Q4 2024 Preferred Bank Earnings Call Transcript
Key Points
- Preferred Bank (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.
- The bank achieved a 50% reduction in non-performing loans, decreasing from $20 million to $10 million, and a 33% reduction in criticized loans.
- Preferred Bank (PFBC) increased its dividend from $0.70 to $0.75, reflecting confidence in its financial stability.
- The bank repurchased 464,000 shares of its common stock for $34 million, indicating a strong capital position and commitment to shareholder value.
- 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.
- 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.
- Loan growth was moderate at 7% and deposit growth at 3.6%, reflecting a slow growth year for the banking industry.
- The Los Angeles wildfire posed a risk to the bank's commercial real estate loan portfolio, although initial assessments showed minimal impact.
- The bank faces competitive pressure in deposit rates, particularly within the local Asian community, affecting its flexibility in pricing.
- 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.
Good day and welcome to the Preferred Bank fourth-quarter 2024 earnings call. All participants will be on listen-only mode. (Operator Instructions) After today's presentation, there will be an opportunity to ask questions. (Operator Instructions) Please note this event is being recorded.
I would now like to turn the conference over to Jeff Haas of Financial Profiles. Please go ahead.
Thank you, Michael. Hello, everyone, and thank you for joining us to discuss Preferred Bank's financial results for the fourth quarter ended December 31, 2024. With me today from management are Chairman and CEO, Li Yu; President and Chief Operating Officer, Wellington Chen; Chief Financial Officer, Edward Czajka; Chief Credit Officer, Nick Pi; 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
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