LOS ANGELES, July 22, 2026 (GLOBE NEWSWIRE) -- Preferred Bank (NASDAQ: PFBC), one of the larger independent California banks, today reported results for the quarter ended June 30, 2026. Preferred Bank (“the Bank”) reported net income of $33.5 million or $2.78 per diluted share for the second quarter of 2026. This represents an increase in net income of $2.4 million from the prior quarter and an increase of $693,000 over the same quarter last year. The increase compared to the prior quarter was due to an increase in net interest income of $4.7 million partially offset by an $827,000 decrease in noninterest income and a small increase in noninterest expense of $176,000. The difference compared to the same quarter last year was again due to net interest income which increased by $3.1 million partially offset by a small decrease in noninterest income of $279,000 and an increase in noninterest expense of $1.3 million.
Highlights for the Quarter:
- Return on average assets was 1.75%
- Return on average equity was 17.05%
- Total loans increased by $124.8 million or 2.0%, linked quarter
- Total deposits increased by $52.1 million, or 0.8%, linked quarter
- The efficiency ratio for the quarter was 32.3%
- The Bank’s net interest margin expanded to 3.73%
Li Yu, Chairman and CEO, commented, “We are pleased to report net income for the quarter ending June 30, 2026, of $33.5 million or $2.78 per share, which increased from the previous quarter of $2.4 million and an increase of $693,000 over the same quarter last year.
“At June 30, 2026, non-performing loans decreased by $70.2 million or 41.5% from March 31, 2026. Similarly, criticized loans also decreased 33.9% from the previous quarter. We were able to sell several loans at book value plus accrued interest, one nonaccrual loan paid off and one was returned to accrual status resulting in aggregate interest recoveries of $2.9 million on these loans. One loan sold below book by $950,000 and was recorded as a loss on sale.
“Because of the sizable reduction in criticized loans, corresponding reserve requirements on these loans were also reduced. The provision for credit losses for the quarter was $1.2 million. However, our allowance for credit loss to total loans was stable at 1.22%.
“Our loan origination activities were very positive. This quarter, our total loans increased $124.8 million or 2.0% on a linked quarter basis. Considering the sizeable loan sales and normal payoffs, the actual origination activities were strong. For deposits, however, we continue to face stiff competition. Interest rates on deposits also trend higher in the quarter-end, reflecting the change of market expectations. Our deposits increased $52.1 million or 0.8% on a linked quarter basis.
“Net interest margin for the quarter was 3.73%. This quarter, the margin was benefited by interest recovery of the previously mentioned $2.9 million. Non-interest expense for the quarter stayed in control with efficiency ratio of 32.3%.
“We are optimistic on our current operating environment.”
Results of Operations
Net Interest Income and Net Interest Margin. Net interest income before provision for credit losses was $70.0 million for the second quarter of 2026. This represents a $4.7 million increase from the $65.3 million recorded in the prior quarter and a $3.1 million increase over the same quarter last year. The increase compared to the prior quarter was due mainly to a $2.9 million net interest recovery due to nonaccrual loans sold for par and nonaccrual loans which paid off. The increase in net interest income over the same quarter last year was due to an increase in loan interest and a small decrease in total interest expense. The Bank’s net interest margin (“NIM”) expanded in the quarter to 3.73% due somewhat to the interest recoveries on loans sold and a nonaccrual loan payoff. In the prior quarter the NIM was 3.57% due to interest reversals on loans placed on nonaccrual status during the first quarter. For the same quarter last year, the NIM was 3.85%.
Noninterest Income. For the second quarter of 2026, noninterest income was $3.5 million compared with $3.8 million for the same quarter last year and compared to $4.3 million for the first quarter of 2026. The decrease from the same quarter last year was mainly due to a loss on the sale of one of the Bank’s nonaccrual loans which sold at a discount of $950,000 on a total note balance of $19,950,000. Partially offsetting the variance was an increase in letter of credit (“LC”) fees of $556,000. In comparison to the prior quarter, the primary variance was due to the loss on the note sale as most other line items were in line on a quarter-to-quarter basis.
Noninterest Expense. Total noninterest expense was $23.7 million for the second quarter of 2026 compared to $23.5 million for the first quarter of 2026 and compared to $22.4 million recorded in the same period last year. The primary reason for the increase from the prior quarter was mainly due to an increase in other professional services of $502,000 due mainly to legal fees on problem loans. This was partially offset by decreases in personnel expense and OREO expense of $179,000 each. The increase over the same quarter last year was due to an increase in personnel expense of $1.0 million and an increase in other expense of $762,000 partially offset by a decrease in OREO expense of $1.3 million. The Bank’s efficiency ratio came in at 32.3% for the quarter, which compares to 33.8% last quarter and to 31.8% in the same quarter last year.
Income Taxes. The Bank recorded a provision for income taxes of $15.0 million for the second quarter of 2026. This represents an effective tax rate (“ETR”) of 30.9% which is up from the 29.5% ETR for the same quarter last year and up from 30.1% ETR recorded in the first quarter of 2026. The Bank’s ETR will fluctuate slightly from quarter to quarter within a fairly small range due to the timing of taxable events throughout the year.
Balance Sheet Summary
Total gross loans at June 30, 2026 were $6.25 billion, an increase of $193.4 million from the total of $6.05 billion as of December 31, 2025. Total deposits were $6.47 billion, an increase of $126.8 million from the $6.35 billion as of December 31, 2025. Total assets were $7.73 billion, an increase of $129.5 million over the total of $7.60 billion as of December 31, 2025.
Asset Quality
Non-accrual loans and loans 90 days or more past due and still accruing totaled $98.9 million as of June 30, 2026 as compared to $169.1 million in the prior quarter, a decrease of $70.2 million. This was due to $68.4 million in note sales, two notes totaling $3.8 million note which were upgraded to accrual status and one small addition to nonaccrual loans. Total net charge-offs (recoveries) on loans for the quarter were $(40,000) compared to $5.5 million in the first quarter of 2026 and compared to net recoveries of ($96,000) in the second quarter of 2025. Total classified assets decreased to $103.8 million as of June 30, 2026 compared to $174.7 million as of March 31, 2026.
Allowance for Credit Losses
The provision for credit losses for the second quarter of 2026 was $1.2 million compared to $1.5 million in the prior quarter and compared to $1.6 million in the same quarter last year. The Bank’s allowance coverage ratio was 1.22% of total loans held for investment compared to 1.24% last quarter and compared to 1.30% as of the end of 2025.
Capitalization
As of June 30, 2026, the Bank’s tangible common equity ratio was 10.26%, the leverage ratio was 10.55%, the common equity tier 1 capital ratio was 11.06% and the total capital ratio stood at 13.74%. As of December 31, 2025, the Bank’s tangible common equity ratio was 10.38%, the Bank’s leverage ratio was 10.54%, the common equity tier 1 ratio was 11.26% and the total capital ratio was 14.47%.
Conference Call and Webcast
A conference call with simultaneous webcast to discuss Preferred Bank’s second quarter 2026 financial results will be held this afternoon, July 22, 2026 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.
Preferred Bank's Chairman and CEO Li Yu, President and Chief Operating Officer Wellington Chen, Chief Financial Officer Edward J. Czajka, Chief Risk Officer Nick Pi and Deputy Chief Operating Officer Johnny Hsu will discuss Preferred Bank's financial results, business highlights and outlook. After the live webcast, a replay will be available at the Investor Relations section of Preferred Bank's website. A replay of the call will also be available at 855-669-9658 (domestic) or 412-317-0088 (international) through August 5, 2026; the passcode is 6264757.
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 twelve full-service branch banking offices in California (Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine (2), Diamond Bar, Pico Rivera, Tarzana and San Francisco (2)), two branches in New York (Manhattan and Flushing, Queens) and a branch office in the Houston, Texas suburb of Sugar Land. In addition, the Bank also operates a loan production office in Sunnyvale, California. 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 2025 Annual Report on Form 10-K filed with the Federal Deposit Insurance Corporation which can 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.
AT THE COMPANY:AT FINANCIAL PROFILES:Edward J. CzajkaJeffrey HaasExecutive Vice PresidentGeneral InformationChief Financial Officer(310) 622-8240(213) [email protected]Financial Tables to Follow
PREFERRED BANKCondensed Consolidated Statements of Operations
(unaudited)
(in thousands, except for net income per share and shares)
For the Quarter Ended
June 30,
2026
March 31,
2026
June 30,
2025
Interest income: Loans, including fees$108,358 $103,382 $105,884 Investment securities 13,883 13,301 14,326 Fed funds sold 205 192 233 Total interest income 122,446 116,875 120,443 Interest expense: Interest-bearing demand 15,624 15,120 16,171 Savings 75 54 71 Time certificates 33,497 33,373 34,932 FHLB borrowings 1,743 1,690 1,070 Subordinated debt 1,517 1,325 1,325 Total interest expense 52,456 51,562 53,569 Net interest income 69,990 65,313 66,874 Provision for credit losses 1,200 1,500 1,600 Net interest income after provision for credit losses 68,790 63,813 65,274 Noninterest income: Fees & service charges on deposit accounts 570 516 635 Letters of credit fee income 2,890 2,737 2,333 BOLI income 107 105 104 Net gain on called and sale of investment securities 35 59 - Net (loss) gain on sale of loans (874) 24 172 Other income 755 869 518 Total noninterest income 3,483 4,310 3,762 Noninterest expense: Salary and employee benefits 15,281 15,460 14,247 Net occupancy expense 2,395 2,426 2,271 Business development and promotion expense 322 203 240 Professional services 2,149 1,647 1,507 Office supplies and equipment expense 340 358 419 OREO valuation allowance and related expense 184 363 1,479 Other 3,044 3,082 2,282 Total noninterest expense 23,715 23,539 22,445 Income before provision for income taxes 48,558 44,584 46,591 Income tax expense 15,018 13,440 13,744 Net income$33,540 $31,144 $32,847 Income per share available to common shareholders Basic$2.83 $2.57 $2.61 Diluted$2.78 $2.53 $2.57 Weighted-average common shares outstanding Basic 11,843,821 12,105,359 12,569,107 Diluted 12,049,162 12,292,237 12,774,591 Cash dividends per common share$0.80 $0.80 $0.75
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except for net income per share and shares)
For the Six Months Ended June 30,
2026
June 30,
2025
Change
%
Interest income: Loans, including fees$211,740 $207,375 2.1% Investment securities 27,184 27,136 0.2% Fed funds sold 397 461 -13.9% Total interest income 239,321 234,972 1.9% Interest expense: Interest-bearing demand 30,744 32,761 -6.2% Savings 129 140 -7.9% Time certificates 66,870 68,819 -2.8% FHLB borrowings 3,433 1,070 221.0% Subordinated debt 2,842 2,650 7.2% Total interest expense 104,018 105,440 -1.3% Net interest income 135,303 129,532 4.5% Provision for credit losses 2,700 2,300 17.4% Net interest income after provision for credit losses 132,603 127,232 4.2% Noninterest income: Fees & service charges on deposit accounts 1,086 1,351 -19.6% Letters of credit fee income 5,627 4,578 22.9% BOLI income 212 207 2.7% Net gain on called and sale of investment securities 94 - 100.0% Net (loss) gain on sale of loans (850) 447 -290.0% Other income 1,624 1,177 37.9% Total noninterest income 7,793 7,760 0.4% Noninterest expense: Salary and employee benefits 30,741 29,086 5.7% Net occupancy expense 4,821 4,565 5.6% Business development and promotion expense 525 702 -25.2% Professional services 3,796 3,158 20.2% Office supplies and equipment expense 698 805 -13.3% OREO valuation allowance and related expense 547 3,010 -81.8% Other 6,126 4,488 36.5% Total noninterest expense 47,254 45,814 3.1% Income before provision for income taxes 93,142 89,178 4.4% Income tax expense 28,458 26,307 8.2% Net income$64,684 $62,871 2.9% Income per share available to common shareholders Basic$5.40 $4.88 10.8% Diluted$5.32 $4.80 10.8% Weighted-average common shares outstanding Basic 11,973,867 12,896,028 -7.2% Diluted 12,163,976 13,100,242 -7.1% Dividends per share$1.60 $1.50 6.7%
Condensed Consolidated Statements of Financial Condition
(unaudited)
(in thousands)
June 30,
2026
December 31,
2025
(Unaudited) (Audited)
Assets Cash and due from banks$749,820 $807,098 Fed funds sold 40,000 20,000 Cash and cash equivalents 789,820 827,098 Securities held-to-maturity, at amortized cost 18,154 18,749 Securities available-for-sale, at fair value 525,956 566,186 Loans held for sale, at lower of cost or fair value 8,348 - Loans 6,239,281 6,054,264 Less allowance for credit losses (76,276) (78,992) Less amortized deferred loan fees, net (8,288) (9,030) Loans, net 6,154,717 5,966,242 Other real estate owned and repossessed assets 3,010 3,510 Bank furniture and fixtures, net 10,463 8,064 Bank-owned life insurance 10,853 10,712 Accrued interest receivable 32,818 34,233 Investment in affordable housing partnerships 77,729 69,978 Federal Home Loan Bank stock, at cost 15,000 15,000 Deferred tax assets 44,230 41,976 Income tax receivable 7,390 3,884 Operating lease right-of-use assets 28,643 30,531 Other assets 3,490 5,002 Total assets$7,730,621 $7,601,165 Liabilities and shareholders' Equity Deposits: Noninterest bearing demand deposits$754,670 $699,160 Interest bearing deposits: 2,209,390 2,205,914 Savings 31,617 30,376 Time certificates of $250,000 or more 1,822,765 1,754,273 Other time certificates 1,653,766 1,655,723 Total deposits 6,472,208 6,345,446 Advances from Federal Home Loan Bank 200,000 200,000 Subordinated debt issuance, net 148,825 148,706 Commitments to fund investment in affordable housing partnerships 29,949 23,327 Operating lease liabilities 33,295 35,107 Accrued interest payable 15,311 16,513 Other liabilities 37,506 42,589 Total liabilities 6,937,094 6,811,688 Shareholders' equity 793,527 789,477 Total liabilities and shareholders' equity$7,730,621 $7,601,165 Book value per common share$66.95 $64.83 Number of common shares outstanding 11,853,101 12,177,588
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)
For the Quarter Ended June 30,
2026
March 31,
2026
December 31,
2025
September 30,
2025
June 30,
2025
Unaudited historical quarterly operations data: Interest income$122,446 $116,875 $124,633 $126,850 $120,443 Interest expense 52,456 51,562 54,658 55,540 53,569 Interest income before provision for credit losses 69,990 65,313 69,975 71,310 66,874 Provision for credit losses 1,200 1,500 4,300 2,500 1,600 Noninterest income 3,483 4,310 8,094 3,665 3,762 Noninterest expense 23,715 23,539 24,377 21,498 22,445 Income tax expense 15,018 13,440 14,570 15,038 13,744 Net income$33,540 $31,144 $34,822 $35,939 $32,847 Earnings per share Basic$2.83 $2.57 $2.85 $2.90 $2.61 Diluted$2.78 $2.53 $2.79 $2.84 $2.57 Ratios for the period: Return on average assets 1.75% 1.67% 1.82% 1.93% 1.85% Return on average equity 17.05% 15.89% 17.59% 18.64% 17.55% Net interest margin (fully-taxable equivalent) 3.73% 3.57% 3.74% 3.92% 3.85% Noninterest expense to average assets 1.24% 1.26% 1.27% 1.16% 1.26% Efficiency ratio 32.28% 33.81% 31.22% 28.67% 31.78% Net charge-offs (recoveries) to average loans (annualized) -0.00% 0.37% 0.00% 0.11% 0.00% Ratios as of period end: Tangible common equity ratio 10.26% 10.05% 10.38% 10.38% 10.26% Tier 1 leverage capital ratio 10.55% 10.37% 10.54% 10.66% 10.73% Common equity tier 1 risk-based capital ratio 11.06% 10.87% 11.26% 11.34% 11.18% Tier 1 risk-based capital ratio 11.06% 10.87% 11.26% 11.34% 11.18% Total risk-based capital ratio 13.74% 13.98% 14.47% 14.56% 14.43% Allowances for credit losses to loans at end of period 1.22% 1.24% 1.30% 1.27% 1.29% Allowance for credit losses to non-performing loans 0.84x 0.8x 1.54x 4.24x 1.41x Average balances: Total securities$558,696 $580,248 $586,950 $583,302 $503,861 Total loans 6,021,420 6,037,241 5,947,814 5,753,801 5,623,010 Total earning assets 7,532,781 7,437,232 7,439,767 7,234,568 6,984,272 Total assets 7,668,719 7,563,705 7,585,940 7,382,265 7,121,047 Total time certificate of deposits 3,500,857 3,451,924 3,402,304 3,330,241 3,321,327 Total interest bearing deposits 5,712,097 5,644,722 5,651,369 5,501,767 5,345,308 Total deposits 6,420,198 6,311,446 6,336,242 6,169,728 6,005,486 Total interest bearing liabilities 6,060,886 5,993,452 6,000,042 5,850,376 5,614,737 Total equity 789,114 794,931 785,581 764,766 750,535
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)
For the Six Months Ended June 30,
2026
June 30,
2025
Interest income$239,321 $234,972 Interest expense 104,018 105,440 Interest income before provision for credit losses 135,303 129,532 Provision for credit losses 2,700 2,300 Noninterest income 7,793 7,760 Noninterest expense 47,254 45,814 Income tax expense 28,458 26,307 Net income$64,684 $62,871 Earnings per share Basic$5.40 $4.88 Diluted$5.32 $4.80 Ratios for the period: Return on average assets 1.71% 1.81% Return on average equity 16.47% 16.58% Net interest margin (fully-taxable equivalent) 3.65% 3.80% Noninterest expense to average assets 1.25% 1.32% Efficiency ratio 33.02% 33.37% Net charge-off to average loans 0.18% 0.00% Average balances: Total securities$569,413 $453,588 Total loans 6,029,287 5,597,386 Total earning assets 7,485,270 6,882,920 Total assets 7,616,502 7,013,744 Total time certificate of deposits 3,476,526 3,243,479 Total interest bearing deposits 5,678,597 5,295,055 Total deposits 6,366,123 5,946,154 Total interest bearing liabilities 6,027,357 5,504,349 Total equity 792,006 764,857
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)
As of June 30,
2026
March 31,
2026
December 31,
2025
September 30,
2025
June 30,
2025
Unaudited quarterly statement of financial position data: Assets: Cash and cash equivalents$789,820 $825,161 $827,098 $815,459 $796,257 Securities held-to-maturity, at amortized cost 18,154 18,458 18,749 19,034 19,456 Securities available-for-sale, at fair value 525,956 553,184 566,186 569,115 577,040 Loans: Real estate – mortgage: Real estate—residential$737,321 $738,508 $783,136 $793,217 $767,620 Real estate—commercial 3,169,037 3,105,331 3,028,762 2,890,990 2,868,308 Total Real estate – mortgage 3,906,358 3,843,839 3,811,898 3,684,207 3,635,928 Real estate – construction: R/E construction — residential 284,219 265,748 282,808 285,623 291,343 R/E construction — commercial 364,807 343,598 387,759 323,897 303,354 Total real estate construction loans 649,026 609,346 670,567 609,520 594,697 Commercial and industrial 1,675,300 1,584,984 1,563,504 1,570,423 1,501,188 SBA 8,444 8,087 8,053 7,630 7,741 Consumer and others 153 288 242 231 56 Gross loans 6,239,281 6,046,544 6,054,264 5,872,011 5,739,610 Allowance for credit losses on loans (76,276) (75,036) (78,992) (74,692) (73,830) Net deferred loan fees (8,288) (7,923) (9,030) (9,956) (11,940) Net loans, excluding loans held for sale$6,154,717 $5,963,585 $5,966,242 $5,787,363 $5,653,840 Loans held for sale$8,348 $76,324 $- $- $- Net loans$6,163,065 $6,039,909 $5,966,242 $5,787,363 $5,653,840 Other real estate owned and repossessed assets$3,010 $3,010 $3,510 $52,609 $13,755 Investment in affordable housing partnerships 77,729 66,394 69,978 73,874 74,783 Federal Home Loan Bank stock, at cost 15,000 15,000 15,000 15,000 15,000 Other assets 137,887 133,521 134,402 135,340 128,629 Total assets$7,730,621 $7,654,637 $7,601,165 $7,467,794 $7,278,760 Liabilities: Deposits: Demand$754,670 $716,777 $699,160 $654,302 $675,102 Interest bearing demand 2,209,390 2,200,374 2,205,914 2,205,865 2,004,135 Savings 31,617 26,822 30,376 31,087 34,333 Time certificates of $250,000 or more 1,822,765 1,795,883 1,754,273 1,699,757 1,681,026 Other time certificates 1,653,766 1,680,291 1,655,723 1,638,662 1,683,737 Total deposits$6,472,208 $6,420,147 $6,345,446 $6,229,673 $6,078,333 Advance from Federal Home Loan Bank 200,000 200,000 200,000 200,000 200,000 Subordinated debt issuance, net 148,825 148,766 148,706 148,647 148,588 Commitments to fund investment in affordable housing partnerships 29,949 18,873 23,327 24,874 30,645 Other liabilities 86,112 96,652 94,209 88,958 73,534 Total liabilities$6,937,094 $6,884,438 $6,811,688 $6,692,152 $6,531,100 Equity: Common stock, no par value$210,882 $210,882 $210,882 $210,882 $210,882 Additional paid-in capital 110,913 108,853 105,105 103,235 101,088 Treasury stock (334,591) (334,490) (293,406) (277,351) (271,005) Retained earnings 826,365 802,308 780,637 755,587 728,891 Accumulated other comprehensive income (20,042) (17,354) (13,741) (16,711) (22,196) Total shareholders' equity$793,527 $770,199 $789,477 $775,642 $747,660 Total liabilities and shareholders' equity$7,730,621 $7,654,637 $7,601,165 $7,467,794 $7,278,760
Quarter-to-Date Average Balances, Yield and Rates
(unaudited)
Three months ended June 30, Three months ended March 31, Three months ended June 30, 2026
2026
2025
Average
Balance Interest
Income or
Expense Average
Yield/
Rate Average
Balance Interest
Income or
Expense Average
Yield/
Rate Average
Balance Interest
Income or
Expense Average
Yield/
RateAssets(Dollars in thousands)Interest earning assets: Loans (1,2)$6,038,330 $108,358 7.20% $6,051,465 $103,382 6.93% $5,632,204 $105,884 7.54% Investment securities (3) 558,696 5,611 4.03% 580,248 5,712 3.99% 503,861 5,195 4.14% Federal funds sold 21,538 205 3.82% 20,507 192 3.80% 20,511 233 4.56% Other earning assets 914,217 8,364 3.67% 785,012 7,681 3.97% 827,696 9,230 4.47% Total interest earning assets 7,532,781 122,538 6.52% 7,437,232 116,967 6.38% 6,984,272 120,542 6.92% Deferred loan fees, net (8,139) (8,334) (10,005) Allowance for credit losses on loans (75,675) (78,986) (72,328) Noninterest earning assets: Cash and due from banks 11,141 10,685 12,590 Bank furniture and fixtures 9,694 8,509 8,215 Right of use assets 29,211 30,195 19,917 Other assets 169,706 164,404 178,386 Total assets$7,668,719 $7,563,705 $7,121,047 Liabilities and shareholders' equity Interest bearing liabilities: Deposits: Interest bearing demand and savings$2,211,240 $15,699 2.85% $2,192,798 $15,174 2.81% $2,023,981 $16,242 3.22% TCD $250K or more 1,812,356 17,065 3.78% 1,773,086 16,886 3.86% 1,644,322 17,092 4.17% Other time certificates 1,688,501 16,432 3.90% 1,678,838 16,487 3.98% 1,677,005 17,840 4.27% Total interest bearing deposits 5,712,097 49,196 3.45% 5,644,722 48,547 3.49% 5,345,308 51,174 3.84%Short-term borrowings - - 0.00% 2 0 4.20% - - 0.00%Advance from Federal Home Loan Bank 200,000 1,743 3.50% 200,000 1,690 3.43% 120,879 1,070 3.55%Subordinated debt, net 148,789 1,517 4.09% 148,728 1,325 3.61% 148,550 1,325 3.58% Total interest bearing liabilities 6,060,886 52,456 3.47% 5,993,452 51,562 3.49% 5,614,737 53,569 3.83%Noninterest bearing liabilities: Demand deposits 708,101 666,724 660,178 Lease liability 33,946 34,885 23,657 Other liabilities 76,672 73,713 71,940 Total liabilities 6,879,605 6,768,774 6,370,512 Shareholders’ equity 789,114 794,931 750,535 Total liabilities and shareholders’ equity$7,668,719 $7,563,705 $7,121,047 Net interest income $70,082 $65,405 $66,973 Net interest spread 3.05% 2.89% 3.10%Net interest margin 3.73% 3.57% 3.85% Cost of Deposits: Noninterest bearing demand deposits$708,101 $666,724 $660,178 Interest bearing deposits 5,712,097 49,196 3.45% 5,644,722 48,547 3.49% 5,345,308 51,174 3.84% Total Deposits$6,420,198 $49,196 3.07% $6,311,446 $48,547 3.12% $6,005,486 $51,174 3.42% (1)Includes non-accrual loans and loans held for sale
(2)Net loan fee income of $1.2 million, $1.2 million and $1.1 million for the quarter ended June 30, 2026, March 31, 2026 and June 30, 2025, respectively, are included in the yield computations
(3)Yields on securities have been adjusted to a tax-equivalent basis
Year-to-Date Average Balances, Yield and Rates
(unaudited)
Six Months ended June 30, 2026
2025
Average
Balance Interest
Income or
Expense Average
Yield/
Rate Average
Balance Interest
Income or
Expense Average
Yield/
Rate Assets(Dollars in thousands) Interest earning assets: Loans(1,2)$6,044,861 $211,740 7.06% $5,594,572 $207,375 7.47% Investment securities(3) 569,413 11,324 4.01% 453,588 9,289 4.13% Federal funds sold 21,025 397 3.81% 20,367 461 4.56% Other earning assets 849,971 16,045 3.81% 814,393 18,045 4.47% Total interest earning assets 7,485,270 239,505 6.45% 6,882,920 235,170 6.89% Deferred loan fees, net (8,236) (9,599) Allowance for credit losses on loans (77,321) (71,941) Noninterest earning assets: Cash and due from banks 10,704 11,846 Bank furniture and fixtures 9,105 8,326 Right of use assets 29,700 17,572 Other assets 167,280 174,620 Total assets$7,616,502 $7,013,744 Liabilities and shareholders' equity Interest bearing liabilities: Deposits: Interest bearing demand/ savings$2,202,071 $30,873 2.83% $2,051,576 $32,901 3.23% TCD $250K or more 1,792,830 33,951 3.82% 1,563,771 32,732 4.22% Other time certificates 1,683,696 32,919 3.94% 1,679,708 36,087 4.33% Total interest \bearing deposits 5,678,597 97,743 3.47% 5,295,055 101,720 3.87% Short-term borrowings 1 0 4.17% - - 0.00% Advance from Federal Home Loan Bank 200,000 3,433 3.46% 60,773 1,070 3.55% Subordinated debt, net 148,759 2,842 3.85% 148,521 2,650 3.60% Total interest bearing liabilities 6,027,357 104,018 3.48% 5,504,349 105,440 3.86% Noninterest bearing liabilities: Demand deposits 687,526 651,099 Lease liability 34,413 21,323 Other liabilities 75,200 72,116 Total liabilities 6,824,496 6,248,887 Shareholders’ equity 792,006 764,857 Total liabilities and shareholders’ equity$7,616,502 $7,013,744 Net interest income $135,487 $129,730 Net interest spread 2.97% 3.03% Net interest margin 3.65% 3.80% Cost of Deposits: Noninterest bearing demand deposits$687,526 $651,099 Interest bearing deposits 5,678,597 97,743 3.47% 5,295,055 101,720 3.87% Total Deposits$6,366,123 $97,743 3.10% $5,946,154 $101,720 3.45% (1)Includes non-accrual loans and loans held for sale
(2)Net loan fee income of $2.4 million and $1.9 million for the six months ended June 30, 2026 and 2025, respectively, are included in the yield computations
(3)Yields on securities have been adjusted to a tax-equivalent basis
Loan and Credit Quality Information
Allowance For Credit Losses History
Six Months Ended
June 30, 2026 Year Ended
December 31, 2025
(Dollars in 000's) Allowance for credit losses Balance at beginning of period$78,992 $71,477 Charge-Offs Commercial & Industrial 2,545 8 Mini-perm real estate 3,833 1,749 Total charge-offs 6,378 1,757 Recoveries Commercial & Industrial 109 172 Mini-perm real estate 853 - Total recoveries 962 172 Net charge-offs 5,416 1,585 Provision for credit losses: 2,700 9,100 Balance at end of period$76,276 $78,992 Average loans held for investment$6,029,287 $5,721,077 Loans held for investment at end of period$6,239,281 $6,054,264 Net charge-offs to average loans 0.18% 0.03% Allowances for credit losses to loans at end of period 1.22% 1.30%