Bronstein, Gewirtz & Grossman, LLC Announces Investigation of Preferred Bank

News provided by

Jul 09, 2012, 08:30 ET

NEW YORK, July 9, 2012 /PRNewswire/ -- Attorney Advertising -- Bronstein, Gewirtz & Grossman, LLC is investigating potential claims on behalf of purchasers of the securities of Preferred Bank ("Preferred Bank" or the "Company") (NasdaqGS: PFBC), concerning whether the company and certain of its officers and directors have violated federal securities laws.

On July 6, 2012, Shares of Preferred Bank fell $2.42 or 17% to close at $11.67 after reporting developments regarding two different loans which will negatively impact the Bank's second quarter financial results. In the case of the first loan, the Bank recently received the results of the annual Shared National Credit Report. The report requires the Bank to place a $13.9 million loan on nonaccrual status and further requires the Bank to write off 45% of the principal balance. This loan matured as of April 30, 2012, and the borrower was not able to re margin the loan based on updated collateral values. However, as of July 2, 2012, the loan renewal and modification were signed requiring the borrower to pledge the cash flows from a separate, large and renowned commercial real estate property to support the principal and interest payments on this loan. Management has placed the remaining portion of this loan in held-for-sale status. In the case of the second loan relationship, management has discovered significant irregular borrower activity associated with a $16.9 million loan relationship. Initial estimates indicate the potential loan collateral shortfall could reach as high as $8 million. Based on the current assessment of the Bank's allowance adequacy analysis and due to these two events, the Bank expects to report a net loss for the quarter ended June 30, 2012 ranging from $5.5-5.7 million. The Bank does not believe this loss will affect the results of operations beyond that of the second quarter of 2012.

If you are aware of any facts relating to this investigation, or purchased shares of Preferred Bank, you can assist this investigation by contacting either Peretz Bronstein or Eitan Kimelman of Bronstein, Gewirtz & Grossman, LLC at 212-697-6484 or via email [email protected]. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.

Bronstein, Gewirtz & Grossman, LLC is a corporate litigation boutique. Our primary expertise is the aggressive pursuit of litigation claims on behalf of our clients. In addition to representing institutions and other investor plaintiffs in class action security litigation, the firm's expertise includes general corporate and commercial litigation, as well as securities arbitration.

Contact:
Bronstein, Gewirtz & Grossman, LLC
Peretz Bronstein or Eitan Kimelman, 212-697-6484
[email protected]

SOURCE Bronstein, Gewirtz & Grossman, LLC