Preferred Bank (PFBC) investor relations material

Executive summary

• Q4 2025 net income was $34.8 million ($2.79 per share), with full-year net income reported as $434 million ($10.41 per share) in one source and $133.6 million ($10.41 per share) in another, reflecting strong profitability metrics.

• Loan demand strengthened, with Q4 loan growth of $182.3 million (over 12% or 3.1% linked quarter) and deposit growth of $115.8 million (7.4% or 1.9% linked quarter).

• Net interest margin declined in Q4 due to federal rate cuts and high deposit costs.

• Asset quality saw an increase in criticized assets, mainly from a $123 million relationship downgrade, but OREO sales reduced nonperforming assets.

• Sold two OREO properties, resulting in a net gain of $1.8 million to $3.6 million.

Financial highlights

• Q4 net income: $34.8 million; EPS: $2.79 (including $0.20 per share after-tax OREO gain).

• Net interest income for Q4 was $70.0 million; net interest margin contracted to 3.66%–3.74%.

• Noninterest income rose to $8.1 million, driven by OREO sales and higher letter of credit fees.

• Noninterest expense increased to $24.4 million, mainly due to OREO-related write-downs and expenses.

• Efficiency ratio for Q4 was 31.2%, up from last quarter but improved year-over-year.

Outlook and guidance

• Management expects relative growth and stability in 2026, with customers and economists indicating improved outlook.

• Loan and deposit growth expected to continue at a similar or higher pace as 2025.

• Non-interest expense forecasted at $21.5–$22.5 million for Q1 2026, with mid to high single-digit growth for the full year.

• Fee income for 2026 expected to be in line with Q4 2025, excluding one-time OREO gains.