Preferred Bank reports Q4 EPS $2.60, consensus $2.54

Li Yu, Chairman and CEO, commented, “Our fourth quarter net income was $35.8 or $2.60 per share and closed out the full year 2023 with record earnings of $150.04M or $10.52 per diluted share. We attribute the record performance to active margin management and continuous effective cost control. “Credit quality remains generally stable in the fourth quarter. Total criticized loans reduced from $98.6 million at September 30, 2023 to $83.0 M . However, non-performing loans have increased from $19.4 million on September 30 to $28.7 million on December 31. The quarterly increase does not appear systemic. There were no loan charge-offs recorded during the fourth quarter. Provision expense for the quarter was $3.5 million, which has increased the allowance for credit losses to 1.49% of total loans at December 31, 2023. “Loan and deposit growth for the year was below the historical standards of Preferred Bank but in-line with industry performance. The year 2023 was a year marked by high inflation, the last of the unprecedented Federal Reserve rate hikes and the regional Bank meltdown events of March. Looking forward, we expect that loan demand will gradually recover and that deposit costs will ease. “Looking ahead, the year 2024 will likely be a less eventful year in banking than 2023. It seems to us that the banking industry will begin to have a “back to normal” process. We are hopeful to return to our historical growth pattern.”