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INVESTOR RELATIONS PRESS RELEASE Preferred Bank Reports Quarterly Earnings Company Release - 4/20/2021 LOS ANGELES , April 20 , 2021 ( GLOBE NEWSWIRE ) -- Preferred Bank ( NASDAQ : PFBC ) , one of the larger independent California banks , today repor ended March 31 , 2021. Preferred Bank ( " the Bank " ) reported net income of $ 21.2 million or $ 1.42 per diluted share for the first quarter of 2021. This is up million or $ 1.40 per diluted share for the fourth quarter of 2020 and easily tops recorded net income of $ 16.2 million or $ 1.08 per diluted share for the first primary reasons for the increase compared to the prior year is a $ 3.9 million decrease in the provision for credit losses this quarter , an increase in net inte million , partially offset by a decrease in noninterest income of $ 325,000 as well as an increase in non - interest expense of $ 468,000 . When compared to th provision for credit losses decreased by $ 2.8 million but that was partially offset by a decrease in net interest income as well as an increase in noninteres First Quarter 2021 Highlights : Net income of $ 21.2 million , or $ 1.42 per diluted share ⚫ Linked quarter loan growth ( non - PPP ) of 2.6 % . Linked quarter deposit growth of 6.3 % • NIM held fairly steady at 3.61 % • Return on average assets ( " ROA " ) of 1.65 % • Return on beginning equity ( " ROE " ) of 16.36 % Li Yu , Chairman and CEO , commented , " We are pleased to report another record quarter of earnings for our Bank . For the first quarter of 2021 , our net ir $ 1.42 per share . " The quarter features significant growth in total assets of 5.9 % , resulting from deposit growth of $ 280 million or 6.30 % from year - end totals . This outsized increased the Bank's excess cash on hand but moderately compressed capital ratios , ROA , net interest income and net interest margin . It does , however more opportunities to grow . " First quarter loan growth was $ 104 million excluding PPP or 2.6 % from year end . We can't help but take note of how our customers have become more nation's economy and thus are increasing their business or expansion activities . Likewise , we are also planning for increased efforts to serve our custom opened a loan production office in Houston , Texas and will continue to look for opportunities in new markets . In California , we have also added several re " You may recall that beginning in the fourth quarter of 2020 , we started discussing potential inflation and its potential impact on the yield curve . We are co that interest rates overall will be trending upward . Therefore , we have been preparing and will continue to work to generate more asset sensitivity in our b " At March 31 , 2021 , credit metrics are stable . Total loans on payment deferral from COVID is down to $ 25.8 million . Operation expenses were elevated th specific reasons . We are now preparing ourselves for post - pandemic normalized operations to begin in the summer . " Results of Operations Net Interest Income and Net Interest Margin . Net interest income before provision for credit losses was $ 45.3 million for the first quarter of 2021. This v $ 46.1 million recorded in the fourth quarter of 2020 but was well ahead of the $ 41.8 million recorded in the first quarter of 2020. The decrease from last q two items that increased fourth quarter 2020 loan interest . One was a non - recurring fee collected in the Main Street Lending Program and the second wa on a purchased credit deteriorated loan . These two items added $ 972,000 to fourth quarter loan interest . The increase over first quarter of 2020 was due in interest expense ( $ 7.1 million ) partially offset by a decrease in interest income of $ 3.5 million . The Bank's taxable equivalent net interest margin was 3 . 2021 , down slightly from the 3.66 % achieved in the fourth quarter of 2020 and a 9 basis point decrease from the 3.70 % posted in the first quarter of 2020 Noninterest Income . For the first quarter of 2021 , noninterest income was $ 1,347,000 compared with $ 1,672,000 for the same quarter last year and com the fourth quarter of 2020. The decrease compared to last year was due to loss on sales of loans of $ 379,000 this quarter . Although total noninterest inco compared to last quarter , there were variances ; letter of credit ( " LC " ) fee income was down by $ 197,000 this quarter and last quarter the Bank recorded a investment securities . Noninterest Expense . Total noninterest expense was $ 15.7 million for the first quarter of 2021. This is up compared to the $ 15.2 million recorded in the and is also up from the $ 14.2 million posted in the fourth quarter of 2020. Salaries and benefits expense totaled $ 11.1 million for the first quarter of 2021 , from the first quarter of 2020 and an increase of $ 1.7 million from the fourth quarter of 2020. The increase over the prior quarter was due mainly to higher expense and the increase over the prior year was due to increased payroll tax expense , increased vacation accrual and lowered capitalized loan originati quarter of 2020. Occupancy expense totaled $ 1.4 million for the quarter which was relatively flat compared to both comparable periods . Business develop expense was $ 73,000 for the quarter , a decrease from both comparable periods . The decrease from the fourth quarter of 2020 was due to the fact that ou typically are paid out in the fourth quarter each year . The decrease from the first quarter of last year was due primarily to fewer opportunities to engage in events such as lunches and entertainment . Professional services expense was $ 981,000 for the first quarter of 2021 , a slight decrease from the $ 1.0 milli period last year and a $ 103,000 decrease from the previous quarter . The decrease from the fourth quarter of 2020 was due to lower legal fees . Other exp for the first quarter of 2021 , an increase of $ 405,000 over the same period last year and essentially flat compared to the fourth quarter of 2020. The incre was due to FDIC insurance premiums which were significantly lower in the first quarter of 2020. For the quarter ended March 31 , 2021 , the Bank's efficiel small increase from the two comparable periods . Income Taxes . The Bank recorded a provision for income taxes of $ 8.4 million for the first quarter of 2021. This represents an effective tax rate ( " ETR " ) c increase from the ETR of 28.1 % for the prior quarter but a decrease from the ETR of 29.7 % in the same period last year . The Bank's ETR will fluctuate sl quarter within a fairly small range due to the timing of taxable events throughout the year . Balance Sheet Summary