In This Article:
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Net Income (Annual): $131 million or $9.64 per share.
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Net Income (Q4): $30.3 million or $2.25 per share.
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Return on Assets: 19.1%.
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Return on Investment of Equity: 18.8%.
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Loan Growth (Annual): 7%.
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Deposit Growth (Annual): 3.6%.
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Non-Performing Loans: Reduced from $20 million to $10 million, a 50% improvement.
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Dividend Increase: From $0.70 to $0.75, payable in January.
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Share Repurchase: 464,000 shares for $34 million.
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Leverage Capital Ratio: Improved from 10.85% to 11.3%.
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Tangible Book Value: Increased from $50.54 to $57.86.
Release Date: January 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Preferred Bank (NASDAQ:PFBC) reported a net income of $131 million for the year, with a return on assets of 19.1% and return on equity of 18.8%, outperforming industry averages.
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The bank achieved a 50% reduction in non-performing loans, decreasing from $20 million to $10 million, and a 33% reduction in criticized loans.
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Preferred Bank (NASDAQ:PFBC) increased its dividend from $0.70 to $0.75, reflecting confidence in its financial stability.
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The bank repurchased 464,000 shares of its common stock for $34 million, indicating a strong capital position and commitment to shareholder value.
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The leverage capital ratio improved from 10.85% to 11.3%, and the tangible book value per share increased from $50.54 to $57.86, showcasing financial strength and growth.
Negative Points
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The bank's net income for the fourth quarter was negatively impacted by a $8.1 million correction to rental expenses, equating to a $0.42 after-tax adjustment.
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Loan growth was moderate at 7% and deposit growth at 3.6%, reflecting a slow growth year for the banking industry.
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The Los Angeles wildfire posed a risk to the bank's commercial real estate loan portfolio, although initial assessments showed minimal impact.
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The bank faces competitive pressure in deposit rates, particularly within the local Asian community, affecting its flexibility in pricing.
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Non-interest expenses are expected to rise in the first quarter due to increased payroll taxes, legal fees, and charitable contributions related to wildfire relief efforts.
Q & A Highlights
Q: Can you provide insights on the margin outlook for the first quarter, considering the mix of floating rate loans? A: Li Yu, Chairman and CEO, stated that the margin is expected to remain relatively stable in the first quarter, with no major effects anticipated. Edward Czajka, CFO, added that the spot margin for December was 3.98%, with a quarterly NIM of 4.06%, and they do not foresee significant further compression.