Preferred Bank (PFBC) investor relations material

Executive summary

• Net income for Q2 2025 was $32.8 million ($2.52 per share), up sequentially but down year-over-year due to higher noninterest expense, including a $1.3 million OREO write-down.

• Total assets reached $7.28 billion, up 5.1% from year-end 2024; loan portfolio grew by $99 million to $5.74 billion.

• Deposits increased 2.7% to $6.08 billion since year-end 2024.

• Loan growth was approximately 7% annualized, with early July indicating increased demand.

• Asset quality improved, with decreases in non-accrual, criticized, and past due loans; non-accrual loans fell from $78.9 million to $51.2 million sequentially.

Financial highlights

• Net interest margin for Q2 2025 was 3.85%, up from 3.75% in the prior quarter but down from 3.96% year-over-year.

• Net interest income before provision for credit losses was $66.9 million, up $4.2 million sequentially and $767,000 year-over-year.

• Noninterest income for Q2 2025 was $3.8 million, up from $3.4 million year-over-year.

• Noninterest expense increased to $22.5 million, mainly due to OREO write-down and higher personnel/occupancy costs.

• $1.4 billion in CDs will roll off in Q3 at a 4.21% rate; new offerings average just under 4%.

Outlook and guidance

• Management expects continued focus on credit quality and borrower health amid economic volatility and potential recession risk.

• Expense ratio expected between 21.8% and 22.6% in coming quarters.

• No further OREO write-downs anticipated in future quarters.

• Loan demand appears to be increasing, but actual growth remains uncertain due to market conditions.

• Positive credit trends and stable loan growth expected to support future performance.