Preferred Bank Reports Quarterly Earnings

LOS ANGELES, July 17, 2019 (GLOBE NEWSWIRE) -- Preferred Bank PFBC, an independent commercial bank, today reported results for the quarter ended June 30, 2019. Preferred Bank ("the Bank") reported net income of $20.0 million or $1.31 per diluted share for the second quarter of 2019. This compares favorably to net income of $17.4 million or $1.14 per diluted share for the second quarter of 2018 and also favorably to net income of $18.7 million or $1.23 per diluted share for the first quarter of 2019.

Highlights from the second quarter of 2019:

		• Year-over-Year Earnings Growth					14.8%
		• Year-over-Year EPS Growth					15.0%
		• Return on Assets					1.89%
		• Return on Beginning Equity					18.54%
		• Efficiency Ratio					31.68%
		• Net Interest Margin					4.07%
		• Loan Growth – LQ, Non-annualized					5.31%

Li Yu, Chairman and CEO, commented, "This quarter's highlight was our loan production. Sequentially, total loans increased $181 million or 5.3%. Fluctuations in credit line usage and loan pay-off activity accounted for some of the increase, but organic loan originations was one of the best in recent periods.

"Conversely, our total deposits decreased $43 million or 1.2% sequentially. One of the reasons for the decrease was higher drawdowns on bank accounts by our commercial customers, which is echoed by the higher credit line usage discussed above. During the quarter, we pro-actively reduced interest rates on deposits ahead of much of our competition, which also may have also cost us some opportunities.

"We are pleased with the quarterly net income of $20.0 or $1.31 per share. This number compares well with the prior quarter and with the same quarter last year. Our net interest margin came in at 4.07%, which met our expectations. The Bank's efficiency ratio for the quarter was 31.7%, so costs remain well under control and credit quality remains stable. Our ROA and ROE (beginning) for the quarter were 1.89% and 18.54%, respectively.

"As has always been the case, we remain focused on managing the Bank's interest rate risk. As of June 30, 2019, roughly two-thirds of our loan portfolio are floating rate loans (mostly Prime indexed) with a floor. With new production at current market rates and pay-offs of old loans and their associated lower floor rates, the overall floors are being continuously updated. Also important for interest rate risk, third quarter CD maturities will now be renewing at approximately our current average cost.

"We recently announced the approval of a $30 million stock repurchase plan, which will allow us the opportunity to return more capital to our shareholders and manage our capital more effectively."

Income Statement Summary

Net Interest Income and Net Interest Margin. Net interest income before provision for loan and lease losses was $41.8 million for the second quarter of 2019. This is up 11.9% over the $37.4 million recorded in the second quarter of 2018 and up over the $40.9 million recorded in the first quarter of 2019. The increase over the same period last year is due primarily to loan and overall asset growth. In comparing to the first quarter of 2019, strong loan growth mainly fueled the increase in net interest income. The Bank's taxable equivalent net interest margin was 4.07% for the second quarter of 2019, flat compared to the second quarter of 2018 and a 5 basis point decrease from the 4.12% posted in the first quarter of 2019. The decline in the margin was due to total deposit costs which rose by 12 basis points partially offset by an increase in earning asset yields of 4 basis points.

Noninterest Income. For the second quarter of 2019, noninterest income was $1,985,000 compared with $1,756,000 for the same quarter last year and compared to $1,861,000 for the first quarter of 2019. The increase over last year is primarily due to service charges on deposits and LC fee income which were both up fairly sharply, partially offset by a gain on the call of investment securities of $112,000 which occurred in the second quarter of 2018. The increase over the prior quarter is mainly due to service charges on deposits and other income which were both up over last quarter.

Noninterest Expense. Total noninterest expense was $13.9 million for the second quarter of 2019, an increase of around $80,000 over the same period last year but a sharp decrease from $15.7 million recorded in the first quarter of 2019. The primary reason for the linked quarter decrease was the $1.4 million loss on sale of the New York OREO properties in the first quarter of 2019. Salaries and benefits expense totaled $9.5 million for the second quarter of 2019, an increase of $672,000 over the $8.8 million recorded in the second quarter of 2018 and a decrease from the $9.8 million recorded in the first quarter of 2019. The increase over last year is due mainly to normal merit increases and additional relationship officers, while the decrease from the prior quarter is due mainly to payroll taxes, which spike in the first quarter as annual incentive awards are paid out. Occupancy expense totaled $1.3 million for the quarter and was essentially flat from the $1.3 million recorded in the second quarter of 2018 but was up by $122,000 over the prior quarter. In the first quarter of 2019, the Bank recorded a small benefit of $229,000 due to the implementation of the new Lease Accounting Standard, ASC 842. Professional services expense was $1.1 million for the second quarter of 2019 compared to $1.7 million for the same quarter of 2018 and $1.3 million recorded in the first quarter of 2019. The decrease from the prior year is due primarily to lower information technology costs as the Bank converted to a new core I.T. system last year. The decrease from the prior quarter is mainly due to a decrease in legal fees as the Bank's previously-owned OREO properties have all been divested, thus incurring no more fees. Other expenses were $1.4 million for the second quarter of 2019 compared to $1.3 million for both the second quarter of 2018 and the first quarter of 2019.

Balance Sheet Summary

Total gross loans and leases at June 30, 2019 were $3.59 billion, an increase of $252.3 million or 7.6% over the total of $3.33 billion as of December 31, 2018. On a linked-quarter basis, total loans grew by $180.7 million or 5.3%. Total deposits increased by $37.3 million or 1.0% over the $3.64 billion as of December 31, 2018. Total deposits for the second quarter declined by $42.8 million on a linked quarter basis. Total assets reached $4.29 billion as of June 30, 2019, an increase of $78.0 million or 1.9% over the total of $4.22 billion as of December 31, 2018.

Income Taxes

The Bank recorded a provision for income taxes of $8.4 million for the second quarter of 2019. This represents an effective tax rate ("ETR") of 29.5% and consistent with the ETR of 29.5% for the first quarter of 2019. This is up, however from the 28.0% ETR recorded in the second quarter of 2018. The Bank's ETR may fluctuate slightly from quarter to quarter within a fairly small range due to the timing of taxable events throughout the year.

Asset Quality
As of June 30, 2019, nonaccrual loans totaled $3.4 million, a decrease from the $3.6 million as of March 31, 2019 and down significantly from the total of $44.8 million as of December 31, 2018 due to the sale of the New York NPA's in the first quarter of 2019. As of June 30, 2019, total classified loans stood at $7.4 million compared to $46.2 million as of December 31, 2018.

Total net recoveries for the second quarter of 2019 were $315,000 compared to $330,000 in the first quarter of 2019 and compared to $2,000 for the second quarter of 2018. The Bank recorded a provision for loan loss of $1.6 million for the second quarter of 2019, compared to $1.2 million in the second quarter of 2018 and compared to $500,000 recorded in the first quarter of 2019. The allowance for loan loss at June 30, 2019 was $33.8 million or 0.94% of total loans compared to $31.1 million or 0.93% of total loans at December 31, 2018.

Capitalization
As of June 30, 2019, the Bank's leverage ratio was 10.50%, the common equity tier 1 capital ratio was 10.53% and the total capital ratio was 13.74%. As of December 31, 2018, the Bank's leverage ratio was 10.16%, the common equity tier 1 ratio was 10.43% and the total risk based capital ratio was 13.77%.

Conference Call and Webcast
A conference call with simultaneous webcast to discuss Preferred Bank's second quarter 2019 financial results will be held tomorrow, July 18, 2019 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. Web participants are encouraged to go to the website at least 15 minutes prior to the start of the call to register, download and install any necessary audio software.

Preferred Bank's Chairman and Chief Executive Officer Li Yu, President and Chief Operating Officer Wellington Chen, Chief Financial Officer Edward J. Czajka, and Chief Credit Officer Nick Pi will be present to discuss Preferred Bank's financial results, business highlights and outlook. After the live webcast, a replay will remain available in the Investor Relations section of Preferred Bank's website. A replay of the call will also be available at 877-344-7529 (domestic) or 412-317-0088 (international) through August 1, 2019; the passcode is 10130589.

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 eleven full-service branch banking offices in California (Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine, Diamond Bar, Pico Rivera, Tarzana and San Francisco (2)) and one branch in Flushing, New York. 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 2018 Annual Report on Form 10-K filed with the Federal Deposit Insurance Corporation which can also 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.

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
	June 30,			March 31,			June 30,
	2019			2019			2018
Interest income:
Loans, including fees	$	52,844		$	50,460		$	42,970
Investment securities		4,707			4,691			3,301
Fed funds sold		271			306			477
Total interest income		57,822			55,457			46,748

Interest expense:
Interest-bearing demand		4,819			4,743			3,343
Savings		13			12			16
Time certificates		9,612			8,248			4,432
FHLB borrowings		7			12			20
Subordinated debit		1,530			1,532			1,531
Total interest expense		15,981			14,547			9,342
Net interest income		41,841			40,910			37,406
Provision for loan losses		1,600			500			1,200
Net interest income after provision for loan losses		40,241			40,410			36,206

Noninterest income:
Fees & service charges on deposit accounts		418			368			350
Letters of credit fee income		1,071			1,070			889
BOLI income		92			91			90
Net gain on called and sale of investment securities		-			-			112
Other income		404			332			315
Total noninterest income		1,985			1,861			1,756

Noninterest expense:
Salary and employee benefits		9,479			9,781			8,807
Net occupancy expense		1,270			1,148			1,296
Business development and promotion expense		187			286			181
Professional services		1,090			1,344			1,736
Office supplies and equipment expense		497			425			367
Net (gain) loss on sale of other real estate owned and expense		(45	)		1,391			107
Other		1,407			1,319			1,311
Total noninterest expense		13,885			15,694			13,805
Income before provision for income taxes		28,341			26,577			24,157
Income tax expense		8,362			7,834			6,752
Net income	$	19,979		$	18,743		$	17,405

Dividend and earnings allocated to participating securities		(158	)		(158	)		(297	)
Net income available to common shareholders	$	19,821		$	18,585		$	17,108

Income per share available to common shareholders
Basic	$	1.31		$	1.23		$	1.14
Diluted	$	1.31		$	1.23		$	1.14

Weighted-average common shares outstanding
Basic		15,171,399			15,145,923			15,063,450
Diluted		15,171,399			15,145,923			15,063,450

Dividends per share	$	0.30		$	0.30		$	0.25

PREFERRED BANK
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except for net income per share and shares)


	For the Six Months Ended
	June 30,			June 30,			Change
	2019			2018			%
Interest income:
Loans, including fees	$	103,304		$	83,263		24.1	%
Investment securities		9,398			6,251		50.3	%
Fed funds sold		577			886		-35.0	%
Total interest income		113,279			90,400		25.3	%

Interest expense:
Interest-bearing demand		9,562			5,765		65.9	%
Savings		25			32		-21.7	%
Time certificates		17,860			7,952		124.6	%
FHLB borrowings		19			40		-51.3	%
Subordinated debit		3,062			3,062		100.0	%
Total interest expense		30,528			16,850		81.2	%
Net interest income		82,751			73,550		12.5	%
Provision for loan losses		2,100			2,700		-22.2	%
Net interest income after provision for loan losses		80,651			70,850		13.8	%

Noninterest income:
Fees & service charges on deposit accounts		786			670		17.3	%
Letters of credit fee income		2,141			1,880		13.9	%
BOLI income		183			179		2.5	%
Net gain on called and sale of investment securities		-			112		100.0	%
Other income		736			478		53.8	%
Total noninterest income		3,846			3,320		15.8	%

Noninterest expense:
Salary and employee benefits		19,260			17,433		10.5	%
Net occupancy expense		2,418			2,634		-8.2	%
Business development and promotion expense		473			331		42.9	%
Professional services		2,434			3,167		-23.1	%
Office supplies and equipment expense		922			742		24.2	%
Net loss on sale of other real estate owned and expense		1,346			213		532.5	%
Other		2,726			3,015		-9.6	%
Total noninterest expense		29,579			27,535		7.4	%
Income before provision for income taxes		54,918			46,635		17.8	%
Income tax expense		16,196			12,619		28.3	%
Net income	$	38,722		$	34,016		13.8	%

Dividend and earnings allocated to participating securities		(317	)		(550	)	-42.4	%
Net income available to common shareholders	$	38,405		$	33,466		14.8	%

Income per share available to common shareholders
Basic	$	2.53		$	2.22		14.1	%
Diluted	$	2.53		$	2.22		14.1	%

Weighted-average common shares outstanding
Basic		15,158,731			15,049,435		0.7	%
Diluted		15,158,731			15,053,885		0.7	%

Dividends per share	$	0.60		$	0.47		27.7	%

PREFERRED BANK
Condensed Consolidated Statements of Financial Condition
(unaudited)
(in thousands)


	June 30,			December 31,
	2019			2018
	(Unaudited)			(Audited)
Assets

Cash and due from banks	$	304,121		$	526,759
Fed funds sold		47,000			76,000
Cash and cash equivalents		351,121			602,759

Securities held to maturity, at amortized cost		7,702			8,007
Securities available-for-sale, at fair value		238,589			182,413
Loans and leases		3,585,686			3,333,377
Less allowance for loan and lease losses		(33,811	)		(31,065	)
Less net deferred loan fees		(1,401	)		(2,323	)
Net loans and leases		3,550,474			3,299,989

Customers' liability on acceptances		8,074			10,074
Bank furniture and fixtures, net		12,757			7,497
Bank-owned life insurance		9,443			9,317
Accrued interest receivable		15,510			14,266
Investment in affordable housing		41,136			43,848
Federal Home Loan Bank stock		13,101			11,933
Deferred tax assets		17,804			19,640
Income tax receivable		3,585			-
Operating lease right-of-use assets		17,616			-
Other assets		7,513			6,692
Total assets	$	4,294,425		$	4,216,435


Liabilities and Shareholders' Equity

Liabilities:
Deposits:
Demand	$	718,611		$	730,096
Interest-bearing demand		1,279,104			1,397,006
Savings		20,927			20,369
Time certificates of $250,000 or more		839,203			738,626
Other time certificates		819,163			753,588
Total deposits		3,677,008			3,639,685
Acceptances outstanding		8,074			10,074
Advances from Federal Home Loan Bank		-			1,307
Subordinated debt issuance		99,149			99,087
Commitments to fund investment in affordable housing partnership		15,186			19,530
Operating lease liabilities		21,416			-
Accrued interest payable		5,753			6,839
Other liabilities		16,397			23,262
Total liabilities		3,842,983			3,799,784

Commitments and contingencies
Shareholders' equity:
Common stock, no par value. Authorized 100,000,000 shares; issued and outstanding 15,300,577 at June 30, 2019 and 15,308,688 at December 31, 2018, respectively.		210,882			210,882
Treasury stock		(36,373	)		(34,529	)
Additional paid-in-capital		49,805			47,425
Retained earnings		224,401			194,855
Accumulated other comprehensive income (loss):
Unrealized gain (loss) on securities, available-for-sale, net of tax of $1,110 and $(725) at June 30, 2019 and December 31, 2018, respectively		2,727			(1,982	)
Total shareholders' equity		451,442			416,651
Total liabilities and shareholders' equity	$	4,294,425		$	4,216,435

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)



	For the Quarter Ended

	June 30,			March 31,			December 31,			September 30,			June 30,
	2019			2019			2018			2018			2018
Unaudited historical quarterly operations data:
Interest income	$	57,822		$	55,457		$	54,373		$	50,392		$	46,748
Interest expense		15,981			14,547			12,931			11,155			9,342
Interest income before provision for credit losses		41,841			40,910			41,442			39,237			37,406
Provision for credit losses		1,600			500			5,550			1,880			1,200
Noninterest income		1,985			1,861			4,405			1,676			1,756
Noninterest expense		13,885			15,694			13,683			13,584			13,805
Income tax expense		8,362			7,834			7,960			7,126			6,752
Net income	$	19,979		$	18,743		$	18,654		$	18,323		$	17,405

Earnings per share
Basic	$	1.31		$	1.23		$	1.22		$	1.20		$	1.14
Diluted	$	1.31		$	1.23		$	1.22		$	1.20		$	1.14

Ratios for the period:
Return on average assets		1.89	%		1.83	%		1.82	%		1.84	%		1.83	%
Return on beginning equity		18.54	%		18.24	%		18.50	%		18.87	%		18.82	%
Net interest margin (Fully-taxable equivalent)		4.07	%		4.12	%		4.13	%		4.04	%		4.07	%
Noninterest expense to average assets		1.31	%		1.54	%		1.33	%		1.37	%		1.46	%
Efficiency ratio		31.68	%		36.69	%		29.84	%		33.20	%		35.25	%
Net charge-offs (recoveries) to average loans (annualized)		-0.04	%		-0.04	%		0.80	%		-0.04	%		0.00	%

Ratios as of period end:
Tier 1 leverage capital ratio		10.50	%		10.32	%		10.16	%		10.07	%		10.04	%
Common equity tier 1 risk-based capital ratio		10.53	%		10.54	%		10.43	%		10.23	%		10.14	%
Tier 1 risk-based capital ratio		10.53	%		10.54	%		10.43	%		10.23	%		10.14	%
Total risk-based capital ratio		13.74	%		13.82	%		13.77	%		13.65	%		13.62	%
Allowances for credit losses to loans and leases at end of period		0.94	%		0.94	%		0.93	%		0.98	%		0.95	%
Allowance for credit losses to non-performing loans and leases		981.65	%		887.75	%		69.29	%		63.42	%		58.92	%

Average balances:
Total securities	$	241,664		$	189,684		$	184,168		$	184,283		$	187,190
Total loans and leases	$	3,450,583		$	3,327,005		$	3,217,850		$	3,184,527		$	3,092,571
Total earning assets	$	4,134,320		$	4,034,284		$	3,988,970		$	3,861,346		$	3,696,854
Total assets	$	4,235,612		$	4,142,906		$	4,068,592		$	3,946,924		$	3,804,557
Total time certificate of deposits	$	1,627,953		$	1,521,209		$	1,446,661		$	1,324,724		$	1,251,176
Total interest-bearing deposits	$	2,924,526		$	2,874,045		$	2,787,788		$	2,697,807		$	2,590,394
Total deposits	$	3,625,021		$	3,555,981		$	3,498,226		$	3,392,878		$	3,268,490
Total interest-bearing liabilities	$	3,024,452		$	2,974,442		$	2,888,171		$	2,800,486		$	2,695,759
Total equity	$	445,101		$	428,136		$	411,249		$	396,942		$	381,815

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)



	For the Six Months Ended
	June 30,			June 30,
	2019			2018
Interest income	$	113,279		$	90,400
Interest expense		30,528			16,850
Interest income before provision for credit losses		82,751			73,550
Provision for credit losses		2,100			2,700
Noninterest income		3,846			3,320
Noninterest expense		29,579			27,535
Income tax expense		16,196			12,619
Net income	$	38,722		$	34,016

Earnings per share
Basic	$	2.53		$	2.22
Diluted	$	2.53		$	2.22

Ratios for the period:
Return on average assets		1.86	%		1.84	%
Return on beginning equity		18.74	%		19.32	%
Net interest margin (Fully-taxable equivalent)		4.10	%		4.10	%
Noninterest expense to average assets		1.42	%		1.49	%
Efficiency ratio		34.16	%		35.82	%
Net charge-offs (recoveries) to average loans		-0.04	%		0.19	%

Average balances:
Total loans and leases	$	3,389,136		$	3,025,759
Earning assets	$	4,084,580		$	3,623,961
Total assets	$	4,189,515		$	3,727,117
Total deposits	$	3,590,692		$	3,200,419

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)



	As of

	June 30,			March 31,			December 31,			September 30,			June 30,
	2019			2019			2018			2018			2018
Unaudited quarterly statement of financial position data:
Assets:
Cash and cash equivalents	$	351,121		$	623,002		$	602,759		$	531,240		$	493,521
Securities held-to-maturity, at amortized cost		7,702			7,861			8,007			8,203			8,370
Securities available-for-sale, at fair value		238,589			182,280			182,413			173,953			176,930
Loans and Leases:
Real estate - Single and multi-family residential		646,830			625,416			587,562			559,050			508,470
Real estate - Land		9,330			9,352			10,646			10,725			11,133
Real estate - Commercial		1,419,224			1,395,074			1,358,821			1,337,794			1,319,664
Real estate - For sale housing construction		171,584			152,418			138,815			122,225			112,236
Real estate - Other construction		212,988			228,174			207,849			246,815			231,276
Commercial and industrial, trade finance and other		1,125,730			994,571			1,029,684			998,781			955,663
Gross loans		3,585,686			3,405,005			3,333,377			3,275,390			3,138,442
Allowance for loan and lease losses		(33,811	)		(31,896	)		(31,065	)		(31,966	)		(29,772	)
Net deferred loan fees		(1,401	)		(1,501	)		(2,323	)		(2,571	)		(2,287	)
Net loans, excluding loans held for sale	$	3,550,474		$	3,371,608		$	3,299,989		$	3,240,853		$	3,106,383
Loans held for sale	$	-		$	-		$	-		$	-		$	47,337
Net loans and leases	$	3,550,474		$	3,371,608		$	3,299,989		$	3,240,853		$	3,153,720

Other real estate owned	$	-		$	-		$	-		$	4,112		$	4,112
Investment in affordable housing		41,136			42,492			43,849			45,555			47,201
Federal Home Loan Bank stock		13,101			11,932			11,933			11,933			12,158
Other assets		92,302			89,095			67,485			60,339			62,792
Total assets	$	4,294,425		$	4,328,270		$	4,216,435		$	4,076,188		$	3,958,804

Liabilities:
Deposits:
Demand	$	718,611		$	731,795		$	730,096		$	745,861		$	713,492
Interest-bearing demand		1,279,104			1,372,760			1,397,006			1,360,237			1,372,771
Savings		20,927			20,550			20,369			21,490			21,918
Time certificates of $250,000 or more		839,203			778,020			738,626			737,465			683,561
Other time certificates		819,163			816,678			753,588			653,697			618,493
Total deposits	$	3,677,008		$	3,719,803		$	3,639,685		$	3,518,750		$	3,410,235

Advances from Federal Home Loan Bank	$	8,074		$	8,417		$	10,074		$	6,256		$	8,313
Subordinated debt issuance		99,149			99,118			99,087			99,056			99,025
Commitments to fund investment in affordable housing partnership		15,186			17,340			19,530			21,514			29,116
Other liabilities		43,566			51,460			31,408			30,643			26,889
Total liabilities	$	3,842,983		$	3,896,138		$	3,799,784		$	3,676,219		$	3,573,578

Equity:
Net common stock, no par value	$	224,314		$	222,782		$	223,778		$	221,518		$	220,669
Retained earnings		224,401			209,012			194,855			180,793			166,302
Accumulated other comprehensive income		2,727			338			(1,982	)		(2,342	)		(1,745	)
Total shareholders' equity	$	451,442		$	432,132		$	416,651		$	399,969		$	385,226
Total liabilities and shareholders' equity	$	4,294,425		$	4,328,270		$	4,216,435		$	4,076,188		$	3,958,804

Preferred Bank
Loan and Credit Quality Information

Allowance For Credit Losses & Loss History
	Six Months Ended			Year ended
	June 30, 2019			December 31, 2018

	(Dollars in 000's)
Allowance For Credit Losses
Balance at Beginning of Period	$	31,065		$	29,921
Charge-Offs
Commercial & Industrial		9			4,040
Mini-perm Real Estate		101			5,742
Total Charge-Offs		110			9,782

Recoveries
Commercial & Industrial		341			796
Mini-perm Real Estate		415			-
Total Recoveries		756			796

Net Loan Charge-Offs		(646	)		8,986
Provision for Credit Losses		2,100			10,130
Balance at End of Period	$	33,811		$	31,065
Average Loans and Leases	$	3,389,136		$	3,114,132
Loans and Leases at end of Period	$	3,585,686		$	3,333,337
Net Charge-Offs to Average Loans and Leases		-0.04	%		0.29	%
Allowances for credit losses to loans and leases at end of period		0.94	%		0.93	%