Shares in Preferred Bank Inc. tumbled more than 25 percent early Wednesday after the bank company posted a 94 percent dip in second-quarter profit due to a surge in loan loss provisions.

The Chinese-American-focused bank posted second quarter net income of $449,000 (5 cents per share), compared to $7 million (65 cents) in the same period a year earlier. The results fell way short of Wall Street’s estimates of 30 cents per share, according to Reuter’s Estimates.

Net interest income for the Los Angeles-based bank fell $4 million to $13.3 million for the quarter while net interest margin, a measure of profitability for banks, fell from 5.2 percent to 3.63 percent, year-over-year.

The company also said it took a pre-tax charge of $1.9 million for a temporary impairment on some preferred stock.

The amount of money set aside to cover souring loans, called the provision for loan losses, jumped to $7.2 million from $650,000 a year earlier. That’s because total non-accrual loans rose to $54.2 million, up from just $230,000 during the second quarter of 2007.

Shares in the bank dropped more than 26 percent to $6 per share in early trading Wednesday. Shares are off 77 percent so far this year.