Preferred Bank reports Q2 EPS $1.31, consensus $1.28
Net Interest Income and Net Interest Margin. Net interest income before provision for loan and lease losses was $41.8 million for the second quarter of 2019. This is up 11.9% over the $37.4 million recorded in the second quarter of 2018 and up over the $40.9 million recorded in the first quarter of 2019. The increase over the same period last year is due primarily to loan and overall asset growth. In comparing to the first quarter of 2019, strong loan growth mainly fueled the increase in net interest income. The Bank's taxable equivalent net interest margin was 4.07% for the second quarter of 2019, flat compared to the second quarter of 2018 and a 5 basis point decrease from the 4.12% posted in the first quarter of 2019. The decline in the margin was due to total deposit costs which rose by 12 basis points partially offset by an increase in earning asset yields of 4 basis points.Li Yu, Chairman and CEO, commented, "This quarter's highlight was our loan production. Sequentially, total loans increased $181 million or 5.3%. Fluctuations in credit line usage and loan pay-off activity accounted for some of the increase, but organic loan originations was one of the best in recent periods. "Conversely, our total deposits decreased $43 million or 1.2% sequentially. One of the reasons for the decrease was higher drawdowns on bank accounts by our commercial customers, which is echoed by the higher credit line usage discussed above. During the quarter, we pro-actively reduced interest rates on deposits ahead of much of our competition, which also may have also cost us some opportunities.