Preferred Bank Reports Q1 2025 Financial Results

Preferred Bank ( (PFBC) ) has released its Q1 earnings. Here is a breakdown of the information Preferred Bank presented to its investors.

Preferred Bank is a prominent independent commercial bank based in California, offering a wide range of financial services including real estate finance, commercial loans, and trade finance to a diverse clientele. In the first quarter of 2025, Preferred Bank reported a net income of $30.0 million or $2.23 per diluted share, reflecting a slight decrease from the previous quarter and a more significant drop compared to the same period last year. This decline was primarily attributed to a reduction in net interest income, influenced by nonaccrual loans and lower overall interest rates.

The bank’s net interest income for the quarter was $62.7 million, marking a decrease from both the previous quarter and the same quarter last year. Noninterest income, however, saw an increase, reaching $4.0 million, driven by higher fees from letters of credit and gains on SBA loan sales. Noninterest expenses were reduced compared to the previous quarter due to adjustments in occupancy expenses, although they increased year-over-year due to higher personnel and OREO expenses.

Preferred Bank’s total deposits grew by $155.9 million, while total loans experienced a slight decrease. The bank maintained a strong efficiency ratio of 35.1% and a return on average assets of 1.76%. Despite challenges from nonaccrual loans, the bank’s management remains confident in the security of these loans and anticipates no losses. The bank continues to monitor the impact of import tariff uncertainties on loan demand.

Looking ahead, Preferred Bank’s management remains vigilant in navigating economic uncertainties, particularly those related to international trade tariffs. The bank is committed to maintaining its strong financial position and adapting its strategies to ensure continued growth and stability.