			33,899							21,857
	Other liabilities			79,212							73,512
		Total liabilities		6,858,500							6,373,109
Shareholders’ equity				797,309							764,826
		Total liabilities and shareholders’ equity	$	7,655,809						$	7,137,935
Net interest income						$	202,292						$	201,132
Net interest spread								2.91	%						3.09	%
Net interest margin								3.60	%						3.84	%

Cost of Deposits:
	Noninterest bearing demand deposits		$	706,030						$	656,782
	Interest bearing deposits			5,690,570			147,266	3.46	%		5,364,715			154,141	3.84	%
		Total Deposits	$	6,396,600		$	147,266	3.08	%	$	6,021,497		$	154,141	3.42	%

⁽¹⁾	Includes non-accrual loans and loans held for sale
⁽²⁾	Net loan fee income of $3.2 million and $3.6 million for the nine months ended September 30, 2026 and 2025, 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, 2026			December 31, 2025
			(Dollars in 000's)
Allowance for credit losses
Balance at beginning of period			$	78,992		$	71,477
	Charge-Offs
		Commercial & Industrial		2,555			8
		Mini-perm real estate		3,833			1,749
		Total charge-offs		6,388			1,757

	Recoveries
		Commercial & Industrial		112			172
		Mini-perm real estate		868			-
		Total recoveries		980			172

	Net charge-offs			5,408			1,585
	Provision for dredit losses			4,700			9,100
Balance at dnd of period			$	78,284		$	78,992

Average loans held for investment			$	6,083,964		$	5,721,077
Loans held for investment at end of period			$	6,198,293		$	6,054,264
Net charge-offs to average loans				0.12	%		0.03	%
Allowances for credit losses to loans at end of period				1.26	%		1.30	%

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

Source: Preferred Bank

PFBC Preferred Bank

Preferred Bank Beat Consensus Estimates

Preferred Bank Reports Third Quarter Results