Preferred Bank (PFBC) Q3 2025 earnings summary

Executive summary

• Achieved record Q3 2025 net income of $35.9 million ($2.84 per share), with sequential and year-over-year growth driven by higher net interest income and lower interest expense.

• Credit quality improved as nonperforming loans dropped from $52 million to $17 million, mainly due to foreclosure and sale of a large OREO asset.

• Loan growth of 2.3% ($133 million) and deposit growth of 2.5% ($151 million) in Q3, reflecting cautious optimism among customers.

• Repurchased $6.3 million of shares in Q3 and an additional $11.2 million in October due to price softness.

• Commercial bank with $7.5 billion in assets, focused on small/medium businesses and high net worth individuals, especially in ethnic Chinese and East Asian markets, operating 16 branches across California, New York, and Texas.

Financial highlights

• Q3 2025 EPS: $2.84; Net income: $35.9 million; ROA: 1.93%; ROE: 18.64%; NIM: 3.92%.

• Loan growth: 2.3% ($133 million); Deposit growth: 2.5% ($151 million); total loans at $5.87 billion, deposits at $6.23 billion as of Q3 2025.

• Efficiency ratio improved to 28.7% in Q3 2025, ranking among the top nationally.

• Tangible book value per share reached $60.19 as of June 30, 2025, with a 13.02% CAGR over nine years.

• Annual dividend of $3.00 per share, current yield 3.23%.

Outlook and guidance

• Expecting reasonable loan growth in Q4 2025, potentially matching Q3 levels, with optimism for further growth if rate cuts continue.

• Margin expected to remain stable in Q4, benefiting from CDs rolling off at higher rates and being replaced at lower rates.

• OREO gain in Q4 estimated at $3–4 million.

• Balance sheet has shifted to a more matched asset-liability profile to navigate a declining or sideways rate environment.

• Noninterest expense expected to run $22–22.5 million per quarter, with gradual increases into 2026.