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Sep 30
Preferred Bank Q3 2025 Earnings Report
Preferred Bank reported its financial results for the third quarter of 2025, highlighting record diluted earnings per share and growth in loans and deposits.
Key Takeaways
Preferred Bank achieved a record diluted EPS of $2.84 and net income of $35.9 million for Q3 2025, driven by increased net interest income and growth in both loans and deposits. The bank also significantly reduced nonperforming loans and improved its efficiency ratio.
Record diluted earnings per share of $2.84 was reported for the third quarter of 2025.
Net income for the quarter increased to $35.9 million, up $2.6 million from the same quarter last year.
Total loans grew by $132.4 million (2.3%) and total deposits increased by $151.3 million (2.5%) on a linked quarter basis.
Nonperforming loans decreased significantly from $52.3 million to $17.6 million, primarily due to a loan foreclosure and subsequent sale of the OREO asset.
Preferred Bank
Preferred Bank
Forward Guidance
Preferred Bank anticipates continued cautious optimism from customers despite economic uncertainties. The bank expects to report a large pre-tax gain from the sale of an OREO asset in the fourth quarter of 2025.
Positive Outlook
- A large pre-tax gain from the sale of an OREO asset will be reported in Q4 2025.
- Customers are showing slightly more optimism, potentially leading to continued growth.
- The bank's efforts to decrease rates on deposits are yielding positive results.
- The efficiency ratio has improved, indicating better operational management.
- Strong capital ratios provide a solid foundation for future growth and stability.
Challenges Ahead
- Economic uncertainties continue to make customers cautious.
- Market price for stock repurchases was often above the bank's willingness to pay, limiting buybacks.
- Net interest margin was lower compared to the same quarter last year.
- Interest expense increased compared to the prior quarter due to deposit growth and increased borrowings.
- Fluctuations in the effective tax rate are expected due to the timing of taxable events.