Preferred Bank Reports Final First Quarter Results

LOS ANGELES, May 20 /PRNewswire-FirstCall/ -- Preferred Bank , an independent commercial bank focusing on the Chinese-American and diversified Southern California mainstream market, today reported final results for the quarter ended March 31, 2009. Preferred Bank reported a net loss of $1.3 million or $0.13 per diluted share for the quarter compared to net income of $3.4 million or $0.34 per diluted share for the first quarter of 2008 and compared to a net loss of $5.0 million or $0.51 per diluted share for the fourth quarter of 2008. On April 17, 2009 Preferred Bank released preliminary results which indicated that net income for the first quarter of 2009 was $337,000, or $0.03 per diluted share. The change between the earnings release on April 17, 2009 was due primarily to an increase in the provision for credit losses for the quarter from $1.35 million to $6.55 million partially offset by a decrease in other real estate owned ("OREO") expense of $2.3 million and a decrease in other-than temporary impairment charges ("OTTI") of $225,000.

Of the increase in provision for credit losses, $2.7 million was related to one credit due to the receipt of information that indicated a decline in fair value that Preferred Bank received from the lead bank on May 11, 2009. In addition, Preferred Bank also reclassified OREO expense to provision for credit losses of $2.3 million reflecting the fair value of a property upon foreclosure in March 2009. In addition, Preferred Bank also increased its qualatative component of its allowance for loan loss by $140,000. Finally, the final analysis of Preferred Bank's investment portfolio and the effect of the adoption of the three new FSPs related to FAS 157 indicated that the OTTI charge was actually $425,000 from the previously disclosed amount of $650,000.

Preferred Bank filed its Quarterly Report on Form 10-Q today with the FDIC in accordance with the five day extension allowed by its filing of a Form 12b-25 which was filed with the FDIC on May 15, 2009. This report can be accessed at http://www.preferredbank.com/ .

About Preferred Bank

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

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 2008 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 http://www.preferredbank.com/.

For Further Information: AT THE COMPANY: AT FINANCIAL RELATIONS BOARD: Edward J. Czajka Lasse Glassen Executive Vice President General Information Chief Financial Officer [phone] [phone] [e-mail]

Preferred Bank

CONTACT: Edward J. Czajka, Executive Vice President and Chief Financial
Officer of Preferred Bank, [phone]; or Financial Relations Board,
Lasse Glassen, [phone], [e-mail], for Preferred Bank

Web Site: http://www.preferredbank.com/