Financial Data and Key Metrics Changes - Net income for Q2 2022 was $28 million or $1.87 per share, with a total of $54 million or $3.61 per share for the first half of the year [11] - Loan growth was $329 million or 28.6% annualized for the quarter, and 22.4% annualized for the first half of the year [11] - Deposit growth was $98 million or 7.3% for the quarter [13] Business Line Data and Key Metrics Changes - The loan portfolio consists of 13% fixed rate loans and 87% floating rate loans, with 76% of the total loan portfolio fully floating as of June 30 [16][17] - A provision of $2.9 million was made mainly related to large loan production [16] Market Data and Key Metrics Changes - Competition for deposits has intensified, primarily led by major banks, leading to an expectation of increased deposit costs [13][33] - The average margin in June was about 20 basis points higher than the average for Q2 [21] Company Strategy and Development Direction - The company is focusing on credit quality amid a looming recession and has begun a deep dive into its portfolio [14] - Plans for capital allocation include potential increases in dividends, additional share buybacks, and investments in securities when prices are more attractive [44] Management Comments on Operating Environment and Future Outlook - Management noted that while loan growth may revert to 2021 levels, they aim for low double-digit annualized growth [63] - The company is cautious about committing capital due to economic uncertainties and is monitoring the situation closely [44] Other Important Information - The share repurchase program of $32 million is progressing, with $24 million completed as of the call [18] - Non-performing assets increased mainly due to the payoff of senior loans on a property [15] Q&A Session Summary Question: What is the average margin in June and expectations for Q3? - The June margin was higher than the average for Q2, and margin expansion is expected in Q3, though not to the same extent as in Q2 [21][22] Question: What are the expectations for non-interest expenses in the second half of the year? - The run rate for Q2 was higher than expected, with Q3 expected to be similar, influenced by ongoing salary pressures and inflation [26][27] Question: What is the appetite for broker deposits? - There is currently no appetite for brokered deposits, and the company has allowed brokered money to mature without replacement [64] Question: How is the company approaching reserve levels given economic uncertainties? - The company is applying a cautious posture in reviewing both quantitative and qualitative factors for reserves, maintaining a higher reserve than peer groups [55]

Preferred Bank (NASDAQ:PFBC) Q1 2022 Results Earnings Conference Call April 20, 2022 2:00 PM ET Company Participants Larry Clark - Investor Relations, Financial Profiles, Inc. Li Yu - Chairman and Chief Executive Officer Edward Czajka - Executive Vice President and Chief Financial Officer Nick Pi - Executive Vice President and Chief Credit Officer Wellington Chen - President and Chief Operating Officer Conference Call Participants Gary Tenner - D.A. Davidson Matthew Clark - Piper Sandler Steve Moss - B. Ril ...

Preferred Bank (NASDAQ:PFBC) Q4 2021 Earnings Conference Call January 20, 2022 2:00 PM ET Company Participants Li Yu – Chairman and Chief Executive Officer Jeff Haas – Financial Profiles Edward Czajka – Chief Financial Officer Wellington Chen – President and Chief Operating Officer Nick Pi – Chief Credit Officer Johnny Hsu – Deputy Chief Operating Officer Conference Call Participants Matthew Clark – Piper Sandler Gary Tenner – D.A. Davidson Steve Moss – B. Riley Andrew Terrell – Stephens Inc. David Feaster ...

Preferred Bank (NASDAQ:PFBC) Q3 2021 Earnings Conference Call October 21, 2021 2:00 PM ET Company Participants Jeff Haas - Financial Profiles Li Yu - Chairman and Chief Executive Officer Edward Czajka - Chief Financial Officer Wellington Chen - President and Chief Operating Officer Nick Pi - Chief Credit Officer Johnny Hsu - Deputy Chief Operating Officer Conference Call Participants Matthew Clark - Piper Sandler Gary Tenner - D.A. Davidson Steve Moss - B. Riley Andrew Terrell - Stephens Inc. Operator Good ...

Preferred Bank (NASDAQ:PFBC) Q2 2021 Earnings Conference Call July 21, 2021 2:00 PM ET Company Participants Jeff Haas - Investor Relations Li Yu - Chairman and Chief Executive Officer Wellington Chen - President and Chief Operating Officer Ed Czajka - Chief Financial Officer Nick Pi - Chief Credit Officer Johnny Hsu - Deputy Chief Operating Officer Conference Call Participants Matthew Clark - Piper Jaffray Andrew Terrell - Stephens Steve Moss - B. Riley Securities Tim Coffey - Janney Gary Tenner - D.A. Davi ...

Financial Data and Key Metrics Changes - Preferred Bank reported a record income of $21.2 million or $1.42 per share for Q1 2021, compared to the previous quarter, which had 92 days instead of 90 days in the current quarter [8] - The bank experienced strong deposit growth of over 25% on an annualized basis [9] - Loan growth for the first quarter was $104 million, representing a 10.4% annualized increase [11] Business Line Data and Key Metrics Changes - The bank added a team of four relationship officers in Houston and five in California to meet increased loan demand [12] - The total deferred COVID-19 related loans decreased to $25.8 million, indicating stability in the credit matrix [13] Market Data and Key Metrics Changes - The bank's operating expenses were slightly higher due to quarterly specific payroll taxes, but overall expenses remained consistent with previous quarters [13] - The bank's loan portfolio is 82% floating rate, with over 99% of floating rate loans having floors [33] Company Strategy and Development Direction - The management is focused on becoming more asset sensitive and is actively preparing the balance sheet for potential interest rate increases [13][33] - The bank aims to maintain reasonable organic growth and is dedicated to expanding its client base through new hires and market penetration [34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic recovery and noted that clients are increasingly optimistic about business expansion [11] - The bank anticipates continued loan growth in the coming quarters, although quantifying this growth remains challenging due to economic variables [34] Other Important Information - The bank's loan loss provision for 2020 was $26 million, with a charge-off of $5.4 million, indicating a stable loan portfolio [68] - The bank is managing liquidity carefully, balancing the need for deposits with the potential for reduced costs [70][71] Q&A Session Summary Question: Margin contribution from PPP - The contribution from PPP was negligible against a $4 billion portfolio, with a rate including fees around 2% [22] Question: Outlook for margin and loan growth - The margin prediction is closely monitored, with a payoff rate 90 basis points higher than new loan rates, indicating potential margin compression [23][24] Question: Update on Houston LPO and loan growth expectations - The Houston LPO has not yet contributed to loan origination, but there are several deals ready to close [44] Question: Loan loss reserve outlook - The bank expects a more stable loan loss reserve this year compared to last year, with potential releases in the future [69] Question: Deposit growth and client activity - Most deposit growth came from existing clients, indicating improved financial conditions among the customer base [54] Question: Time deposits maturing and pricing differential - Approximately $500 million in time deposits will mature at an average rate of 95 basis points, expected to be replaced at around 50 basis points [60]

Preferred Bank (NASDAQ:PFBC) Q4 2020 Earnings Conference Call January 26, 2021 2:00 PM ET Company Participants Jeff Haas - IR, Financial Profiles Li Yu - Chairman & Chief Executive Officer Edward Czajka - Chief Financial Officer Wellington Chen - President & Chief Operating Officer Johnny Hsu - Deputy Chief Operating Officer Conference Call Participants Nick Cucharale - Piper Sandler Timothy Coffey - Janney David Feaster - Raymond James Steve Moss - B. Riley Operator Good day and welcome to the Preferred Ba ...

Financial Data and Key Metrics Changes - Preferred Bank reported a net income of $17.1 million or $1.15 per share for Q3 2020, showing improvement compared to the previous two quarters [7] - The net interest margin for the quarter was 3.54%, a slight decrease of 3 basis points from the previous quarter, but improved to 3.61% when excluding PPP loans [9] - Return on equity was reported at 13.7%, reflecting the bank's efforts to restructure and reposition its loan portfolio [12] Business Line Data and Key Metrics Changes - Total deposits grew by 1.5% or $64 million, while loans declined by $14 million due to reduced deal flow in key markets [10] - The bank's loan-loss provision for the quarter was $9 million, with total reserves to loans standing at 1.58% [10] Market Data and Key Metrics Changes - The bank experienced a 53% reduction in loans receiving modifications under the CARES Act, indicating a positive trend in borrower repayment plans [11] - Nonperforming loans were reported at less than 50 basis points as of June 30, with proactive measures taken to charge-off and reserve for potential losses [10] Company Strategy and Development Direction - The management emphasized a shift from being an asset-sensitive bank to a liability-sensitive bank, focusing on reducing deposit costs and controlling overhead [8] - The bank is cautious about new loan opportunities, particularly in sectors like hotels and retail, due to current market uncertainties and pricing challenges [29][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the bank's ability to maintain profitability despite uncertainties, with a focus on credit management [12][48] - The bank's strategy includes preparing for potential economic challenges while aiming for growth through careful loan management [19][49] Other Important Information - The bank's total capital ratio increased by nearly 80 basis points from the end of the previous year, indicating strong internal capital generation [19] - The bank has submitted applications for PPP loan forgiveness, with expectations of recognizing fees throughout Q4 [73] Q&A Session Summary Question: Impact of capitalized origination costs on operating expenses - Management noted that loan originations were flat quarter-over-quarter, with PPP loan fees contributing to capitalized credit costs [17] Question: Outlook on commercial paydowns and loan balances - Management indicated that commercial paydowns have reduced balances, but net production showed some activity [18] Question: Capital priorities and potential buyback plans - Management stated that current focus is on uncertainties ahead, with no immediate plans for stock buybacks [19] Question: Tax rate expectations for future quarters - The tax rate decreased in Q3 due to a true-up of 2019 tax returns, with expectations for a similar rate in Q4 [20] Question: Details on charge-offs during the quarter - Management provided insights on charge-offs related to larger loans and the ongoing collection process [22][23] Question: Loan demand and borrower hesitance - Management acknowledged that while there is capital on the sidelines, borrowers are cautious about new investments [46] Question: Trends in loan deferrals and future projections - Management confirmed that deferrals have decreased significantly, with expectations of minimal amounts by year-end [40] Question: Update on classified and criticized loans - Classified loans were reported at $59 million, with criticized loans totaling approximately $139 million [70] Question: Applications for PPP forgiveness and fee recognition - Management confirmed that applications for PPP forgiveness have been submitted, with fees being amortized over the life of the loans [74][75]

Financial Data and Key Metrics Changes - For Q2 2020, Preferred Bank reported a net income of $15.3 million or $1.03 per share, which was impacted by a $7.5 million loan loss provision [8] - Return on assets was 1.26% and return on equity was 12.65% [9] - Total deposits grew by $264 million and loans increased by $70 million, including $74 million in PPP loans [10] - Net interest margin (NIM) for the quarter was 3.53%, a decrease of 17 basis points from the previous quarter [11] Business Line Data and Key Metrics Changes - The bank experienced a net organic origination of loans of $50 million, with $211 million in new loans and $161 million in payoffs [10] - Loan yield decreased by 47 basis points while deposit cost decreased by 43 basis points [12] - Total modified loans amounted to $467 million, with a slowdown in new modification requests towards the end of the quarter [13] Market Data and Key Metrics Changes - The bank's total assets exceeded $5 billion, providing significant liquidity but negatively impacting ROA and capital ratio [16] - The cost of deposits as of June 30 was down to 74 basis points [34] Company Strategy and Development Direction - The management indicated a focus on maintaining a low efficiency ratio and expects deposit costs to continue declining [16] - The bank is cautious about deposit growth, balancing between paying less interest and managing liquidity [60] - Management is considering staff realignment and operational adjustments in response to changes in customer behavior due to the pandemic [66] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for PPP loan forgiveness, which could positively impact future earnings [45][75] - The bank is closely monitoring economic conditions and expects to build reserves based on ongoing evaluations of the loan portfolio [15][58] - Management noted that the current environment has created challenges but remains hopeful for recovery as the pandemic situation improves [81] Other Important Information - The bank's efficiency ratio is less than 33%, indicating strong operational performance [16] - The bank has a significant portion of its loan portfolio secured by real estate, which is expected to mitigate risks associated with non-accrual loans [21][50] Q&A Session Summary Question: Can you provide details on non-accrual loans? - Management indicated that non-accrual loans are primarily secured by real estate, with ongoing efforts to resolve issues related to delayed sales due to COVID-19 [21] Question: What is the book value of the non-accrual loans? - The book values were reported as $16.8 million, $6.32 million, and $1.13 million for the respective loans [26] Question: What are the expectations for loan payoffs in the coming quarters? - Management expects a reduction in both origination levels and payoffs due to the ongoing pandemic [40] Question: How is the bank managing its bond portfolio? - The bank is cautious with bond purchases, focusing on small opportunities rather than significant investments due to the current market environment [49] Question: What is the mix of hotel exposure in the loan portfolio? - The hotel portfolio is approximately 80% metropolitan hotels and 20% boutique hotels by total value [54] Question: What are the assumptions for CECL regarding GDP and unemployment? - The bank forecasts an unemployment rate of 11% to 12% and a GDP contraction of 5% to 6% [58] Question: How much of the PPP loans are under $150,000? - Approximately 60% to 70% of the PPP loans are under $150,000 [72]

PREFERED BANK D.A. Davidson & Co. 22nd Annual Financial Institutions Virtual Conference Forward Looking Statements During the course of this presentation, management may make statements regarding events or future financial performance of the Bank. These statements may include comments with respect to our objectives and strategies, and the results of our operations and our business. However, by their nature, these forward-looking statements involve numerous assumptions, uncertainties and opportunities, both ...