# PFBC earnings call intelligence

LOPJLB CallCard / temporal rollup · freemium · [stock page](https://www.lopjlb.com/stock/PFBC) · [Earnings tab](https://www.lopjlb.com/stock/PFBC?tab=earnings)

Updated: 2026-10-23T06:14:43

Quarters analyzed: 8

## Cross-quarter narrative

Across the nine earnings calls, Preferred Bank’s story shifted from early optimism about loan growth and margin stability to a more cautious outlook dominated by tariff‑related headwinds and deposit‑cost pressures. Q3 2024 highlighted a 10% annualized loan expansion and a stable NIM, but warned of credit‑risk spikes and volatile brokered deposits. By Q1 2025 loan demand softened amid tariff war uncertainty, margins were squeezed by interest reversals, and two large NPLs surfaced. A modest buyback continued, while deposit growth stayed positive. Q2 2025 showed the first signs of demand recovery and an NIM rise to 3.85%, yet OREO resolution lagged and tariff uncertainty persisted. Q3 2025 delivered record EPS, a sharp drop in NPLs to $17 M and efficiency gains, but the outlook remained clouded by competitive pricing and upcoming CD rollovers. In 2026 the bank reported mixed results: NPLs fell further, loan growth steadied around 2%, but NIM compressed to the mid‑3.5% range as deposit competition intensified. Throughout, branch expansion progressed, share repurchases stayed active, and OREO and asset‑quality initiatives moved toward completion, while tariff and rate uncertainties remained recurring themes.

## Latest CallCard · Q2

Preferred Bank Q2 2026: net income $33.5M, NPLs down 41.5%, loan growth 2% QoQ, deposit competition intense, NIM expected to compress to mid-3.50s, optimistic but cautious on H2 loan growth.

**Guidance:** vague — Management provided directional expectations: NIM mid-3.50s in Q3, non-interest expense flat, loan growth tougher in Q3, deposit growth target higher but no pipeline visibility; no formal numeric guidance.

**Tone:** mgmt 0.3 · Q&A pressure 0.6 · divergence 0.2

CEO Li Yu highlighted strong earnings, significant reduction in troubled assets, and expressed optimism for the remainder of the year while acknowledging deposit competition and uncertain loan resolution timing.

### Demand visibility

Loan demand showing signs of hesitation due to rate uncertainty and non-bank competition; pipeline vibrant but selective.

Early quarter optimism faded in June as rate cut expectations reversed; customers delaying decisions; non-bank lenders increasing competition for quality loans; pipeline still good but pricing discipline may limit volume.

### Margins / costs

NIM compressed to 3.60% adjusted; expected mid-3.50s in Q3; deposit costs rising with CD rollovers at higher rates; loan yields under competitive pressure.

June total deposit cost 3.06%, interest-bearing 3.44%; $1.5B CDs maturing in Q3 at 3.80% avg likely rolling higher; loan yields reset ~7% ex-recoveries; competitive pressure on both loan and deposit pricing.

### Capital allocation

Share buybacks under continuous evaluation if loan growth disappoints; focus on maintaining ~95% loan-to-deposit ratio and liquidity.

CEO confirmed buybacks as a capital use option; loan-to-deposit ratio currently ~95%, comfortable short-term but prefer to maintain long-term; allowance at 1.22% of loans, expected stable.

### Milestones

- **Troubled asset resolution** [delivered]: Non-performing loans reduced $70M (41.5%) and criticized loans reduced $90M (34%) in Q2.
- **Remaining NPL resolution ($60M)** [at_risk]: Three loans totaling $60M scheduled for H2 2026 resolution, but timing dependent on bankruptcy proceedings.
- **Loan production** [delivered]: Loans increased $125M (2.0% QoQ); adjusting for $70M sale, origination effort strong.
- **Deposit growth** [delivered]: Deposits increased $52M (0.8% QoQ); DDA growth encouraging but overall competition intense.
- **CD rollover Q3** [on_track]: $1.5B CDs maturing in Q3 at 3.80% average rate, expected to roll at slightly higher rates.
- **Expense management** [on_track]: Non-interest expense flat QoQ; legal fees elevated due to large relationship; Q3 expected flat to slightly better.
- **Deposit mix improvement** [on_track]: Focus on growing DDA to offset funding cost pressure; DDA growth year-to-date encouraging.
- **Loan-to-deposit ratio management** [on_track]: Ratio ~95%; comfortable short-term but prefer to maintain long-term for liquidity.

## Quarter one-liners

- **2026 Q2:** Preferred Bank Q2 2026: net income $33.5M, NPLs down 41.5%, loan growth 2% QoQ, deposit competition intense, NIM expected to compress to mid-3.50s, optimistic but cautious on H2 loan growth.
- **2026 Q1:** Preferred Bank Q1 net income $31.3M ($2.53/share) impacted by $177M nonaccrual relationship; sold ~50% at par, targeting resolution by Q3; NIM 3.57% down due to interest reversal, expected rebound to ~3.70%; loan/deposit growth ~1%; severe pricing competition; capital priority security over buybacks
- **2025 Q4:** —
- **2025 Q3:** Preferred Bank reports record Q3 EPS $2.84, NPLs drop to $17M after OREO sale, loan/deposit growth ~2.5%, efficiency ratio <30%, expects similar Q4 loan growth, active buyback, managing asset sensitivity.
- **2025 Q2:** Preferred Bank reports Q2 EPS $2.52, 7% annualized loan growth, NIM 3.85%, $56M buyback; asset quality improves but tariff uncertainty clouds outlook; Manhattan branch strong, Silicon Valley branch opening H2.
- **2025 Q1:** Preferred Bank Q1 net income fell to $30M as interest reversals and a $1.3M OREO charge hit margins, loan demand stays weak amid tariff uncertainty, while credit resolutions, deposit growth and a modest buyback program are underway.
- **2024 Q4:** —
- **2024 Q3:** Preferred Bank posted $33.6M net income, cut non‑performing loans, saw 10% annualized loan growth, slight deposit decline, OREO charge hit expenses, and expects modest rate cuts to support margins.

## Theme arcs

- **Loan demand** (improving): Early slowdown in Q1 2025 gave way to pickup in Q2 2025 and modest growth through 2026
- **Margins/NIM** (deteriorating): Initial stability gave way to pressure from interest reversals and deposit‑cost rises, ending with compression in 2026
- **Asset quality/NPLs** (improving): NPLs fell from ~$66 M in early 2025 to $17 M by Q3 2025 and continued down 41.5% in Q2 2026

## Guidance path

2024 Q3:vague → 2024 Q4:vague → 2025 Q1:vague → 2025 Q2:vague → 2025 Q3:vague → 2025 Q4:vague → 2026 Q1:vague → 2026 Q2:vague

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Research context only. Not personalized investment advice.

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