Preferred Bank(US:PFBC)2021-04-21 21:51Financial 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]