Preferred Bank said it is further reclassifying a large loan relationship to nonaccrual status after previously downgrading it to substandard classification in the fourth quarter of 2025. The relationship totals $2.0 million in commercial and industrial loans and $115.6 million in real estate loans, with the change attributed to the principals’ involvement in several lawsuits with other banks that led to sluggish cash flow and unacceptable payment patterns. The bank reported the real estate loan balances total $115.604 million against appraised collateral value of $219.3 million, implying a combined loan-to-value ratio of 52.7%. Individual real estate loans include $9.399 million (appraised at $24.99 million, 37.6% LTV), $48.459 million (appraised at $72.66 million, 66.7% LTV), $7.915 million (appraised at $13.22 million, 59.9% LTV), $19.95 million (appraised at $41.2 million, 48.4% LTV), and $29.882 million (appraised at $67.23 million, 44.4% LTV). Preferred Bank said it believes resolution of these loans will not have a significant impact on its 2026 earnings and noted a new appraisal has been ordered for the shopping center loan.
Disclaimer: This news brief was created by Public Technologies (PUBT) using generative artificial intelligence. While PUBT strives to provide accurate and timely information, this AI-generated content is for informational purposes only and should not be interpreted as financial, investment, or legal advice. Preferred Bank published the original content used to generate this news brief via GlobeNewswire (Ref. ID: GNW9659445-en) on February 23, 2026, and is solely responsible for the information contained therein.
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