Preferred Bank(US:PFBC)2025-07-21 19:02Financial Data and Key Metrics Changes - Preferred Bank reported a net income of $32.8 million or $2.52 per share for Q2 2025, showing improvement from the previous quarter [6] - Loan growth was approximately 7% on an annualized basis, with indications of increased loan demand in July [6] - Net interest margin increased to 3.85% from 3.75% in the previous quarter [7] - The bank repurchased $56 million worth of stock during the quarter, which may have impacted net interest income and net interest margin [7] Business Line Data and Key Metrics Changes - The quality of assets improved, with decreases in non-accrual loans, criticized loans, and past due loans compared to the previous quarter [8] - The bank's loan loss reserve is deemed sufficient to cover any exposure [8] Market Data and Key Metrics Changes - Deposits remained flat, attributed to the bank's strategy to control deposit costs [7] - The average margin for June was reported at 3.83%, with a cost of deposits at 3.41% [13][14] Company Strategy and Development Direction - The bank aims to continue growing deposits while managing costs effectively [32] - There are plans for new branch openings, including a branch in Silicon Valley in the second half of the year [43] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about economic uncertainties, including tariffs, interest rates, and inflation, which could impact the operating environment [9] - The bank is closely monitoring clients affected by tariffs and supply chain issues, indicating a cautious approach to growth [46][48] Other Important Information - The bank's Manhattan branch is performing well in loan generation, indicating positive growth prospects [43] - The bank is cautious about stock buybacks due to current share prices being higher than in previous quarters [19] Q&A Session Summary Question: Inquiry about margin and cost of deposits - The margin for June was 3.83%, with a cost of deposits at 3.41%, remaining consistent throughout the quarter [13] Question: Update on loan growth and competition - Loan growth was stronger in Q2, particularly in commercial and industrial sectors, with increased demand noted in July [22][30] Question: Thoughts on OREO and credit quality - Management acknowledged challenges with OREO properties but noted overall credit quality remains stable [39] Question: Update on new branch performance - The Manhattan branch is performing well, with plans for further expansion in Silicon Valley [43] Question: Comments on economic uncertainties and client sentiment - Management highlighted ongoing uncertainties in the economy and the need for close monitoring of client situations [46][48]