Preferred Bank Reports Final Fourth Quarter Results

LOS ANGELES, April 15 /PRNewswire-FirstCall/ -- Preferred Bank (Nasdaq: PFBC) (the "Bank"), an independent commercial bank focusing on the Chinese-American and diversified Southern California mainstream market, today reported final, revised results for the quarter and year ended December 31, 2009.  The Bank reported a fourth quarter loss of $25.7 million or $1.80 per diluted share, as compared to the previously announced results of net income of $803,000 or $0.05 per diluted share. The change in results stems mainly from the Bank's decision to provide a $27.0 million valuation allowance against its deferred tax asset. In addition, the Bank provided a $1.0 million provision for loan loss, recorded a $442,000 charge for Federal Deposit Insurance Corporation ("FDIC") premiums which were significantly increased in the fourth quarter of 2009, recorded an additional other-than-temporary impairment ("OTTI") charge of $1.4 million and recorded a $525,000 valuation charge on other real estate owned. The provision for loan loss and the OTTI charge were precipitated by the issuance of a Consent Order to the Bank by the FDIC and the California Department of Financial Institutions on March 22, 2010, as a result of an examination conducted by these two agencies in the fourth quarter of 2009. The Consent Order required the Bank to charge-off 50% of the book value of all assets that were classified as 'doubtful' as of the examination date. Management chose to record these charge-offs as of December 31, 2009, since the examination from which the Consent Order stemmed took place in 2009.

Today the Bank is filing its Annual Report on Form 10-K with the FDIC after filing a Form 12b-25 with the FDIC on March 31, 2010, which allows for a 15-day extension of the filing deadline. This report will be available on the Bank's website at www.preferredbank.com in the "Investor Relations" section under "Company Filings."

About Preferred Bank

Preferred Bank is one of the largest independent commercial banks in California focusing on the Chinese-American market.  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 nine full-service branch banking offices in Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine, Diamond Bar, Anaheim and Pico Rivera, 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.  The Bank continues to benefit from the significant migration to Southern California of ethnic Chinese from China and other areas of East Asia.  While its business is not solely dependent on the Chinese-American market, it represents an important element of the Bank's operating strategy, especially for its branch network and deposit products and services. The Bank believes it is well positioned to compete effectively with the smaller Chinese-American community banks, the larger commercial banks and other major banks operating in Southern California by offering a high degree of personal service and responsiveness, experienced multi-lingual staff and substantial lending limits.

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 2009 Annual Report on Form 10-K filed with the Federal Deposit Insurance Corporation which can be found on the 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 the Bank, please visit the Bank's website at www.preferredbank.com.

SOURCE Preferred Bank

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