(Source: PRNewswire-FirstCall)
LOS ANGELES, March 25 /PRNewswire-FirstCall/ -- Preferred Bank , an independent commercial bank focusing on the Chinese-American and diversified Southern California mainstream market, today reported an additional revision to results for the quarter and year ended December 31, 2008 due to the receipt of an appraisal on an impaired construction loan. Preferred Bank had previously reported, on March 18, 2009 a net loss of $3.2 million or $0.32 per diluted share for the fourth quarter of 2008 and a net loss of $3.2 million or $0.32 per diluted share for the year ended December 31, 2008. Subsequent to March 18, 2009, management recorded an additional $3.1 million in provision for loan losses due to an increase in the impairment loss on an impaired loan based upon the receipt of a new appraisal on the loan's collateral. For the quarter ended December 31, 2008, Preferred Bank posted a net loss of $5.0 million or $0.51 per diluted share and for the year ended December 31, 2008, the Bank reported a net loss of $5.0 million or $0.51 per diluted share.
Preferred Bank received the appraisal report in March on a townhouse-style condominium project in downtown San Diego that is 99.5% complete. As of the Press Release of March 18, 2009, the Bank had allocated $584,000 in specific allowances which was based on discounting an appraisal dated November, 2007 by the decline in residential real estate values for the San Diego metropolitan area.
Mr. Li Yu, Chairman and President of Preferred Bank commented, "This appraisal indicates a value deterioration far beyond our estimation for that area and far in excess of published market statistics for that market area. This appraisal has been forwarded to a third party appraiser for a thorough review. Although this appraisal is still being reviewed, we believe that since we received this information prior to our 10-K filing, that it is prudent to record a specific allowance on this credit based on this appraised value as of December 31, 2008."
The following is a brief summary of information relative to the history of values of this 14-unit condominium:
Appraised Value (Bulk) as of November 2007: $7,910,000 Discounted Value used for March 18, 2009 Press Release: $6,764,000 New 'As-Is' Bulk Value from new appraisal: $3,720,000
Based on this latest revision to our allowance for loan losses, our ratio of allowance for loan losses to total loans is now at 2.19%, from the earlier reported ratio of 1.94%.
About Preferred Bank
Preferred Bank is one of the largest independent commercial banks in California focusing on the Chinese-American market.
