Preferred Bank Projects Q4 Expenses of $23 Million to $24 Million

Preferred Bank expects noninterest expense of $23 million to $24 million in the fourth quarter of 2026, above its third-quarter total. Deposits rose 1.2% in Q3, while the bank’s chief executive said deposit competition and market conditions were likely to continue into 2027.

Chief Financial Officer Edward Czajka gave the forecast during the bank’s earnings call Friday, Oct. 23, which began at 2 p.m. ET (18:00 UTC). “On a go-forward basis, I would say for Q4, look for somewhere between $23 million and $24 million,” Czajka said. The range is a forecast for the coming quarter, not an expense figure already recorded.

The projected range is $841,000 to $1.841 million above the $22.159 million Preferred Bank recorded in Q3. Compared with the second quarter’s $23.715 million, the forecast’s low end is $715,000 lower and its high end is $285,000 higher. Q3 expense was also $661,000 above the $21.498 million recorded in Q3 2025.

Czajka attributed the quarter-to-quarter decline to lower professional-services costs, primarily legal fees connected with problem loans. A smaller incentive-compensation accrual also reduced expenses; he tied the lower accrual to slightly lower profitability. The two items account for the reasons he gave for the sequential decrease.

Deposits grew by $77.7 million from Q2 to $6.55 billion as of Sept. 30, an increase of 1.2%. Chairman and CEO Li Yu said it was “highly likely that the competition for deposits and market conditions will continue into 2027.”

Yu also described competition from nonbank institutions and said some customers were putting additional funds into Treasuries. His comments pointed to both outside competition and customer choices as factors affecting the bank’s deposit market. The Q4 expense range was given on the Oct. 23 call, while the deposit figure reflects the balance at the end of Q3.