Q1 2026 Preferred Bank Earnings Call Transcript
Key Points
- Preferred Bank (PFBC) reported a net income of $31.3 million or $2.53 per share for the first quarter.
- The bank successfully sold loans at par, reducing a non-performing loan relationship by approximately 50%.
- Operating overhead or non-interest expense has been stable, with expectations to maintain this stability.
- The bank repurchased approximately 400,000 shares of its own common stock, indicating confidence in its valuation.
- Preferred Bank (PFBC) is hopeful for a rebound in net interest margin in the ensuing quarters as interest income reversals are nonrecurring.
- Net income was negatively impacted by the placement of a large relationship on non-performing status.
- The net interest margin decreased to 3.457% from 3.74% in the previous quarter due to interest income reversals.
- Market competition, especially in pricing, has been severe, affecting loan and deposit growth.
- Deposit costs are not decreasing as rapidly as in previous quarters, indicating potential pressure on margins.
- The bank faces challenges in resolving non-performing loans, with some loans still undergoing foreclosure and bankruptcy processes.
Good day, and welcome to the Preferred Bank first quarter 2026 earnings conference call. (Operator Instructions) Please note this event is being recorded.
I would now like to turn the conference over to [Mr. Evan New]. Please go ahead.
Hello, everyone, and thank you for joining us to discuss Preferred Bank's financial results for the first quarter ended March 31, 2026. With me today from management are Chairman and CEO, Li Yu; President and Chief Operating Officer, Wellington Chen; Chief Financial Officer, Edward Czajka; and Deputy Chief Operating Officer, Johnny Hsu.
Management will provide a brief summary of the results, and then we will open up the call to your questions. During the course of this conference call, statements made by management may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on specific assumptions that may or may not prove correct.
Forward-looking statements are also subject to
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