Chairman's Message from the 2016 Annual Report

 

April 17, 2017

 

Dear Shareholders:

 

2016 was a year in which we delivered the highest total shareholder return in our corporate history; 60.6%. The change in the administration in Washington coupled with the prospect of further Federal Reserve interest rate hikes have caused investors to elevate bank stock valuations but Preferred Bank’s financial performance remains the main reason for our extraordinary shareholder return.

For 2016, Preferred Bank:

  • Recorded net income of $36.4 million which is 22.3% higher than 2015.
  • Increased loans by $484 million or 23.5% from 2015.
  • Increased deposits by $477 million or 20.9% from 2015.
  • Improved the efficiency ratio to 39.7%.
  • Posted a best in class ROA of 1.27% and an ROE of 12.77%.

Our prospects for 2017 remain bright due to the following reasons:

  • There’s no sign of slowdown in our local economies. Most data indicates that business activity seems to have accelerated.
  • Further Fed Rate increases will improve Preferred Bank’s earnings as we are one of the most assets sensitive banks in the country.
  • A corporate tax cut, if and when it happens, will reduce Preferred Bank’s tax burden and further improve our profitability.

We are very pleased with our performance for 2016 and we will remain focused on executing our business plan for 2017.

Very truly yours,

 

Li Yu

Chairman of the Board

Chief Executive Officer