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Chairman's Message

May 2, 2024

Dear Shareholders,

I am pleased to report that our 2023 net income was $150.0 million or $10.52 per diluted share, both new records for the Bank. Compared to 2022, net income increased 16.5% and diluted earnings per share increased 20.9%. Preferred Bank remains one of the most profitable banks in all of the U.S. for the last several years.

During 2022 and 2023, the Federal Reserve increased interest rates many times and, together with the record high inflation, the country experienced very low demand for new credit which curbed loan growth in the banking industry. With the significant equity generated from our profitable operations, and with the approval of our shareholders, Preferred Bank repurchased approximately 5.8% of our own common stock in 2023. We believe the repurchase will enhance our shareholder value both in the short term and long item in the form of higher earnings per share. Even after the repurchase, the Bank’s capital ratios continue to grow due to the high level of profitability.

Throughout our years of operation, Preferred Bank has used a rather simple business model that has produced top tier profitability under high, low and normal interest rate environments. As the nation’s interest rates are now expected to come back to “normal” mode, your Board and management team are fully prepared for the change.  

Very truly yours,

Li Yu

Chairman of the Board

Chief Executive Officer

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