Slides
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Q3 2025 Investor Deck
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Dark Green 0 92 67 Lighter Green 42 136 42 Light Green 143 196 15 Green/Grey 151 175 177 Grey 175 175 175 Dark Grey 87 84 75 Forward Looking Statements 2 During the course of this presentation, management may make statements regarding events or future financial performance of the Bank. These statements may include comments with respect to our objectives and strategies, and the results of our operations and our business. However, by their nature, these forward-looking statements involve numerous assumptions, uncertainties and opportunities, both general and specific. These statements are based on the beliefs and assumptions of the management of PFBC, and on the information available to management at the time the presentation materials were prepared. The risk exists that these statements may not be fulfilled. We caution readers of this presentation not to place undue reliance on these forward-looking statements as a number of factors could cause future results to differ materially from these statements. Forward-looking statements may be influenced in particular by factors such as fluctuations in interest rates and stock indices, the effects of competition in the areas in which we operate, and changes in economic, political, and regulatory conditions. We caution that the foregoing list is not exhaustive. Additional factors that could cause the Bank's results to differ materially from those described in the forward-looking statements can be found in the Bank’s 2024 Annual Report on Form 10-K filed with the Federal Deposit Insurance Corporation. When relying on forward-looking statements to make decisions, investors should carefully consider the aforementioned factors as well as other uncertainties and events.
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Dark Green 0 92 67 Lighter Green 42 136 42 Light Green 143 196 15 Green/Grey 151 175 177 Grey 175 175 175 Dark Grey 87 84 75 Franchise Overview: Preferred Bank 3 ➢ $7.5 billion commercial bank headquartered in Los Angeles, CA, targeting small/medium businesses and high net worth individuals within footprint lending ➢ Services customers through attractive branch footprint • 13 branches in California, (11 in Southern California and 2 in San Francisco) • 2 Branches in New York (Manhattan and Queens) • 1 Branch in Houston, Texas • 1 LPO in Silicon Valley California (Soon to be a branch) ➢ Significant insider ownership aligned with stakeholders • Directors and Officers collectively own 7.7% ➢ Focused on ethnic Chinese (plus other areas of East Asia) and mainstream markets • Ethnic Chinese clients estimated to account for ~[45%] of deposits and ~[20%] of loans ➢ Fortress capital, liquidity, and a short duration balance sheet ➢ Operational hallmark is efficiency, both structurally and culturally Preferred Bank (NASDAQ: PFBC) Headquarters Los Angeles, CA Founded / IPO 1991 / 2005 Branches 16 Employees 325 Market Cap.1 $1.14bb Assets $7,468mm Gross Loans $5,872mm Deposits $6,230mm Loan / Deposit 94.3% TCE/TA 10.38% CET1 11.34% Total Capital 14.56% NPAs/ Assets2 0.94% YTD NCOs/Avg. Loans 0.04% Q3 ‘25 ROA 1.84% Q3 ‘25 ROE 17.19% Q3 ‘25 NIM 3.92% Q3 ‘25 Efficiency Ratio 30.7% Q3 ‘25 Nonint. Inc. / Op. Rev. 4.9% Note: Financial data as of September 30, 2025 1) Market data as of November 4, 2025 2) Nonperforming assets includes nonaccrual loans and repossessed assets
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PFBC Stock Profile 4 NASDAQ: PFBC Ticker Symbol $92.89 (11/13/25) Recent Price 12.35mm Shares O/S $1.14bb Market Cap 78.8m shares Avg Volume (50-day) Raymond James & Co D.A. Davidson Piper Sandler Companies Janney Montgomery Scott Stephens Co. Annual Dividend: $3.00 Current Yield: 3.23%
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Management Overview and Business Model Management team averages 36 years of industry experience and average 24 years with Preferred Bank 5 Li Yu Chairman & CEO ➢ Founded Preferred Bank in 1991 ➢ Largest individual shareholder ➢ 39 years of banking experience Wellington Chen President & COO ➢ 38 years in banking ➢ Formerly EVP and Corporate Banking Director at East-West Bank Edward J Czajka EVP & CFO ➢ 19 years with Preferred Bank ➢ 38 years of banking experience Johnny Hsu EVP & Deputy COO ➢ 33 years of banking experience, all with Preferred Bank Nick Pi EVP & CCO ➢ 22 years with Preferred Bank ➢ 33 years of banking experience Long-Tenured Management Team with Average of [~17] Years in Current Roles ➢ Ultra high-touch service – our frontline personnel develop long lasting and deep relationships with their clients, fostering loyalty and word of mouth advertising ➢ We recruit senior level lenders and BD personnel with strong books of business ➢ Business model allows for high level of automated banking. Average branch operations staff is relatively small even though average branch size is around $389mm in deposits ➢ Local decision-making, ability to execute and access to senior management ➢ Efficient back office, and NO Holding Company • Efficiency Ratio of 30.7% in Q3 2025 ranks in the top 2% in the U.S. (FDIC UBPR) • Assets per employee of $23.4mm as of September 30, 2025, ranks in the 91st percentile. How We Execute – Business Model
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Dark Green 0 92 67 Lighter Green 42 136 42 Light Green 143 196 15 Green/Grey 151 175 177 Grey 175 175 175 Dark Grey 87 84 75 Branch Map 6 ➢ Primarily serving ethnic Chinese in: • San Gabriel Valley area of Southern California (Alhambra, Arcadia, Diamond Bar, City of Industry) • South Bay (Torrance) • Irvine (2) • San Francisco (Business District) • Flushing, NY • Manhattan • Houston, TX ➢ Primarily serving mainstream clientele in: • San Fernando Valley (Tarzana) • Downtown Los Angeles • Westside (Century City) • Southern L.A. County (Pico Rivera) • San Francisco (Richmond District) Branch light model with average branch size of $380mm in deposits
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Dark Green 0 92 67 Lighter Green 42 136 42 Light Green 143 196 15 Green/Grey 151 175 177 Grey 175 175 175 Dark Grey 87 84 75 Performance
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Dark Green 0 92 67 Lighter Green 42 136 42 Light Green 143 196 15 Green/Grey 151 175 177 Grey 175 175 175 Dark Grey 87 84 75 Superior ROE and Operating Efficiency 8 23.19% 21.21% 19.36% 19.00% 18.70% 18.00% 15.58% 16.48% 17.19% 4.00% 9.00% 14.00% 19.00% 24.00% 29.00% Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 ROE 24.99% 25.00% 27.99% 28.11% 28.37% 31.02% 33.67% 31.98% 30.68% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Efficiency Ratio
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Dark Green 0 92 67 Lighter Green 42 136 42 Light Green 143 196 15 Green/Grey 151 175 177 Grey 175 175 175 Dark Grey 87 84 75 Consistent Loan and Deposit Growth….. 9 $5,128 $5,274 $5,326 $5,429 $5,572 $5,643 $5,634 $5,740 $5,872 $4,800 $5,200 $5,600 $6,000 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Total Loans $5,683 $5,709 $5,802 $5,879 $5,868 $5,917 $6,073 $6,078 $6,230 $5,000 $5,400 $5,800 $6,200 $6,600 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Total Deposits
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Dark Green 0 92 67 Lighter Green 42 136 42 Light Green 143 196 15 Green/Grey 151 175 177 Grey 175 175 175 Dark Grey 87 84 75 5-Year Total Return vs S&P West Banks > $5bb 10 274.0%268.5% 263.2% 229.5% 203.6% 180.1%169.6% 161.3% 140.2% 112.9%108.8% 94.0% 82.4% 80.7% 77.2% 70.8% 59.5% 58.7% 38.6%37.7% 31.4% 29.5% 8.4% 2.4% -41.6%-54.7%-70.0% -50.0% -30.0% -10.0% 10.0% 30.0% 50.0% 70.0% 90.0% 110.0% 130.0% 150.0% 170.0% 190.0% 210.0% 230.0% 250.0% 270.0% 290.0% 5-Year Period Ending September 30, 2025
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Dark Green 0 92 67 Lighter Green 42 136 42 Light Green 143 196 15 Green/Grey 151 175 177 Grey 175 175 175 Dark Grey 87 84 75 Capital
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Dark Green 0 92 67 Lighter Green 42 136 42 Light Green 143 196 15 Green/Grey 151 175 177 Grey 175 175 175 Dark Grey 87 84 75 Capital Ratios – September 30, 2025 12 10.66% 11.34% 11.34% 14.56% 5.00% 6.50% 8.00% 10.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% Tier 1 Leverage Ratio Common Equity Tier 1 Ratio Tier 1 Capital Ratio Total Capital Ratio Well Capitalized Regulatory Guidance
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Dark Green 0 92 67 Lighter Green 42 136 42 Light Green 143 196 15 Green/Grey 151 175 177 Grey 175 175 175 Dark Grey 87 84 75 Tangible Book Value per Share 13 CAGR of 13.02% Over the Last 9 Years $20.00 $20.99 $25.14 $29.50 $32.73 $37.36 $40.44 $47.04 $54.23 $60.19 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 $45.00 $50.00 $55.00 $60.00 $65.00 30-Jun-16 30-Jun-17 30-Jun-18 30-Jun-19 30-Jun-20 30-Jun-21 30-Jun-22 30-Jun-23 30-Jun-24 30-Jun-25 TBVPS – 10 Years
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Dark Green 0 92 67 Lighter Green 42 136 42 Light Green 143 196 15 Green/Grey 151 175 177 Grey 175 175 175 Dark Grey 87 84 75 Stock Repurchase 2023-2025 14 • As deposit growth has slowed, total asset growth slows concurrently, which leads to outsized capital ratios, even after dividends, due to the Bank’s superior profitability metrics. This is a highly efficient way to return money to the shareholders in the form of a higher stock price. • On May 16, 2023, shareholders approved a $150 million stock repurchase, $50.7mm of stock was repurchased in 2023, $34.3mm was repurchased in 2024 and $65.7 was repurchased in early 2025 • On May 20, 2025, shareholders approved a new, $125mm share repurchase plan. Of that, we have repurchased $28.9mm worth of outstanding shares.
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Dark Green 0 92 67 Lighter Green 42 136 42 Light Green 143 196 15 Green/Grey 151 175 177 Grey 175 175 175 Dark Grey 87 84 75 15
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Dark Green 0 92 67 Lighter Green 42 136 42 Light Green 143 196 15 Green/Grey 151 175 177 Grey 175 175 175 Dark Grey 87 84 75 Credit Overview
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Dark Green 0 92 67 Lighter Green 42 136 42 Light Green 143 196 15 Green/Grey 151 175 177 Grey 175 175 175 Dark Grey 87 84 75 Loan Portfolio Composition – September 30, 2025 17 • Diverse loan portfolio – 26.7% of loans are C & I • High level of diversification among industries • Above-average number of Senior Lenders and Business Development staff allow PFBC to look at a high level of deal flow • Drives strong loan yields Loan Composition Commercial Real Estate Commercial & Industrial 1-4 Family Multifamily Construction & Development Land Gross Loans & Leases ($mm) $5,872 Yield on Loans Q3 ’25 7.63% LQA Growth Q3 ‘25 2.3% % that is floating Rate 71.5% 39.5% 26.7% 13.3% 9.7% 10.4% 0.4%
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Dark Green 0 92 67 Lighter Green 42 136 42 Light Green 143 196 15 Green/Grey 151 175 177 Grey 175 175 175 Dark Grey 87 84 75 Real Estate Loan Portfolio – September 30, 2025 18 1-4 Family 5.2% Multi- Family 19.1% Retail 23.7% Office 15.3% Industrial 12.9% Hotel/Motel 16.2% Other 7.5% Portfolio Characteristics 20 Largest Relationships 23.8% of total CRE Wtd Avg Maturity 2.5 Years Wtd Avg Coupon 7.40% Average DCR 1.60x Wtd Average LTV 55.1%
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Dark Green 0 92 67 Lighter Green 42 136 42 Light Green 143 196 15 Green/Grey 151 175 177 Grey 175 175 175 Dark Grey 87 84 75 C&I Portfolio Detail – Sep 30, 2025 19 Service 30.6% Food Service 1.4% Healthcare 9.1% Motion Pictures 6.8%Professionals 6.6% Merchant Wholesaler 2.1% Electronics 2.4% Food distribution 2.5% Other 15.8% Securities Brokerage 3.2% Manufacturing 6.2% Media Assets 1.8% Data Processing, Hosting Services 10.3% Secondary Market Financing 1.4% Portfolio Characteristics 20 Largest Relationships 32.2% of C&I Loans Line Usage % 67.1% Wtd Avg Maturity 2.8 Years Weighted Average Coupon 7.23%
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Dark Green 0 92 67 Lighter Green 42 136 42 Light Green 143 196 15 Green/Grey 151 175 177 Grey 175 175 175 Dark Grey 87 84 75 NPA’s 20 * $37.1mm of NPA’s were sold in early October for a sizeable gain 36,104 45,435 35,031 57,267 34,444 24,358 92,532 66,041 70,215 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Nonperforming Assets
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Dark Green 0 92 67 Lighter Green 42 136 42 Light Green 143 196 15 Green/Grey 151 175 177 Grey 175 175 175 Dark Grey 87 84 75 Deposits
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Deposit Composition – September 30, 2025 22 DDA 10.5% MMDA 35.4% Savings 0.5% CD's < $250k 26.3% CD's > $250k Characteristics Percentage DDA 10.5% MRQ Cost of Deposits 3.37% LQA Growth Rate 2.50% Core Deposits / Total Deposits 57.0%
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Dark Green 0 92 67 Lighter Green 42 136 42 Light Green 143 196 15 Green/Grey 151 175 177 Grey 175 175 175 Dark Grey 87 84 75 Recent Expansion 23 • On April 7, 2025, the Bank opened a full-service Branch office In Manhattan, NY in the prestigious Penn 2 building at Penn Station. • The Bank has signed a lease agreement with the owner of a retail property in Cupertino, California with the intent to move the Silicon Valley LPO to a location that will be a full-service branch. • The Bank’s San Francisco – Richmond branch is essentially being moved from Geary Street to the corner of 19th Avenue and Irving Street in the Outer Sunset neighborhood of San Francisco. 19th Avenue is also U.S. Highway 1 so this will be an ideal location for this branch.
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Dark Green 0 92 67 Lighter Green 42 136 42 Light Green 143 196 15 Green/Grey 151 175 177 Grey 175 175 175 Dark Grey 87 84 75 Summary 24 • Preferred Bank has a strong capital base with 10.4% tangible common equity • Since June of 2023, the Bank repurchased 2,404,145 shares at an average price of $72.17. This represents 16.7% of total outstanding shares which has significantly increased EPS over this period. The Bank still has a significant level of authorized share repurchases to execute but is sparsely active now due to the market price of the stock relative to book value • The Bank has reduced its high level of asset sensitivity which benefitted the Bank through 2022 and 2023 and now has a more matched balance sheet which has helped to navigate a declining or sideways rate environment • ACL coverage is 1.27% of total loans, providing a robust cushion against credit losses • Currently trading at 9.1X 2026 consensus earnings • TSR proves that organic growth and consistent TBV growth equal superior shareholder returns in the banking industry • Important performance metrics (ROA, ROE, efficiency ratio) are well above peer group