Preferred Bank Reports First Quarter Results

LOS ANGELES, April 22, 2026 (GLOBE NEWSWIRE) -- Preferred Bank (NASDAQ: PFBC), one of the larger independent California banks, today reported results for the quarter ended March 31, 2026. Preferred Bank (“the Bank”) reported net income of $31.1 million or $2.53 per diluted share for the first quarter of 2026. This represents a decrease in net income of $3.7 million from the prior quarter and an increase of $1.1 million over the same quarter last year. The increase compared to last year was primarily due to an increase in net interest income of $2.7 million. The decrease in net income from the prior quarter was due to a decrease in net interest income of $4.7 million coupled with a decrease in noninterest income of $3.8 million. The primary reason for the decrease in net interest income was due to the reversal of interest on loans which were placed on nonaccrual status during the quarter. This was previously detailed in a press release on February 23, 2026. The decrease in noninterest income was due to a $3.6 million gain on sale of OREO recorded in the fourth quarter of 2025 which did not recur.

Highlights for the Quarter:

• Return on average assets was 1.67%
• Return on average equity was 16.00%
• Total loans increased by $68.6 million or 1.1%, linked quarter
• Total deposits increased by $74.7 million, or 1.2%, linked quarter
• The efficiency ratio for the quarter was 33.8%
  
  

Li Yu, Chairman and CEO, commented, “Net income for the first quarter ending March 31, 2026, was $31.1 million or $2.53 per diluted share compared to $34.8 million or $2.79 per diluted share recorded in the previous quarter. This quarter’s net income was negatively affected by the Fed’s rate cuts and reversal of interest income related to a large relationship which was placed on nonaccrual status.

“During the first quarter, we disclosed that we placed $117.6 million in loans related to one relationship on nonaccrual status. We have made good progress towards resolving these loans as well as other nonaccrual loans. We sold a $9.4 million loan at par during the quarter and also charged off the $2.0 million in C&I loans related to this relationship. In addition, on April 1, we sold two loans totaling $48.5 million also at par so this sale will not be reflected as of March 31, 2026. We are continuing to work with note buyers to resolve more of these loans.

“Total non-performing assets at March 31, 2026, to $172.1million, an increase of $117.3 million over the $54.8 million as of December 31, 2025. However, the $48.5 million loan sold in April 2026, it was included in the total above but is now gone as of today.

“Loans for the quarter have increased $68.6 million or 4.5% annualized. Deposits increased $74.7 million or 4.7% annualized. Competition remains intense for both loans and deposits as pricing remains tight. The Bank’s net interest margin decreased to 3.57% for the quarter as compared to 3.74% for the previous quarter, the decrease entirely due to the reversal of interest income related to new non-accrual loans.

“During the first quarter, we repurchased 402,299 shares of our common stock for total consideration of $35.8 million as part of our ongoing $125 million stock repurchase plan which was approved by shareholders in May of 2025.”

Results of Operations

Net Interest Income and Net Interest Margin. Net interest income before provision for credit losses was $65.3 million for the first quarter of 2026. This represents a $4.7 million decrease from the $70.0 million recorded in the prior quarter and a $2.7 million increase over the same quarter last year. The decrease compared to the prior quarter was due mainly to a $3.4 million net interest reversal due to loans placed on nonaccrual status during the quarter. 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”) contracted in the quarter to 3.57% due to the interest reversals from 3.74% last quarter and down from the 3.75% net interest margin recorded in the first quarter of 2025. Without the interest reversals this quarter, the NIM would have been 3.75%.

Noninterest Income. For the first quarter of 2026, noninterest income was $4.3 million compared with $4.0 million for the same quarter last year and compared to $8.1 million for the fourth quarter of 2025. The increase over the same quarter last year was mainly due to increases in letter of credit (“LC”) fee income and other income partially offset by a decrease in gain on sales of loans and service charges on deposits. In comparison to the prior quarter, noninterest income was down primarily due to a $3.6 million gain on sale of OREO recorded in the fourth quarter of 2025.

Noninterest Expense. Total noninterest expense was $23.5 million for the first quarter of 2026 compared to $24.4 million for the fourth quarter of 2025 and compared to $23.4 million recorded in the same period last year. The primary reason for the decrease from the prior quarter was mainly due to a $3.1 million decrease in OREO expense partially offset by an increase in personnel expense of $2.4 million. The small increase over the same quarter last year was due to an increase in personnel expense of $621,000 and an increase in other expense of $876,000 partially offset by a decrease in OREO expense of $1.2 million. The Bank’s efficiency ratio came in at 33.8% for the quarter, which compares to 31.2% last quarter and to 35.1% in the same quarter last year.

Income Taxes. The Bank recorded a provision for income taxes of $13.4 million for the first quarter of 2026. This represents an effective tax rate (“ETR”) of 30.1% which is up from the 29.5% ETR for the same quarter last year and the same as the 29.5% ETR recorded in the fourth quarter of 2025. 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 March 31, 2026 were $6.12 billion, an increase of $68.6 million from the total of $6.05 billion as of December 31, 2025. Total deposits were $6.42 billion, an increase of $74.7 million from the $6.35 billion as of December 31, 2025. Total assets were $7.65 billion, an increase of $53.5 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 $169.1 million, an increase of $117.8 million over the $51.3 million reported as of December 31, 2025. The increase was from the previously mentioned large relationship that was placed on nonaccrual status during the first quarter. As previously mentioned, the Bank sold two of the nonaccrual notes totaling $48.5 million on April 1, 2026, at par so total nonperforming loans are $120.6 million as of this writing. Total net charge-offs (recoveries) on loans for the quarter were $5.5 million compared to $0 in the prior quarter and compared to net recoveries of ($97,000) in the first quarter of 2025. Total classified assets decreased to $171.7 million as of March 31, 2026 compared to $225.3 million as of December 31, 2025. The table below lists the Bank’s nonperforming loans and their associated property appraised values:

C&ISFRCRETotalBalanceAppraised ValueBalanceAppraised ValueBalanceAppraised ValueBalanceAppraised Value$4,519,590 $461,638$780,000$649,036$1,550,000   46,156  144,542 1,275,000 4,037,500 4,250,000   63,744  924,624 1,308,000 3,690,251 6,260,000   3,526  658,067 967,246 6,265,056 7,100,000       19,500,000 48,300,000       19,950,000 41,300,000       48,458,994 65,650,000       29,882,035 67,230,000       7,914,950 12,890,000       21,881,109 27,000,000  $4,633,016 $2,188,871$4,330,246$162,228,931$281,530,000$169,050,818$285,860,246        Note:        1) Weighted LTV: 57.5% (Total Nonperforming Loans / Total Appraisal Value)
2) $48.5 million CRE sold at par on 4/1/26
        

Allowance for Credit Losses

The provision for credit losses for the first quarter of 2026 was $1.5 million compared to $4.3 million in the prior quarter and compared to $700,000 in the same quarter last year. The Bank’s allowance coverage ratio was 1.24% of total loans held for investment compared to 1.30% last quarter and compared to 1.28% in the first quarter of 2025.

Capitalization

As of March 31, 2026, the Bank’s tangible common equity ratio was 10.05%, the leverage ratio was 10.37%, the common equity tier 1 capital ratio was 10.87% and the total capital ratio stood at 13.98%. 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 first quarter 2026 financial results will be held this afternoon, April 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, 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 February 5, 2026; the passcode is 4064016.

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. CzajkaEvan NiuExecutive Vice President General InformationChief Financial Officer(310) 622-8243(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 March 31, December 31, March 31, 2026
 2025
 2025
Interest income:     Loans, including fees$103,382 $109,747 $101,491Investment securities 13,301  14,677  12,810Fed funds sold 192  209  228Total interest income 116,875  124,633  114,529      Interest expense:     Interest-bearing demand 15,120  16,952  16,590Savings 54  55  69Time certificates 33,373  34,543  33,887FHLB borrowings 1,690  1,783  -Subordinated debt 1,325  1,325  1,325Total interest expense 51,562  54,658  51,871Net interest income 65,313  69,975  62,658Provision for credit losses 1,500  4,300  700Net interest income after provision for credit losses 63,813  65,675  61,958      Noninterest income:     Fees & service charges on deposit accounts 516  545  716Letters of credit fee income 2,737  2,408  2,244BOLI income 105  105  103Net gain on sale of other real estate owned -  3,609  -Net gain on called and sale of investment securities 59  132  -Net gain on sale of loans 24  93  275Other income 869  1,202  660Total noninterest income 4,310  8,094  3,998      Noninterest expense:     Salary and employee benefits 15,460  13,101  14,839Net occupancy expense 2,426  2,430  2,294Business development and promotion expense 203  163  462Professional services 1,647  2,091  1,651Office supplies and equipment expense 358  375  386OREO valuation allowance and related expense 363  3,465  1,531Other 3,082  2,752  2,206Total noninterest expense 23,539  24,377  23,369Income before provision for income taxes 44,584  49,392  42,587Income tax expense 13,440  14,570  12,563Net income$31,144 $34,822 $30,024      Income per share available to common shareholders     Basic$2.57 $2.85 $2.27Diluted$2.53 $2.79 $2.23      Weighted-average common shares outstanding     Basic 12,105,359  12,210,077  13,226,582Diluted 12,292,237  12,479,124  13,453,176      Cash dividends per common share$0.80 $0.80 $0.75

PREFERRED BANKCondensed Consolidated Statements of Financial Condition(unaudited)(in thousands)         March 31, December 31,  2026   2025  (Unaudited) (Audited)Assets   Cash and due from banks$805,161  $807,098 Fed funds sold 20,000   20,000 Cash and cash equivalents 825,161   827,098     Securities held-to-maturity, at amortized cost 18,458   18,749 Securities available-for-sale, at fair value 553,184   566,186     Loans held for sale, at lower of cost or fair value 76,324   -     Loans 6,046,544   6,054,264 Less allowance for credit losses (75,036)  (78,992)Less amortized deferred loan fees, net (7,923)  (9,030)Loans, net 5,963,585   5,966,242     Other real estate owned and repossessed assets 3,010   3,510 Bank furniture and fixtures, net 8,972   8,064 Bank-owned life insurance 10,782   10,712 Accrued interest receivable 34,811   34,233 Investment in affordable housing partnerships 66,394   69,978 Federal Home Loan Bank stock, at cost 15,000   15,000 Deferred tax assets 43,492   41,976 Income tax receivable -   3,884 Operating lease right-of-use assets 29,593   30,531 Other assets 5,871   5,002 Total assets$7,654,637  $7,601,165     Liabilities and Shareholders' Equity   Deposits:   Noninterest bearing demand deposits$716,777  $699,160 Interest bearing deposits: 2,200,374   2,205,914 Savings 26,822   30,376 Time certificates of $250,000 or more 1,795,883   1,754,273 Other time certificates 1,680,291   1,655,723 Total deposits 6,420,147   6,345,446     Advances from Federal Home Loan Bank 200,000   200,000 Subordinated debt issuance, net 148,766   148,706 Commitments to fund investment in affordable housing partnerships 18,873   23,327 Operating lease liabilities 34,383   35,107 Accrued interest payable 16,754   16,513 Other liabilities 45,515   42,589 Total liabilities 6,884,438   6,811,688     Shareholders' equity 770,199   789,477 Total liabilities and shareholders' equity$7,654,637  $7,601,165     Book value per common share$65.04  $64.83 Number of common shares outstanding 11,841,866   12,177,588 

PREFERRED BANKSelected Consolidated Financial Information(unaudited)(in thousands, except for ratios)                               For the Quarter Ended           March 31, December 31, September 30, June 30, March 31,  2026   2025   2025   2025   2025 Unaudited historical quarterly operations data:         Interest income$116,875  $124,633  $126,850  $120,443  $114,529 Interest expense 51,562   54,658   55,540   53,569   51,871 Interest income before provision for credit losses 65,313   69,975   71,310   66,874   62,658 Provision for credit losses 1,500   4,300   2,500   1,600   700 Noninterest income 4,310   8,094   3,665   3,762   3,998 Noninterest expense 23,539   24,377   21,498   22,445   23,369 Income tax expense 13,440   14,570   15,038   13,744   12,563 Net income$31,144  $34,822  $35,939  $32,847  $30,024           Earnings per share         Basic$2.57  $2.85  $2.90  $2.61  $2.27 Diluted$2.53  $2.79  $2.84  $2.57  $2.23           Ratios for the period:         Return on average assets 1.67%  1.82%  1.93%  1.85%  1.76%Return on average equity 15.89%  17.59%  18.64%  17.55%  15.62%Net interest margin (Fully-taxable equivalent) 3.57%  3.74%  3.92%  3.85%  3.75%Noninterest expense to average assets 1.26%  1.27%  1.16%  1.26%  1.37%Efficiency ratio 33.81%  31.22%  28.67%  31.78%  35.06%Net charge-offs (recoveries) to average loans (annualized) 0.37%  0.00%  0.11%  0.00%  -0.01%          Ratios as of period end:         Tangible common equity ratio 10.05%  10.38%  10.38%  10.26%  10.96%Tier 1 leverage capital ratio 10.37%  10.54%  10.66%  10.73%  11.52%Common equity tier 1 risk-based capital ratio 10.87%  11.26%  11.34%  11.18%  11.86%Tier 1 risk-based capital ratio 10.87%  11.26%  11.34%  11.18%  11.86%Total risk-based capital ratio 13.98%  14.47%  14.56%  14.43%  15.15%Allowances for credit losses to loans at end of period 1.24%  1.30%  1.27%  1.29%  1.28%Allowance for credit losses to non-performing loans 0.8x   1.54x   4.24x   1.41x   0.91x           Average balances:         Total securities$580,248  $586,950  $583,302  $503,861  $402,754 Total loans 6,037,241   5,947,814   5,753,801   5,623,010   5,555,010 Total earning assets 7,437,232   7,439,767   7,234,568   6,984,272   6,780,438 Total assets 7,563,705   7,585,940   7,382,265   7,121,047   6,905,249 Total time certificate of deposits 3,451,924   3,402,304   3,330,241   3,321,327   3,164,766 Total interest bearing deposits 5,644,722   5,651,369   5,501,767   5,345,308   5,244,243 Total deposits 6,311,446   6,336,242   6,169,728   6,005,486   5,886,163 Total interest bearing liabilities 5,993,452   6,000,042   5,850,376   5,614,737   5,392,735 Total equity 794,931   785,581   764,766   750,535   779,339 

PREFERRED BANKSelected Consolidated Financial Information(unaudited)(in thousands, except for ratios)                               As of           March 31, December 31, September 30,June 30, March 31,  2026   2025   2025   2025   2025 Unaudited quarterly statement of financial position data:         Assets:         Cash and cash equivalents$825,161  $827,098  $815,459  $796,257  $925,183 Securities held-to-maturity, at amortized cost 18,458   18,749   19,034   19,456   19,745 Securities available-for-sale, at fair value 553,184   566,186   569,115   577,040   390,096 Loans:         Real estate – Mortgage:         Real estate—Residential$738,508  $783,136  $793,217  $767,620  $779,462 Real estate—Commercial 3,105,331   3,028,762   2,890,990   2,868,308   2,897,956 Total Real Estate – Mortgage 3,843,839   3,811,898   3,684,207   3,635,928   3,677,418 Real estate – Construction:         R/E Construction — Residential 265,748   282,808   285,623   291,343   306,283 R/E Construction — Commercial 343,598   387,759   323,897   303,354   269,065 Total real estate construction loans 609,346   670,567   609,520   594,697   575,348 Commercial and industrial 1,584,984   1,563,504   1,570,423   1,501,188   1,374,379 SBA 8,087   8,053   7,630   7,741   7,104 Consumer and others 288   242   231   56   164 Gross loans 6,046,544   6,054,264   5,872,011   5,739,610   5,634,413 Allowance for credit losses on loans (75,036)  (78,992)  (74,692)  (73,830)  (72,274)Net deferred loan fees (7,923)  (9,030)  (9,956)  (11,940)  (9,652)Net loans, excluding loans held for sale$5,963,585  $5,966,242  $5,787,363  $5,653,840  $5,552,487 Loans held for sale$76,324  $-  $-  $-  $- Net loans$6,039,909  $5,966,242  $5,787,363  $5,653,840  $5,552,487           Other real estate owned and repossessed assets$3,010  $3,510  $52,609  $13,755  $13,650 Investment in affordable housing partnerships 66,394   69,978   73,874   74,783   63,612 Federal Home Loan Bank stock, at cost 15,000   15,000   15,000   15,000   15,000 Other assets 133,521   134,402   135,340   128,629   120,319 Total assets$7,654,637  $7,601,165  $7,467,794  $7,278,760  $7,100,092           Liabilities:         Deposits:         Demand$716,777  $699,160  $654,302  $675,102  $730,270 Interest bearing demand 2,200,374   2,205,914   2,205,865   2,004,135   2,099,987 Savings 26,822   30,376   31,087   34,333   32,631 Time certificates of $250,000 or more 1,795,883   1,754,273   1,699,757   1,681,026   1,531,715 Other time certificates 1,680,291   1,655,723   1,638,662   1,683,737   1,678,132 Total deposits$6,420,147  $6,345,446  $6,229,673  $6,078,333  $6,072,735           Advance from Federal Home Loan Bank 200,000   200,000   200,000   200,000   - Subordinated debt issuance, net 148,766   148,706   148,647   148,588   148,529 Commitments to fund investment in affordable housing partnerships 18,873   23,327   24,874   30,645   20,956 Other liabilities 96,652   94,209   88,958   73,534   79,268 Total liabilities$6,884,438  $6,811,688  $6,692,152  $6,531,100  $6,321,488           Equity:         Common stock, no par value$210,882  $210,882  $210,882  $210,882  $210,882 Additional paid-in capital 108,853   105,105   103,235   101,088   99,603 Treasury stock (334,490)  (293,406)  (277,351)  (271,005)  (214,406)Retained earnings 802,308   780,637   755,587   728,891   705,360 Accumulated other comprehensive income (17,354)  (13,741)  (16,711)  (22,196)  (22,835)Total shareholders' equity$770,199  $789,477  $775,642  $747,660  $778,604 Total liabilities and shareholders' equity$7,654,637  $7,601,165  $7,467,794  $7,278,760  $7,100,092 

PREFERRED BANK
QUARTER-TO-DATE AVERAGE BALANCES, YIELD AND RATES
(Unaudited)
                       Three months ended March 31, Three months ended December 31, Three months ended March 31,  2026   2025   2025   InterestAverage  InterestAverage  InterestAverage AverageIncome orYield/ AverageIncome orYield/ AverageIncome orYield/ BalanceExpenseRate BalanceExpenseRate BalanceExpenseRateASSETS(Dollars in thousands)Interest earning assets:           Loans(1,2)$6,051,465 $103,3826.93% $5,947,986 $109,7477.32% $5,556,521 $101,4917.41%Investment securities(3) 580,248  5,7123.99%  586,950  5,8833.98%  402,754  4,0934.12%Federal funds sold 20,507  1923.80%  20,337  2094.08%  20,222  2284.57%Other earning assets 785,012  7,6813.97%  884,494  8,8863.99%  800,941  8,8164.46%Total interest earning assets 7,437,232  116,9676.38%  7,439,767  124,7256.65%  6,780,438  114,6286.86%Deferred loan fees, net (8,334)    (9,739)    (9,189)  Allowance for credit losses on loans (78,986)    (74,738)    (71,550)  Noninterest earning assets:           Cash and due from banks 10,685     11,055     11,513   Bank furniture and fixtures 8,509     7,887     8,439   Right of use assets 30,195     28,344     15,201   Other assets 164,404     183,364     170,397   Total assets$7,563,705    $7,585,940    $6,905,249               LIABILITIES AND SHAREHOLDERS' EQUITY           Interest bearing liabilities:           Deposits:           Interest bearing demand and savings$2,192,798 $15,1742.81% $2,249,065 $17,0073.00% $2,079,477 $16,6593.25%TCD $250K or more 1,773,086  16,8863.86%  1,725,674  17,2203.96%  1,482,324  15,6404.28%Other time certificates 1,678,838  16,4873.98%  1,676,630  17,3234.10%  1,682,442  18,2474.40%Total interest bearing deposits 5,644,722  48,5473.49%  5,651,369  51,5513.62%  5,244,243  50,5463.91%Advance from Federal Home Loan Bank 200,000  1,6903.43%  200,000  1,7833.54%  -  -0.00%Subordinated debt, net 148,728  1,3253.61%  148,673  1,3253.54%  148,492  1,3253.62%Total interest bearing liabilities 5,993,452  51,5623.49%  6,000,042  54,6583.61%  5,392,735  51,8713.90%Noninterest bearing liabilities:           Demand deposits 666,724     684,873     641,920   Lease liability 34,885     32,626     18,963   Other liabilities 73,713     82,818     72,292   Total liabilities 6,768,774     6,800,359     6,125,910   Shareholders’ equity 794,931     785,581     779,339   Total liabilities and shareholders’ equity$7,563,705    $7,585,940    $6,905,249   Net interest income $65,405   $70,067   $62,757 Net interest spread  2.89%   3.04%   2.96%Net interest margin  3.57%   3.74%   3.75%            Cost of Deposits:           Noninterest bearing demand deposits$666,724    $684,873    $641,920   Interest bearing deposits 5,644,722  48,5473.49%  5,651,369  51,5513.62%  5,244,243  50,5463.91%Total Deposits$6,311,446 $48,5473.12% $6,336,242 $51,5513.23% $5,886,163 $50,5463.48%            1) Includes non-accrual loans and loans held for sale
2) Net loan fee income of $1.2 million, $1.4 million and $865,000 or the quarter ended March 31, 2026, December 31, 2025 and March 31, 2025, respectively, are included in the yield computations3) Yields on securities have been adjusted to a tax-equivalent basis

Preferred BankLoan and Credit Quality Information    Allowance For Credit Losses History Quarter Ended Year Ended March 31, 2026 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 73   172 Mini-perm Real Estate 849   - Total Recoveries 922   172     Net Charge-Offs 5,456   1,585 Provision for Credit Losses: 1,500   9,100 Balance at End of Period$75,036  $78,992     Average Loans Held for Investment$6,037,241  $5,721,077 Loans Held for Investment at End of Period$6,046,544  $6,054,264 Net Charge-Offs to Average Loans 0.37%  0.03%Allowances for Credit Losses to Loans at End of Period 1.24%  1.30%