Yahoo Finance Preferred Bank (NASDAQ:PFBC) Q1 2024 Earnings Call Transcript
Preferred Bank (NASDAQ:PFBC) Q1 2024 Earnings Call Transcript April 23, 2024
Preferred Bank isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good day and welcome to the Preferred Bank First Quarter 2024 Earnings Call. All participants will be in listen-only mode. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Jeff Haas, Financial Profile. Please go ahead.
Jeff Haas: Thank you Nick. Hello everyone. Thank you for joining us to discuss Preferred Bank's financial results for the first quarter ended March 31, 2024. With me today for management are Chairman and CEO Li Yu, President and Chief Operating Officer Wellington Chen, Chief Financial Officer Edward Czajka, and Chief Credit Officer, Nick Pi. 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 upon specific assumptions that may or may not prove correct.
Forward-looking statements are also subject to known and unknown risks, uncertainties, and other factors relating to Preferred Bank's operations and business environment, all of which are difficult to predict and many of which are beyond the control of Preferred Bank. For a detailed description of these risks and uncertainties, please refer to the SEC required documents in the bank files with the Federal Deposit Insurance Corporation, or FDIC. If any of these uncertainties materialized or any of these assumptions prove incorrect, Preferred Bank's results could differ materially from its expectations as set forth in these statements. Preferred Bank assumes no obligation to update such forward-looking statements. At this time, I'd like to turn the call over to Mr. Li Yu. Please go ahead.
Li Yu: Thank you very much. Good morning. I'm very pleased to report that Preferred Bank's first quarter net income of $33.5 million, or $2.44, the fully diluted share. This quarter, our loan growth was annualized at 4% and deposit growth was 6.5% annualized. This quarter, our net interest margin is 4.19%, which is a slight decrease from previous quarter. Looking ahead, the second quarter, NIM, likely will also compress, but we don't think it's going to be very significant. It's going to be mild compression. The reason for the compression in the first quarter is continued increase in cost of deposits. As of March 31, total criticized loans is $87.6 million, which is $3.6 million higher than the $83 million at year end. I know there's a mass mistake somewhere, but you have to round off three numbers.
And non-performing loans has reduced from $28.7 million at year end to $18.2 million in the first quarter end. This quarter, we have a charge-off $3.5 million related to loans that previously identified with lost content and fully reserved for them. This quarter, our provision is $4.4 million. The reserve allowance now stands at 1.49%. On the business side, we have just opened a new branch in Orange County, Irvine area. This is a full service branch staffed with a team of deposit personnel and a team of loan personnel. We also practically, as a right now at this minute, open up a Sunnyvale [ph] loan production office in the Silicon Valley area. And we plan to continue to add relations with personnel in the remainder of the years. Since third quarter last year, we have been trying to reduce the sensitivity of our loan portfolio.
And as of today, we believe it's a much better balance with our deposit composition. With the current change is a trend of interest rate movement, we will obviously monitor the situation and making the necessary adjustment to control our interest rates risk even better. Thank you very much, and I'm ready for your questions.
Operator: We will now begin the question and answer session. [Operator Instructions] The first question comes from Matthew Clark with Piper Sandler. Please go ahead.
See also
20 U.S. Cities Most People Moved To: 2024 Rankings and
10 Undervalued Cyclical Stocks To Invest In According to Analysts.
To continue reading the Q&A session, please click here.
