Oct 23, 2026 earnings call — Quarterly results and credit update
Preferred Bank reported Q3 net income of $32.9 million, or $2.73 per share.
Revenue $0.1B (est $0.1B) · EPS $2.73 (est $2.69)
Key quotes
"Resolution of nonaccrual loans is continuing, but slower than what we hoped for."
"The banks are now not only facing more competition from non-bank institutions, but also strangely, we see many of our customers invest their extra funds into the Treasuries."
"We are very hopeful that in the fourth quarter to have good, solid growth."
Analyst Q&A 3
CD maturities and problem loans
Q (Matthew Clark · Piper Sandler): They asked how much in CDs mature in Q4 and the expected rollover rates, plus the spot deposit cost and likely deposit beta if rates rise. They also asked for the criticized loan balance, how much of NPAs could be resolved by Q1, and whether there are loss concerns.
A: They said just under $1.7 billion of CDs mature in the fourth quarter, with a weighted average yield of 3.81% and expected rollovers between 3.75%-4%. Total deposit cost was 306 for September and spot margin was 358, and they expect deposit repricing to be slower on the way up as management focuses on keeping costs under control. Total classified loans are $177.6 million (including +$11.5 million OREO), several bankruptcy cases are progressing with some court-approved sales, and disposal timing depends on the court decisions.
"Yeah, we have just under $1.7 billion maturing in the fourth quarter, so it is a fairly heavy quarter from a maturity standpoint." — Edward Czajka (CFO)
Loan growth and expense outlook
Q (Andrew Liesch · StoneX Financial): He asked why loan growth was modest this quarter and if there were outsized paydowns or weaker production. He also asked if any customers are delaying projects because of higher rates, and whether the lower expenses were unusual and what to expect for Q4.
A: They said loan growth reflected some unexpected payoffs and production that was not as robust as in the second quarter, with pipeline delays pushing some funding into the next quarter. Customers are more cautious with higher rates but also look for better deals. Management said professional services (primarily legal fees) and incentive compensation were lower this quarter and gave Q4 expense guidance of somewhere between $23 million and $24 million.
"On a go-forward basis, I would say for Q4, look for somewhere between $23 million and $24 million, Andrew." — Edward Czajka (CFO)
Quarter-end deposits and market view
Q (Andrew Terrell · Stephens): He asked whether the quarter-end deposit balance was transitory or a good starting point for Q4, and for views on deposit growth and likely funding costs in the current market.
A: They said the quarter-end balance is a good launch point for the next quarter and the difference versus the quarterly average was because many broker deposits matured and came on late in the quarter. They described deposit pricing as very mixed: TCDs on the bank side are generally mid to high threes, some securities firms are in the mid-fours (one example at 4.75%), customers are moving into Treasuries for after-tax yield, and the market is "all over the place," so they are focused on holding customers while trying to grow.
"It's a good launch point for the next quarter, Andrew." — Edward Czajka (CFO)