Preferred Bank Reports Record Third Quarter Results

LOS ANGELES, Oct. 20, 2025 (GLOBE NEWSWIRE) -- Preferred Bank (NASDAQ: PFBC), one of the larger independent California banks, today reported results for the quarter ended September 30, 2025. Preferred Bank (“the Bank”) reported net income of $35.9 million or $2.84 per diluted share for the third quarter of 2025. This represents an increase in net income of $3.1 million from the prior quarter and an increase of $2.6 million over the same quarter last year. The increase compared to both periods was primarily due to an increase in net interest income. The primary reason that net interest income increased over the same quarter last year was due to a large $5.0 million decrease in interest expense. In comparison to the prior quarter, gross interest income increased by $6.4 million due to an increase in loans and investment securities.

Highlights for the Quarter:

Return on average assets was 1.93%Return on average equity was 18.64%Total loans increased by $132.4 million or 2.3%, linked quarterTotal deposits increased by $151.3 million, or 2.5%, linked quarterThe efficiency ratio for the quarter was 28.7%

Li Yu, Chairman and CEO, commented, “We are pleased to report a quarterly record for diluted earnings per share of $2.84 for the third quarter of 2025. Net income for the quarter was $35.9 million.

“For the quarter, nonperforming loans decreased significantly from $52.3 million at June 30, 2025 to $17.6 million as of September 30, 2025. The primary reason for the decrease is the foreclosure of a loan with the balance transferred to OREO. We are happy to report that the OREO asset has already been sold as of this writing, and a large pre-tax gain was also recorded on the sale which will be reported in our fourth quarter results. Net charge-offs were $1.6 million on a year-to-date (“YTD”) basis.

“This quarter we have also recorded reasonable growth in both loans and deposits. Total loans increased by $132.4 million or 2.3% on a linked quarter basis. Deposits also increased by $151.3 million or 2.5% on a linked quarter basis. Our customers appear to be slightly more optimistic but still cautious as there are a lot of uncertainties remaining in our economy. Worth noting is that without the aforementioned loan transferred to OREO, loan growth would have been near $170 million for the quarter.

“Net interest income and the net interest margin both increased from the previous quarter while noninterest expense was relatively unchanged from previous quarters. In late June, regulators approved our stock repurchase program but for most of the time since then, the market price was above what we were willing to pay to buy it back. During the third quarter, we repurchased a total of 70,842 shares for total consideration of $6.3 million.”

Results of Operations

Net Interest Income and Net Interest Margin. Net interest income before provision for credit losses was $71.3 million for the third quarter of 2025. This represents a $4.4 million increase over the $66.9 million recorded in the prior quarter and a $2.5 million increase over the same quarter last year. The increase compared to the prior quarter was due to loan growth as well as an increase in the Bank’s investment securities. This was partially offset by an increase in interest expense which was due to deposit growth and an increase in borrowings. The increase over the same period last year was due to a $5.0 million decrease in interest expense partially offset by a smaller decrease in interest income. The Bank has made significant efforts to decrease rates on deposits and the results in this quarter are indicative of that effort. The Bank’s net interest margin expanded in the quarter to 3.92% from 3.85% last quarter but was lower than the net interest margin of 4.10% recorded in the third quarter of last year.

Noninterest Income. For the third quarter of 2025, noninterest income was $3.7 million compared with $3.5 million for the same quarter last year and compared to $3.8 million for the second quarter of 2025. The increase over the same quarter last year was due to letter of credit (LC) fee income which was up by $461,000. In comparison to the prior quarter, gains on sales of loans was down by $116,000.

Noninterest Expense. Total noninterest expense was $21.5 million for the third quarter of 2025 compared to $22.4 million for the second quarter of 2025 and compared to the $22.1 million recorded in the same period last year. The primary reason for the decrease from the prior quarter was mainly due to a $1.3 million write-down of the Bank’s OREO property which occurred in the second quarter of 2025 as compared to a $300,000 charge on OREO holdings this quarter. The decrease from the same quarter last year was due again to a $1.7 million write-down of the same property in the third quarter of 2024. Personnel expense was $14.2 million this quarter which was a $715,000 increase over the same period last year but was nearly flat compared to the second quarter of 2025. Occupancy expense was up by $414,000 over the same period last year due to the Bank’s branch expansions and the change in accounting for leases which was adopted in the fourth quarter of 2024. The Bank’s efficiency ratio came in at 28.7% for the quarter which compares to 31.8% last quarter and to 30.6% in the same quarter last year.

Income Taxes. The Bank recorded a provision for income taxes of $15.0 million for the third quarter of 2025. This represents an effective tax rate (“ETR”) of 29.5% which is up from the 29.0% ETR for the same quarter last year and the same as the 29.5% ETR recorded in the second quarter of 2025. The Bank’s ETR will fluctuate slightly from quarter to quarter within a fairly small range due to the timing of taxable events throughout the year.

Year-to-Date Results

Net income for the nine months ended September 30, 2025 was $98.8 million or $7.63 per diluted share compared to $100.4 million or $7.39 million last year. The reason that diluted earnings per share (“EPS”) increased over 2024 was due to the stock repurchases that occurred in late 2024 and early 2025 which decreased the outstanding share count, leading to increased diluted earnings per share. The primary reason for the decrease in net income was a decrease in net interest income of $2.6 million and a $5.5 million increase in noninterest expense partially offset by a $5.3 million decrease in the provision for credit losses.

Balance Sheet Summary

Total gross loans at September 30, 2025 were $5.87 billion, an increase of $231.4 million from the total of $5.64 billion as of December 31, 2024. Total deposits were $6.23 billion, an increase of $312.8 million from the $5.92 billion as of December 31, 2024. Total assets were $7.47 billion, an increase of $544.4 million over the total of $6.92 billion as of December 31, 2024.

Asset Quality

Non-accrual loans and loans 90 days or more past due and still accruing totaled $17.6 million as of September 30, 2025. This represents a decrease from the prior quarter of $52.3 million as the Bank foreclosed on one of its large nonaccrual loans reported as of June 30, 2025. The $37 million multifamily nonaccrual loan was foreclosed on in the third quarter however the Bank has sold this property subsequent to September 30, 2025 and recorded a pre-tax gain on sale. Total OREO as of September 30, 2025 was $52.6 million as of September 30, 2025 however, as of this writing, OREO totals $14.7 million due to the aforementioned OREO sale. Total net charge-offs (recoveries) for the quarter were $1.6 million compared to net charge-offs of $44,000 in the prior quarter and compared to $(3,000) in the same quarter last year.

Allowance for Credit Losses

The provision for credit losses for the third quarter of 2025 was $2.5 million compared to $1.6 million last quarter and compared to $3.2 million in the same quarter last year.   The Bank’s allowance coverage ratio decreased to 1.27% of loans as compared to 1.29% in the prior quarter.

Capitalization

As of September 30, 2025, the Bank’s tangible capital ratio was 10.38%, the leverage ratio was 10.66%, the common equity tier 1 capital ratio was 11.34% and the total capital ratio stood at 14.56%. As of December 31, 2024, the Bank’s tangible capital ratio was 11.02%, the Bank’s leverage ratio was 11.33%, the common equity tier 1 ratio was 11.80% and the total capital ratio was 15.11%.

Conference Call and Webcast

A conference call with simultaneous webcast to discuss Preferred Bank’s third quarter 2025 financial results will be held tomorrow October 21, 2025 at 2:00 p.m. Eastern / 11:00 a.m. Pacific. Interested participants and investors may access the conference call by dialing 888-243-4451 (domestic) or 412-542-4135 (international) and referencing “Preferred Bank.” There will also be a live webcast of the call available at the Investor Relations section of Preferred Bank's website at www.preferredbank.com.

Preferred Bank's Chairman and CEO Li Yu, President and Chief Operating Officer Wellington Chen, Chief Financial Officer Edward J. Czajka, Chief Credit Officer Nick Pi and Deputy Chief Operating Officer Johnny Hsu will discuss Preferred Bank's financial results, business highlights and outlook. After the live webcast, a replay will be available at the Investor Relations section of Preferred Bank's website. A replay of the call will also be available at 877-344-7529 (domestic) or 412-317-0088 (international) through November 4, 2025; the passcode is 7582330.

About Preferred Bank

Preferred Bank is one of the larger independent commercial banks headquartered in California. The Bank is chartered by the State of California, and its deposits are insured by the Federal Deposit Insurance Corporation, or FDIC, to the maximum extent permitted by law. The Bank conducts its banking business from its main office in Los Angeles, California, and through twelve full-service branch banking offices in California (Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine (2), Diamond Bar, Pico Rivera, Tarzana and San Francisco (2)), two branches in New York (Manhattan and Flushing, Queens) and a branch office in the Houston, Texas suburb of Sugar Land. In addition, the Bank also operates a loan production office in Sunnyvale, California. Preferred Bank offers a broad range of deposit and loan products and services to both commercial and consumer customers. The Bank provides personalized deposit services as well as real estate finance, commercial loans and trade finance to small and mid-sized businesses, entrepreneurs, real estate developers, professionals and high net worth individuals. Although originally founded as a Chinese-American Bank, Preferred Bank now derives most of its customers from the diversified mainstream market but does continue to benefit from the significant migration to California of ethnic Chinese from China and other areas of East Asia.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the Bank’s future financial and operating results, the Bank's plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of the Bank’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: changes in economic conditions; changes in the California real estate market; the loss of senior management and other employees; natural disasters or recurring energy
shortage; changes in interest rates; competition from other financial services companies; ineffective underwriting practices; inadequate allowance for loan and lease losses to cover actual losses; risks inherent in construction lending; adverse economic conditions in Asia; downturn in international trade; inability to attract deposits; inability to raise additional capital when needed or on favorable terms; inability to manage growth; inadequate communications, information, operating and financial control systems, technology from fourth party service providers; the U.S. government’s monetary policies; government regulation; environmental liability with respect to properties to which the bank takes title; and the threat of terrorism. 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 which can be found on Preferred Bank’s website. The forward-looking statements in this press release speak only as of the date of the press release, and the Bank assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those contained in the forward-looking statements. For additional information about Preferred Bank, please visit the Bank’s website at www.preferredbank.com.

AT THE COMPANY:AT FINANCIAL PROFILES:Edward J. CzajkaJeffrey HaasExecutive Vice PresidentGeneral InformationChief Financial Officer(310) 622-8240(213) [email protected]

Financial Tables to Follow

PREFERRED BANKCondensed Consolidated Statements of Operations(unaudited)(in thousands, except for net income per share and shares) For the Quarter Ended September 30, June 30, September 30, 2025 2025 2024 Interest income: Loans, including fees $110,645 $105,884 $114,112 Investment securities 15,977 14,326 15,032 Fed funds sold 228 233 280 Total interest income 126,850 120,443 129,424 Interest expense: Interest-bearing demand 17,562 16,171 23,211 Savings 67 71 84 Time certificates 34,792 34,932 35,956 FHLB borrowings 1,794 1,070 - Subordinated debt 1,325 1,325 1,325 Total interest expense 55,540 53,569 60,576 Net interest income 71,310 66,874 68,848Provision for credit losses 2,500 1,600 3,200 Net interest income after provision for credit losses 68,810 65,274 65,648 Noninterest income: Fees & service charges on deposit accounts 625 635 747 Letters of credit fee income 2,421 2,333 1,959 BOLI income 105 104 108 Net gain on sale of loans 56 172 91 Other income 458 518 554 Total noninterest income 3,665 3,762 3,459 Noninterest expense: Salary and employee benefits 14,240 14,247 13,525 Net occupancy expense 2,297 2,271 1,883 Business development and promotion expense 238 240 241 Professional services 1,494 1,507 1,816 Office supplies and equipment expense 361 419 435 OREO valuation allowance and related expense 463 1,479 1,915 Other 2,405 2,282 2,274 Total noninterest expense 21,498 22,445 22,089 Income before provision for income taxes 50,977 46,591 47,018Income tax expense 15,038 13,744 13,635 Net income $35,939 $32,847 $33,383 Income per share available to common shareholders Basic $2.90 $2.61 $2.50 Diluted $2.84 $2.57 $2.46 Weighted-average common shares outstanding Basic 12,384,924 12,570,755 13,327,848 Diluted 12,634,174 12,776,240 13,544,273 Cash dividends per common share $0.75 $0.75 $0.70

PREFERRED BANKCondensed Consolidated Statements of Operations(unaudited)(in thousands, except for net income per share and shares) For the Nine Months Ended September 30, September 30, Change 2025 2024 %Interest income: Loans, including fees $318,020 333,543 -4.7% Investment securities 43,113 48,841 -11.7% Fed funds sold 689 854 -19.3% Total interest income 361,822 383,238 -5.6% Interest expense: Interest-bearing demand 50,323 69,706 -27.8% Savings 207 238 -13.1% Time certificates 103,611 105,864 -2.1% FHLB borrowings 2,864 - 100.0% Subordinated debt 3,975 3,975 0.0% Total interest expense 160,980 179,783 -10.5% Net interest income 200,842 203,455 -1.3%Provision for credit losses 4,800 10,100 -52.5% Net interest income after provision for credit losses 196,042 193,355 1.4% Noninterest income: Fees & service charges on deposit accounts 1,976 2,411 -18.0% Letters of credit fee income 6,998 5,211 34.3% BOLI income 312 318 -1.8% Net gain on sale of loans 503 547 -8.0% Other income 1,636 1,441 13.5% Total noninterest income 11,425 9,928 15.1% Noninterest expense: Salary and employee benefits 43,326 40,369 7.3% Net occupancy expense 6,862 5,310 29.2% Business development and promotion expense 940 910 3.3% Professional services 4,652 5,105 -8.9% Office supplies and equipment expense 1,166 1,385 -15.8% OREO valuation allowance and related expense 3,473 2,079 67.1% Other 6,893 6,656 3.6% Total noninterest expense 67,312 61,814 8.9% Income before provision for income taxes 140,155 141,469 -0.9%Income tax expense 41,345 41,028 0.8% Net income $98,810 $100,441 -1.6% Income per share available to common shareholders Basic $7.77 $7.50 3.6% Diluted $7.63 $7.39 3.2% Weighted-average common shares outstanding Basic 12,723,788 13,399,487 -5.0% Diluted 12,949,445 13,587,820 -4.7% Dividends per share $2.25 $2.10 7.1%

PREFERRED BANKCondensed Consolidated Statements of Financial Condition(unaudited)(in thousands) September 30, December 31, 2025 2024 (Unaudited) (Audited)Assets Cash and due from banks$795,459 $765,515 Fed funds sold 20,000 20,000 Cash and cash equivalents 815,459 785,515 Securities held-to-maturity, at amortized cost 19,034 20,021 Securities available-for-sale, at fair value 569,115 348,706 Loans held for sale, at lower of cost or fair value - 2,214 Loans 5,872,011 5,640,615 Less allowance for credit losses (74,692) (71,477) Less amortized deferred loan fees, net (9,956) (9,234) Loans, net 5,787,363 5,559,904 Other real estate owned and repossessed assets 52,609 14,991 Bank furniture and fixtures, net 7,771 8,462 Bank-owned life insurance 10,641 10,433 Accrued interest receivable 36,449 33,561 Investment in affordable housing partnerships 73,874 58,346 Federal Home Loan Bank stock, at cost 15,000 15,000 Deferred tax assets 43,711 47,402 Income tax receivable 5,190 2,195 Operating lease right-of-use assets 27,063 13,182 Other assets 4,515 3,497 Total assets$7,467,794 $6,923,429 Liabilities and Shareholders' Equity Deposits: Noninterest bearing demand deposits$654,302 $704,859 Interest bearing deposits: 2,205,865 2,026,965 Savings 31,087 30,150 Time certificates of $250,000 or more 1,699,757 1,477,931 Other time certificates 1,638,662 1,676,943 Total deposits 6,229,673 5,916,848 Advances from Federal Home Loan Bank 200,000 - Subordinated debt issuance, net 148,647 148,469 Commitments to fund investment in affordable housing partnerships 24,874 21,623 Operating lease liabilities 31,073 16,990 Accrued interest payable 15,655 16,517 Other liabilities 42,230 39,830 Total liabilities 6,692,152 6,160,277 Shareholders' equity 775,642 763,152 Total liabilities and shareholders' equity$7,467,794 $6,923,429 Book value per common share$62.81 $57.86 Number of common shares outstanding 12,349,889 13,188,776

PREFERRED BANKSelected Consolidated Financial Information(unaudited)(in thousands, except for ratios) For the Quarter Ended September 30,June 30,March 31,December 31,September 30, 2025 2025 2025 2024 2024 Unaudited historical quarterly operations data: Interest income$126,850 $120,443 $114,529 $125,858 $129,424 Interest expense 55,540 53,569 51,871 56,685 60,576 Interest income before provision for credit losses 71,310 66,874 62,658 69,173 68,848 Provision for credit losses 2,500 1,600 700 2,000 3,200 Noninterest income 3,665 3,762 3,998 3,637 3,459 Noninterest expense 21,498 22,445 23,369 28,246 22,089 Income tax expense 15,038 13,744 12,563 12,343 13,635 Net income$35,939 $32,847 $30,024 $30,221 $33,383 Earnings per share Basic$2.90 $2.61 $2.27 $2.29 $2.50 Diluted$2.84 $2.57 $2.23 $2.25 $2.46 Ratios for the period: Return on average assets 1.93% 1.85% 1.76% 1.74% 1.95% Return on average equity 18.64% 17.55% 15.62% 15.81% 17.77% Net interest margin (Fully-taxable equivalent) 3.92% 3.85% 3.75% 4.06% 4.10% Noninterest expense to average assets 1.16% 1.26% 1.37% 1.62% 1.29% Efficiency ratio 28.67% 31.78% 35.06% 38.79% 30.55% Net (recoveries) charge-offs to average loans (annualized) 0.11% 0.00% -0.01% 0.47% -0.00% Ratios as of period end: Tangible common equity ratio 10.38% 10.26% 10.96% 11.02% 10.92% Tier 1 leverage capital ratio 10.66% 10.73% 11.52% 11.33% 11.28% Common equity tier 1 risk-based capital ratio 11.34% 11.18% 11.86% 11.80% 11.66% Tier 1 risk-based capital ratio 11.34% 11.18% 11.86% 11.80% 11.66% Total risk-based capital ratio 14.56% 14.43% 15.15% 15.11% 15.06% Allowances for credit losses to loans at end of period 1.27% 1.29% 1.28% 1.27% 1.36% Allowance for credit losses to non-performing loans4.24x1.41x0.91x1.89x3.92x Average balances: Total securities$583,302 $503,861 $402,754 $350,732 $356,590 Total loans 5,753,801 5,623,010 5,555,010 5,542,558 5,458,613 Total earning assets 7,234,568 6,984,272 6,780,438 6,788,487 6,684,766 Total assets 7,382,265 7,121,047 6,905,249 6,920,325 6,817,979 Total time certificate of deposits 3,330,241 3,321,327 3,164,766 3,144,523 2,874,985 Total interest bearing deposits 5,501,767 5,345,308 5,244,243 5,220,655 5,124,245 Total deposits 6,169,728 6,005,486 5,886,163 5,905,127 5,828,227 Total interest bearing liabilities 5,850,376 5,614,737 5,392,735 5,369,092 5,272,617 Total equity 764,766 750,535 779,339 760,345 747,222

PREFERRED BANKSelected Consolidated Financial Information(unaudited)(in thousands, except for ratios) For the Nine Months Ended September 30, September 30, 2025 2024 Interest income$361,822 $383,238 Interest expense 160,980 179,783 Interest income before provision for credit losses 200,842 203,455 Provision for credit losses 4,800 10,100 Noninterest income 11,425 9,928 Noninterest expense 67,312 61,814 Income tax expense 41,345 41,028 Net income$98,810 $100,441 Earnings per share Basic$7.77 $7.50 Diluted$7.63 $7.39 Ratios for the period: Return on average assets 1.85% 1.97% Return on average equity 17.27% 18.57% Net interest margin (Fully-taxable equivalent) 3.84% 4.08% Noninterest expense to average assets 1.26% 1.21% Efficiency ratio 31.71% 28.97% Net charge-off to average loans 0.04% 0.31% Average balances: Total securities$497,301 $352,982 Total loans 5,644,668 5,347,918 Total earning assets 7,001,424 6,666,439 Total assets 7,137,935 6,800,008 Total time certificate of deposits 3,272,717 2,870,717 Total interest bearing deposits 5,364,715 5,110,755 Total deposits 6,021,497 5,830,555 Total interest bearing liabilities 5,620,958 5,259,068 Total equity 764,826 722,560

PREFERRED BANKSelected Consolidated Financial Information(unaudited)(in thousands, except for ratios) As of September 30,June 30, March 31, December 31, September 30, 2025 2025 2025 2024 2024 Unaudited quarterly statement of financial position data: Assets: Cash and cash equivalents$815,459 $796,257 $925,183 $785,515 $804,994 Securities held-to-maturity, at amortized cost 19,034 19,456 19,745 20,021 20,311 Securities available-for-sale, at fair value 569,115 577,040 390,096 348,706 337,363 Loans: Real estate – Mortgage: Real estate—Residential$793,217 $767,620 $779,462 $790,069 $753,453 Real estate—Commercial 2,890,990 2,868,308 2,897,956 2,840,771 2,882,506 Total Real Estate – Mortgage 3,684,207 3,635,928 3,677,418 3,630,840 3,635,959 Real estate – Construction: R/E Construction — Residential 285,623 291,343 306,283 296,580 274,214 R/E Construction — Commercial 323,897 303,354 269,065 287,185 290,308 Total real estate construction loans 609,520 594,697 575,348 583,765 564,522 Commercial and industrial 1,570,423 1,501,188 1,374,379 1,418,930 1,365,550 SBA 7,630 7,741 7,104 6,833 5,424 Consumer and others 231 56 164 247 124 Gross loans 5,872,011 5,739,610 5,634,413 5,640,615 5,571,579 Allowance for credit losses on loans (74,692) (73,830) (72,274) (71,477) (76,051) Net deferred loan fees (9,956) (11,940) (9,652) (9,234) (10,414) Net loans, excluding loans held for sale$5,787,363 $5,653,840 $5,552,487 $5,559,904 $5,485,114 Loans held for sale$- $- $- $2,214 $225 Net loans$5,787,363 $5,653,840 $5,552,487 $5,562,118 $5,485,339 Other real estate owned and repossessed assets$52,609 $13,755 $13,650 $14,991 $15,082 Investment in affordable housing partnerships 73,874 74,783 63,612 58,346 58,009 Federal Home Loan Bank stock, at cost 15,000 15,000 15,000 15,000 15,000 Other assets 135,340 128,629 120,319 118,732 136,246 Total assets$7,467,794 $7,278,760 $7,100,092 $6,923,429 $6,872,344 Liabilities: Deposits: Demand$654,302 $675,102 $730,270 $704,859 $682,859 Interest bearing demand 2,205,865 2,004,135 2,099,987 2,026,965 1,994,288 Savings 31,087 34,333 32,631 30,150 29,793 Time certificates of $250,000 or more 1,699,757 1,681,026 1,531,715 1,477,931 1,478,500 Other time certificates 1,638,662 1,683,737 1,678,132 1,676,943 1,682,324 Total deposits$6,229,673 $6,078,333 $6,072,735 $5,916,848 $5,867,764 Advance from Federal Home Loan Bank 200,000 200,000 - - - Subordinated debt issuance, net 148,647 148,588 148,529 148,469 148,410 Commitments to fund investment in affordable housing partnerships 24,874 30,645 20,956 21,623 23,617 Other liabilities 88,958 73,534 79,268 73,337 82,436 Total liabilities$6,692,152 $6,531,100 $6,321,488 $6,160,277 $6,122,227 Equity: Common stock, no par value$210,882 $210,882 $210,882 $210,882 $210,882 Additional paid-in capital 103,235 101,088 99,603 95,791 93,631 Treasury stock (277,351) (271,005) (214,406) (201,172) (194,585) Retained earnings 755,587 728,891 705,360 685,108 664,808 Accumulated other comprehensive income (16,711) (22,196) (22,835) (27,457) (24,619) Total shareholders' equity$775,642 $747,660 $778,604 $763,152 $750,117 Total liabilities and shareholders' equity$7,467,794 $7,278,760 $7,100,092 $6,923,429 $6,872,344

PREFERRED BANKQuarter-to-Date Average Balances, Yield and Rates(unaudited) Three months ended September 30, Three months ended March 31, Three months ended September 30, 2025 2025 2024 InterestAverage InterestAverage InterestAverage AverageIncome orYield/ AverageIncome orYield/ AverageIncome orYield/ BalanceExpenseRate BalanceExpenseRate BalanceExpenseRateASSETS(Dollars in thousands)Interest earning assets: Loans(1,2)$5,754,073 $110,6457.63% $5,632,204 $105,8847.54% $5,459,842 $114,1128.31% Investment securities(3) 583,302 6,2574.26% 503,861 5,1954.14% 356,590 3,6104.03% Federal funds sold 20,000 2284.52% 20,511 2334.56% 20,164 2805.52% Other earning assets 877,193 9,8114.44% 827,696 9,2304.47% 848,170 11,5215.40% Total interest earning assets 7,234,568 126,9416.96% 6,984,272 120,5426.92% 6,684,766 129,5237.71% Deferred loan fees, net (10,686) (10,005) (10,248) Allowance for credit losses on loans (72,784) (72,328) (72,899) Noninterest earning assets: Cash and due from banks 10,071 12,590 10,826 Bank furniture and fixtures 7,945 8,215 9,419 Right of use assets 19,153 19,917 22,496 Other assets 193,998 178,386 173,619 Total assets$7,382,265 $7,121,047 $6,817,979 LIABILITIES AND SHAREHOLDERS' EQUITY Interest bearing liabilities: Deposits: Interest bearing demand and savings$2,171,526 $17,6293.22% $2,023,981 $16,2423.22% $2,249,260 $23,2954.12% TCD $250K or more 1,686,710 17,4064.09% 1,644,322 17,0924.17% 1,412,073 17,8665.03% Other time certificates 1,643,531 17,3864.20% 1,677,005 17,8404.27% 1,462,912 18,0904.92% Total interest bearing deposits 5,501,767 52,4213.78% 5,345,308 51,1743.84% 5,124,245 59,2514.60%Advance from Federal Home Loan Bank 200,000 1,7943.56% 120,879 1,0703.55% - -0.00%Subordinated debt, net 148,609 1,3253.54% 148,550 1,3253.58% 148,372 1,3253.55% Total interest bearing liabilities 5,850,376 55,5403.77% 5,614,737 53,5693.83% 5,272,617 60,5764.57%Noninterest bearing liabilities: Demand deposits 667,961 660,178 703,982 Lease liability 22,908 23,657 18,882 Other liabilities 76,255 71,940 75,276 Total liabilities 6,617,500 6,370,512 6,070,757 Shareholders’ equity 764,766 750,535 747,222 Total liabilities and shareholders’ equity$7,382,266 $7,121,047 $6,817,979 Net interest income $71,401 $66,973 $68,947 Net interest spread 3.19% 3.10% 3.14%Net interest margin 3.92% 3.85% 4.10% Cost of Deposits: Noninterest bearing demand deposits$667,961 $660,178 $703,982 Interest bearing deposits 5,501,767 52,4213.78% 5,345,308 51,1743.84% 5,124,245 59,2514.60% Total Deposits$6,169,728 $52,4213.37% $6,005,486 $51,1743.42% $5,828,227 $59,2514.04% (1)Includes non-accrual loans and loans held for sale (2)Net loan fee income of $1.1 million, $1.7 million and $991,000 for the quarter ended September 30, 2025, June 30, 2025 and September 30, 2024, respectively, are included in the yield computations(3)Yields on securities have been adjusted to a tax-equivalent basis

PREFERRED BANKYear-to-Date Average Balances, Yield and Rates(unaudited) Nine Months ended September 30, 2025 2024 InterestAverage InterestAverage AverageIncome orYield/ AverageIncome orYield/ BalanceExpenseRate BalanceExpenseRateASSETS(Dollars in thousands)Interest earning assets: Loans(1,2)$5,648,323 $318,0207.53% $5,350,465 $333,5438.33% Investment securities(3) 497,301 15,5464.18% 352,982 10,6914.05% Federal funds sold 20,244 6894.55% 20,472 8545.57% Other earning assets 835,556 27,8574.46% 942,520 38,4485.45% Total interest earning assets 7,001,424 362,1126.91% 6,666,439 383,5367.68% Deferred loan fees, net (9,965) (10,466) Allowance for credit losses on loans (72,225) (76,775) Noninterest earning assets: Cash and due from banks 11,178 10,693 Bank furniture and fixtures 8,198 9,762 Right of use assets 18,105 22,462 Other assets 181,220 177,893 Total assets$7,137,935 $6,800,008 LIABILITIES AND SHAREHOLDERS' EQUITY Interest bearing liabilities: Deposits: Interest bearing demand/ savings$2,091,998 $50,5303.23% $2,240,038 $69,9444.17% TCD $250K or more 1,605,201 50,1384.18% 1,377,621 51,6625.01% Other time certificates 1,667,516 53,4734.29% 1,493,096 54,2024.85% Total interest \bearing deposits 5,364,715 154,1413.84% 5,110,755 175,8084.59%Advance from Federal Home Loan Bank 107,692 2,8643.56% - -0.00%Subordinated debt, net 148,551 3,9753.58% 148,313 3,9753.58% Total interest bearing liabilities 5,620,958 160,9803.83% 5,259,068 179,7834.57%Noninterest bearing liabilities: Demand deposits 656,782 719,800 Lease liability 21,857 19,401 Other liabilities 73,511 79,179 Total liabilities 6,373,108 6,077,448 Shareholders’ equity 764,826 722,560 Total liabilities and shareholders’ equity$7,137,934 $6,800,008 Net interest income $201,132 $203,753 Net interest spread 3.09% 3.12%Net interest margin 3.84% 4.08% Cost of Deposits: Noninterest bearing demand deposits$656,782 $719,800 Interest bearing deposits 5,364,715 154,1413.84% 5,110,755 175,8084.59% Total Deposits$6,021,497 $154,1413.42% $5,830,555 $175,8084.03% (1)Includes non-accrual loans and loans held for sale (2)Net loan fee income of $3.6 million and $3.4 million for the nine months ended September 30, 2025 and 2024, respectively, are included in the yield computations(3)Yields on securities have been adjusted to a tax-equivalent basis

PREFERRED BANK Loan and Credit Quality Information Allowance For Credit Losses History Nine Months EndedYear Ended September 30, 2025December 31, 2024 (Dollars in 000's) Allowance For Credit Losses Balance at Beginning of Period $71,477 $78,355 Charge-Offs Commercial & Industrial 8 19,028 Mini-perm Real Estate 1,749 - Total Charge-Offs 1,757 19,028 Recoveries Commercial & Industrial 172 50 Total Recoveries 172 50 Net (Recoveries) Charge-Offs 1,585 18,978 Provision for Credit Losses: 4,800 12,100 Balance at End of Period $74,692 $71,477 Average Loans Held for Investment $5,644,668 $5,396,844 Loans Held for Investment at End of Period $5,872,011 $5,640,615 Net (Recoveries) Charge-Offs to Average Loans 0.04% 0.35% Allowances for Credit Losses to Loans at End of Period 1.27% 1.27%