Preferred Bank Reports First Quarter Results

LOS ANGELES, April 22, 2026 (GLOBE NEWSWIRE) -- Preferred Bank (NASDAQ: PFBC), one of the larger independent California banks, today reported results for the quarter ended March 31, 2026. Preferred Bank ("the Bank") reported net income of $31.1 million or $2.53 per diluted share for the first quarter of 2026. This represents a decrease in net income of $3.7 million from the prior quarter and an increase of $1.1 million over the same quarter last year. The increase compared to last year was primarily due to an increase in net interest income of $2.7 million. The decrease in net income from the prior quarter was due to a decrease in net interest income of $4.7 million coupled with a decrease in noninterest income of $3.8 million. The primary reason for the decrease in net interest income was due to the reversal of interest on loans which were placed on nonaccrual status during the quarter. This was previously detailed in a press release on February 23, 2026. The decrease in noninterest income was due to a $3.6 million gain on sale of OREO recorded in the fourth quarter of 2025 which did not recur.

Highlights for the Quarter:

• Return on average assets was 1.67%
• Return on average equity was 16.00%
• Total loans increased by $68.6 million or 1.1%, linked quarter
• Total deposits increased by $74.7 million, or 1.2%, linked quarter
• The efficiency ratio for the quarter was 33.8%
  
  

Li Yu, Chairman and CEO, commented, "Net income for the first quarter ending March 31, 2026, was $31.1 million or $2.53 per diluted share compared to $34.8 million or $2.79 per diluted share recorded in the previous quarter. This quarter's net income was negatively affected by the Fed's rate cuts and reversal of interest income related to a large relationship which was placed on nonaccrual status.

"During the first quarter, we disclosed that we placed $117.6 million in loans related to one relationship on nonaccrual status. We have made good progress towards resolving these loans as well as other nonaccrual loans. We sold a $9.4 million loan at par during the quarter and also charged off the $2.0 million in C&I loans related to this relationship. In addition, on April 1, we sold two loans totaling $48.5 million also at par so this sale will not be reflected as of March 31, 2026. We are continuing to work with note buyers to resolve more of these loans.

"Total non-performing assets at March 31, 2026, to $172.1million, an increase of $117.3 million over the $54.8 million as of December 31, 2025. However, the $48.5 million loan sold in April 2026, it was included in the total above but is now gone as of today.

"Loans for the quarter have increased $68.6 million or 4.5% annualized. Deposits increased $74.7 million or 4.7% annualized. Competition remains intense for both loans and deposits as pricing remains tight. The Bank's net interest margin decreased to 3.57% for the quarter as compared to 3.74% for the previous quarter, the decrease entirely due to the reversal of interest income related to new non-accrual loans.

"During the first quarter, we repurchased 402,299 shares of our common stock for total consideration of $35.8 million as part of our ongoing $125 million stock repurchase plan which was approved by shareholders in May of 2025."

Results of Operations

Net Interest Income and Net Interest Margin. Net interest income before provision for credit losses was $65.3 million for the first quarter of 2026. This represents a $4.7 million decrease from the $70.0 million recorded in the prior quarter and a $2.7 million increase over the same quarter last year. The decrease compared to the prior quarter was due mainly to a $3.4 million net interest reversal due to loans placed on nonaccrual status during the quarter. The increase in net interest income over the same quarter last year was due to an increase in loan interest and a small decrease in total interest expense. The Bank's net interest margin ("NIM") contracted in the quarter to 3.57% due to the interest reversals from 3.74% last quarter and down from the 3.75% net interest margin recorded in the first quarter of 2025. Without the interest reversals this quarter, the NIM would have been 3.75%.

Noninterest Income. For the first quarter of 2026, noninterest income was $4.3 million compared with $4.0 million for the same quarter last year and compared to $8.1 million for the fourth quarter of 2025. The increase over the same quarter last year was mainly due to increases in letter of credit ("LC") fee income and other income partially offset by a decrease in gain on sales of loans and service charges on deposits. In comparison to the prior quarter, noninterest income was down primarily due to a $3.6 million gain on sale of OREO recorded in the fourth quarter of 2025.

Noninterest Expense- Total noninterest expense was $23.5 million for the first quarter of 2026 compared to $24.4 million for the fourth quarter of 2025 and compared to $23.4 million recorded in the same period last year. The primary reason for the decrease from the prior quarter was mainly due to a $3.1 million decrease in OREO expense partially offset by an increase in personnel expense of $2.4 million. The small increase over the same quarter last year was due to an increase in personnel expense of $621,000 and an increase in other expense of $876,000 partially offset by a decrease in OREO expense of $1.2 million. The Bank's efficiency ratio came in at 33.8% for the quarter, which compares to 31.2% last quarter and to 35.1% in the same quarter last year.

Income Taxes. The Bank recorded a provision for income taxes of $13.4 million for the first quarter of 2026. This represents an effective tax rate ("ETR") of 30.1% which is up from the 29.5% ETR for the same quarter last year and the same as the 29.5% ETR recorded in the fourth 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.

Balance Sheet Summary

Total gross loans at March 31, 2026 were $6.12 billion, an increase of $68.6 million from the total of $6.05 billion as of December 31, 2025. Total deposits were $6.42 billion, an increase of $74.7 million from the $6.35 billion as of December 31, 2025. Total assets were $7.65 billion, an increase of $53.5 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 $169.1 million, an increase of $117.8 million over the $51.3 million reported as of December 31, 2025. The increase was from the previously mentioned large relationship that was placed on nonaccrual status during the first quarter. As previously mentioned, the Bank sold two of the nonaccrual notes totaling $48.5 million on April 1, 2026, at par so total nonperforming loans are $120.6 million as of this writing. Total net charge-offs (recoveries) on loans for the quarter were $5.5 million compared to $0 in the prior quarter and compared to net recoveries of ($97,000) in the first quarter of 2025. Total classified assets decreased to $171.7 million as of March 31, 2026 compared to $225.3 million as of December 31, 2025. The table below lists the Bank's nonperforming loans and their associated property appraised values:

C&I			SFR				CRE				Total
Balance		Appraised Value	Balance		Appraised Value		Balance		Appraised Value		Balance		Appraised Value
-	4,519,590		-	461,638	-	780,000	-	649,036	-	1,550,000
	46,156			144,542		1,275,000		4,037,500		4,250,000
	63,744			924,624		1,308,000		3,690,251		6,260,000
	3,526			658,067		967,246		6,265,056		7,100,000
								19,500,000		48,300,000
								19,950,000		41,300,000
								48,458,994		65,650,000
								29,882,035		67,230,000
								7,914,950		12,890,000
								21,881,109		27,000,000
-	4,633,016		-	2,188,871	-	4,330,246	-	162,228,931	-	281,530,000	-	169,050,818	-	285,860,246
Note:
1) Weighted LTV: 57.5% (Total Nonperforming Loans / Total Appraisal Value)
2) $48.5 million CRE sold at par on 4/1/26

Allowance for Credit Losses

The provision for credit losses for the first quarter of 2026 was $1.5 million compared to $4.3 million in the prior quarter and compared to $700,000 in the same quarter last year. The Bank's allowance coverage ratio was 1.24% of total loans held for investment compared to 1.30% last quarter and compared to 1.28% in the first quarter of 2025.

Capitalization

As of March 31, 2026, the Bank's tangible common equity ratio was 10.05%, the leverage ratio was 10.37%, the common equity tier 1 capital ratio was 10.87% and the total capital ratio stood at 13.98%. 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 first quarter 2026 financial results will be held this afternoon, April 22, 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, 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 February 5, 2026; the passcode is 4064016.

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 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.

AT THE COMPANY:	AT FINANCIAL PROFILES:
Edward J. Czajka	Evan Niu
Executive Vice President	General Information
Chief Financial Officer	[phone]
[phone]	[e-mail]

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
	March 31,			December 31,			March 31,
	2026			2025			2025
Interest income:
Loans, including fees	-	103,382		-	109,747		-	101,491
Investment securities		13,301			14,677			12,810
Fed funds sold		192			209			228
Total interest income		116,875			124,633			114,529
Interest expense:
Interest-bearing demand		15,120			16,952			16,590
Savings		54			55			69
Time certificates		33,373			34,543			33,887
FHLB borrowings		1,690			1,783			-
Subordinated debt		1,325			1,325			1,325
Total interest expense		51,562			54,658			51,871
Net interest income		65,313			69,975			62,658
Provision for credit losses		1,500			4,300			700
Net interest income after provision for credit losses		63,813			65,675			61,958
Noninterest income:
Fees & service charges on deposit accounts		516			545			716
Letters of credit fee income		2,737			2,408			2,244
BOLI income		105			105			103
Net gain on sale of other real estate owned		-			3,609			-
Net gain on called and sale of investment securities		59			132			-
Net gain on sale of loans		24			93			275
Other income		869			1,202			660
Total noninterest income		4,310			8,094			3,998
Noninterest expense:
Salary and employee benefits		15,460			13,101			14,839
Net occupancy expense		2,426			2,430			2,294
Business development and promotion expense		203			163			462
Professional services		1,647			2,091			1,651
Office supplies and equipment expense		358			375			386
OREO valuation allowance and related expense		363			3,465			1,531
Other		3,082			2,752			2,206
Total noninterest expense		23,539			24,377			23,369
Income before provision for income taxes		44,584			49,392			42,587
Income tax expense		13,440			14,570			12,563
Net income	-	31,144		-	34,822		-	30,024
Income per share available to common shareholders
Basic	-	2.57		-	2.85		-	2.27
Diluted	-	2.53		-	2.79		-	2.23
Weighted-average common shares outstanding
Basic		12,105,359			12,210,077			13,226,582
Diluted		12,292,237			12,479,124			13,453,176
Cash dividends per common share	-	0.80		-	0.80		-	0.75

PREFERRED BANK
Condensed Consolidated Statements of Financial Condition
(unaudited)
(in thousands)
	March 31,				December 31,
		2026				2025
	(Unaudited)				(Audited)
Assets
Cash and due from banks	-	805,161			-	807,098
Fed funds sold		20,000				20,000
Cash and cash equivalents		825,161				827,098
Securities held-to-maturity, at amortized cost		18,458				18,749
Securities available-for-sale, at fair value		553,184				566,186
Loans held for sale, at lower of cost or fair value		76,324				-
Loans		6,046,544				6,054,264
Less allowance for credit losses		(75,036	-			(78,992	-
Less amortized deferred loan fees, net		(7,923	-			(9,030	-
Loans, net		5,963,585				5,966,242
Other real estate owned and repossessed assets		3,010				3,510
Bank furniture and fixtures, net		8,972				8,064
Bank-owned life insurance		10,782				10,712
Accrued interest receivable		34,811				34,233
Investment in affordable housing partnerships		66,394				69,978
Federal Home Loan Bank stock, at cost		15,000				15,000
Deferred tax assets		43,492				41,976
Income tax receivable		-				3,884
Operating lease right-of-use assets		29,593				30,531
Other assets		5,871				5,002
Total assets	-	7,654,637			-	7,601,165
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing demand deposits	-	716,777			-	699,160
Interest bearing deposits:		2,200,374				2,205,914
Savings		26,822				30,376
Time certificates of $250,000 or more		1,795,883				1,754,273
Other time certificates		1,680,291				1,655,723
Total deposits		6,420,147				6,345,446
Advances from Federal Home Loan Bank		200,000				200,000
Subordinated debt issuance, net		148,766				148,706
Commitments to fund investment in affordable housing partnerships		18,873				23,327
Operating lease liabilities		34,383				35,107
Accrued interest payable		16,754				16,513
Other liabilities		45,515				42,589
Total liabilities		6,884,438				6,811,688
Shareholders' equity		770,199				789,477
Total liabilities and shareholders' equity	-	7,654,637			-	7,601,165
Book value per common share	-	65.04			-	64.83
Number of common shares outstanding		11,841,866				12,177,588

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)
	For the Quarter Ended
	March 31,				December 31,				September 30,				June 30,				March 31,
		2026				2025				2025				2025				2025
Unaudited historical quarterly operations data:
Interest income	-	116,875			-	124,633			-	126,850			-	120,443			-	114,529
Interest expense		51,562				54,658				55,540				53,569				51,871
Interest income before provision for credit losses		65,313				69,975				71,310				66,874				62,658
Provision for credit losses		1,500				4,300				2,500				1,600				700
Noninterest income		4,310				8,094				3,665				3,762				3,998
Noninterest expense		23,539				24,377				21,498				22,445				23,369
Income tax expense		13,440				14,570				15,038				13,744				12,563
Net income	-	31,144			-	34,822			-	35,939			-	32,847			-	30,024
Earnings per share
Basic	-	2.57			-	2.85			-	2.90			-	2.61			-	2.27
Diluted	-	2.53			-	2.79			-	2.84			-	2.57			-	2.23
Ratios for the period:
Return on average assets		1.67	-			1.82	-			1.93	-			1.85	-			1.76	-
Return on average equity		15.89	-			17.59	-			18.64	-			17.55	-			15.62	-
Net interest margin (Fully-taxable equivalent)		3.57	-			3.74	-			3.92	-			3.85	-			3.75	-
Noninterest expense to average assets		1.26	-			1.27	-			1.16	-			1.26	-			1.37	-
Efficiency ratio		33.81	-			31.22	-			28.67	-			31.78	-			35.06	-
Net charge-offs (recoveries) to average loans (annualized)		0.37	-			0.00	-			0.11	-			0.00	-			-0.01	-
Ratios as of period end:
Tangible common equity ratio		10.05	-			10.38	-			10.38	-			10.26	-			10.96	-
Tier 1 leverage capital ratio		10.37	-			10.54	-			10.66	-			10.73	-			11.52	-
Common equity tier 1 risk-based capital ratio		10.87	-			11.26	-			11.34	-			11.18	-			11.86	-
Tier 1 risk-based capital ratio		10.87	-			11.26	-			11.34	-			11.18	-			11.86	-
Total risk-based capital ratio		13.98	-			14.47	-			14.56	-			14.43	-			15.15	-
Allowances for credit losses to loans at end of period		1.24	-			1.30	-			1.27	-			1.29	-			1.28	-
Allowance for credit losses to non-performing loans		0.8x				1.54x				4.24x				1.41x				0.91x
Average balances:
Total securities	-	580,248			-	586,950			-	583,302			-	503,861			-	402,754
Total loans		6,037,241				5,947,814				5,753,801				5,623,010				5,555,010
Total earning assets		7,437,232				7,439,767				7,234,568				6,984,272				6,780,438
Total assets		7,563,705				7,585,940				7,382,265				7,121,047				6,905,249
Total time certificate of deposits		3,451,924				3,402,304				3,330,241				3,321,327				3,164,766
Total interest bearing deposits		5,644,722				5,651,369				5,501,767				5,345,308				5,244,243
Total deposits		6,311,446				6,336,242				6,169,728				6,005,486				5,886,163
Total interest bearing liabilities		5,993,452				6,000,042				5,850,376				5,614,737				5,392,735
Total equity		794,931				785,581				764,766				750,535				779,339

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)
	As of
	March 31,				December 31,				September 30,				June 30,				March 31,
		2026				2025				2025				2025				2025
Unaudited quarterly statement of financial position data:
Assets:
Cash and cash equivalents	-	825,161			-	827,098			-	815,459			-	796,257			-	925,183
Securities held-to-maturity, at amortized cost		18,458				18,749				19,034				19,456				19,745
Securities available-for-sale, at fair value		553,184				566,186				569,115				577,040				390,096
Loans:
Real estate - Mortgage:
Real estate-Residential	-	738,508			-	783,136			-	793,217			-	767,620			-	779,462
Real estate-Commercial		3,105,331				3,028,762				2,890,990				2,868,308				2,897,956
Total Real Estate - Mortgage		3,843,839				3,811,898				3,684,207				3,635,928				3,677,418
Real estate - Construction:
R/E Construction - Residential		265,748				282,808				285,623				291,343				306,283
R/E Construction - Commercial		343,598				387,759				323,897				303,354				269,065
Total real estate construction loans		609,346				670,567				609,520				594,697				575,348
Commercial and industrial		1,584,984				1,563,504				1,570,423				1,501,188				1,374,379
SBA		8,087				8,053				7,630				7,741				7,104
Consumer and others		288				242				231				56				164
Gross loans		6,046,544				6,054,264				5,872,011				5,739,610				5,634,413
Allowance for credit losses on loans		(75,036	-			(78,992	-			(74,692	-			(73,830	-			(72,274	-
Net deferred loan fees		(7,923	-			(9,030	-			(9,956	-			(11,940	-			(9,652	-
Net loans, excluding loans held for sale	-	5,963,585			-	5,966,242			-	5,787,363			-	5,653,840			-	5,552,487
Loans held for sale	-	76,324			-	-			-	-			-	-			-	-
Net loans	-	6,039,909			-	5,966,242			-	5,787,363			-	5,653,840			-	5,552,487
Other real estate owned and repossessed assets	-	3,010			-	3,510			-	52,609			-	13,755			-	13,650
Investment in affordable housing partnerships		66,394				69,978				73,874				74,783				63,612
Federal Home Loan Bank stock, at cost		15,000				15,000				15,000				15,000				15,000
Other assets		133,521				134,402				135,340				128,629				120,319
Total assets	-	7,654,637			-	7,601,165			-	7,467,794			-	7,278,760			-	7,100,092
Liabilities:
Deposits:
Demand	-	716,777			-	699,160			-	654,302			-	675,102			-	730,270
Interest bearing demand		2,200,374				2,205,914				2,205,865				2,004,135				2,099,987
Savings		26,822				30,376				31,087				34,333				32,631
Time certificates of $250,000 or more		1,795,883				1,754,273				1,699,757				1,681,026				1,531,715
Other time certificates		1,680,291				1,655,723				1,638,662				1,683,737				1,678,132
Total deposits	-	6,420,147			-	6,345,446			-	6,229,673			-	6,078,333			-	6,072,735
Advance from Federal Home Loan Bank		200,000				200,000				200,000				200,000				-
Subordinated debt issuance, net		148,766				148,706				148,647				148,588				148,529
Commitments to fund investment in affordable housing partnerships		18,873				23,327				24,874				30,645				20,956
Other liabilities		96,652				94,209				88,958				73,534				79,268
Total liabilities	-	6,884,438			-	6,811,688			-	6,692,152			-	6,531,100			-	6,321,488
Equity:
Common stock, no par value	-	210,882			-	210,882			-	210,882			-	210,882			-	210,882
Additional paid-in capital		108,853				105,105				103,235				101,088				99,603
Treasury stock		(334,490	-			(293,406	-			(277,351	-			(271,005	-			(214,406	-
Retained earnings		802,308				780,637				755,587				728,891				705,360
Accumulated other comprehensive income		(17,354	-			(13,741	-			(16,711	-			(22,196	-			(22,835	-
Total shareholders' equity	-	770,199			-	789,477			-	775,642			-	747,660			-	778,604
Total liabilities and shareholders' equity	-	7,654,637			-	7,601,165			-	7,467,794			-	7,278,760			-	7,100,092

PREFERRED BANK
QUARTER-TO-DATE AVERAGE BALANCES, YIELD AND RATES
(Unaudited)
	Three months ended March 31,								Three months ended December 31,								Three months ended March 31,
		2026								2025								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)	-	6,051,465		-	103,382	6.93	-		-	5,947,986		-	109,747	7.32	-		-	5,556,521		-	101,491	7.41	-
Investment securities(3)		580,248			5,712	3.99	-			586,950			5,883	3.98	-			402,754			4,093	4.12	-
Federal funds sold		20,507			192	3.80	-			20,337			209	4.08	-			20,222			228	4.57	-
Other earning assets		785,012			7,681	3.97	-			884,494			8,886	3.99	-			800,941			8,816	4.46	-
Total interest earning assets		7,437,232			116,967	6.38	-			7,439,767			124,725	6.65	-			6,780,438			114,628	6.86	-
Deferred loan fees, net		(8,334	-							(9,739	-							(9,189	-
Allowance for credit losses on loans		(78,986	-							(74,738	-							(71,550	-
Noninterest earning assets:
Cash and due from banks		10,685								11,055								11,513
Bank furniture and fixtures		8,509								7,887								8,439
Right of use assets		30,195								28,344								15,201
Other assets		164,404								183,364								170,397
Total assets	-	7,563,705							-	7,585,940							-	6,905,249
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Deposits:
Interest bearing demand and savings	-	2,192,798		-	15,174	2.81	-		-	2,249,065		-	17,007	3.00	-		-	2,079,477		-	16,659	3.25	-
TCD $250K or more		1,773,086			16,886	3.86	-			1,725,674			17,220	3.96	-			1,482,324			15,640	4.28	-
Other time certificates		1,678,838			16,487	3.98	-			1,676,630			17,323	4.10	-			1,682,442			18,247	4.40	-
Total interest bearing deposits		5,644,722			48,547	3.49	-			5,651,369			51,551	3.62	-			5,244,243			50,546	3.91	-
Advance from Federal Home Loan Bank		200,000			1,690	3.43	-			200,000			1,783	3.54	-			-			-	0.00	-
Subordinated debt, net		148,728			1,325	3.61	-			148,673			1,325	3.54	-			148,492			1,325	3.62	-
Total interest bearing liabilities		5,993,452			51,562	3.49	-			6,000,042			54,658	3.61	-			5,392,735			51,871	3.90	-
Noninterest bearing liabilities:
Demand deposits		666,724								684,873								641,920
Lease liability		34,885								32,626								18,963
Other liabilities		73,713								82,818								72,292
Total liabilities		6,768,774								6,800,359								6,125,910
Shareholders' equity		794,931								785,581								779,339
Total liabilities and shareholders' equity	-	7,563,705							-	7,585,940							-	6,905,249
Net interest income				-	65,405							-	70,067							-	62,757
Net interest spread						2.89	-							3.04	-							2.96	-
Net interest margin						3.57	-							3.74	-							3.75	-
Cost of Deposits:
Noninterest bearing demand deposits	-	666,724							-	684,873							-	641,920
Interest bearing deposits		5,644,722			48,547	3.49	-			5,651,369			51,551	3.62	-			5,244,243			50,546	3.91	-
Total Deposits	-	6,311,446		-	48,547	3.12	-		-	6,336,242		-	51,551	3.23	-		-	5,886,163		-	50,546	3.48	-
1) Includes non-accrual loans and loans held for sale
2) Net loan fee income of $1.2 million, $1.4 million and $865,000 or the quarter ended March 31, 2026, December 31, 2025 and March 31, 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
	Quarter Ended				Year Ended
	March 31, 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		2,545				8
Mini-perm Real Estate		3,833				1,749
Total Charge-Offs		6,378				1,757
Recoveries
Commercial & Industrial		73				172
Mini-perm Real Estate		849				-
Total Recoveries		922				172
Net Charge-Offs		5,456				1,585
Provision for Credit Losses:		1,500				9,100
Balance at End of Period	-	75,036			-	78,992
Average Loans Held for Investment	-	6,037,241			-	5,721,077
Loans Held for Investment at End of Period	-	6,046,544			-	6,054,264
Net Charge-Offs to Average Loans		0.37	-			0.03	-
Allowances for Credit Losses to Loans at End of Period		1.24	-			1.30	-