Preferred Bank Posts $32.9 Million Q3 Profit as Net Interest Margin Falls

Preferred Bank reported third-quarter net income of $32.948 million as its net interest margin narrowed to 3.49%, down from both the prior quarter and a year earlier.

The independent California commercial bank’s earnings for the quarter ended Sept. 30, 2026, were $3 million lower than a year earlier and $592,000 below the second quarter. Diluted earnings per share were $2.73, compared with $2.84 in the year-earlier quarter and $2.78 in the second quarter. The bank released its results Oct. 23 at 8 a.m. ET (12:00 UTC).

Net interest income was $66.711 million, compared with $71.3 million a year earlier. Noninterest income was $4.992 million, up from $3.7 million. Together, the two items totaled $71.703 million for the quarter.

The bank identified a $2.1 million interest-income reversal as the primary driver of the year-over-year decline in net interest income. The second quarter included $2.9 million in interest recoveries. Net interest margin fell 0.24 percentage points from the second quarter’s 3.73% and 0.43 points from 3.92% a year earlier.

During the quarter, five loans entered nonaccrual status: one for $56.7 million and four totaling $13.5 million. Deposits increased $77.7 million, or 1.2%, from the second quarter.

Chairman and CEO Li Yu said, “It is highly likely that the competition for deposits and market conditions will continue into 2027.”