Li Yu, Chairman and CEO, commented, “We are pleased to report third quarter net income of
Deposits continued to grow in the third quarter as we saw a
Our main focus at present is credit management. We elected to charge-off portions of the two loans which were placed on nonaccrual status last quarter in addition to fully reserving for any amounts which may not be collectible. In addition, due to the ongoing economic disruption caused by the pandemic, our provision for credit losses is again elevated this quarter. The allowance for credit loss to total loans now stands at 1.58% (excluding PPP loans).
A great deal of the credit management effort was also spent on loans modified under the CARES Act. These loans totaled
The pandemic has resulted in unprecedented uncertainties for our citizens, our economy and the banking industry. Preferred Bank’s outstanding operating metrics and earnings power will provide an additional resource in meeting the challenges ahead.”
Results of Operations
Net Interest Income and Net Interest Margin. Net interest income before provision for credit losses was
Noninterest Income. For the third quarter of 2020, noninterest income was
Noninterest Expense. Total noninterest expense was
Income Taxes. The Bank recorded a provision for income taxes of
Balance Sheet Summary
Total gross loans at
Below is a breakdown of the Bank’s loan portfolio by segment as of
Category | Loan Count | Total Balance (000's) | % of Loan Balance | Average LTV | Average DCR | ||
Cash Secured | 79 | 34,241 | 0.87% | N/A | N/A | ||
Commercial | 1,741 | 1,094,872 | 27.72% | N/A | N/A | ||
International | 62 | 15,006 | 0.38% | N/A | N/A | ||
Construction - 1-4 Residential | 54 | 170,773 | 4.32% | 48.8% | N/A | ||
Construction - Commercial | 41 | 223,706 | 5.66% | 53.8% | N/A | ||
Real Estate - 1-4 Residential | 165 | 248,371 | 6.29% | 55.5% | 1.32 | ||
Real Estate - Industrial | 99 | 243,130 | 6.16% | 53.9% | 1.71 | ||
Real Estate - Multifamily | 68 | 282,188 | 7.14% | 58.1% | 1.24 | ||
Real Estate - Office | 70 | 327,786 | 8.30% | 55.5% | 1.66 | ||
Real Estate - Retail | 116 | 411,508 | 10.42% | 59.0% | 1.55 | ||
Real Estate - Special Purpose | 75 | 542,561 | 13.74% | 51.5% | 1.51 | ||
Real Estate - | 4 | 7,787 | 0.20% | 49.4% | N/A | ||
SBA | 227 | 74,551 | 1.89% | N/A | N/A | ||
HELOC | 6 | 1,545 | 0.04% | 42.4% | N/A | ||
Residential Mortgage | 422 | 271,695 | 6.88% | 59.7% | % (DTI) | ||
Total | 3,229 | 3,949,721 | 100.00% |
Asset Quality
As of
COVID – 19 Relief Modifications
Below is a breakdown of loans at
Loan Type | Prior Qtr Total in Deferral | Curr Qtr Total in Deferral | % of Total Portfolio | Weighted Average LTV | Quarterly Decrease | ||||
$ | % | ||||||||
Commercial and Industrial | $ | 39,518 | $ | 5,865 | 0.6% | N/A | $ | 33,653 | 85.2% |
Office | 28,696 | 16,200 | 4.9% | 55.5% | 12,496 | 43.5% | |||
Industrial | 29,495 | 13,064 | 5.4% | 53.9% | 16,431 | 55.7% | |||
Retail | 88,319 | 64,169 | 15.6% | 59.0% | 24,150 | 27.3% | |||
Multi-Family | 17,593 | 17,200 | 6.1% | 58.1% | 393 | 2.2% | |||
1-4 Family (Inv) | 6,624 | 3,915 | 1.6% | 55.6% | 2,709 | 40.9% | |||
Restaurant | 6,149 | 4,212 | 19.2% | 47.2% | 1,937 | 31.5% | |||
Special Purpose / Hotel | 172,531 | 47,305 | 13.8% | 54.9% | 125,226 | 72.6% | |||
Special Purpose / Other | 51,232 | 12,720 | 6.4% | 45.7% | 38,512 | 75.2% | |||
Construction / AD | - | - | 0.0% | - | 0.0% | ||||
Residential Mortgage | 26,935 | 14,887 | 5.5% | - | 12,048 | 44.7% | |||
Grand Total | $ | 467,092 | $ | 199,537 | 5.1% | $ | 267,555 | 57.3% |
At
Allowance for Credit Losses
Due primarily to the ongoing partial economic shutdown and uncertainty regarding future economic activity, the provision for credit losses continues to be elevated at
Capitalization
As of
Conference Call and Webcast
A conference call with simultaneous webcast to discuss Preferred Bank’s third quarter 2020 financial results will be held tomorrow,
About
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
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
AT THE COMPANY: | AT FINANCIAL PROFILES: |
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 | ||||||||||||||
2020 | 2020 | 2019 | ||||||||||||
Interest income: | ||||||||||||||
Loans, including fees | $ | 50,417 | $ | 49,813 | $ | 52,862 | ||||||||
Investment securities | 2,335 | 2,320 | 4,875 | |||||||||||
Fed funds sold | 30 | 31 | 222 | |||||||||||
Total interest income | 52,782 | 52,164 | 57,959 | |||||||||||
Interest expense: | ||||||||||||||
Interest-bearing demand | 1,432 | 1,462 | 4,904 | |||||||||||
Savings | 20 | 17 | 13 | |||||||||||
Time certificates | 5,681 | 6,973 | 10,034 | |||||||||||
Subordinated debit | 1,530 | 1,531 | 1,531 | |||||||||||
Total interest expense | 8,663 | 9,983 | 16,482 | |||||||||||
Net interest income | 44,119 | 42,181 | 41,477 | |||||||||||
Provision for credit losses | 9,000 | 7,500 | 900 | |||||||||||
Net interest income after provision for | ||||||||||||||
credit losses | 35,119 | 34,681 | 40,577 | |||||||||||
Noninterest income: | ||||||||||||||
Fees & service charges on deposit accounts | 428 | 339 | 401 | |||||||||||
Letters of credit fee income | 690 | 742 | 874 | |||||||||||
BOLI income | 96 | 95 | 94 | |||||||||||
Net gain (loss) on called and sale of investment securities | 15 | (113 | ) | - | ||||||||||
Other income | 376 | 367 | 368 | |||||||||||
Total noninterest income | 1,605 | 1,430 | 1,737 | |||||||||||
Noninterest expense: | ||||||||||||||
Salary and employee benefits | 9,126 | 10,095 | 9,801 | |||||||||||
Net occupancy expense | 1,455 | 1,296 | 1,329 | |||||||||||
Business development and promotion expense | 95 | 114 | 109 | |||||||||||
Professional services | 974 | 1,006 | 1,149 | |||||||||||
Office supplies and equipment expense | 443 | 459 | 483 | |||||||||||
Net loss (gain) on sale of other real estate owned and expense | 3 | 2 | (129) | |||||||||||
Other | 1,567 | 1,362 | 1,156 | |||||||||||
Total noninterest expense | 13,663 | 14,334 | 13,898 | |||||||||||
Income before provision for income taxes | 23,061 | 21,777 | 28,416 | |||||||||||
Income tax expense | 5,936 | 6,468 | 8,383 | |||||||||||
Net income | $ | 17,125 | $ | 15,309 | $ | 20,033 | ||||||||
Dividend and earnings allocated to participating securities | (53 | ) | (49 | ) | (168 | ) | ||||||||
Net income available to common shareholders | $ | 17,072 | $ | 15,260 | $ | 19,865 | ||||||||
Income per share available to common shareholders | ||||||||||||||
Basic | $ | 1.15 | $ | 1.03 | $ | 1.32 | ||||||||
Diluted | $ | 1.15 | $ | 1.03 | $ | 1.32 | ||||||||
Weighted-average common shares outstanding | ||||||||||||||
Basic | 14,893,774 | 14,879,383 | 15,091,270 | |||||||||||
Diluted | 14,893,774 | 14,879,383 | 15,091,270 | |||||||||||
Cash dividends per common share | $ | 0.30 | $ | 0.30 | $ | 0.30 |
PREFERRED BANK | |||||||||||
Condensed Consolidated Statements of Financial Condition | |||||||||||
(unaudited) | |||||||||||
(in thousands) | |||||||||||
2020 | 2019 | 2019 | |||||||||
(Unaudited) | (Audited) | (Unaudited) | |||||||||
Assets | |||||||||||
Cash and due from banks | $ | 780,291 | $ | 498,645 | $ | 409,189 | |||||
Fed funds sold | 27,500 | 37,000 | 56,000 | ||||||||
Cash and cash equivalents | 807,791 | 535,645 | 465,189 | ||||||||
Securities held to maturity, at amortized cost | 6,727 | 7,310 | 7,545 | ||||||||
Securities available-for-sale, at fair value | 219,778 | 240,640 | 242,655 | ||||||||
Loans | 3,949,721 | 3,724,922 | 3,671,450 | ||||||||
Less allowance for credit losses | (61,262 | ) | (34,830 | ) | (34,281 | ) | |||||
Amortized deferred loan fees, net | (4,411 | ) | (3,028 | ) | (2,518 | ) | |||||
Loans, net | 3,884,048 | 3,687,064 | 3,634,651 | ||||||||
Loans held for sale, at lower of cost or fair value | - | - | 2,999 | ||||||||
Customers' liability on acceptances | 7,463 | 7,379 | 7,333 | ||||||||
Bank furniture and fixtures, net | 11,797 | 12,236 | 12,438 | ||||||||
Bank-owned life insurance | 9,764 | 9,571 | 9,507 | ||||||||
Accrued interest receivable | 24,353 | 14,961 | 14,505 | ||||||||
Investment in affordable housing | 47,917 | 53,142 | 39,780 | ||||||||
15,000 | 13,101 | 13,101 | |||||||||
Deferred tax assets | 21,219 | 19,560 | 17,338 | ||||||||
Income tax receivable | 9,090 | 3,368 | 3,849 | ||||||||
Operating lease right-of-use assets | 16,384 | 17,103 | 17,362 | ||||||||
Other assets | 4,243 | 7,401 | 7,232 | ||||||||
Total assets | $ | 5,085,574 | $ | 4,628,481 | $ | 4,495,484 | |||||
Liabilities and Shareholders' Equity | |||||||||||
Deposits: | |||||||||||
Non-interest bearing demand deposits | $ | 926,166 | $ | 835,790 | $ | 774,869 | |||||
Interest-bearing deposits: | 1,620,495 | 1,328,863 | 1,435,144 | ||||||||
Savings | 32,830 | 23,784 | 21,985 | ||||||||
Time certificates of | 977,821 | 976,727 | 849,574 | ||||||||
Other time certificates | 857,113 | 818,130 | 787,392 | ||||||||
Total deposits | 4,414,425 | 3,983,294 | 3,868,964 | ||||||||
Acceptances outstanding | 7,463 | 7,379 | 7,333 | ||||||||
Subordinated debt issuance | 99,304 | 99,211 | 99,180 | ||||||||
Commitments to fund investment in affordable housing partnership | 16,689 | 24,149 | 12,904 | ||||||||
Operating lease liabilities | 19,106 | 20,497 | 20,958 | ||||||||
Accrued interest payable | 2,940 | 3,324 | 6,117 | ||||||||
Other liabilities | 21,780 | 20,612 | 20,948 | ||||||||
Total liabilities | 4,581,707 | 4,158,466 | 4,036,404 | ||||||||
Shareholders' equity | 503,867 | 470,015 | 459,080 | ||||||||
Total liabilities and shareholders' equity | $ | 5,085,574 | $ | 4,628,481 | $ | 4,495,484 | |||||
Book value per common share | $ | 33.74 | $ | 31.47 | $ | 30.42 | |||||
Number of common shares outstanding | 14,933,307 | 14,933,768 | 15,091,657 |
Selected Consolidated Financial Information | ||||||||||
(unaudited) | ||||||||||
(in thousands, except for ratios) | ||||||||||
For the Quarter Ended | ||||||||||
Mars 31, | ||||||||||
2020 | 2020 | 2020 | 2019 | 2019 | ||||||
Unaudited historical quarterly operations data: | ||||||||||
Interest income | $ | 52,782 | $ | 52,164 | $ | 55,667 | $ | 55,483 | $ | 57,959 |
Interest expense | 8,663 | 9,983 | 13,876 | 15,074 | 16,482 | |||||
Interest income before provision for credit losses | 44,119 | 42,181 | 41,791 | 40,409 | 41,477 | |||||
Provision for credit losses | 9,000 | 7,500 | 5,300 | 450 | 900 | |||||
Noninterest income | 1,605 | 1,430 | 1,672 | 1,883 | 1,737 | |||||
Noninterest expense | 13,663 | 14,334 | 15,184 | 13,770 | 13,898 | |||||
Income tax expense | 5,936 | 6,468 | 6,825 | 8,456 | 8,383 | |||||
Net income | $ | 17,125 | $ | 15,309 | $ | 16,154 | $ | 19,616 | $ | 20,033 |
Earnings per share | ||||||||||
Basic | $ | 1.15 | $ | 1.03 | $ | 1.08 | $ | 1.31 | $ | 1.32 |
Diluted | $ | 1.15 | $ | 1.03 | $ | 1.08 | $ | 1.31 | $ | 1.32 |
Ratios for the period: | ||||||||||
Return on average assets | 1.34% | 1.26% | 1.40% | 1.74% | 1.81% | |||||
Return on beginning equity | 13.94% | 13.00% | 13.82% | 16.95% | 17.61% | |||||
Net interest margin (Fully-taxable equivalent) | 3.54% | 3.57% | 3.70% | 3.67% | 3.84% | |||||
Noninterest expense to average assets | 1.07% | 1.18% | 1.31% | 1.22% | 1.25% | |||||
Efficiency ratio | 29.88% | 32.87% | 34.93% | 32.56% | 32.16% | |||||
Net charge-offs (recoveries) to average loans (annualized) | 0.35% | -0.01% | 0.00% | -0.01% | 0.05% | |||||
Ratios as of period end: | ||||||||||
Tier 1 leverage capital ratio | 9.75% | 9.87% | 10.05% | 10.32% | 10.27% | |||||
Common equity tier 1 risk-based capital ratio | 10.98% | 10.39% | 10.80% | 10.57% | 10.40% | |||||
Tier 1 risk-based capital ratio | 10.98% | 10.39% | 10.80% | 10.57% | 10.40% | |||||
Total risk-based capital ratio | 14.47% | 13.80% | 14.26% | 13.70% | 13.53% | |||||
Allowances for credit losses to loans and leases at end of period | 1.55% | 1.41% | 1.24% | 0.94% | 0.93% | |||||
Allowance for credit losses to non-performing loans and leases | 243.56% | 211.08% | 2263.66% | 1631.42% | 895.30% | |||||
Average balances: | ||||||||||
Total securities | $ | 237,801 | $ | 250,134 | $ | 247,689 | $ | 248,904 | $ | 249,060 |
Total loans | $ | 3,956,145 | $ | 3,919,674 | $ | 3,717,175 | $ | 3,613,400 | 3,534,194 | |
Total earning assets | $ | 4,975,005 | $ | 4,768,537 | $ | 4,548,512 | $ | 4,381,206 | $ | 4,298,523 |
Total assets | $ | 5,073,650 | $ | 4,868,356 | $ | 4,651,956 | $ | 4,482,210 | $ | 4,395,357 |
Total time certificate of deposits | $ | 1,841,901 | $ | 1,757,531 | $ | 1,765,816 | $ | 1,756,480 | $ | 1,650,965 |
Total interest bearing deposits | $ | 3,501,275 | $ | 3,399,924 | $ | 3,244,711 | $ | 3,050,318 | $ | 3,051,007 |
Total deposits | $ | 4,408,882 | $ | 4,220,197 | $ | 4,010,629 | $ | 3,849,825 | $ | 3,772,097 |
Total interest bearing liabilities | $ | 3,600,560 | $ | 3,499,178 | $ | 3,343,933 | $ | 3,149,511 | $ | 3,150,167 |
Total equity | $ | 503,515 | $ | 486,931 | $ | 475,409 | $ | 463,849 | $ | 460,451 |
Selected Consolidated Financial Information | ||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||
(in thousands, except for ratios) | ||||||||||||||||||||||
As of | ||||||||||||||||||||||
Mars 31, | ||||||||||||||||||||||
2020 | 2020 | 2020 | 2019 | 2019 | ||||||||||||||||||
Unaudited quarterly statement of financial position data: | ||||||||||||||||||||||
Assets: | ||||||||||||||||||||||
Cash and cash equivalents | $ | 807,791 | $ | 656,183 | $ | 484,869 | $ | 535,645 | $ | 465,189 | ||||||||||||
Securities held-to-maturity, at amortized cost | 6,727 | 6,922 | 7,077 | 7,310 | 7,545 | |||||||||||||||||
Securities available-for-sale, at fair value | 219,778 | 270,667 | 235,097 | 240,640 | 242,655 | |||||||||||||||||
Loans: | ||||||||||||||||||||||
Real estate – Mortgage: | ||||||||||||||||||||||
Real estate—Residential | $ | 528,371 | $ | 511,354 | $ | 493,226 | $ | 468,321 | $ | 432,605 | ||||||||||||
Real estate—Commercial | 1,808,200 | 1,781,660 | 1,730,017 | 1,731,017 | 1,751,735 | |||||||||||||||||
2,336,571 | 2,293,014 | 2,223,243 | 2,199,338 | 2,184,340 | ||||||||||||||||||
Real estate – Construction: | ||||||||||||||||||||||
170,773 | 187,083 | 177,364 | 173,951 | 179,651 | ||||||||||||||||||
223,706 | 217,729 | 223,385 | 218,562 | 216,812 | ||||||||||||||||||
Total real estate construction loans | 394,480 | 404,812 | 400,749 | 392,513 | 396,463 | |||||||||||||||||
Commercial and industrial | 1,144,051 | 1,192,056 | 1,269,242 | 1,132,629 | 1,090,230 | |||||||||||||||||
PPP | 74,551 | 73,524 | - | - | - | |||||||||||||||||
Consumer and others | 68 | 241 | 91 | 442 | 417 | |||||||||||||||||
Gross loans | 3,949,721 | 3,963,647 | 3,893,325 | 3,724,922 | 3,671,450 | |||||||||||||||||
Allowance for credit losses on loans | (61,262 | ) | (55,762 | ) | (48,130 | ) | (34,830 | ) | (34,281 | ) | ||||||||||||
Net deferred loan fees | (4,411 | ) | (5,097 | ) | (3,084 | ) | (3,028 | ) | (2,518 | ) | ||||||||||||
Net loans, excluding loans held for sale | $ | 3,884,048 | $ | 3,902,788 | $ | 3,842,111 | $ | 3,687,064 | $ | 3,634,651 | ||||||||||||
Loans held for sale | $ | - | $ | - | $ | - | $ | - | $ | 2,999 | ||||||||||||
Net loans | $ | 3,884,048 | $ | 3,902,788 | $ | 3,842,111 | $ | 3,687,064 | $ | 3,637,650 | ||||||||||||
Investment in affordable housing | 47,917 | 49,658 | 51,400 | 53,142 | 39,780 | |||||||||||||||||
15,000 | 15,000 | 13,101 | 13,101 | 13,101 | ||||||||||||||||||
Other assets | 104,313 | 103,239 | 93,979 | 91,579 | 89,564 | |||||||||||||||||
Total assets | $ | 5,085,574 | $ | 5,004,457 | $ | 4,727,634 | $ | 4,628,481 | $ | 4,495,484 | ||||||||||||
Liabilities: | ||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||
Demand | $ | 926,166 | $ | 934,764 | $ | 753,750 | $ | 835,790 | $ | 774,869 | ||||||||||||
Interest-bearing demand | 1,620,495 | 1,594,682 | 1,503,618 | 1,328,863 | 1,435,144 | |||||||||||||||||
Savings | 32,830 | 27,737 | 23,035 | 23,784 | 21,985 | |||||||||||||||||
Time certificates of | 977,821 | 970,649 | 1,030,282 | 976,727 | 849,574 | |||||||||||||||||
Other time certificates | 857,113 | 822,404 | 775,792 | 818,130 | 787,392 | |||||||||||||||||
Total deposits | $ | 4,414,425 | $ | 4,350,236 | $ | 4,086,477 | $ | 3,983,294 | $ | 3,868,964 | ||||||||||||
Acceptances outstanding | $ | 7,463 | $ | 6,112 | $ | 6,507 | $ | 7,379 | $ | 7,333 | ||||||||||||
Subordinated debt issuance | 99,304 | 99,273 | 99,242 | 99,211 | 99,180 | |||||||||||||||||
Commitments to fund investment in affordable housing partnership | 16,689 | 17,536 | 21,195 | 24,149 | 12,904 | |||||||||||||||||
Other liabilities | 43,826 | 42,571 | 40,428 | 44,433 | 48,023 | |||||||||||||||||
Total liabilities | $ | 4,581,707 | $ | 4,515,728 | $ | 4,253,849 | $ | 4,158,466 | $ | 4,036,404 | ||||||||||||
Equity: | ||||||||||||||||||||||
Net common stock, no par value | $ | 213,519 | $ | 212,187 | $ | 210,091 | $ | 210,998 | $ | 215,123 | ||||||||||||
Retained earnings | 284,568 | 271,923 | 261,095 | 255,050 | 239,914 | |||||||||||||||||
Accumulated other comprehensive income | 5,780 | 4,619 | 2,599 | 3,967 | 4,043 | |||||||||||||||||
Total shareholders' equity | $ | 503,867 | $ | 488,729 | $ | 473,785 | $ | 470,015 | $ | 459,080 | ||||||||||||
Total liabilities and shareholders' equity | $ | 5,085,574 | $ | 5,004,457 | $ | 4,727,634 | $ | 4,628,481 | $ | 4,495,484 |
PREFERRED BANK | |||||||||||||||||||
QUARTER-TO-DATE AVERAGE BALANCES, YIELD AND RATES | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three months ended | Three months ended | Three months ended | |||||||||||||||||
2020 | 2020 | 2019 | |||||||||||||||||
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) | $ | 3,956,145 | $ | 50,417 | 5.07% | $ | 3,921,694 | $ | 49,813 | 5.11% | $ | 3,534,283 | $ | 52,862 | 5.93% | ||||
Investment securities (3) | 237,801 | 1,967 | 3.29% | 250,134 | 2,098 | 3.37% | 249,060 | 2,253 | 3.59% | ||||||||||
Federal funds sold | 23,828 | 30 | 0.50% | 24,324 | 31 | 0.52% | 35,079 | 222 | 2.52% | ||||||||||
Other earning assets | 757,231 | 474 | 0.25% | 572,385 | 318 | 0.22% | 480,101 | 2,737 | 2.26% | ||||||||||
Total interest-earning assets | 4,975,005 | 52,888 | 4.23% | 4,768,537 | 52,260 | 4.41% | 4,298,523 | 58,074 | 5.36% | ||||||||||
Deferred loan fees, net | (4,713) | (3,182) | (1,742) | ||||||||||||||||
Allowance for credit losses on loans | (55,724) | (48,247) | (33,717) | ||||||||||||||||
Noninterest earning assets: | |||||||||||||||||||
Cash and due from banks | 7,355 | 8,274 | 4,935 | ||||||||||||||||
Bank furniture and fixtures | 11,856 | 11,993 | 12,656 | ||||||||||||||||
Right of use assets | 16,550 | 16,768 | 17,525 | ||||||||||||||||
Other assets | 123,321 | 114,213 | 97,177 | ||||||||||||||||
Total assets | $ | 5,073,650 | $ | 4,868,356 | $ | 4,395,357 | |||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||
Deposits: | |||||||||||||||||||
Interest-bearing demand and savings | 1,659,374 | $ | 1,452 | 0.35% | 1,642,393 | $ | 1,479 | 0.36% | $ | 1,400,042 | $ | 4,917 | 1.39% | ||||||
TCD | 987,631 | 2,993 | 1.21% | 945,043 | 3,624 | 1.54% | 845,262 | 5,120 | 2.40% | ||||||||||
Other time certificates | 854,270 | 2,688 | 1.25% | 812,488 | 3,349 | 1.66% | 805,703 | 4,914 | 2.42% | ||||||||||
Total interest-bearing deposits | 3,501,275 | 7,133 | 0.81% | 3,399,924 | 8,452 | 1.00% | 3,051,007 | 14,951 | 1.94% | ||||||||||
Subordinated debt | 99,285 | 1,530 | 6.13% | 99,254 | 1,531 | 6.20% | 99,160 | 1,531 | 6.13% | ||||||||||
Total interest-bearing liabilities | 3,600,560 | 8,663 | 0.96% | 3,499,178 | 9,983 | 1.15% | 3,150,167 | 16,482 | 2.08% | ||||||||||
Non-interest bearing liabilities: | |||||||||||||||||||
Demand deposits | 907,607 | 820,273 | 721,090 | ||||||||||||||||
Lease Liability | 19,400 | 19,841 | 21,252 | ||||||||||||||||
Other liabilities | 42,568 | 42,133 | 42,397 | ||||||||||||||||
Total liabilities | 4,570,135 | 4,381,425 | 3,934,906 | ||||||||||||||||
Shareholders’ equity | 503,515 | 486,931 | 460,451 | ||||||||||||||||
Total liabilities and shareholders’ equity | $ | 5,073,650 | $ | 4,868,356 | $ | 4,395,357 | |||||||||||||
Net interest income | $ | 44,225 | $ | 42,277 | $ | 41,592 | |||||||||||||
Net interest spread | 3.27% | 3.26% | 3.28% | ||||||||||||||||
Net interest margin | 3.54% | 3.57% | 3.84% | ||||||||||||||||
Cost of Deposits: | |||||||||||||||||||
Noninterest bearing demand deposits | $ | 907,607 | $ | 820,273 | $ | 721,090 | |||||||||||||
Interest bearing deposits | 3,501,275 | 7,133 | 0.81% | 3,399,924 | 8,452 | 1.00% | 3,051,007 | 14,951 | 1.94% | ||||||||||
Total Deposits | $ | 4,408,882 | $ | 7,133 | 0.64% | $ | 4,220,197 | $ | 8,452 | 0.81% | $ | 3,772,097 | $ | 14,951 | 1.57% | ||||
(1) | Includes non-accrual loans and loans held for sale | ||||||||||||||||||
(2) | Net loan fee income of | ||||||||||||||||||
(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 | |||||||||||||
2020 | 2019 | ||||||||||||
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) | $ | 3,865,350 | $ | 151,794 | 5.25% | $ | 3,389,136 | $ | 156,166 | 6.16% | |||
Investment securities (3) | 245,181 | 6,193 | 3.37% | 215,818 | 6,442 | 3.99% | |||||||
Federal funds sold | 26,093 | 185 | 0.95% | 42,720 | 799 | 2.50% | |||||||
Other earning assets | 628,165 | 2,736 | 0.58% | 436,906 | 8,143 | 7.41% | |||||||
Total interest-earning assets | 4,764,789 | 160,908 | 4.51% | 4,084,580 | 171,550 | 5.62% | |||||||
Deferred loan fees, net | (3,662) | (1,721) | |||||||||||
Allowance for credit losses on loans | (48,949) | (31,776) | |||||||||||
Noninterest earning assets: | |||||||||||||
Cash and due from banks | 7,321 | 5,923 | |||||||||||
Bank furniture and fixtures | 12,039 | 10,201 | |||||||||||
Right of use assets | 16,774 | 11,852 | |||||||||||
Other assets | 117,105 | 110,456 | |||||||||||
Total assets | $ | 4,865,417 | $ | 4,189,515 | |||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||
Interest-bearing liabilities: | |||||||||||||
Deposits: | |||||||||||||
Interest-bearing demand/ savings | 1,593,793 | $ | 6,313 | 0.53% | 1,324,550 | $ | 14,504 | 1.46% | |||||
TCD | 967,413 | 11,469 | 1.58% | 787,522 | 13,992 | 2.38% | |||||||
Other time certificates | 821,199 | 10,148 | 1.65% | 787,354 | 13,902 | 2.36% | |||||||
Total interest-bearing deposits | 3,382,405 | 27,930 | 1.10% | 2,899,426 | 42,398 | 1.96% | |||||||
Subordinated debt | 99,254 | 4,592 | 6.18% | 99,108 | 4,593 | 6.20% | |||||||
Long-term debt | - | - | 0.00% | 1,052 | 19 | 2.46% | |||||||
Total interest-bearing liabilities | 3,481,659 | 32,522 | 1.25% | 2,999,586 | 47,010 | 2.10% | |||||||
Non-interest bearing liabilities: | |||||||||||||
Demand deposits | 831,545 | 691,266 | |||||||||||
Lease Liability | 19,850 | 14,546 | |||||||||||
Other liabilities | 43,690 | 47,452 | |||||||||||
Total liabilities | 4,376,744 | 3,752,850 | |||||||||||
Shareholders’ equity | 488,673 | 436,665 | |||||||||||
Total liabilities and shareholders’ equity | $ | 4,865,417 | $ | 4,189,515 | |||||||||
Net interest income | $ | 128,386 | $ | 124,540 | |||||||||
Net interest spread | 3.26% | 3.52% | |||||||||||
Net interest margin | 3.60% | 4.08% | |||||||||||
Cost of Deposits: | |||||||||||||
Noninterest bearing demand deposits | $ | 831,545 | $ | 691,266 | |||||||||
Interest bearing deposits | 3,382,405 | 27,930 | 1.10% | 2,899,426 | 42,398 | 1.96% | |||||||
Total Deposits | $ | 4,213,950 | $ | 27,930 | 0.89% | $ | 3,590,692 | $ | 42,398 | 1.58% | |||
(1) | Includes non-accrual loans and loans held for sale | ||||||||||||
(2) | Net loan fee income of | ||||||||||||
(3) | Yields on securities have been adjusted to a tax-equivalent basis |
Loan and Credit Quality Information | |||||||||||
Allowance For Credit Losses History | |||||||||||
Nine Months Ended | Year ended | ||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
(Dollars in 000's) | |||||||||||
Allowance For Credit Losses | |||||||||||
Balance at Beginning of Period | $ | 34,830 | $ | 31,065 | |||||||
Charge-Offs | |||||||||||
Commercial & Industrial | 1,661 | 526 | |||||||||
1,900 | 101 | ||||||||||
Total Charge-Offs | 3,561 | 627 | |||||||||
Recoveries | |||||||||||
Commercial & Industrial | - | 527 | |||||||||
- | 415 | ||||||||||
Construction - Commercial | 193 | - | |||||||||
Total Recoveries | 193 | 942 | |||||||||
Net Charge-Offs (Recoveries) | 3,368 | (315 | ) | ||||||||
Provision for Credit Losses: | |||||||||||
CECL Cumulative Effect Adjustment | 8,000 | - | |||||||||
Current Provision | 21,800 | 3,450 | |||||||||
Balance at End of Period | $ | 61,262 | $ | 34,830 | |||||||
Average Loans Held for Investment | $ | 3,864,667 | $ | 3,482,218 | |||||||
Loans Held for Investment at End of Period | $ | 3,949,721 | $ | 3,724,922 | |||||||
Net Charge-Offs (Recoveries) to Average Loans | 0.12 | % | -0.01% | ||||||||
Allowances for Credit Losses to Loans at End of Period | 1.55 | % | 0.94 | % |
Source:
2020 GlobeNewswire, Inc., source